BOARD OF GOVERNORS RETREAT/MEETING - L.A. … BoG...Board of Governors Retreat/Meeting Agenda September 7, 2017 Page 2 of 2 9/1/2017 12:08 PM Presentation 13. Parent Brand Initiative

BOARD OF GOVERNORS RETREAT/MEETING

September 7, 2017 ● 8:30 AM Redwood Conference Room The California Endowment 1000 N. Alameda Street, Los Angeles, CA 90012

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Mission Statement

L.A. Care’s mission is to provide access to quality health care for Los Angeles County's vulnerable and low-income communities and residents and to support the safety net required to achieve that purpose.

Overview

Committed to the promotion of accessible, affordable and high quality health care, L.A. Care Health Plan (Local Initiative Health Authority of Los Angeles County) is an independent local public agency created by the State of California to provide health coverage to low-income Los Angeles County residents. Serving more than two million members in five product lines, L.A. Care is the nation’s largest publicly operated health plan.

L.A. Care Health Plan is governed by 13 board members representing specific stakeholder groups, including consumer members, physicians, federally qualified health centers, children’s health care providers, local hospitals and the Los Angeles County Department of Health Services.

L.A. Care advances individual and community health through a variety of targeted activities including a Community Health Investment Fund that has awarded more than $150 million throughout the years to support the health care safety net and expand health coverage. The patient-centered health plan has a robust system of consumer advisory groups, including 11 Regional Community Advisory Committees (governed by an Executive Community Advisory Committee), four Coordinated Care Initiative Consumer Councils, 35 health promoters and five Family Resource Centers that offer free health education and exercise classes to the community, and has made significant investments in Health Information Technology for the benefit of the more than 10,000 doctors and other health care professionals who serve L.A. Care members.

Programs

Medi-Cal – In addition to offering a direct Medi-Cal line of business, L.A. Care works with three subcontracted health plans to provide coverage to Medi-Cal members. These partners are Anthem Blue Cross, Care 1st Health Plan, and Kaiser Permanente. Medi-Cal beneficiaries represent a vast majority of L.A. Care members.

L.A. Care Covered™ – As a state selected Qualified Health Plan, L.A. Care provides the opportunity for all members of a family to receive health coverage under one health plan in the Covered California state exchange.

L.A. Care Covered Direct™ – L.A. Care’s first private health plan for all members of a family.

L.A. Care Cal MediConnect Plan– L.A. Care Cal MediConnect Plan provides coordinated care for Los Angeles

County seniors and people with disabilities who are eligible for Medicare and Medi-Cal.

PASC-SEIU Homecare Workers Health Care Plan – L.A. Care provides health coverage to Los Angeles County’s In-Home Supportive Services (IHSS) workers, who enable our most vulnerable community members to remain safely in their homes by providing services such as meal preparation and personal care services.

About L.A. Care Health Plan

Updated 6/22/2017

Updated June 22, 2017

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9/1/2017 12:08 PM

AGENDA BOARD OF GOVERNORS RETREAT/MEETING Thursday, September 7, 2017, 8:30 AM Redwood Conference Room, The California Endowment 1000 N. Alameda Street, Los Angeles, CA 90012

Welcome

Louise McCarthy, Chair

1. Approve today’s Agenda

Chair

2. S

“Shaping The Future For Medicaid – What’s Next?” (Guest Speaker and Moderated Discussion)

John Baackes, Chief Executive Officer Marilyn Tavenner, President and CEO,

America’s Health Insurance Plans

10:30 a.m. Break

3. Public Comment

Chair

4. Approve July 26, 2017 meeting minutes

Chair

5. Chairperson’s Report

Chair

6. Chief Executive Officer Report · Government Affairs Update

John Baackes Chief Executive Officer Cherie Compartore

Senior Director, Government Affairs

7. Chief Medical Officer Report Richard Seidman, MD, MPH Chief Medical Officer

Motions for Consideration

8. Health Management Systems (HMS) Coordination of Benefits Contract Amendment (BOG 100)

Dino Kasdagly Chief Operating Officer

9. TransUnion Contract Amendment (BOG 101) Dino Kasdagly

10. Authorization to Contract for Broker Self-Service Portal (BOG 102) Tom Schwaninger Chief Information Officer

Standing Committee Reports

Finance & Budget Committee

Michael Rembis Committee Chair

11. Chief Financial Officer’s Report · Approval of Financial Reports (FIN 100)

· Monthly Investment Transactions Report

Marie Montgomery Chief Financial Officer

12. Approve FY 2017-18 Capital and Operating Budget (FIN 101)

Marie Montgomery

12:00 p.m. Lunch

12:45 p.m. Reconvene

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Board of Governors Retreat/Meeting Agenda September 7, 2017 Page 2 of 2

9/1/2017 12:08 PM

Presentation

13. Parent Brand Initiative

John Baackes Alex Gallegos

Senior Director, Sales & Marketing, Product Sales

ADJOURN TO CLOSED SESSION (Estimated time: 3 hours)

Chair

14. CONTRACT RATES Pursuant to Welfare and Institutions Code Section 14087.38(m) · Plan Partner Rates · Provider Rates · DHCS Rates

15. REPORT INVOLVING TRADE SECRET Pursuant to Welfare and Institutions Code Section 14087.38(n) Discussion Concerning New Product Lines, Technology Estimated date of public disclosure: September 2019

16. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Section 54956.9(d)(2) of the Ralph M. Brown Act: one case

17. CONTRACT RATES Pursuant to Welfare and Institutions Code Section 14087.38(m) · Plan Partner Rates

RECONVENE IN OPEN SESSION

Chair

Adjournment Chair

The next meeting is scheduled as a placeholder meeting on October 4, 2017. at L.A. Care Health Plan, 1055 W. 7th Street, Los Angeles, CA 90017

Please keep public comments to three minutes or less.

The order of items appearing on the agenda may change during the meeting. If a teleconference location is listed at the top of this agenda, the public can participate in the meeting at that location.

Teleconference arrangements listed at the top of this Agenda may change prior to the meeting. L.A. Care may make the teleconference number available to the public. If you wish to listen to the meeting by telephone, you can confirm details with L.A. Care Board Services staff prior to the meeting by

calling (213) 694-1250, extension 4183 or 4184. THE PUBLIC MAY ADDRESS THE BOARD OF GOVERNORS ON ALL MATTERS LISTED ON THE AGENDA BY FILLING OUT A

“REQUEST TO ADDRESS” FORM AND SUBMITTING THE FORM TO L.A. CARE STAFF PRESENT AT THE MEETING BEFORE THE AGENDA ITEM IS ANNOUNCED. YOUR NAME WILL BE CALLED WHEN THE ITEM YOU ARE ADDRESSING IS DISCUSSED. THE

PUBLIC MAY ALSO ADDRESS THE BOARD ON L.A. CARE MATTERS DURING PUBLIC COMMENT. AN AUDIO RECORDING OF THE MEETING IS MADE TO ASSIST IN WRITING THE MINUTES AND IS RETAINED FOR 30 DAYS.

NOTE: THE BOARD OF GOVERNORS CURRENTLY MEETS ON THE FIRST THURSDAY OF MOST MONTHS AT 2:00 P.M. POSTED AGENDA and PRINTED MEETING MATERIALS ARE AVAILABLE FOR INSPECTION at Board Services, 1055 W. 7th Street – 10th Floor, Los

Angeles, California 90017.

Any documents distributed to a majority of the Board Members regarding any agenda item for an open session after the agenda has been posted will be available for public inspection at Board Services, L.A. Care Health Plan, 1055 W. 7th Street, 10th Floor, Los Angeles, CA 90017, during regular business

hours, 8:00 a.m. to 5:00 p.m., Monday – Friday.

Meetings are accessible to people with disabilities. Individuals who may require any accommodations (alternative formats – i.e., large print, audio, translation of meeting materials, interpretation, etc.) to participate in this meeting and wish to request an alternative format for the agenda, meeting notice, and meeting packet may contact L.A. Care’s Board Services Department at (213) 694-

1250. Notification at least one week before the meeting will enable us to make reasonable arrangements to ensure accessibility to the meetings and to the related materials.

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Marilyn B. Tavenner President & CEO

America’s Health Insurance Plans

Marilyn Tavenner is President & CEO of America's Health Insurance Plans (AHIP). Prior to joining AHIP in the summer of 2015, Marilyn served as administrator/principal deputy administrator of the Centers for Medicare & Medicaid Services (CMS) from 2010-2015. Prior to her appointment to CMS, she served as Secretary of Health and Human Resources in the cabinet of Governor Tim Kaine from 2006-2010. From 1981-2005 she was employed by the Hospital Corporation of America (HCA) beginning as a nurse at Richmond-based Johnston-Willis Hospital and eventually becoming the Chief Executive Officer in 1993. In 2001, she became President of HCA’s Central Atlantic Division, and was later appointed Group President of Outpatient Services before resigning from HCA in December of 2005. She earned both her Bachelor of Science in Nursing and her Masters in Health Administration from Virginia Commonwealth University. Marilyn led CMS work to implement the Affordable Care Act which included the development and implementation of major health insurance reforms across the country as well as establishing affordable health insurance options for over 11.5 million individuals through the state and federal marketplaces and the expansion of Medicaid in 28 states and DC. She also led the implementation of innovative programs and delivery system models aimed at reducing costs and improving quality. During Marilyn's tenure, the country experienced historically low growth in overall healthcare spending, extending solvency of the Medicare Trust Fund to 2030. As President and CEO of AHIP, Marilyn leads the national association that is the unified voice for the evolving health insurance industry. AHIP members provide health and supplemental benefits to 200 million Americans through employer-sponsored coverage, the individual insurance market, and public programs. Marilyn directs the industry's advocacy agenda in Washington and the states as AHIP members tackle the challenges facing consumers and the broader health care system. For the past four years, Modern Healthcare has recognized Ms. Tavenner as one of the 100 most influential people in health care in her roles at CMS and at AHIP. In 2017, Modern Healthcare also named her as one of Top 25 women leaders in the industry.

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For information on the current month’s meetings, check calendar of events at www.lacare.org. Meetings may be cancelled or rescheduled at the last moment. To check on a particular meeting, please call (213) 694-1250 or send email to [email protected].

Prepared by mhbalones/printed on 09/01/17

Monday Tuesday Wednesday Thursday Friday 1

4 5 6 7 Board of Governors

All Day Retreat/Meeting

8:30 am

8

11

12

13 ECAC 10 am

(for approx. 3 hours)

14

15

RCAC 6 10:30 am

(for approx. 2-1/2 hours)

18 RCAC 9

9 am (for approx. 2-1/2 hours)

19 RCAC 4


20

21 RCAC 11


Compliance & Quality

2 pm (for approx. 2 hours)

RCAC 7

3 pm (for approx. 2-1/2 hours)

22

25

26 CCI 1 10 am


27

CCI 2 10 am


Finance & Budget 1 pm


Executive 2 pm


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Schedule of Meetings September 2017

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For information on the current month’s meetings, check calendar of events at www.lacare.org. Meetings may be cancelled or rescheduled at the last moment. To check on a particular meeting,

please call (213) 694-1250 or send email to [email protected].

1055 W. 7th Street, 10th Floor, Los Angeles, CA 90017 Tel. (213) 694-1250 / Fax (213) 438-5728

MEETING DAY, TIME, & LOCATION

MEETING DATES MEMBERS

Board of Governors

General Meeting

1st Thursday 2:00 PM

(for approximately 3 hours) 1055 W. 7th Street,

10th Floor, Los Angeles, CA 90017

**The California Endowment, 1000 N. Alameda Street, Los

Angeles, CA 90012, from 8:30 am to 4:00 pm

September 7 (all day retreat) **

October 5 (place holder) November 2 December 7

Louise McCarthy, Chairperson Hector De La Torre, Vice Chairperson Michael Rembis, FACHE, Treasurer G. Michael Roybal, MD, MPH, Secretary Alvaro Ballesteros, MBA Stephanie Booth, MD Layla Delgado Mark Gamble Christina R. Ghaly, MD Hilda Perez Honorable Mark Ridley-Thomas Sheryl Spiller Kimberly Uyeda, MD, MPH Staff Contact: John Baackes, Chief Executive Officer x4102 Linda Merkens, Manager, Board Services, x4050

Board of Governors & Public Advisory Committees 2017 Meeting Schedule / Member Listing

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BOARD OF GOVERNORS & PUBLIC ADVISORY COMMITTEES 2017 MEETING SCHEDULE / MEMBER LISTING



Board of Governors - Standing Committees

MEETING DAY, TIME,

& LOCATION

MEETING DATES

MEMBERS

Executive Committee

4th Wednesday of the month 2:00 PM

(for approximately 2 hours)

1055 W. 7th Street, 10th Floor, Los Angeles,

CA 90017

September 27 October 25

November 15 No meetings in

December

Louise McCarthy, Chairperson Hector De La Torre Michael Rembis, FACHE, G. Michael Roybal, MD, MPH Mark Gamble Kimberly Uyeda, MD, MPH Staff Contact: Linda Merkens, Manager, Board Services, x4050

Compliance & Quality

Committee

3rd Thursday every 2 months 2:00 PM

(for approximately 2 hours) 1055 W. 7th Street,


September 21 November 16

Kimberly Uyeda, MD, Chairperson Alvaro Ballesteros, MBA Stephanie Booth, MD Hilda Perez G. Michael Roybal, MD, MPH

Staff Contact: Jennifer Carabali Committee Liaison, Board Services, x 4184

Finance & Budget

Committee

4th Wednesday of the month 1:00 PM

(for approximately 2 hours)


CA 90017

September 27 October 25

November 15 No meetings in

December

Michael A. Rembis, FACHE, Chairperson Mark Gamble Louise McCarthy Hilda Perez Kimberly Uyeda, MD Staff Contact: Malou Balones Committee Liaison, Board Services/x 4183

Governance Committee

1055 W. 7th Street, 10th Floor

Los Angeles, CA 90017

MEETS AS NEEDED

Chairperson - To be elected Layla Delgado Mark Gamble Hilda Perez Michael Rembis, FACHE G. Michael Roybal, MD, MPH, Sheryl Spiller

Staff Contact: Malou Balones Committee Liaison, Board Services/x 4183

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MEETING DAY, TIME,

& LOCATION

MEETING DATES

MEMBERS

Service Agreement Committee

1055 W. 7th Street, 10th Floor


MEETS AS NEEDED

Hector De La Torre, Chairperson Layla Delgado Louise McCarthy Hilda Perez Sheryl Spiller Staff Contact Malou Balones Committee Liaison, Board Services/x 4183

Audit Committee 1055 W. 7th Street, 10th Floor


MEETS AS NEEDED

Hector De La Torre, Chairperson Alvaro Ballesteros, MBA Stephanie Booth, MD Staff Contact Malou Balones Committee Liaison, Board Services, x 4183

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MEETING DAY, TIME,

& LOCATION

MEETING DATES

MEMBERS

L.A. Care Community

Health

Meets Annually or as needed


CA 90017


L.A. Care Joint Powers Authority

Meets Quarterly or as needed


CA 90017


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Public Advisory Committees

MEETING DAY, TIME,

& LOCATION

MEETING DATES

STAFF CONTACT

Children’s Health Consultant Advisory

Committee General Meeting

3rd Tuesday of every other month

8:30 AM (for approximately 2 hours)

1055 W. 7th Street,



Lyndee Knox, PhD, Chairperson Staff Contact: Jennifer Carabali Committee Liaison, Board Services/x 4184

Executive Community

Advisory Committee

2nd Wednesday of the month


1055 W. 7th Street,


September 13 October 11 November 8 December 13

Christina Deh-Lee, Chairperson Staff Contact: Idalia Chitica, Community Outreach & Education, Ext. 4420

Technical Advisory Committee

4th Thursdays every other month


1055 W. 7th Street,


Placeholder meeting

dates. This Committee is under

restructure.

Chairperson to be elected Staff Contact: Jennifer Carabali Committee Liaison, Board Services/x 4184

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REGIONAL COMMUNITY ADVISORY COMMITTEES

REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Region 1 Antelope Valley

3rd Friday of every other month

10:00 AM (for approximately 2-1/2 hours) L.A. Care Family Resource

Center -Palmdale 2072 East Palmdale Blvd.

Palmdale, CA 93550 (213) 438-5580

October 20 December 15

Adela Guadarrama, Chairperson Staff Contact: Courtney Nicholas Community Outreach & Education, Ext. 6583

Region 2 San Fernando

Valley

3rd Monday of every other month

10:00 AM (for approximately 2-1/2 hours)

Family Resource Center-Pacoima

10807 San Fernando Road Pacoima, CA 91331

(844) 858-9942


Ana Rodriguez, Chairperson Staff Contact: Courtney Nicholas Community Outreach & Education, Ext. 6583

Region 3 Alhambra,

Pasadena and Foothill



Rosemead Community Center

3936 N. Muscatel Avenue, Room 3

Rosemead, CA 91770 (626) 569-2160


Cynthia Conteas-Wood, Chairperson Staff Contact: Kristina Chung Community Outreach & Education, Ext. 5139

Region 4 Hollywood-

Wilshire, Central L.A. and Glendale


9:00 AM (for approximately 2-1/2 hours) Hope Street Family Center 1600 Hope Street, Rm 305

Los Angeles, CA 90015 (213) 742-6385


Michael Shelton, Chairperson Staff Contact: Kristina Chung Community Outreach & Education, Ext. 5139

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REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Region 5 Culver City, Venice,

Santa Monica, Malibu, Westchester

3rd Monday of every other month 2:00 PM

(for approximately 2-1/2 hours) Veterans Memorial Building

Garden Room 4117 Overland Avenue Culver City, CA 90230

(310) 253-6625


Maria Sanchez, Chairperson Staff Contact: Martin Vicente Community Outreach & Education, x 4423

Region 6 Compton,

Inglewood, Watts, Gardena,

Hawthorne

3rd Thursday of every other month

3:00 PM (for approximately 2-1/2 hours) L.A. Care Family Resource

Center - Inglewood 3111 W Century Blvd #100

Inglewood, CA 90303 (310) 330-3130


Andria McFerson, Chairperson Staff Contact: Frank Meza Community Outreach & Education, x 4239

Region 7 Huntington Park,

Bellflower, Norwalk, Cudahy


3:00 PM (for approximately 2-1/2 hours) YWCA Supervisor Gloria

Molina Community Empowerment Center

7515 Pacific Blvd. Walnut Park, CA 90255

(213) 516-3575


Fatima Vasquez, Chairperson Staff Contact: Frank Meza Community Outreach & Education, x 4239

Region 8 Carson, Torrance,

San Pedro, Wilmington

3rd Friday of every other month


Providence Community Health Wellness and

Activity Center 470 N. Hawaiian Ave. Wilmington, CA 90744

(424) 212-5699


Maria Montes – Chairperson Staff Contact: Frank Meza Community Outreach & Education, x 4239

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REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Region 9 Long Beach

3rd Monday of every other month


Miller Family Health Education Center

3820 Cherry Avenue Long Beach, CA 90807

(562) 570-7987


Christina Deh-Lee, Chairperson Staff Contact: Kristina Chung Community Outreach & Education, Ext. 5139

Region 10 East Los Angeles,

Whittier and Highland Park


1:00 PM (for approximately 2-1/2 hours) Historic General Hospital

The Wellness Center 1200 N. State Street, Room

1035 Los Angeles, CA 90033

(213) 784-9191


Leticia Navarro, Chairperson Staff Contact: Martin Vicente, Community Outreach & Education, Ext. 4423

Region 11 Pomona and El

Monte

3rd Thursday of every other Month


dA Center for the Arts 252 D South Main Street

Pomona, CA 91766 (909) 397-9716


Lluvia Salazar, Chairperson Staff Contact: Martin Vicente, Community Outreach & Education, Ext. 4423

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COORDINATED CARE INITIATIVE (CCI) CONSUMER COUNCIL

REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Area 1 Antelope Valley

4th Tuesday of every other month

10:00 AM (for approximately 2-1/2 hours) Antelope Valley Partners for

Health 44226 10th Street West Lancaster, CA 93534

(661) 267-5656

September 26 November 14*

*will meet the 3rd Tuesday of the month

Demetria Saffore, Chairperson Staff Contact: Mariah Walton Community Outreach & Education, Ext. 5956

Area 2 San Fernando

Valley

4th Wednesday of every other month


Family Resource Center-Pacoima

10807 San Fernando Road Pacoima, CA 91331

(877) 287-6290

September 27 November 15*

*will meet the 3rd Wednesday of the

month

Wilma Ballew, Chairperson Staff Contact: Mariah Walton Community Outreach & Education, Ext. 5956

Area 3 South Los Angeles

4th Wednesday of every other month

10:00 AM (for approximately 2-1/2 hours) Inglewood Family Resource

Center 3111 W. Century Boulevard,

Suite 100 Inglewood, CA 90303

(310) 330-3130

October 25 December 20*

*will meet the 3rd Wednesday of the

month

Brenda White, Chairperson Staff Contact: Susan Ma Community Outreach & Education, Ext. 4586

Area 4 Long Beach

4th Tuesday of every other month 1:00 PM

(for approximately 2-1/2 hours) Mark Twain Branch Library

1325 E. Anaheim Street Long Beach, CA 90813

(562) 570-1046

October 24 December 19*

*will meet the 3rd Tuesday of the month

Neisma Istrefi, Chairperson Staff Contact: Susan Ma Community Outreach & Education, Ext. 4586

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DRAFT

Board of Governors Regular and Special Supplemental Meeting Minutes #264 July 26, 2017 Michelle Obama Neighborhood Library, 5870 Atlantic Avenue, Long Beach, CA 90805

Members Management/Staff Louise McCarthy, Chair John Baackes, Chief Executive Officer Hector De La Torre, Vice Chair ** Phinney Ahn, Chief of Staff Michael Rembis, Treasurer Terry Brown, Chief of Human Resources G. Michael Roybal, MD, MPH, Secretary * Ellin Davtyan, Associate General Counsel Alvaro Ballesteros, MBA * Dino Kasdagly, Chief Operating Officer Stephanie Booth, MD Mark Gamble Marie Montgomery, Chief Financial Officer Christina R. Ghaly, MD Richard Seidman, MD, MPH, Chief Medical Officer Layla Gonzalez-Delgado Hilda Perez Honorable Mark Ridley-Thomas Sheryl Spiller * Kimberly Uyeda, MD, MPH *Absent **Via teleconference

AGENDA ITEM/PRESENTER

MOTIONS / MAJOR DISCUSSIONS

ACTION TAKEN

WELCOME

Louise McCarthy Chair

Louise McCarthy, Chair, called the meeting to order for both the Regular and Special Supplemental Agendas at 2:03 p.m. She announced that the public may address the Board on any matter at the Public Comment section at the beginning of this meeting, before or during the Board’s consideration of items listed on the Agenda. Guests are welcome to introduce themselves or can remain anonymous.

APPROVAL OF MEETING AGENDA Louise McCarthy

The meeting agenda was approved as amended.

Approved unanimously 8 AYES (Booth, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Rembis and Uyeda).

PUBLIC COMMENT This item was also included on the

(Board Member De La Torre joined the meeting by phone.)

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Board of Governors Regular and Special Supplemental Meeting July 26, 2017, Page 2 of 22 DRAFT



ACTION TAKEN

Supplemental Special Meeting Agenda

Demetria Saffore, CCI Council Area 1 Chair, expressed her appreciation for the Family Resource Center (FRC) in Palmdale, and said she is happy with the health care services she is receiving through L.A. Care.

John Baackes, Chief Executive Officer, thanked Ms. Saffore. He noted that Ms. Saffore and Adela Guadarrama, RCAC 1 Chair, attended the opening of the FRC in the Antelope Valley and helped him cut the ribbon to officially open the FRC. Since the opening about a month ago, 1773 people have visited or participated in the 78 classes at the FRC for physical exercise or health education. Care management staff will be placed in the FRC in the near future.

Wilma Ballew, CCI Council Area 2 Chair, indicated she would like to comment during the ECAC report later in the meeting.

Mellow Desire is a housing advocate for all Los Angeles County SPAs, particularly for Lancaster and Palmdale. There are approximately 8,900 homeless families in that area, with only 200 shelter beds available, and health care in the Antelope Valley is below par. She asked about L.A. Care’s plans to reach out to this area, particularly in Los Angeles County Service Planning Area (SPA) 6, where health has declined for African American families. She would like to know how more resources can be made available to bridge the gap between clients and service providers. A main problem she sees in the shelters is that disabled individuals are not able to climb to the top bunk are being put out of the shelters left and right. These are senior citizens, a lot of whom are first-time homeless. She wants to know what resources are out there so they can at least find temporary help while the shelters are rehabilitating themselves, particularly because there are only 200 shelter beds in the Antelope Valley. She wants to know what partnership L.A. Care has with Rex Parris and Jim Ledford. Instead of embezzling money she encouraged more accountability efforts. She commented that homeless people have about $4,000 in services in LA County, but in the Antelope Valley they only receive about $300 in services. She is glad to hear that the FRC was opened in Palmdale. She noted that more is needed, as well as in Lancaster and Victorville. She is here for the first time and will come more often. She wants to know what partnerships L.A. Care has and wants to increase the help for the homeless burst in the last two years.

Mr. Baackes responded that L.A. Care is an active partner in the Los Angeles County Whole Person Care (WPC) initiative. The focus is on providing additional services for Medi-Cal members who are homeless or coming out of incarceration. L.A. Care has pledged $20 million, specifically in a grant to Brilliant Corners to provide housing for 300 people. That does not fully address the needs in the Antelope Valley or SPA 6. He suggested that L.A. Care staff working on the WPC could contact Ms. Desire to share information.

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ACTION TAKEN

Ms. Desire said that Brilliant Corners is atrocious, and suggested that L.A. Care rethink its partnerships. She represents four clients that went through Brilliant Corners who were discriminated against and did not get their housing because of the leadership of Brilliant Corners. Transparency is needed with these organizations that are supposed to assist with housing and give resources to the homeless, but are not doing so.

Elizabeth Cooper, RCAC 2 and CCI Council Area 2 Member, thanked the Board that Mr. Baackes was in Washington, D.C., to address the issues of the Affordable Care Act (ACA). She thanked the lady who just spoke about housing, as she has brought up that issue for years.

Mr. Baackes responded that today, the Senate defeated the “repeal and delay” bill in a vote of 45 to 55. He noted this is good news for protecting Medi-Cal benefits. L.A. Care will continue to monitor the federal legislation.

Andria McPherson, RCAC 6 Chair, thanked the Board for offering the opportunity for public comment, because every single person’s comments are relevant and they matter. She works with all demographics; that is the reason she can speak on this. The facilities for the homeless have an abrasive disconnected attitude toward them. She suggested that a structure is needed to speak to them. To cure the homeless does not have to do with just money. It has everything to do with communication and how you value your clients, and how they feel about themselves. The shelters and different facilities have not been providing that service. She knows, because she has been through it herself. She noted that everyone speaks on it but no one is doing anything about it. She suggested that L.A. Care do something. She suggested that a sunshine seminar is needed to train staff to evaluate the client, develop goals and communication. This would focus on the individual needs of the client. She noted that communication is needed to bridge the gap.

Anna Rodriguez, RCAC 2 Chair, invited Board members to hold a Board meeting in the San Fernando Valley.

Elizabeth Cooper spoke on behalf of Jonathan Cooper, L.A. Care member. Ms. Cooper noted that her son, Jonathan, is a Regional Center consumer and is developmentally disabled. She also informed the Board that Jonathan would like to thank the Board for the 24-hour nurse advice line, which she called recently. She indicated that the nurse called her back the following day to inquire about Jonathan. She noted that Medicare doctors are very busy, and it is difficult to contact the doctor after hours.

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ACTION TAKEN

ACCEPTANCE OF MINUTES OF MEETING

Louise McCarthy

The minutes of the June 1, 2017 meeting were approved as submitted.

Approved unanimously by roll call. 9 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Rembis and Uyeda).

APPROVAL OF CONSENT AGENDA

Louise McCarthy

Members Booth and Perez may have financial interests in Plan Participating Providers or other programs as and as such their discussion and vote will be for the consent agenda excluding the following items for the individual member: Motions FIN 104 Member Advocacy Day and FIN 109 Health Promoters Program: Perez Motion FIN 107, Provider Continuing Education Program: Booth

PUBLIC COMMENT: Elizabeth Cooper asked to make comments later in the meeting.

Andria McFerson spoke about improving the Community Outreach and Engagement (CO&E) department. She has asked Francisco Oaxaca, Senior Director, Communications, Community Outreach and Engagement, to provide more opportunities for health promoters to reach out to the community like they used to do. Every time she speaks to all of the L.A. Care members at meetings she is shut down by an advisory committee member, an employee, or by Mr. Oaxaca. All of her questions aren’t answered. She is requesting oversight of the CO&E department because since Mr. Oaxaca started, it has changed. The volunteers don’t communicate as much with each other or with the staff. Another staff member with experience is needed. A staff member that has been with the CO&E department and realizes what it was structured on and how it was built. It was built to get out there to the community. Now it is treated like a private company; like it is trying to make money instead of using public funds. The RCAC and CCI Council members should be out in the community so they can bridge the gap between the community and the advisory committees. A more experienced and credible manager is needed, who realizes that this is an organization. Members have a right to speak but their words are not being heard. Ms. McFerson noted that her RCAC has discussed this issue and she brought the RCAC discussion before the ECAC. Mr. Baackes responded that he would not discuss personnel matters, and that he would take her comments under advisement.

Member Booth requested that items FIN 100 and FIN 111 be removed from the Consent Agenda for discussion.

· 2018 Board and Committee Meeting Schedule (BOG 100)

Approved unanimously by roll call with discussion and voting excluded as noted for individual members on certain items with a

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ACTION TAKEN

Revisions to Accounting and Financial Services Policy AFS 006 Alchemy Communications, Inc. Contract Amendment

· Revisions to Accounting and Financial Services Policy AFS 006 (Authorization and Approval Limits) (FIN 100)

· Authorization to procure equipment, software and installation services from ePlus, Inc. to replenish L.A. Care’s storage hardware. (FIN 101 )

· Authorization to purchase Vmware NSX Network and Security Software to enhance L.A Care’s internal server architecture from ePlus. (FIN 102 )

· Quarterly Investment Report (FIN 103)

· Motions in Compliance with Policy AFS 004 (Non-Travel and Other Related Expenses) o Member Advocacy Day (FIN 104) o Coordinated Care Initiative Consumer Advisory Councils meetings (FIN 105) o Funds for Safety Net Initiatives (FIN 106) o Provider Continuing Education Program (FIN 107) o Credentialing Committee Meetings (FIN 108) o Health Promoters Program (FIN 109)

· PaySpan Contract (FIN 110) · Alchemy Communications, Inc. Contract Amendment (FIN 111) · RCAC/CCI Membership (ECA 100)

Revisions to Accounting and Financial Services Policy AFS 006 (Authorization and Approval Limits) (FIN 100) Member Booth commented that L.A. Care is wisely working to save costs, and she suggested that there be regular reporting of procurement activities and approval of contracts with costs that exceed the original board-approved cost. Marie Montgomery, Chief Financial Officer, responded that all expenditures are included in quarterly reports submitted to the Finance & Budget Committee.

(Supervisor Ridley-Thomas joined the meeting.)

Alchemy Communications, Inc. Contract Amendment (FIN 111) Member Booth asked about the total expenses for the server racks and the Alchemy contract. Mr. Baackes noted that this expense is part of the relocation of the servers to the secure facility at 1200 W 7th Street. Lance MacLean, Director of Facilities Services, reported that the total cost is approximately $3.5 million over the next five years. This motion is for support of recently deployed core system transformation project equipment that was not included in the original agreement.

potential conflict of interest 9 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Rembis and Uyeda). Approved unanimously by roll call 9 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Rembis and Uyeda). Approved unanimously by roll call 10 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Rembis, Ridley Thomas and Uyeda).

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CHAIRPERSON’S REPORT

Chair McCarthy announced that there are no board or committee meetings scheduled in August, 2017. The next Board meeting will be an all-day retreat at the Center for Healthy Communities on September 7, 2017. She noted that the 2018 meeting schedule that was approved earlier today has no meetings scheduled in July, 2018. The schedule of upcoming advisory committee meetings is in today’s packet.

She reported that she attended an advisory committee meeting in Pomona. She thanked the RCAC 11 members for hosting the meeting. She noted that the advisory committee meeting was well-attended, even on a hot day in a room with no air conditioning. The CO&E staff, Martin Vincente and Felicia Grey, did a great job facilitating the meeting and working with the members. She was impressed by the member participation at the meeting, and noted that the Chair and Vice Chair share in presiding over alternate meetings, and each member presented an item on the meeting agenda. There was rich discussion on community outreach and engagement, member issues, and cultural and linguistic competence. She encouraged board members to visit the advisory committee meetings.

CHIEF EXECUTIVE OFFICER REPORT John Baackes

Mr. Baackes reported · Through Congress’ efforts toward ACA repeal and replace, L.A. Care has continued to

advocate for Medi-Cal and safety net providers. · Because trade associations took very weak positions to protect beneficiaries and providers,

L.A. Care formed a coalition of 10 health plans to send a letter to Senate leadership to inform them about how the proposed legislation would adversely affect Medicaid beneficiaries and the safety net providers that serve them. The letter included ideas to improve the Medicaid program.

· Earlier in the meeting he reported on the Palmdale FRC, and he informed the Board that L.A. Care is hoping to present plans to open two more FRCs in the next fiscal year.

· He introduced Terry Brown, Chief Human Resources Officer. · RCAC members met with legislators in their local offices to advocate for Medi-Cal

beneficiaries. · The Association for Community Affiliated Plans has been outspoken in support of

continued health coverage for people who received coverage under the Affordable Care Act. ACAP has recognized the Achievable Foundation with the 2017 Supporting the Safety Net Award.

· Chair McCarthy thanked Mr. Baackes for stepping forward to advocate for L.A. Care’s members and the safety net providers.

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ACTION TAKEN

Third Quarter FY 2016-17 Organizational Goals Project Report

Materials are included in the meeting packets. The format will be updated to include additional detail. Member Booth asked who decides on the status of each task. Dino Kasdagly, Chief Operating Officer responded that there are many people involved in the assessment and validation of the current status of each task.

FY 2015-16 Sponsorship Report

Mr. Baackes referred to the report included in the meeting packet. The sponsorships are evaluated carefully for relevance to L.A. Care, its members and providers.

MOTIONS FOR CONSIDERATION

Community Clinic Association of Los Angeles County (CCALAC) Grant to provide financial technical assistance

Motion BOG 100.0717* To approve the 2018 Board of Governors meeting schedule as submitted.

(Member McCarthy may have financial interests in Plans, Plan Participating Providers or other programs and refrained from the discussion of and vote on motion BOG 101.0717.)

Board Member Rembis presided over discussion and voting on this motion. Roland Palencia, Director, Community Benefits, summarized the motion requesting approval of a grant award.

The Advancing the Financial Strength (AFS) program is designed to enhance the financial and business acumen of Los Angeles County Federally Qualified Health Centers (FQHCs), FQHC Look-alikes and licensed community clinics. This request builds upon L.A. Care’s previous combined investments of $610,000 in 2015 and 2016 (Motions BOG101.0715 and EXE100 .0716). As in the two previous years of the initiative, CCALAC will collaborate with Capital Link, Inc., a nonprofit dedicated to assisting health centers across the nation with capital planning projects, financial growth, and identifying ways to improve performance.

Over 75% of L.A. Care’s contribution will fund Capital Link’s consulting and training fees, and the rest will cover CCALAC administrative overheard and expenses related to site rentals and event convening. The total project budget is $857,800, with L.A. Care covering 35% of the project expenses and Cedars-Sinai Foundation providing the remaining funds. .

This project aligns with L.A. Care’s strategic vision organizational goal 4.5: of fostering innovative approaches to improve the health status of our members and the quality of care provided by the safety net by helping community-based clinics to become more financially savvy and sustainable.

(Member Gamble left the meeting.)

Motion BOG 100.0717 was approved earlier on the Consent Agenda Motion BOG 101 was approved unanimously by roll call 8 AYES (Booth, De La Torre, Ghaly,

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ACTION TAKEN

Motion BOG 101.0717 Approval to award up to $300,000 to the Community Clinic Association of Los Angeles County (CCALAC) to provide financial technical assistance to Federally Qualified Health Centers (FQHCs), FQHC Look-Alikes and licensed community clinics.

Gonzalez-Delgado, Perez, Ridley-Thomas, Rembis and Uyeda) 1 Abstention (McCarthy)

ADVISORY COMMITTEE REPORTS Executive Community Advisory Committee Hilda Perez Layla Gonzalez-Delgado

PUBLIC COMMENT: Staff distributed a written statement from Wilma Ballew. Ms. Ballew read the statement and then commented that for the past 6 months, communications and community relations staff has reviewed and explained proposed revisions to the Consumer Advisory Committee Operating Rules extensively at both the ECAC and at all RCAC and CCI Council meetings, and has given all members at every meeting the opportunity to give feedback. Ms. Ballew was at four of the meetings, in addition to her own council meeting, to observe the presentation and discussion of the revisions. When members were asked if they had questions or concerns there was very little feedback.

Ms. Ballew noted that at the ECAC meeting one of the non-voting members, who has had one on one training from staff, started asking questions that had nothing to do with the revisions. This not only confused the voting members, it also took up a great amount of time. The meeting was running over time, so the members had to move forward and vote, which led to the motion not passing. The non-voting member took up discussion time away from the voting members, and the voting members were not able to share what their own advisory committees actually discussed about the revisions.

Ms. Ballew continued her comments by saying that her point is to say that she hopes L.A. Care leadership, staff and the Board will continue to move forward on these much needed revisions. She wants the Board and L.A. Care leadership to know that there are approximately 300 L.A. Care Consumer Advisory Committee members, and the two or three members that are often at the Board meetings are not representative of the rest of the members.

Ms. Ballew noted that the revisions to the Operating Rules were mostly administrative and set some clear guidelines for how new members of the consumer advisory committees can participate productively. She thanked the consumer advocate representative, Layla Delgado, for offering her assistance through this whole review process to those members who may not understand the revisions.

Ms. Ballew stated that she appreciates that L.A. Care and its Board are so open to hearing member feedback. The L.A. Care Bylaws and the Operating Rules state that the consumer advisory committees “serve at the pleasure of the Board.” She proposed that if the few who are

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elected to represent the many are not carrying forward to ECAC what their own RCACs or CCI Councils actually discussed, as a consumer member of L.A. Care, she would say that the leadership must make some administrative decisions that will fulfill our fiduciary responsibility to California taxpayers.

Ms. Ballew believes that the revisions in the Operating Rules will help do this, because it sets clear guidelines for all involved that will save staff time (and time is money) constantly dealing with advisory members trying to find loop holes to serve their own purpose, so that we can move on to focus on the important health issues that are facing our communities.

Ms. Ballew indicated that she admires Mr. Oaxaca. When she began coming to L.A. Care meetings she was unsure if it was right for her. Mr. Oaxaca engaged her and she feels productive. It is important to her to give back to her community. She makes time for L.A. Care activities. At the consumer advisory committee meetings it is important to represent the community. The problems in the Antelope Valley with access to care should not be tolerated. She thinks that Mr. Oaxaca is doing a great job, and that the staff is fantastic. Ms. Ballew feels at home here. She feels it is important to work as a team. As a volunteer, she will give 100%. The advisory committees know that we need change, to work as a team and respect each other. She appreciates the Board and she appreciates the staff.

Deaka McClain, At Large ECAC Member, allowed Ms. Ballew to use her time allotment for public comment.

Elizabeth Cooper noted that the First Amendment of the U.S. and California Constitutions provide for the right to free speech. No one should take away that right. She is appalled at some of the comments today. She noted that members respect the staff, but the staff is to give the necessary support for advisory committees to operate. No one can take away the first amendment rights. No one should be ashamed to come up and discuss concerns. She is also concerned about cultural insensitivity and public comment issues. Do not take away right to free speech. She encouraged everyone not to forget the Constitution.

· Member Layla Delgado acknowledged RCAC / CCI Members at the meeting:

RCAC Name 1 Maria Caballero

2 Ana Rodriguez / Laura Rhone 3 Maggie Belton 4 Hercey Donis / Hercilia Salvatierra 6 Evangelina Cantero

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7 Maria Sandoval / Angelica Albarran 8 Rosario Moreno / Maria Isabel Tamayo 9 Ana Villasenor / Petra Cruz 10 Elsa Gervacio

CCI Councils Area 1 Demetria Saffore/Russel Mahler Area 2 Wilma Ballew Area 3 Brenda White / Robert Harvey Dixon Area 4 Carmencita Fernandez / Deaka McClain

ECAC members met on July 12. · The Committee received a report from the Ad-Hoc Committee for Meeting Effectiveness. · The ECAC members approved the recommendations. The recommendation will be

reviewed during the August ECAC Leadership Training and will include a training that will assist members frame questions/comments during the ECAC meeting.

· The recommendations will be piloted at the September ECAC meeting. o An educational sheet with the meeting process will be created to distribute to ECAC

members and the public. o A training session will take place at RCAC/CCI meetings so consumer advisory

committee members understand the meeting process. · ECAC members discussed revisions to the consumer advisory committee operating rules.

The proposed new version of the rules was not approved by the Committee. The proposed revisions will continue to be discussed at the advisory committee meetings.

· Currently each of the advisory committees have worked on the dental coverage for Medi-Cal and participated in neighborhood events.

· Advisory Committees have enjoyed training on cultural and linguistic diversity. At one meeting the members discussed a lack of cultural sensitivity.

· There was also training on LGBTQ awareness and sensitivity. · For CCI Councils there was training on Long Term Services and Supports. · Members have requested follow up with and a report to ECAC about Brilliant Corners and

the suggestions that it has not provided services to clients.

Board Member Perez reported: · L.A. Care is a unique plan because of the advisory committees and the feedback that

members provide to the Board.

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ACTION TAKEN

· Ms. Perez thanked the Community Outreach and Engagement department for their support of members.

· COE helps community advisory committees in recruitment of new members, and in supporting the needs of each committee because the communities have different needs.

· Other support includes legislative information, information about how Board actions impact the members, and budget information.

· She noted that when members brought to the attention of the Board that special examination equipment was needed in provider offices, L.A. Care quickly organized a review of the provider network to address the needs and ensure access for L.A. Care members.

· There are other issues that members have brought to the Board. · L.A. Care has supported members in many different ways. · In considering the operating rules, members did not seem to understand the proposed

changes. · Members will continue to work with the Board to help L.A. Care improve the services for

its members.

Motion ECA 100.0717* To approve the following candidate(s) as members of the Regional Community Advisory Committees (RCAC) and Coordinated Care Initiative Councils (CCI), as reviewed by the Executive Community Advisory Committee (ECAC) during the June 14, 2017 and July 12, 2017 ECAC meetings.

Name RCAC/CCI # Type of Member (Agency, if applicable)

Antelope Valley Child Abuse Prevention Council- Yes2Kids

RCAC 1 Member Advocate

Chun Choe RCAC 2 Consumer Socrates Rodriguez RCAC 2 Consumer Fung Ha Leung Kwong RCAC 3 Consumer Community Health Alliance of Pasadena (ChapCare)

RCAC 3 Provider

Phylis P. Coto RCAC 4 Consumer Pamela L. Richardson RCAC 5 Consumer Ley Ding RCAC 9 Consumer

Motion ECA 100.0717 was approved earlier on the Consent Agenda

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ACTION TAKEN

Hilda Perez thanked Ms. Delgado. She thanked CO&E for staff support.

Sambour Lay RCAC 9 Consumer Community Health Alliance (ChapCare) RCAC 11 Provider

STANDING COMMITTEE REPORTS Executive Committee

Louise McCarthy

The Executive Committee met on June 28 (meeting minutes are available by contacting Board Services).

Government Affairs Update

Cherie Compartore, reported: · Assembly Bill 428 permanently amends the Brown Act to allow an exception from the

requirement that governing board members for the local initiative must be in the district to count toward the quorum for the meeting. The bill has been placed on the governor’s desk for final action.

· SB 171 and AB 205 are “mirror” bills that contain provisions for the hospital supplemental payment process, medical loss ratio language and network adequacy provisions mandated by the Centers for Medicare and Medicaid Services (CMS) mega rule. California Department of Health Care Services (DHCS) has communicated with CMS that it intends to use prospective rates to mitigate risk for hospitals and health plans in the supplemental payment program, with a reconciliation process at the end of each year. The bills include provisions that hospitals must have contracts with health plans to receive supplemental payments. L.A. Care continues to work with other stakeholders on the hospital network adequacy proposal that was recently released by the state.

· The California State Budget included provisions to restore adult vision benefit for Medi-Cal, but it is not effective until 2020 and will be contingent on federal funding and require legislative action. L.A. Care was supporting separate legislation (AB 1092) to restore the adult vision benefits in Medi-Cal, but that legislation will not move forward at this time. The State Budget restored dental benefits for adults in Medi-Cal beginning in 2018.

· The State Budget repealed the newly-qualified immigrant transition to the health benefit exchange due to the complexity of revising that Medi-Cal program. The health coverage for immigrants in the U.S. less than five years will not change at this time to preserve continuity of care.

· The State Budget did not include language for the distribution of Proposition 56 funds. There is approximately $700 million for provider rate increases, $50 million for women’s reproductive coverage, and $4 million in HIV waiver programs.

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ACTION TAKEN

· Legislation is being proposed to reauthorize the Special Needs Plan for five years. L.A. Care is working with stakeholders to support this bill.

Mr. Baackes commented that it is important that this program become permanent for the CalMedi-Connect (CMC) members, as this will be the coverage program for those beneficiaries if the CMC pilot program ends.

Member Perez asked about universal health care legislation proposed in California. Ms. Compartore reported that current legislation did not identify funding sources or have enough detail and the legislation is not active at this time, although discussions about universal care will continue.

Chair McCarthy asked about AB 1250 legislation related to county contracting and the effect it might have on L.A. Care’s partnership with county facilities. Ms. Compartore indicated that she the Local Health Plans of California (LHPC) will host a teleconference in the next week to discuss this legislation with health plan representatives and she will know more after that meeting.

PUBLIC COMMENT: Elizabeth Cooper thanked the board for the information and for the advocacy and vigilance on legislation. She thanked Supervisor Ridley-Thomas and Hector DeLaTorre for their advocacy.

Worker Education and Resource Center

Roland Palencia, Director, Community Benefits, indicated that the request is to complete the Care Navigator Program. The program will hire 10 care navigators at five community clinics to be part of the clinical care teams. The project will also increase the workforce capacities of the five clinics by allowing physicians and other medical practitioners to practice at the top of their license while the care navigators assist with patient needs not directly related to medical care.

This second-phase funding request will support the salaries of ten Care Navigators who will complete the apprenticeship, receive Community Health Worker (CHW) certification and be hired by the five participating clinics. Care Navigators will address the needs of at least 900 complex patients, including the homeless, allowing for evaluation of emergency room utilization and care coordination processes.

Motion EXE 100.0717 Approval to award up to $316,000 to the Worker Education and Resource Center (WERC) to complete the Care Navigator Apprenticeship Pilot program by hiring and integrating ten Care Navigator apprentices into clinical care teams at five community-

Approved unanimously by roll call. 10 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Ridley-Thomas, Rembis and Uyeda).

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ACTION TAKEN

based clinics to improve care management and coordination of high-risk patients with complex medical, behavioral and social needs.

Finance & Budget Committee

Michael Rembis reported that the Finance & Budget Committee met on June 28 and earlier this today (meeting minutes are available from Board Services). · The Committee approved the following motions (that do not require Board approval):

o Revisions to Edmund Jung & Associates Contract Amendment motion, approved by the F&B Committee on June 28.

o Sungard Contract Amendment o Pamela Gossman Consulting Contract. o SafetyNet Connect Contract

· The Committee approved motions that were earlier approved in Consent Agenda: o Revisions to Accounting Policy AFS 006 (Authorization and Approval Limits) o Authorization Contract with ePlus 1) to replenish L.A. Care’s storage hardware, and 2)

to purchase Vmware NSX Network software o Quarterly Investments Report o Motions to Comply with Policy AFS 004: 1) Member Advocacy Day, 2) CCI Councils

meetings, 3) Safety Net Initiatives, 4) Provider Continuing Education, 5) Credentialing Committee meetings, and 6) Health Promoters Program

o PaySpan Contract o Alchemy Contract Amendment

· The Committee reviewed the Capital and Operating Budget for FY 2017-2018. The final budget will be presented to the Board at the September 7 meeting.

· The Committee met in Closed Session and discussed Contract Rates, Trade Secret, Conference with Legal Counsel for Anticipated Litigation, and Conference with Real Property Negotiators for East LA Family Resource Center, Sacramento Office Lease Extension and 1st Floor HQ Building.

Motions Approved in Consent Agenda

Motion FIN 100 was extracted from the Consent Agenda and considered separately earlier in this meeting.

Motion FIN 100.0717 To approve the revisions to Accounting & Financial Services Policy AFS-006 (Authorizations and Approvals), as attached, and to authorize staff to make non-substantive changes.

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ACTION TAKEN

Motion FIN 101.0717* To authorize staff to procure equipment, software and installation services from ePlus, Inc. in amount not to exceed $800,000 to replenish L.A. Care’s storage hardware.

Motion FIN 102.0717* To authorize staff to procure equipment, software and installation services from ePlus, Inc. in amount not to exceed $800,000 to purchase Vmware NSX Network and Security Software to enhance L.A Care’s internal server architecture.

Motion FIN 103.0717* To accept the Quarterly Investment Report for the quarter ending June 30, 2017, as submitted.

Motions in Compliance with Policy AFS 004 (Non-Travel and Other Related Expenses)

Members Booth, McCarthy and Perez may have financial interests in Plan Participating Providers or other programs as and as such their discussion and vote will be for the consent agenda excluding the following items for the individual member: Motions FIN 104 Member Advocacy Day and FIN 109 Health Promoters Program: Perez Motion FIN 107, Provider Continuing Education Program: Booth

Motion FIN 104.0717* To approve the allocation of funds for L.A. Care’s Sacramento Advocacy Day in the amount of $37,665 for FY 2017-18.

Motion FIN 105.0717* To approve the allocation of funds for catering and stipends for L.A. Care CCI Consumer Advisory Council member meetings from October 1, 2017 to September 30, 2018 in the amount of $37,400.

Motion FIN 106.0717* To approve the allocation of funds for stakeholder and community engagement events for safety net programs in the amount of $44,440 for the period of October 1, 2017 through September 30, 2018.

Motion FIN 107.0717* To approve the allocation of funds for L.A. Care’s Continuing Medical Education and Continuing Education programs, in the amount of $180,500, for the period of October 1, 2017 through September 30, 2018.

These motions were approved earlier on the Consent Agenda

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ACTION TAKEN

Motion FIN 108.0717* To approve the allocation of funds for L.A. Care Credentialing/Peer Review Committee monthly meetings in the amount of $15,080, for the period of October 1, 2017 through September 30, 2018.

Motion FIN 109.0717* To approve allocation of funds for catering for Health Promoters Program activities in the amount of $31,000, for the period of October 1, 2017 through September 30, 2018.

Motion FIN 110.0717* To execute a contract in the amount of $1.5 million with PaySpan to provide check and remittances services for the period of September 1, 2017 to August 31, 2020.

Motion FIN 111 was extracted from the Consent Agenda and considered separately earlier in this meeting. Motion FIN 111.0717* To authorize staff to add six server racks with 30A/208V upgraded electric service in the L.A. Care data center by amending the service agreement with Alchemy Communications, Inc. in an amount not to exceed $670,000.

Approval of Financial Report

Marie Montgomery, Chief Financial Officer, reported the highlights of the Financial Reports for FY 2016-17 for the period ended May 31, 2017. (A copy of the reports can be obtained by contacting Board Services). The Finance & Budget Committee reviewed the June financial report at its meeting earlier today, and those reports will be presented to the Board in September. · Member enrollment is lower than forecast by 40,000 member months, driven by lower than

expected enrollment in Medi-Cal (TANF/MCE). There was an increase in enrollment in June.

· Year to date financial result is a surplus of $91.8 million, which is ahead of forecast by $12.5 million. The favorable surplus is primarily driven by a favorable operating margin.

· Administrative expense is $575 favorable to the forecast; we expect administrative expenses to remain close to the forecast with a potential to be slightly unfavorable by the end of the year.

· Non-operating income is favorable, primarily due to investment income. · June surplus revenue is $15 million, pushing the year to date surplus to $107 million. · The operating margins for business segments are favorable and in line with prior results.

The overall medical cost ratio is 94.3%, with a forecast of 94.5%. · The medical cost ratio for the L.A. Care Covered/PASC segment continues to improve.

Approved unanimously by roll call

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· Key financial ratios are positive except the Cash to Claims, which is lower due to timing of payments from DHCS.

· The tangible net equity level is consistent with prior months.

Motion FIN 112.0717 To accept the Financial Report for the period ended May 2017, as submitted.

10 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Ridley-Thomas, Rembis and Uyeda).

Monthly Investment Transaction Report

Ms. Montgomery referred to the May and June 2017 Investment Transaction Reports included in the meeting materials. (A copy of the reports can be obtained by contacting Board Services). Total market value of the portfolio is $2.3 billion in May and $2.1 in June, in cash and investments, which is lower than prior months due to the timing of payments from DHCS.

Cognizant Contract Amendment (FIN 113)

Richard Seidman, MD, MPH, Chief Medical Officer, presented a motion for an amendment to the contract with Cognizant to provide L.A. Care with a full services health care effectiveness data and information set reporting, on line supplemental data entry portal, and a quality improvement analytic solution. There was a miscalculation in the total amount, it should be $3,043,761, or an annual cost of $1,014,587.

Healthcare Effectiveness Data Information Set (HEDIS) reporting is required by the Centers for Medicare and Medicaid Services (CMS), Department of Health Care Services (DHCS), Covered California, and National Commission on Quality Assurance (NCQA). Cognizant offers a certified software product that enables L.A. Care to submit required reports. Overall the enhanced functionality of the Cognizant product compared to the current engine will support our goal of improving member access, HEDIS performance, NCQA scores, and compliance with other non-HEDIS related measures.

The HEDIS performance is considered by DHCS when determining the auto assignment of members to the health plan.

Member Ghaly asked how this will interface with providers. Dr. Seidman responded that it will enable more frequent, accurate and timely data feedback to help with quality improvement efforts without out the delay that is currently experienced.

Motion FIN 113.0717 To authorize staff to execute an amendment to our current contract in the amount of $2,915,948 $3,043,761 with Cognizant to provide new Healthcare Effectiveness Data and Information Set (HEDIS) services and HEDIS required software for the period of October 1, 2017 to September 30, 2020.

Approved unanimously by roll call 10 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Ridley-Thomas, Rembis and Uyeda).

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Motion FIN 113.0717 To authorize staff to execute an amendment to our current contract in the amount of $3,043,761 over 3 years, or $1, 014,587 annually with Cognizant to provide new Healthcare Effectiveness Data and Information Set (HEDIS) services and HEDIS required software for the period of October 1, 2017 to September 30, 2020.

Optum Contracts For claims editing system For 2nd Pass Data Mining services

Dino Kasdagly, Chief Operating Officer, presented motions to approve contracts with Optum to assist with claims payment accuracy and data integrity strategy.

The first is a five-year contract to prospectively review and correct claims, which could avoid costs of $10 million per year. The contract will include annual updates to comply with Medi-Cal requirements.

Motion FIN 114.0717 To authorize staff to execute a contract not to exceed $3.5 million with Optum to provide a prospective claims editing system for the period of October 1, 2017 to December 31, 2023.

The second motion is to approve a contract for second pass claims review to identify provider overpayments arising from inappropriate coding edits, duplicate billings, and improper application of the provider contract/division of financial responsibility. The pricing structure is based on the vendor receiving 30% contingency fee for overpayments recovered. This is a fully contingent agreement as fees are only paid when L.A. Care overpayments are recovered.

Member Booth asked about the difference in a first- and second- pass review. Mr. Kasdagly indicated that the prospective and retrospective review of claims will include updates to L.A. Care’s system to avoid the same issues going forward, and to generate data that can be used to educate and build awareness among providers about claims submission. The payment structure is very complex.

Motion FIN 115.0717 To authorize staff to execute a contract not to exceed $7.5 million with Optum to provide 2nd Pass Data Mining services for the period of September 1, 2017 to December 31, 2022.

FIN 114 and 115 were simultaneously approved unanimously by roll call 10 AYES (Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Ridley-Thomas, Rembis and Uyeda).

Edifecs, Inc. Contract to purchase pre-processing claims data management software (FIN 116)

Mr. Kasdagly reported that in October 2016, a motion was approved to execute a two-year contract with a vendor not yet specified for encounter claims management and submission for DHCS and CMS. A competitive bidding process was conducted with eight vendors and Edifecs was selected. Through negotiations, improvement in the cost could be realized if the contract

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ACTION TAKEN

term was extended. Originally the request was for two years and $6 million. This proposal is a net savings of $5 million.

The current method of reporting encounters is not sustainable as volumes increase. Automated encounter systems allow the capture of more utilization data, which can lead to better care management and better disease management.

Motion FIN 116.0717 To authorize staff to execute a contract in the amount of $10,200,000 with Edifecs, Inc. to purchase pre-processing claims data management software, end-to-end encounter data management software, implementation services, and maintenance for the period of October 1, 2017 to September 30, 2022.

Approved unanimously by roll call 10 AYES (, Booth, De La Torre, Gamble, Ghaly, Gonzalez-Delgado, McCarthy, Perez, Ridley-Thomas, Rembis and Uyeda).

Maricich Healthcare Communications Master Service Contract Extension (FIN 117)

Mr. Baackes reported that in 2013, a request for proposal was conducted for advertising and communication services. There were 19 bids, and Maricich was selected. The motion is to approve a contract for the 2017-18 fiscal year. A portion of this contract will come from the current budget. Maricich is part of the team that includes internal staff in Marketing and Communications. An RFP will be conducted next year for services beginning in October, 2018.

Board Chair McCarthy commented that there are outdoor ads visible throughout Los Angeles County. Mr. Baackes noted that the primary objective of the advertising is to promote voluntary enrollment in California Covered and Cal Medi-Connect, and we know that there is some spill over among other Medi-Cal beneficiaries. In the past 12 months L.A. Care has a net gain of 90,000 Medi-Cal members while the other Medi-Cal contracted plan in Los Angeles County, Health Net, has a loss of 6,000 members.

Motion FIN 117.0717 To authorize staff to extend and execute the Master Service Agreement with Maricich Healthcare Communications in the amount of $7,085,000 (total contract amount not to exceed $7,085,000) for the period of September 1, 2017 through September 30, 2018.


Audit Committee

Hector DeLaTorre, Audit Committee Chair, reported that the Audit Committee met on July 20 to discuss the Audit Plan for FY 2016-17. (Minutes are available by contacting Board Services.) · The Board previously delegated authority to the Audit Committee for overseeing the work

of our external independent financial audit firm. · Key audit areas of focus will be 1) Revenue Recognition, 2) Health Care Costs and Claims

Reserves, and 3) Risk related to potential management override of controls.

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ACTION TAKEN

· Some of the audit will focus on 1) risk based audit methodology addressing L.A. Care’s unique business and financial reporting risks, 2) leveraging specialists and technology-powered solutions in audit delivery model.

The Audit Committee will meet at the end of 2017 or early 2018 to review the audit results and report back to the Board.

ADJOURN TO CLOSED SESSION Louise McCarthy

Ellin Davtyan., Associate General Counsel, announced the following items to be discussed in closed session. A report is not expected in open session. There was no public comment on the closed session items. The Board adjourned to closed session at 4:10 p.m.

CONTRACT RATES Pursuant to Welfare and Institutions Code Section 14087.38(m) · Plan Partner Rates · Provider Rates · DHCS Rates

The following item was not discussed. REPORT INVOLVING TRADE SECRET Pursuant to Welfare and Institutions Code Section 14087.38(n) Discussion Concerning New Product Lines Estimated date of public disclosure: July 2019

CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: 5139 Pacific Blvd., Vernon Correct address was on the Supplement Special Meeting Agenda Agency Negotiator: John Baackes, CEO Negotiating Parties: Joshua Shadpour, Vice President Property Management. Elizabeth Pueblo, LLC Under Negotiation: Price and Terms of Payment

CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: Suite 1950, 1201 K Street, Sacramento Agency Negotiator: John Baackes, CEO Negotiating Parties: John McKee, Property Manager, CDA Rotunda Partners, LLC Under Negotiation: Price and Terms of Payment

CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: 1055 W. 7th St., 1st Floor, Los Angeles

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ACTION TAKEN

Agency Negotiator: John Baackes Negotiating Parties: Jamison Services, Inc. Under Negotiation: Price and Terms of Payment

CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Initiation of litigation pursuant to Section 54956.9(d)(4) of the Ralph M. Brown Act: four cases

CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Section 54956.9(d)(2) of the Ralph M. Brown Act: one case

CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Section 54956.9(d)(2) of the Ralph M. Brown Act: one case

Supplemental Special Meeting Agenda Items

The following items from the Supplemental Special Meeting Agenda were also considered during closed session. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: 4803 E. Whittier Boulevard, Los Angeles Agency Negotiator: John Baackes, CEO Negotiating Parties: Joshua Shadpour, Vice President Property Management. Elizabeth Pueblo, LLC Under Negotiation: Price and Terms of Payment

CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Section 54956.9(d)(2) of Ralph M. Brown Act, one case


Louise McCarthy

The Board reconvened in open session at 4:42 p.m. There was no report on action taken during the closed session.

MOTION FOR CONSIDERATION Workforce Solution Contract Amendment (BOG 102)

Mr. Baackes presented a motion to amend the current contract with Workforce Solutions Group, LLC (WSG), for temporary staff vendor management service and temporary labor through end of the current fiscal year in the amount of $500,000.

Motion BOG 102.0717 To authorize staff to amend a contract with Workforce Solutions Group, LLC (WSG) to add additional funds in the amount of $500,000 for temporary staff vendor management services (total contract not to exceed $5,535,391).


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ACTION TAKEN

ADJOURNMENT

The regular and the supplemental special meetings were adjourned at 4:45 p.m.

Respectfully submitted by: Linda Merkens, Manager, Board Services Malou Balones, Board Liaison APPROVED BY: _______________________________________ G. Michael Roybal, MD, Board Secretary Date Signed _______________________________________

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September 7, 2017 TO: Board of Governors FROM: John Baackes, Chief Executive Officer SUBJECT: CEO Report – September 2017 The past fiscal year was monumental for L.A. Care, celebrating its 20th year anniversary and enrolling our two-millionth Medi-Cal member. However, the year also posed huge challenges, with the threat from the federal administration to significantly alter the financing structure of Medicaid, in addition to reversing the gains from the Affordable Care Act. L.A. Care was vigilant and vocal in its opposition to proposals designed to undercut Medicaid and the Exchange and will remain watchful of future developments. Despite these external threats, L.A. Care has made significant progress on its Strategic Vision over the year. Operations have continued to improve, as evidenced by the large reduction in open claims after a significant backlog last year. Membership in L.A. Care Covered and Cal MediConnect grew over the year. Furthermore, L.A. Care’s Community Access Network continues to grow in the Antelope Valley, and efforts are underway to expand in other regions. Our parent brand initiative, “Elevating Healthcare in the City of Angels,” was also launched this June and finally, L.A. Care has made its largest contribution yet to the community through its Community Health Investment Fund.

Product Line Updates

Medi-Cal Temporary Assistance for Needy Families/Medicaid Coverage Expansion A residual high volume of redetermination-related disenrollment continued through the first half of the fiscal year, but gradually normalized as expected. Data analytics showed variances in reinstatement rates by plan and segment, which led us to refine our member outreach. L.A. Care continues to collaborate with Los Angeles County Department of Public Social Services, independent physician associations (IPA)/medical groups, and other stakeholders to improve redetermination outreach and retention. SB 75 (Full Scope Medi-Cal for All Children) membership growth was minimal; new SB 75 membership peaked at the end of 2016 and has significantly declined throughout 2017. While still robust, Medi-Cal enrollment growth is projected to slow in the coming years based on demographic, policy and economic factors, making member retention of paramount importance.

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Seniors and People with Disabilities/Coordinated Care Initiative The Department of Health Care Services transitioned 15,000 Medi-Cal Fee-for-Service, Coordinated Care Initiative (CCI) beneficiaries to managed care in early 2017. The Seniors and People with Disabilities (SPD)/CCI product team conducted an in-depth network, financial and utilization analysis to target CCI beneficiaries for transition to Cal MediConnect (CMC) and to reduce avoidable utilization costs.

As of October 1, 2017, L.A. Care will administer the Health Information Form for all new Medi-Cal members. The Health Risk Assessment has been revised to include 10 Managed Long Term Support questions. Analysis of these assessments provide an in-depth picture of L.A. Care’s directly contracted provider network (MCLA) highest-needs and high-cost populations and reinforce the need for more focused medical management strategies around individuals with comorbidities and other special needs.

The SPD/CCI segment is implementing an initiative with the California Long Term Care Education Center to train caregivers for L.A. Care’s SPD/CCI and CMC members. The training of 900 In-Home Support Services caregivers includes ten modules and nine core competencies and will be provided in English, Spanish, Armenian, Cantonese, Mandarin and Korean.

Plan Partners L.A. Care, Anthem, and Care 1st leadership entered into an agreement to cooperate on the implementation of the Value Initiative for IPA Performance (VIIP) to help health care providers improve their practices. The purpose of the collaboration is to improve quality of care to our members by developing a robust network of high performing IPAs, and developing processes that support efficiencies for IPAs across all three health plans. The goals of the collaboration among the three health plans include; 1) implementation of oversight and monitoring processes to support continued quality improvement in IPA performance, and 2) unified messaging and communication strategies that reduce confusion and duplication in supporting the IPAs. For oversight and monitoring, common Action Plans were created that require each of the IPAs to identify how they will improve performance and report progress quarterly. For unified messaging and communication, L.A. Care and the Plan Partners work together to coordinate provider outreach and develop co-branded education materials. Leaders from L.A. Care, Anthem, and Care 1st held a joint meeting with six of the IPAs that contract with all three health plans, which was well-received by the IPAs.

L.A. Care Covered The pricing strategy to position our Silver metal tier plan as one of the lowest cost Exchange plans in L. A. County paid off. During the 2017 open enrollment period, L.A. Care enrolled more than 18,000 new L.A. Care Covered members, bringing our total Exchange product membership to more than 25,000 members. Over 87% of these members are eligible for premium subsidy. L.A. Care’s marketing and outreach efforts were successful in educating current and prospective members on the varying benefit levels of the Silver plans based on cost-sharing reductions. As a result of these efforts, we now have more than 78% of our total membership enrolled in Silver tier plans, allowing enrolled members to take advantage of lower out-of-pocket costs due to the cost-sharing reductions only available on the Silver plans. The last few months have proved to be challenging with the uncertainty of legislative changes impacting the ACA and the Exchange. To preserve our gains from the ACA, our team remains vigilant of any potential ACA changes and continues to work closely with our partners within the organization, Covered California and regulatory agencies for mitigation planning.

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Cal MediConnect L.A. Care’s Cal MediConnect (CMC) program performed strongly this year in terms of membership growth, operational efficiencies, financial standings, and clinical care. CMC membership grew from under 13,000 at the outset of the fiscal year to nearly 16,000 to date. Recently, the L.A. Care team enrolled 900 members in one month. This membership growth can be attributed to growing familiarity with the plan in the communities, mailings from the State, and L.A. Care’s sales and marketing efforts. L.A. Care’s CMC plan is now the largest in Los Angeles County. However, CMC continues to face high monthly disenrollment rates. Our team is analyzing this issue and engaging in efforts to strengthen CMC plan operations and improve the member experience. CMC has strong financial standing, realizing a net revenue surplus on the product for the first time. This net surplus is a result of membership growth and a controlled medical cost ratio (MCR). In terms of the clinical care provided to CMC members, a Model of Care (MOC) pilot has been implemented. The foundation of the MOC is member-centric care management that is tailored by risk levels and establishes close collaboration with our PPGs. Finally, due to CMC’s demonstrated value to the State, the Governor’s new budget renewed CMC for another two years and removed the program’s “poison pill” which allowed the State to discontinue the program at any time.

Value Initiative for IPA Performance

Over the past fiscal year, each IPA received a VIIP scorecard based on October 2015 through November 2016 data. These reports were sent to all MCLA and Plan Partner IPAs and Los Angeles County Department of Health Services (DHS) providers. This version of the VIIP scorecard will serve as the IPAs’ baseline. After VIIP scorecards were sent, L.A. Care hosted follow-up webinars, meetings, and telephone calls to answer the IPAs’ questions. As described earlier, L.A. Care and the Plan Partners worked together to coordinate provider outreach and develop co-branded education materials for providers. 2017 VIIP scorecards with updated data will be released in October 2017.

L.A. Care also combined the IPA Pay for Performance (P4P) Program with VIIP. Incentives will begin in 2017 based on 2016 data. The new 2017 and 2018 VIIP and P4P Program Description as well as the updated Report Structure were released in April 2017, along with a webinar and IPA specific training sessions.

L.A. Care also introduced an “Action Plan” process. The IPAs agreed to document one improvement project in each of the five assessment domains using the SMART goals format. Next, L.A. Care and Plan Partners will respond to Action Plans and the final results of Action Plan projects will be due in December 2017.

L.A. Care Community Access Network

In March 1, 2017, L.A. Care began auto-assigning Medi-Cal members to the Community Access Network (CAN) in the Antelope Valley. CAN is a provider network directly contracted with L.A. Care. As of August 1, 2017, there are 1,471 members and 117 physicians in the Antelope Valley area CAN. Effective October 1, 2017, we plan to launch a CAN in four more areas of Los Angeles County: East Los Angeles, South Los Angeles, Central Los Angeles and Long Beach.

Family Resource Centers

During this past year, L.A. Care opened a fifth Family Resource Center (FRC) in Palmdale. On June 16 and 17, 2017, L.A. Care hosted two open houses at the Palmdale location. The Palmdale FRC has a social worker onsite to assist members, in addition to the FRC’s other programs such as free health and wellness classes, and a variety of exercise classes. In addition to the five FRCs, located in

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Lynwood, Inglewood, Boyle Heights, Pacoima, and Palmdale, L.A. Care will open a sixth FRC in East Los Angeles in summer 2018. To date, the existing FRCs have seen 16,090 participants generating a total of 80,001 visits.

Workforce Growth

L.A. Care has continued to show work force growth from the last few years. We filled 542 positions through July 2017 with a forecast of 651 by end of the fiscal year. We successfully implemented a standardized interviewing platform to ensure consistency in the hiring process, which will help drive toward better hires and lower turnover. As part of the ongoing efforts to improve employee engagement, an expanded Employee Engagement survey was introduced. L.A. Care deploys an Employee Engagement survey in order to learn more about creating an engaged workforce for its employees at all levels of the organization. Further, we are actively working to identify best practices from other organizations to see what could be incorporated in our own employee engagement efforts.

Several of departments have been restructuring to become more efficient and ensure the right people are in the right places. Finally, beginning on October 1, 2017 and pending Board approval, L.A. Care will extend health plan benefits to our temporary employees to be consistent with L.A. Care’s mission and ensure all our employees have the best possible foundation for growth and engagement through their employment at L.A. Care.

Operational Budget

L.A. Care’s Board of Governors adopted a budget with a $125 million surplus for fiscal year 2016-17. The surplus goal was later updated to $142 million as part of the 8+4 forecast (8 months of actuals and 4 months forecast) presented at the June 2017 Board of Governors meeting. The fiscal year-to-date performance for the first ten months ending July 2017 has resulted in a surplus of $126 million. L.A. Care expects to finish the year between the budgeted surplus of $125 million and the updated forecast of $142 million. We expect to maintain our administrative expenses at or around the budgeted target of $345 million.

Core Business Transformation

This year, the Core Business Transformation (CBT) was launched, which was designed to reengineer aspects of the enterprise that are centered on our members, providers, and government sponsors. CBT includes the retirement of MHC, our legacy core operating system, and the migration to QNXT for all front-end processing such as eligibility verification and enrollment. All membership, eligibility, and assignment information will reside on QNXT by the end of the first quarter of 2018.

Other aspects of CBT include the modernization of processes and technologies in Health Services and the Customer Solution Center, including Appeals and Grievances. The processes identified in Health Services include monitoring and performing for utilization management, care management, and disease management. Additionally, consolidated processes and technologies within Health Services will be developed for health assessments for CMC, SPD, and Medi-Cal members.

Claims Stabilization and Optimization As of this fiscal year, claims for all lines of business (LOBs) were operating on the QNXT platform. This accomplishment, as well as other related initiatives, allowed L.A. Care to minimize reliance on the outdated, paper-intensive legacy system which had limited auto adjudication of claims. As of July 2017, the claims inventory fell below L.A. Care’s claims inventory goal.

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The VOICE The VOICE (Value Our Individual Customers Everyday) program is designed to improve L.A. Care’s customer service for members and providers. The VOICE program was initiated during the first quarter of fiscal year 2017, and two projects have been successfully operationalized -- implementing and configuring the QNXT Call Tracking module and a Robohelp tool for call center agents. Two additional pilot projects will be operationalized by the end of fiscal year 2017, which include a barcoding project for return to sender ID Cards and a Work at Home pilot for the call center to enable efficient use of skilled agents during non-core business hours. Future projects include improving functions within the sales broker, member and provider portals.

Health Information Technology (HIT)

HITEC-LA continues to provide meaningful use support to 2,165 Medi-Cal providers under the California Technical Assistance Program contract, including providers with DHS. Over $2.5 million of $10.8 million has been earned by providers through meaningful use milestone achievements. A two-year no-cost extension is expected through 2020.

L.A. Care’s grant-funded eManagement pilot has been implemented with 145 providers, reaching 154,000 members. This pilot connects private physicians with direct, electronic communication to the Los Angeles County Department of Mental Health. To date, over 7,700 depression, anxiety, and substance abuse screenings and 75 eManagement consultations have been conducted for L.A. Care members.

The eConnect program improves coordination of hospital census data between plan providers and hospitals, and is now live at 31 of 55 hospital sites representing 11 organizations. The overall goal is 20 hospital organizations representing at least 70% of ER visits and admissions. Plans for IPA rollout are in process.

Special Initiatives

Whole Person Care The vision of Whole Person Care Los Angeles (WPC-LA) is to ensure that the most vulnerable Medi-Cal beneficiaries in Los Angeles County have the resources and support they need to thrive. WPC-LA aims to provide wraparound supportive services to 50,000 Medi-Cal beneficiaries and house 9,000 in L.A. County by the end of 2021. L.A. Care is a principal partner in WPC-LA and has been an active participant in L.A. County’s planning and implementation activities. Key areas of support have included program design and planning, engagement of Plan Partners, physical health providers, and community-based organizations, WPC-LA staff training support, and administration of a Blue Shield of California Foundation grant to support WPC-LA. L.A. Care and WPC-LA are actively negotiating a data sharing agreement in order to coordinate health plan services for members and provide health outcome and utilization data to WPC-LA.

Community Health Investment Fund This fiscal year, L.A. Care’s Board of Governors allocated $10 million to L.A. Care’s Community Health Investment Fund (CHIF). To support L.A. Care’s strategic vision, the Community Benefits department developed three overarching priorities for CHIF grants:

· supporting the safety net clinics infrastructure to provide high quality and coordinated services and helping clinics thrive in a managed care environment;

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· expanding access to high-barrier services for low-income and vulnerable populations, and · improving community health for underserved populations by addressing the social conditions

that lead to poor health outcomes. A total of 30 projects have been funded to date, with grants totaling $7,561,000. This includes ad hoc and Initiative grants such as the Oral Health Initiative IX, Robert E. Tranquada M.D. Safety Net Infrastructure Initiative VIII, and the newly created Licensed Practitioner of the Healing Arts Initiative to address the opioid epidemic. Ad hoc projects include immigration education and assistance, financial and health literacy for women, community-based violence prevention, food security and more. CHIF also supports homeless housing efforts, providing $4 million this year to Brilliant Corners, a non-profit supportive housing agency, discussed in the following section. Additionally, a number of grants are in the pipeline for approval and all allocated CHIF funds are expected to be expended.

Homeless Initiative L.A. Care continues to focus resources and attention on addressing the complex needs of our members experiencing homelessness, particularly given the 23% countywide annual increase reported by the Los Angeles Homeless Services Authority Homeless Count in 2017. The largest initiative is L.A. Care’s $20 million planned contribution ($4 million per year for five years, contingent on continued Board approval) to the L.A. County Flexible Housing Subsidy Pool through a grant to Brilliant Corners. The grant will fund permanent supportive housing for 300 new high-risk homeless individuals over five years. L.A. Care’s investment in housing allows L.A. County to redirect funds toward other social service needs for these individuals as part of WPC-LA and L.A. County’s Housing for Health program (HfH), essentially doubling the impact of L.A. Care’s investment. L.A. Care has also participated in the County CEO Homeless Initiative planning process, increased staff to support homeless members, provided managed care education to homeless service providers, provided grant funding for partnerships between health and homeless service providers, and encouraged staff participation in the annual Homeless Count and other volunteer opportunities.

Brand Initiative The multi-year parent brand initiative successfully launched this year. Market and political forces as well as key organizational milestones (20th anniversary and 2 millionth Medi-Cal member) created an optimal environment to increase L.A. Care’s visibility as a thought leader locally, regionally and nationally. The current campaign includes 1) an internal launch for employees; 2) a public-facing advertising campaign that includes billboards, transit shelters, radio, TV, and digital advertising with the goal of engaging audiences that may not know L.A. Care; and 3) a targeted public relations effort to leverage L.A. Care’s expertise in the Medicaid area and advocacy for ensuring that this perspective is part of the dialogue happening in health care.

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L.A. Care Legislative Matrix Updated as of August 22, 2017

The following is a list of all legislation currently tracked by Government Affairs that has been introduced during the 2017-2018 Legislative Session and is on interest to L.A. Care. If there are any questions, please contact Cherie Compartore, Senior Director, Government Affairs at [email protected] or extension 5481. Please note, we include bills that perhaps may not have a direct impact, but do have the possibility to be amended in the future to do so. Some of the bills included are spot bills, legislative place holders, in code sections that could have a policy impact on LA Care.

AB 15 AUTHOR Maienschein (R)

TITLE Denti-Cal Program: Reimbursement Rates CODE SECTION An act to add Section 14149.9 to the Welfare and Institutions Code, relating to Medi-Cal. Medi-Cal, and

making an appropriation therefor. SUMMARY Requires the State Department of Health Care Services to double Denti-Cal provider reimbursement

rates for the 15 most common prevention, treatment, and oral evaluation services based on certain average rates. Makes an appropriation from the Healthcare Treatment Fund. To read the current text of

the bill click here. POSITION SPONSOR Author

AB 29 AUTHOR Nazarian (D)

TITLE Pharmacy Benefit Managers CODE SECTION An act to add Division 121 (commencing with Section 152000) to Article 11.10 (commencing with

Section 1399.880) to Chapter 2.2 of Division 2 of the Health and Safety Code, relating to pharmacy benefit managers.

SUMMARY Requires a pharmacy benefit manager to disclose certain information to a purchaser, including the aggregate amount of rebates, retrospective utilization discounts, and other income that the pharmacy benefit manager would receive from a pharmaceutical manufacturer or labeler in connection with drug benefits related to the purchaser. Excuses a pharmacy benefit manager from making these disclosures unless the purchaser agrees to keep any proprietary information disclosed confidential. To read the

current text of the bill click here. POSITION SPONSOR

AB 40 AUTHOR Santiago (D)

TITLE CURES Database: Health Information System CODE SECTION An act to amend Section 11165.1 of the Health and Safety Code, relating to controlled substances, and

declaring the urgency thereof, to take effect immediately. SUMMARY Requires the Department of Justice to make the electronic history of controlled substances dispensed to

an individual under a health care practitioner's care, based on data contained in the Controlled Substance Utilization Review and Evaluation System, available to the practitioner, or a pharmacist, through either an online Internet Web portal or an authorized health information technology system. Authorizes an entity that operates a health information technology system to integrate with the CURES

database. To read the current text of the bill click here. POSITION SPONSOR CA Chapter of the American College of Emergency Physicians

AB 46 AUTHOR Cooper (D)

TITLE Employers: Wage Discrimination CODE SECTION An act to amend Section 1197.5 of the Labor Code, relating to employment. SUMMARY Amends an existing law which authorizes and employee paid lesser wages in violation of certain

prohibitions to file a complaint and to commence a civil action for the wages. Defines employer to

include public and private employers. To read the current text of the bill click here. POSITION SPONSOR

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http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A15&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=c288824f469c9db65b34bff29e88b307&mode=current_text

http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A29&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=f6bcef0fba6b6e17ebb49858138223a5&mode=current_text

http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A40&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=b984b9480c897f77805eccfee64bebff&mode=current_text

http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A46&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=f528528c7a626e5fda113020d3baf1de&mode=current_text

AB 74 AUTHOR Chiu (D)

TITLE Housing CODE SECTION An act to add Part 14.2 (commencing with Section 53590) to Division 31 of the Health and Safety Code,

relating to housing, and making an appropriation therefor, to take effect immediately, bill related to the budget.

SUMMARY Requires the Department of Housing and Community Development to establish a Housing for a Healthy California Program, and to award grants to certain grant applicants. Provides for interim and long-term rental assistance. Authorizes the department to enter into contracts on a bid or negotiated basis, exempt from specified small business procurement, personal service, and public contracting provisions. To read

the current text of the bill click here. POSITION LA County - Support SPONSOR Corporation for Supportive Housing and Housing California

AB 97 AUTHOR Ting (D)

TITLE Budget Act of 2017 CODE SECTION An act making appropriations for the support of the government of the State of California and for several

public purposes in accordance with the provisions of Section 12 of Article IV of the Constitution of the State of California, relating to the state budget, to take effect immediately, budget bill. [Approved by Governor June 27, 2017. Filed with Secretary of State June 27, 2017.]

SUMMARY Makes appropriations for the support of state government for the 2017-18 fiscal year. To read the


AB 113 AUTHOR Budget Cmt

TITLE Health CODE SECTION An act to add and repeal Section 15438.11 of the Government Code, to amend Sections 1276.5, 1276.65,

1341.45, 1348.9, 100235, 101315, 101315.2, 101317, 101317.2, 104151, 120955, 120956, 120970, and 121025 of, to amend the heading of Article 6 (commencing with Section 101315) of Chapter 3 of Part 3 of Division 101 of, to add Chapter 6.1 (commencing with Section 120972) to Part 4 of Division 105 of, and to add and repeal Chapter 1.6 (commencing with Section 103870) of Part 2 of Division 102 of, the Health and Safety Code, to amend Sections 14005.30, 14105.45, 14105.456, 14124.70, 14124.71, 14124.72, 14124.73, 14124.74, 14124.785, 14124.82, 14124.83, 14126.022, 14131.10, 14132.99, 14132.100, 14132.276, 14132.277, 14148.8, 14154, 14166.61, 14182.16, 14182.17, 14182.18, 14186, 14186.1, 14186.2, 14186.3, 14186.4, 14301.2, 15893, and 15894 of, to amend and repeal Sections 12302.6, 14132.24, 14183.6, 14186.35, 14301.1, and 14593 of, to add Sections 14043.1, 14105.29, 14124.13, and 14132.991 to, to add Article 4.11 (commencing with Section 14149.9) to Chapter 7 of Part 3 of Division 9 of, to add and repeal Section 14042.1 of, to repeal Sections 12330, 14124.80, 14124.85, 14124.88, 14148.65, 14148.67, 14186.11, 14186.36, 15893.5, and 15895.5 of, to repeal and amend Section 14132.275 of, and to repeal and add Sections 14102, 14124.81, and 14124.86 of, the Welfare and Institutions Code, to repeal Section 166 of Chapter 717 of the Statutes of 2010, and to amend and repeal Section 34 of Chapter 37 of the Statutes of 2013, relating to health, and making an appropriation therefor, to take effect immediately, bill related to the budget.

SUMMARY Relates to financing of and grants for health facilities. Modifies eligibility for health facility grants. Requires administrative penalties for certain violations at skilled nursing facilities. Establishes various health education and research programs, including nutrition programs and community-living support

benefits for Medi-Cal recipients. To read the current text of the bill click here. POSITION SPONSOR

AB 148 AUTHOR Mathis (R)

TITLE California Physician Corps Program: Practice Setting CODE SECTION An act to amend Section 128552 of Sections 128552 and 128553 of, and to add and repeal Section

128557.5 of, the Health and Safety Code, relating to physicians and surgeons, and making an appropriation therefor.

SUMMARY Amends existing law which establishes the Physician Corps Loan Payment program which provides financial incentives to a physician and surgeon who practices in a medically underserved area. Makes changes to the definition of practice setting. Requires the preparation of a study to determine the effect that this revised definition has on funding for loan repayment granted under the program during

specified years. To read the current text of the bill click here. POSITION SPONSOR

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http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A74&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=779da08894e84411c9fd5ab5990b286b&mode=current_text

http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A97&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=b3bfb520b3dda118e22279a5d86c3fdd&mode=current_text

http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A113&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=cc5c5adc21702d87395cf2f2999df581&mode=current_text

http://custom.statenet.com/public/resources.cgi?id=ID:bill:CA2017000A148&cuiq=42e0ef52-34dd-59ad-ac04-88401563491a&client_md=cf05307c693fc09676eb4efda9058d55&mode=current_text

AB 156 AUTHOR Wood (D)

TITLE Individual Market: Single Risk Pool: Index Rate CODE SECTION An act to amend Section 10965.3 of the Insurance Code, relating to health care coverage. SUMMARY Relates to the federal Patient Protection and Affordable Care Act and the California Health Benefit

Exchange. Deletes a reference to the federal transitional reinsurance program. To read the current text

of the bill click here. POSITION SPONSOR


TITLE Medi-Cal CODE SECTION An act to amend Sections 14094.18 and 14102.5 of the Welfare and Institutions Code, relating to Medi-

Cal. SUMMARY Amends an existing law which provides for the Medi-Cal program and which requires certain reports for

the purpose of informing the California Health and Human Services Agency, the California Health Benefit Exchange, the Legislature, and the public about the enrollment process for insurance affordability programs. Requires ongoing reports to be issued on at least a biannual basis and to be made public

within a specified period of time. To read the current text of the bill click here. POSITION SPONSOR


TITLE Medi-Cal: Managed Care Plans CODE SECTION An act to amend Section 10951 1367.035 of the Health and Safety Code, and to amend Sections 10950

and 10951 of, to add Section 10959.5 to, and to add Article 6.3 (commencing with Section 14197) to Chapter 7 of Part 3 of Division 9 of, the Welfare and Institutions Code, relating to Medi-Cal, and making an appropriation therefor.

SUMMARY Implements provisions regarding federal regulations governing Medicaid managed care plans. Authorizes a person to request a hearing involving a Medi-Cal managed care plan within a specified number of days after receiving a specified notice. Requires the Department of Health Care Services to develop standards for specified provider types to ensure covered services are accessible to enrollees of Medi-Cal managed care plans. Establishes rate requirements for Medi-Cal managed care plans. To read

the current text of the bill click here. POSITION SPONSOR

AB 224 AUTHOR Thurmond (D)

TITLE Dentistry: Anesthesia and Sedation CODE SECTION An act to amend Sections 1646, 1646.1, 1646.2, 1646.3, 1646.4, 1646.5, 1646.8, 1646.9, 1647, 1647.1,

1647.2, 1647.3, 1647.5, 1647.6, 1647.7, 1647.11, 1647.12, 1647.19, 1682, 1724, and 1750.5 of, to amend the heading of Article 2.7 (commencing with Section 1646) and Article 2.8 (commencing with Section 1647) of Chapter 4 of Division 2 of, to add Section 1616.1 to, and to add Article 2.87 (commencing with Section 1647.30) to Chapter 4 of Division 2 of, the Business and Professions Code, relating to dentistry.

SUMMARY Amends the Dental Practices Act. Redefines anesthesia. Extends certain licensing criteria to dentists administering deep sedation. Requires dentists to have a pediatric endorsement and to have completed specified training in order to administer certain drugs to patients under a certain age. Makes other changes concerning sedation. Requires the Dental Board to contract with a nonprofit research

organization for specified purposes. To read the current text of the bill click here. POSITION SPONSOR

AB 237 AUTHOR Gonzalez (D)

TITLE In-Home Supportive Services CODE SECTION An act to amend Section 12300.4 of the Welfare and Institutions Code, relating to public social services. SUMMARY Specifies the definition of a payroll period for providers of in-home supportive services and waiver

personal care services under the In-Home Supportive Services program. To read the current text of the

bill click here. POSITION SPONSOR

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TITLE Local Educational Agency Behavioral Health Integration CODE SECTION An act to add Article 2.986 (commencing with Section 14094.25) to Chapter 7 of Part 3 of Division 9 of

the Welfare and Institutions Code, relating to health care services, and making an appropriation therefor. SUMMARY Requires the establishment of the Local Educational Agency Behavioral Health Integration Pilot Program

for the purpose of improving the behavioral health outcomes of certain students by improving the delivery of direct behavioral health services. Requires an LEA receiving funding through the program to use funds in a specified manner. Deceases the appropriation for the specified fiscal year. To read the



TITLE Prescription Drugs: Prohibition on Price Discount CODE SECTION An act to add Division 114 (commencing with Section 132000) to the Health and Safety Code, relating to

public health. SUMMARY Prohibits a person who manufactures a prescription drug from offering any discount, repayment,

product voucher, or other reduction in an individual's out-of-pocket expenses, including a copayment, coinsurance, or deductible, for any prescription drug if a lower cost generic drug is covered under the

individual's health plan on a lower cost-sharing tier. To read the current text of the bill click here. POSITION CAHP - Support SPONSOR

AB 286 AUTHOR Gipson (D)

TITLE Medi-Cal: Beneficiary Maintenance: Home Upkeep: Funds CODE SECTION An act to add Section 14005.125 to the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Establishes eligibility and other requirements for providing a home upkeep allowance or a transitional

needs fund to Medi-Cal patients residing in a long-term care facility. Prescribes general requirements as well as specific requirements both for facility residents who intend to leave a facility and return to an existing home, who would receive the home upkeep allowance, and for residents who do not have a home but intend to leave the facility and establish a new home. To read the current text of the bill click

here. POSITION SPONSOR Disability Rights California


TITLE Pharmacy Benefit Management CODE SECTION An act to add Division 121 (commencing with Section 152000) to the Health and Safety Code, relating to

pharmacy benefits. SUMMARY Requires pharmacy benefit managers to be registered with the Department of Managed Health Care.

Requires the department to develop applications for the registration, and specifies certain information to be provided in those applications. Requires a pharmacy benefit manager to exercise a duty of good faith and fair dealing in the performance of its contractual duties to a purchaser. Requires a pharmacy benefit manager to notify a pharmacy network provider of certain contract changes. To read the current

text of the bill click here. POSITION CAHP - Oppose SPONSOR

AB 340 AUTHOR Arambula (D)

TITLE Early and Periodic Screening, Diagnosis, and Treatment CODE SECTION An act to add Section 14132.19 to the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Requires that screening services under a specified Early and Periodic Screening, Diagnosis, and

Treatment (EPSDT) Program include screening for trauma. Requires the adoption of tools and protocols

for screening children for trauma. To read the current text of the bill click here. POSITION LHPC - Oppose SPONSOR Californians for Safety and Justice

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TITLE Medi-Cal: Asthma Preventive Services CODE SECTION An act to add Article 1.6 (commencing with Section 14047) to Chapter 7 of Part 3 of Division 9 to of

the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Requires the Department of Health Care Services to seek an amendment to its Medicaid state plan to

include qualified asthma preventive services providers as providers of asthma preventive services for individuals with poorly controlled asthma under the Medi-Cal program. Provides for the review and

approval of certain required training curricula. To read the current text of the bill click here. POSITION SPONSOR California Pan Ethnic Health Network, Children Now, Regional Asthma Management and Prevention

AB 401 AUTHOR Aguiar-Curry (D)

TITLE Pharmacy: Remote Dispensing Site Pharmacy: Telepharmacy CODE SECTION An act to amend Section 4059.5 of, to add Sections 4044.3, 4044.6, and 4044.7 to, and to add Article 8

(commencing with Section 4130) to Chapter 9 of Division 2 of, the Business and Professions Code, relating to pharmacy.

SUMMARY Requires the State Board of Pharmacy to issue certain remote dispensing site pharmacy licenses. Requires such pharmacies to be located in a medically underserved area unless approved by the Board. Authorizes a pharmacy located in the State to serve as a supervising pharmacy to provide telepharmacy services for up to a certain number of remote dispensing sites. Authorizes a licensed remote dispensing site pharmacy to order dangerous drugs and devices and controlled substances. To read the current text

of the bill click here. POSITION SPONSOR Author

AB 428 AUTHOR Ridley-Thomas S (D)

TITLE Local Government: the Ralph M. Brown Act CODE SECTION An act to amend Section 54953 of the Government Code, relating to local government. [Approved by

Governor July 31, 2017. Filed with Secretary of State July 31, 2017.] SUMMARY Extends indefinitely, the operation of provisions relating to the establishment of a quorum for

teleconferenced meetings of a health authority, under the Ralph M. Brown Act. To read the current text

of the bill click here. POSITION LA Care Health Plan - Support; LHPC - Support SPONSOR LA Care


TITLE Personal Care Services CODE SECTION An act to amend Sections 12301.6 and 14132.97 of the Welfare and Institutions Code, relating to

personal care services. SUMMARY Authorizes a county board of supervisors to contract with a nonprofit consortium or to establish a public

authority to provide waiver personal care services. Authorizes certain entities to meet and confer in good faith regarding wages, benefits, and other terms and conditions of employment with representatives of recognized employee organizations for an individual who is employed by a recipient

of waiver personal care services. To read the current text of the bill click here. POSITION SPONSOR Personal Assistance Services Council

AB 447 AUTHOR Gray (D)

TITLE Medi-Cal: Covered Benefits: Continuous Glucose Monitors CODE SECTION An act to amend Section 14132 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Adds glucose monitors and related supplies required for use with those monitors to the schedule of

benefits under the Medi-Cal program for the treatment of diabetes mellitus type 1 and diabetes mellitus type 2 when medically necessary, subject to utilization controls. Authorizes the Department of Health Care Services to require the manufacturer of a continuous glucose monitor to enter into a rebate

agreement with the department. To read the current text of the bill click here. POSITION SPONSOR

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AB 470 AUTHOR Arambula (D)

TITLE Medi-Cal: Specialty Mental Health Services CODE SECTION An act to add Section 14719 to the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Requires the Department of Health Care Services to create a performance outcome dashboard for

specialty mental health services provided to eligible Medi-Cal beneficiaries. Requires the Department to convene a stakeholder advisory committee comprised of special representatives to help create a plan for such dashboard. Requires the Department to post updated reports on its Internet Web site. To read the

current text of the bill click here. POSITION SPONSOR California Pan Ethnic Health Network

AB 479 AUTHOR Gonzalez (D)

TITLE Sales and Use Taxes: Exemption CODE SECTION An act to amend Section 6369 of 32220 of, and to add Sections 6369.8 and 32221.5 to, the Revenue

and Taxation Code, relating to taxation. taxation, to take effect immediately, tax levy. SUMMARY Exempts from sales and use taxes the gross receipts from the sale of wearable incontinence supplies.

Imposes an additional surtax, and a related floor stock tax, on distilled spirits at specified rates. To read



TITLE California Mental Health Planning Council: Name Change CODE SECTION An act to amend Section 14132.47 of the Welfare and Institutions Code, relating to Medi-Cal. Sections

4033, 5400, 5514, 5604.2, 5610, 5614.5, 5664, 5701.1, 5750, and 14682.1 of the Welfare and Institutions Code, relating to mental health.

SUMMARY Relates to the California Mental Health Planning Council. Renames the council as the California Behavioral Health Planning Council, including for purposes of specified acts, the federal Substance Abuse and Mental Health Services Administration (SAMHSA), and mental health managed care. To read the


AB 488 AUTHOR Kiley (R)

TITLE Mental Health Services Act CODE SECTION An act to amend Sections 5813.5, 5821, 5840, 5840.2, 5845, 5846, 5847, 5848, 5878.3, 5890, 5891, 5892,

5897, 5898, and 5899 of, to amend the heading of Part 3.7 (commencing with Section 5845) of Division 5 of, and to add Section 5841 to, the Welfare and Institutions Code, relating to mental health services.

SUMMARY Establishes the Mental Health Services Fund Transparency and Accountability Office within the Health and Human Services Agency. Transfers various functions of the Department of Health Care Services to

the office. To read the current text of the bill click here. POSITION SPONSOR


TITLE Mental Health: Community Care Facilities CODE SECTION An act to amend Section 1502 of, and to add Sections 1562.02 and 1562.03 to, the Health and Safety

Code, and to amend Sections 5848.5 and 11462.01 of, and to add Section 11462.011 to, the Welfare and Institutions Code, relating to mental health.

SUMMARY Amends the Community Care Facilities Act, which provides for the licensing and regulation of community care facilities and includes within the definition of community care facility a short-term residential therapeutic program. Authorizes the licensing of a short-term residential therapeutic program operating as a children's crisis residential center, and requires regulation of those programs. Provides guidance to counties for the provision of children's crisis residential services, including

funding. To read the current text of the bill click here. POSITION SPONSOR California Alliance of Child and Family Services

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AB 508 AUTHOR Santiago (D)

TITLE Health Care Practitioners: Student Loans CODE SECTION An act to repeal Section 685 of the Business and Professions Code, relating to healing arts. SUMMARY Repeals provisions relative to student loans for health care practitioners under the Department of Health

and Human Services education loan and when practitioners are in default of those loans. To read the

current text of the bill click here. POSITION SPONSOR Author

AB 532 AUTHOR Waldron (R)

TITLE Drug Courts: Drug and Alcohol Assistance CODE SECTION An act to add and repeal Section 11875 of the Health and Safety Code, relating to drug and alcohol

programs. SUMMARY Clarifies that a court may collaborate with outside organizations on a program to offer mental health and

addiction treatment services to women who are charged in a complaint that consists only of misdemeanor offenses or who are on probation for one or more misdemeanor offenses. Excludes from these provisions a woman who is charged with a felony or who is under supervision for a felony

conviction. To read the current text of the bill click here. POSITION SPONSOR California Life Sciences Association


TITLE Emergency Medical Air Transportation CODE SECTION An act to amend Section 76000.10 of the Government Code, and to amend Section 10752 of the Welfare

and Institutions Code, relating to emergency medical services. SUMMARY Extends the dates of the Emergency Medical Air Transportation Act so that the assessment of the

penalties will terminate January 1, 2028, and any moneys unexpended and unencumbered in the Emergency Medical Air Transportation Act Fund on June 30, 2029, will transfer to the Federal Fund. Extends the operation of the Emergency Medical Air Transportation Act. To read the current text of the



TITLE State Government: Pharmaceuticals: Procurement CODE SECTION An act to repeal and add Chapter 12 (commencing with Section 14977) of Part 5.5 of Division 3 of Title 2

of the Government Code, relating to state government. SUMMARY Requires the Department of General Services to convene the state Pharmaceutical Collaborative to

address the rising cost of pharmaceuticals, coordinate best value clinical treatment protocols, leverage governmental efficiencies to achieve best value procurement, and negotiate with manufacturers for discounts on pharmaceuticals. Requires the participation of various agencies in the collaborative. To

read the current text of the bill click here. POSITION SPONSOR


TITLE Health Care Service Plans: Health Insurers CODE SECTION An act to add Article 10.2 (commencing with Section 1399.65) to Chapter 2.2 of Division 2 of the Health

and Safety Code, and to add Sections 10133.61 and 10133.62 to the Insurance Code, relating to health care. care service plans.

SUMMARY Requires specified entities that intend to merge with or acquire a health care service plan doing business in this state to give notice to the Director of the Department of Managed Health Care. Requires an entity to apply for licensure as a health care service plan. Requires the Department, prior to approval, to hold a public hearing on the proposal. Requires the department to prepare an independent health care impact statement if determined that a material amount of the plan's assets are subject to merger. To read the

current text of the bill click here. POSITION CAHP - Oppose SPONSOR Health Access

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AB 602 AUTHOR Bonta (D)

TITLE Pharmacy: Nonprescription Diabetes Test Devices CODE SECTION An act to amend Sections 4057, 4081, and 4301 of, and to add Sections 4025.2, 4084.1, and 4160.5 to, the

Business and Professions Code, relating to pharmacy, and declaring the urgency thereof, to take effect immediately. [Approved by Governor July 31, 2017. Filed with Secretary of State July 31, 2017.]

SUMMARY Specifies that it is unprofessional conduct for a licensee of the State Board of Pharmacy to acquire a nonprescription diabetes test device from a person that was not the manufacturer or an authorized distributor, or to submit to specified persons a claim for reimbursement for such a device not purchased directly. Requires pharmacies that dispense these devices to retain records of acquisition and sale. Requires a manufacturer of these devices to publish the names of distributors on its Web site. To read



TITLE Pediatric Home Health Care CODE SECTION An act to add and repeal Section 14132.78 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Requires the State Department of Public Health to establish an incentive-based, supplemental payment

program which would apply to licensed home health agencies that treat children who are receiving continuous nursing care or private nursing services through the Medi-Cal program. To read the current

text of the bill click here. POSITION SPONSOR


TITLE Medi-Cal: Reimbursement Rates CODE SECTION An act to amend Section 14105.22 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Changes the frequency for submitting specified reports to every 3 years under the Medi-cal program.

Requires the data in those reports to be based on the previous calendar year. Provide that the reimbursement rates developed pursuant to these provisions shall become effective on the specified

date. To read the current text of the bill click here. POSITION SPONSOR California Clinical Laboratory Association


TITLE In-Home Supportive Services CODE SECTION An act to amend Section 6531.5 of, and to add Section 110003.5 to, the Government Code, and to amend

Sections 10101.1, 12300.5, 12300.6, 12300.7, 12302.6, 12306, 12306.1, 12306.15, 12330, and 14186.35 of the Welfare and Institutions Code, relating to Medi-Cal, public social services, and making an appropriation therefor.

SUMMARY Provides that a provision conditioning implementation of the Coordinated Care Initiative on an estimation of cost savings by the Director Finance does not apply to the requirement that In-Home Supportive Services be a covered service available through managed care health plans, and continues IHSS as a covered service available through Medi-Cal managed care health plans. To read the current



TITLE Mental Health Services Act: Housing Assistance CODE SECTION An act to amend Section 5892 of the Welfare and Institutions Code, relating to mental health. SUMMARY Clarifies that counties may spend Mental Health Services Act moneys on housing assistance for people in

the target population under the Act. To read the current text of the bill click here. POSITION LA Care Health Plan - Support; LA County - Support SPONSOR County Behavioral Health Directors and County of Los Angeles

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AB 753 AUTHOR Caballero (D)

TITLE Denti-Cal: Improved Access CODE SECTION An act to add Article 5.8 (commencing with Section 14187) to Chapter 7 of Part 3 of Division 9 of the

Welfare and Institutions Code, relating to Medi-Cal, and making an appropriation therefor. SUMMARY Requires the department to implement specified initiatives designed to significantly improve access to

dental services for adults and children in the Medi-Cal program, including a Dental Transformation Initiative for adults consistent with the existing goals and programmatic infrastructure and teledentistry. Requires an increase reimbursement rates of qualified providers for certain pediatric diagnostic and

restorative services. To read the current text of the bill click here. POSITION SPONSOR

AB 834 AUTHOR O'Donnell (D)

TITLE School-Based Health Programs CODE SECTION An act to add Article 14 (commencing with Section 32445) to Chapter 3 of Part 19 of Division 1 of Title 1

of the Education Code, and to amend Section 14115.8 of the Welfare and Institutions Code, relating to school health.

SUMMARY Requires the State Department of Education to establish an Office of School-Based Health Programs for the purpose of administering health-related programs and advising on issues related to the delivery of school-based Medi-Cal services in the state. Requires the State Department of Education to make available to the office any information on other school-based dental, health, and mental health programs.

Increases a certain funding limit. To read the current text of the bill click here. POSITION SPONSOR California School Based Health Alliance

AB 839 AUTHOR Garcia E (D)

TITLE Medi-Cal: Targeted Case Management CODE SECTION An act to amend Section 14132.44 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Expands the definition of a local governmental agency for purposes of the Targeted Case Management

Program to include a Native American Indian organization funded by Public Law 93-638 that manages a statewide Medi-Cal administrative activities program. Authorizes the Department of Health Care Services to contract with no more than one local governmental agency that is a California Native American Indian Organization funded by Public Law that manages a state Medi-Cal administrative

activities program. To read the current text of the bill click here. POSITION SPONSOR


TITLE Cannabidiol CODE SECTION An act to add Section 11150.2 to the Health and Safety Code, relating to controlled substances, and

declaring the urgency thereof, to take effect immediately. SUMMARY Provides if one of specified changes in federal law regarding the controlled substance cannabidiol

occurs, would provide that a physician who prescribes and a pharmacist who dispenses a product composed of cannabidiol, in accordance with federal law, is in compliance with state law. Provides that the prescription, furnishing, dispensing, transfer, possession, or use of that product in accordance with federal law is for a legitimate medical purpose and is authorized pursuant to state law. To read the


AB 904 AUTHOR Gallagher (R)

TITLE Prescription Drugs CODE SECTION An act relating to prescription drugs. SUMMARY Declares the intent of the Legislature to enact legislation that would address high prescription drug

costs. To read the current text of the bill click here. POSITION SPONSOR

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TITLE Health Care Coverage: Pervasive Developmental Disorder CODE SECTION An act to amend Section 1374.73 of the Health and Safety Code, and to amend Section 10144.51 of the

Insurance Code, and to amend Section 14132.56 of the Welfare and Institutions Code, relating to health care coverage.

SUMMARY Requires a qualified autism service professional or a qualified autism service paraprofessional to be supervised by a qualified autism service provider for purposes of providing behavioral health treatment. Authorizes a qualified autism service professional to supervise a qualified autism service paraprofessional. Specifies that the behavioral health treatment may include clinical case management

and case supervision. To read the current text of the bill click here. POSITION CAHP - Oppose SPONSOR Center for Autism and Related Disorders (CARD), California Association for Behavior Analysis (CalABA)

AB 1090 AUTHOR Cunningham (R)

TITLE Cannabis Use: Location Restrictions CODE SECTION An act to amend Section 11362.3 of the Health and Safety Code, relating to marijuana. cannabis. SUMMARY Prohibits the possession, smoking, or ingesting of cannabis or cannabis products in or upon the grounds

of a school, day care center, or youth center, regardless of whether children are present. To read the


AB 1092 AUTHOR Cooley (D)

TITLE Medi-Cal: Eyeglasses CODE SECTION An act to add Section 14132.07 to the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Restores coverage under the Medi-Cal program of one pair of eyeglasses provided every 2 years to an

individual 21 years of age or older. To read the current text of the bill click here. POSITION LA Care Health Plan - Support SPONSOR VSP Vision Care


TITLE Oncology Clinical Pathway Act CODE SECTION An act to add Section 1372.5 to the Health and Safety Code, and to add Section 10123.25 to the Insurance

Code, relating to health care coverage. SUMMARY Enacts the Oncology Clinical Pathway Act to require a health care service plan or health insurer that

develops and implements a clinical pathway to comply with certain requirements for cancer treatment.

To read the current text of the bill click here. POSITION CAHP - Oppose SPONSOR

AB 1110 AUTHOR Burke (D)

TITLE Pupil Health: Eye and Vision Examinations CODE SECTION An act to amend Section 49455 of the Education Code, relating to pupil health. SUMMARY Requires, in a pupil's kindergarten year or upon first enrollment or entry in elementary school including

a charter school, the pupil's vision to be appraised in accordance with certain provisions only if the pupil's parent or guardian fails to provide the results of an eye and vision examination conducted by a physician, optometrist, or ophthalmologist in accordance with specified provisions, unless a certain

waiver is submitted. To read the current text of the bill click here. POSITION CAHP - Oppose SPONSOR California State Board of Optometry

AB 1177 AUTHOR Gray (D)

TITLE Health Care Coverage CODE SECTION An act to amend Section 25001 of the Welfare and Institutions Code, relating to health care coverage. SUMMARY Makes technical, nonsubstantive changes to the existing law which states the intent of the Legislature to

create a process by which the options for achieving universal health care coverage can be thoroughly

examined. To read the current text of the bill click here. POSITION SPONSOR

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TITLE Health Professions Development: Load Repayment CODE SECTION An act to amend amend, repeal, and add Sections 2987.2, 4984.75, and 4996.65 of, and to add Section

4999.121 to, the Business and Professions Code, and to amend amend, repeal, and add Section 128454 of the Health and Safety Code, relating to health professions development, and declaring the urgency thereof, to take effect immediately.

SUMMARY Adds licensed professional clinical counselors and interns to those licensed mental health service providers eligible for grants to reimburse educational loans. Requires the Board of Psychology to collect an additional fee at the time of renewal and directs the deposit of that fee into the Mental Health

Practitioner Education Fund. To read the current text of the bill click here. POSITION SPONSOR California Association of Licensed Professional Clinical Counselors

AB 1240 AUTHOR Fong (R)

TITLE Health Care Coverage: Essential Health Benefits CODE SECTION An act to amend Section 1367.005 of the Health and Safety Code, relating to health care coverage. SUMMARY Relates to the federal Patient Protection and Affordable Care Act, which provides for the California

Health Benefit Exchange, to make a technical change to a provision requiring an individual or small group health care service plan contract to cover certain essential health benefits. To read the current


AB 1250 AUTHOR Jones-Sawyer (D)

TITLE Counties: Personal Services Contracts CODE SECTION An act to add Section 31000.10 to the Government Code, relating to local government. SUMMARY Establishes specific standards for the use of personal services contracts by counties. Requires the county

to demonstrate that the proposed contract will result in costs savings to the county and to show that the contract does not cause displacement of county or city workers. Establishes liability provisions for employment law violations and torts committed in the course of providing services under contract.

Imposes disclosure requirements on contracts. To read the current text of the bill click here. POSITION SPONSOR SEIU and AFSCME

AB 1316 AUTHOR Quirk (D)

TITLE Public Health: Childhood Lead Poisoning: Prevention CODE SECTION An act to amend Sections 1367.3, 105280, 105285, 105290, 105310, 124125, 124130, and 124150 of the

Health and Safety Code, relating to childhood lead poisoning. SUMMARY Changes the definition of lead poisoning to include concentrations of lead in arterial or cord blood.

Requires that regulations establishing a standard of care include the determination of risk factors for whether a child is at risk for lead poisoning. Requires the Department of Public Health to consider the most significant environmental risk factors. Requires a report to be prepared and posted on an Internet Web site that evaluates progress in identifying risk factors. To read the current text of the bill click

here. POSITION CAHP - Oppose SPONSOR Environmental Working Group

AB 1349 AUTHOR Daly (D)

TITLE Diabetes: Strategy for Awareness and Prevention CODE SECTION An act to add Section 104253 to the Health and Safety Code, relating to public health. SUMMARY Requires the State Department of Public Health and the State Department of Health Care Services to

jointly develop a strategy for diabetes awareness and prevention, and to report that strategy and related

findings to the Legislature and the Governor. To read the current text of the bill click here. POSITION SPONSOR

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AB 1353 AUTHOR Waldron (R)

TITLE Health Care Coverage: Prescription Drugs: Continuity CODE SECTION An act to add Sections 1367.245 and 1367.246 to the Health and Safety Code, and to add Sections

10123.203 and 10123.204 to the Insurance Code, relating to health care coverage. SUMMARY Requires a health care service plan and health insurer that provides coverage for outpatient prescription

drugs to establish an expeditious process by which enrollees and insureds or prescribing providers may obtain an exception to any prior authorization process or any other utilization management or medical management practices. Requires coverage for certain medically necessary nonformulary drugs. To read

the current text of the bill click here. POSITION LHPC - Oppose; CAHP - Oppose SPONSOR

AB 1368 AUTHOR Calderon I (D)

TITLE Health Professionals: Authorization Forms CODE SECTION An act to add Sections 123823, 124037, 124037 and 125186 to the Health and Safety Code, and to add

Section 14133.91 to the Welfare and Institutions Code, relating to health professionals. SUMMARY Requires the Department of Health Care Services to allow a physician to designate a physician assistant

or a nurse practitioner to sign any authorization form required by the state Department of Health Care Services for benefits and services under the Medi-Cal program and specified disability programs, subject

to specified criteria. To read the current text of the bill click here. POSITION SPONSOR

AB 1505 AUTHOR Bloom (D)

TITLE Land Use: Zoning Regulations CODE SECTION An act to amend Section 65850 of the Government Code, relating to land use. SUMMARY Amends the Planning and Zoning Law to authorize the legislative body of a city or county to adopt

ordinances to require, as a condition of development of residential rental units, that a development include a certain percentage of residential rental units affordable to, and occupied by, moderate-income, lower income, very low income, or extremely low income households. To read the current text of the bill

click here. POSITION LA Care Health Plan - Support; LA County - Support SPONSOR CA Housing Consortium, CA Rural Legal Assistance Foundation, Housing CA, Non-Profit Housing

Association of N. CA, Western Center on Law & Poverty

AB 1512 AUTHOR McCarty (D)

TITLE Opioid Addiction Prevention and Rehabilitation Act CODE SECTION An act to add Division 10.4 (commencing with Section 11740) to the Health and Safety Code, and to add

Part 14.3 (commencing with Section 33001) to Division 2 of the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor, to take effect immediately, tax levy.

SUMMARY Creates the Opioid Addiction Prevention and Rehabilitation Act to impose a tax upon the distribution of opioids by a manufacturer to a wholesaler at a specified rate. Requires the Board of Equalization to deposit amounts collected under this Act in the Opioid Prevention and Rehabilitation Program Fund to provide critical resources for addiction prevention and rehabilitation programs. To read the current text

of the bill click here. POSITION SPONSOR

AB 1520 AUTHOR Burke (D)

TITLE Lifting Children and Families Out of Poverty Task Force CODE SECTION An act to add Division 11 (commencing with Section 20050) to the Welfare and Institutions Code,

relating to poverty. SUMMARY Establishes the Lifting Children and Families Out of Poverty Task Force, consisting of specified

stakeholders, for the purpose of developing, recommending, and annually updating a plan aimed at addressing deep child poverty and providing recommendations on how to reduce child poverty. Requires the task force to prepare a report that includes specified information about projections of

poverty rates. To read the current text of the bill click here. POSITION LA Care Health Plan - Support SPONSOR

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TITLE Health Care Coverage: HIV Specialists CODE SECTION An act to add Section 1367.693 to the Health and Safety Code, and to add Section 10123.833 to the

Insurance Code, relating to health care coverage. SUMMARY Relates to the Department of Managed Health Care and the Insurance Commissioner. Requires a health

care service plan contract or health insurance policy to permit an HIV specialist to be an eligible primary care provider if the provider requests primary care status and meets the plan's or health insurer's eligibility criteria. Provides exceptions to these provisions. To read the current text of the bill click

here. POSITION LHPC - Oppose SPONSOR

AB 1601 AUTHOR Bloom (D)

TITLE Hearing Aids: Minors CODE SECTION An act to add and repeal Section 1367.72 of the Health and Safety Code, and to add and repeal Section

10123.72 of the Insurance Code, relating to health care coverage. SUMMARY Requires a health care service plan contract or a health insurance policy issued, amended, or renewed on

or after a specified date, to include coverage for hearing aids for an enrollee or insured under a certain

age, as specified. To read the current text of the bill click here. POSITION CAHP - Oppose SPONSOR

AB 1643 AUTHOR Bonta (D)

TITLE Health Care for All Commission CODE SECTION An act to relating to health care coverage. add and repeal Division 122 (commencing with Section

153000) of the Health and Safety Code, relating to health care coverage. SUMMARY Create the 9-member Health Care for All Commission in the State Department of Health Care Services,

for the purpose of investigating and making recommendations on improving health care access and affordability for all Californians. Requires the Governor, the Senate Rules Committee, and the Speaker of the Assembly to each appoint 3 members of the commission, and require the commission to elect its

chair from among its members. To read the current text of the bill click here. POSITION SPONSOR Author

AB 1666 AUTHOR Kiley (R)

TITLE Health Care Service Plans CODE SECTION An act to amend Section 1341 of the Health and Safety Code, relating to health care coverage. SUMMARY Makes a technical, nonsubstantive change to the Knox-Keene Health Care Service Plan Act of 1975, which

provides for the licensure and regulation of health care service plans by the Department of Managed

Health Care. To read the current text of the bill click here. POSITION SPONSOR


TITLE Childrens Mental Health CODE SECTION An act to amend Section 5878.1 of the Welfare and Institutions Code, relating to mental health. SUMMARY Makes technical, nonsubstantive changes to the Children's Mental Health Service Act which establishes

an interagency system of care for children with serious emotional and behavioral disturbances that

provides comprehensive, coordinated care. To read the current text of the bill click here. POSITION SPONSOR

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ACA 11 AUTHOR Caballero (D)

TITLE Middle Class Affordable Housing and Shelter: Funding CODE SECTION A resolution to propose to the people of the State of California an amendment to the Constitution of the

State, by adding Article XXXIV A thereto, relating to housing. SUMMARY Creates the California Middle Class Affordable Housing and Homeless Shelter Account in the General

Fund for the support of local and state programs that assist in the development or acquisition of housing. Imposes a tax upon all retailers at a percent of the gross receipts of any retailer from the sale of all

tangible personal property sold at retail in this state. To read the current text of the bill click here. POSITION SPONSOR

SB 3 AUTHOR Beall (D)

TITLE Affordable Housing Bond Act of 2018 CODE SECTION An act to add Part 16 (commencing with Section 54000) to Division 31 of the Health and Safety Code,

relating to housing, by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California and for the handling and disposition of those funds, and declaring the urgency thereof, to take effect immediately.

SUMMARY Enacts the Affordable Housing Bond Act of 2018 which would authorize the issuance of bonds to be used to finance various existing housing programs, as well as infill infrastructure financing and affordable

housing matching grant programs. To read the current text of the bill click here. POSITION SPONSOR

SB 4 AUTHOR Mendoza (D)

TITLE Medi-Cal: County Organized Health System CODE SECTION An act to add and repeal Section 14087.59 to of the Welfare and Institutions Code, relating to Medi-

Cal. SUMMARY Codifies provisions of the enabling ordinance that prescribe the membership composition, the

qualifications for individual members, tenure of the members, and the procedure for removing a member of the governing body of the commission established in the County of Orange for a county

organized health system. To read the current text of the bill click here. POSITION SPONSOR

SB 17 AUTHOR Hernandez (D)

TITLE Health Care: Prescription Drug Costs CODE SECTION An act to amend Section 1385.045 of, to add Section 1367.243 to, and to add Chapter 9 (commencing

with Section 127675) to Part 2 of Division 107 of, the Health and Safety Code, and to amend Section 10181.45 of, and to add Section 10123.205 to, the Insurance Code, relating to health care.

SUMMARY Requires health care service plans or health insurers that file certain rate information to report specified cost information regarding covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs. Requires the publication of a certain report. Establishes notification requirements for manufacturer of a prescription drug that is purchased or reimbursed by specified purchasers, including state agencies, health care service plans, health insurers, and pharmacy benefit managers. To read the

current text of the bill click here. POSITION CAHP - Support SPONSOR California Labor Federation

SB 33 AUTHOR Dodd (D)

TITLE Arbitration Agreements CODE SECTION An act to amend Section 1281.2 of the Code of Civil Procedure, relating to arbitration. SUMMARY Amends provisions related to arbitration and determinations that allow a court to not order arbitration.

Adds to these determinations instances in which a financial institution is seeking to apply a written agreement to arbitrate, contained in a contract consented to by a consumer, to a relationship with that consumer that was created by the petitioner fraudulently without the consumer's consent or by unlawfully using the consumer's personal identifying information. To read the current text of the bill

click here. POSITION SPONSOR Author

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SB 105 AUTHOR Budget and Fiscal Review Cmt

TITLE Budget Act of 2017 CODE SECTION An act relating to the Budget Act of 2017. to amend the Budget Act of 2017 by amending Items 4260-

101-0001 and 4260-101-0890 of, and to add Item 4260-101-3305 to, Section 2.00 of that act, relating to the state budget, and making an appropriation therefor, to take effect immediately, budget bill.

SUMMARY Amends the Budget Act of 2017 by revising items of appropriation and making other changes. To read



TITLE Individual Market: Health care coverage: continuity of care. CODE SECTION An act to amend Section 1373.96 of the Health and Safety Code, and to amend Section 10133.56 of the

Insurance Code, relating to health care coverage. SUMMARY Provides that an enrollee or insured who has a condition that will require a transplant is not limited and

would require the completion of covered services to be provided for the duration of the condition and until the time he or she undergoes the transplant surgery and receives the necessary followup care that is consistent with good professional practice. Requires a health care service plan to include notice of the process to obtain continuity of care in its disclosure form and any evidence of coverage.. To read the

current text of the bill click here. POSITION SPONSOR Author

SB 138 AUTHOR McGuire (D)

TITLE School Meal Programs: Free and Reduced-Price Meals CODE SECTION An act to amend Section 49562 of, and to add Sections 49564 and 49564.5 to, the Education Code,

relating to school meals. SUMMARY Requires a school district or county superintendent of schools that has a very high poverty school in its

jurisdiction to apply to operate a federal universal meal service provisions pursuant to specified federal law, and to begin providing breakfast and lunch free of charge. Requires the State Department of Education to share participation data from the Medi-Cal program with school districts to certify children whose families meet the applicable income criteria for free and reduced-price school meals. To read the



TITLE Medi-Cal CODE SECTION An act to amend Sections 14094.18 and 14102.5 of the Welfare and Institutions Code, relating to Medi-

Cal. SUMMARY Amends an existing law which establishes the Medi-Cal program and which requires the Department of

Health Care Services to develop and prepare reports for the purpose of informing the California Health and Human Services Agency, the California Health Benefit Exchange, the Legislature, and the public about the enrollment process for all insurance affordability programs. Requires a report to be issued on at least a biannual basis. Relates to an assessment on Medi-Cal managed care plan performance. To read

the current text of the bill click here. POSITION SPONSOR Author


TITLE Medi-Cal: Medi-Cal Managed Care Plans CODE SECTION An act to amend Section 10951 1367.035 of the Health and Safety Code, and to amend Sections 10950

and 10951 of, to add Section 10959.5 to, and to add Article 6.3 (commencing with Section 14197) to Chapter 7 of Part 3 of Division 9 of, the Welfare and Institutions Code, relating to Medi-Cal, and making an appropriation therefor.

SUMMARY Implements provisions regarding federal regulations governing Medicaid managed care plans, authorizes a person to request a hearing involving a Medi-Cal managed care plan with in a specified number of days after the order of action, requires the Department of Health Care Services to develop standards for specified provider types to ensure covered services are accessible to enrollees of Medi-Cal managed care plans, establishes rate requirements for Medi-Cal managed care plans. To read the

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SB 172 AUTHOR Portantino (D)

TITLE Health Care Coverage: Fertility Preservation CODE SECTION An act to add Section 1374.551 to the amend Section 1345 of the Health and Safety Code, and to add

Section 10119.61 to the Insurance Code, relating to health care coverage. SUMMARY Expands the definition of basic health care services to include standard fertility preservation services

when a medically necessary treatment may directly or indirectly cause iatrogenic infertility. Requires an individual or group health insurance policy issued, amended, or renewed on or after the specified date, that covers hospital, medical, or surgical expenses to include coverage for standard fertility preservation

services. To read the current text of the bill click here. POSITION SPONSOR American Society of Reproductive Medicine, Alliance for Fertility Preservation, Fertile Action


TITLE Pupil Health: Mental Health and Substance Use Disorder CODE SECTION An act to add Part 5.5 (commencing with Section 5920) to Division 5 of the Welfare and Institutions

Code, relating to pupil health. SUMMARY Authorizes a county, or a qualified provider operating as part of the county mental health plan network,

and a local educational agency to enter into a partnership to create a program that includes, among other things, targeted interventions for pupils with identified social-emotional, behavioral, and academic needs and an agreement to establish a Medi-Cal mental health and substance use disorder provider that is county operated or county contracted for the provision of mental health services. To read the current



TITLE Mental Health Services Act Reversion Fund CODE SECTION An act to amend Sections 5891, 5892, and 5892.5 of, and to add Section 5892.3 to, the Welfare and

Institutions Code, relating to mental health. SUMMARY Relates to the Mental Health Services Act, which imposes a tax on incomes above a specified sum for the

purpose of financing new or expanded mental health services. Requires the counties, or counties jointly, seeking funding to demonstrate to the Mental Health Service Oversight and Accountability Commission that funding will be used to create, or expand the capacity for, services and supports to address unmet

community needs. To read the current text of the bill click here. POSITION LA County - Oppose SPONSOR


TITLE Health Care Cost, Quality, and Equity Atlas CODE SECTION An act to repeal and add Chapter 8 (commencing with Section 127670) of Part 2 of Division 107 of

add Section 127672 to the Health and Safety Code, relating to health care. SUMMARY Requires the Secretary of Health and Human Services, in furtherance of the goal of creating the Health

Care Cost, Quality, and Equity Atlas, to convene an advisory committee composed of a broad spectrum of health care stakeholders and experts. Requires the advisory committee with identifying the type of data, purpose of use, and entities and individuals that are required to report to, or that may have access to, a health care cost, quality, and equity atlas, and with developing a set of recommendations. To read the


SB 202 AUTHOR Dodd (D)

TITLE Medi-Cal: Beneficiary Maintenance Needs: Personal Needs CODE SECTION An act to amend Section 14005.12 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Increases the personal needs allowance amount per month under the Medi-Cal program while a person

is a patient in a medical institution or nursing facility, and requires the Department of Health Care Services to annually increase this amount based on a percentage increase in the California Consumer

Price Index. To read the current text of the bill click here.

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POSITION SPONSOR

SB 209 AUTHOR Cannella (R)

TITLE State Department of Health Care Services CODE SECTION An act relating to public health. SUMMARY States the intent of the Legislature to enact legislation relating to the powers and duties of the State

Department of Health Care Services. To read the current text of the bill click here. POSITION SPONSOR

SB 220 AUTHOR Pan (D)

TITLE Medi-Cal Children's Health Advisory Panel CODE SECTION An act to amend Section 14005.271 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Relates to the Medi-Cal Children's Health Advisory Panel. Revises the qualification criteria for panel

positions filled by parent members. Provides for the terms of members. Expands the requirement to pay a per-meeting stipend to include a foster parent, relative caregiver, or legal guardian of a Medi-Cal

enrollee. To read the current text of the bill click here. POSITION SPONSOR

SB 221 AUTHOR Wiener (D)

TITLE Health Care Coverage: Lipodystrophy Syndrome CODE SECTION An act to add Section 1367.47 to the Health and Safety Code, to add Section 10123.92 to the Insurance

Code, and to add Section 14132.04 to the Welfare and Institutions Code, relating to health care coverage. SUMMARY Requires health care service plan contracts and health insurance policies issued, amended, renewed, or

delivered after a specified date to include coverage for medical or drug treatments to correct or repair disturbances of body composition caused by HIV associated lipodystrophy syndrome, including, but not limited to, reconstructive surgery, such as suction assisted lipectomy, other restorative procedures and dermal injections or fillers for reversal of facial lipoatrophy syndrome. To read the current text of the

bill click here. POSITION SPONSOR Equality California


TITLE Inmates: Health Care Enrollment CODE SECTION An act to amend Section 14011.10 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Requires the suspension of Medi-Cal benefits to end on the date he or she is no longer an inmate of a

public institution or is no longer otherwise eligible for benefits under the Medi-Cal program. Requires the State Department of Health Care Services, in consultation with specified stakeholders, to develop and implement a simplified annual renewal process for individuals in a suspended eligibility status. To read

the current text of the bill click here. POSITION LA Care Health Plan - Support SPONSOR California Welfare Directors Association

SB 223 AUTHOR Atkins (D)

TITLE Health Care Language Assistance Services CODE SECTION An act to amend Section 1367.04 of, and to add Sections 1367.032 and 1367.042 to, the Health and

Safety Code, to amend Section 10133.8 of, and to add Section 10133.11 to, the Insurance Code, and to amend Sections 14029.91 and 14684 of, and to add Sections 14029.92 and 14727 to, the Welfare and Institutions Code, relating to health care coverage.

SUMMARY Requires a written notice of availability of interpretation services for health care services to be made available in the top 15 languages spoken by limited-English-proficient individuals in the state. Establishes qualifications for interpreters providing services to enrollees and insureds. Prohibits a health plan or insurer from requiring an individual to provide their own interpreter. Requires a plan or insurer to notify enrollees or insureds of language assistance and nondiscrimination protections. To

read the current text of the bill click here. POSITION CAHP - Oppose SPONSOR California Pan-Ethnic Health Network

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SB 241 AUTHOR Monning (D)

TITLE Medical Records: Access CODE SECTION An act to amend Section 123110 of the Health and Safety Code, and to amend Section 5328 of the

Welfare and Institutions Code, relating to medical records. SUMMARY Amends an existing law which governs a patient's access to his or her health records. Changes the basis

of the fee that a health care provider is authorized to charge for access to such records. Allows disclosure of information and records obtained in the course of providing mental health and developmental services to a business associate or for health care operations purposes. To read the current text of the


SB 255 AUTHOR Mendoza (D)

TITLE California Partnership for Long-Term Care Program CODE SECTION An act to amend Sections 10232.1 and 10232.81 of the Insurance Code, and to amend Section 22009 of

the Welfare and Institutions Code, relating to long-term care, and declaring the urgency thereof, to take effect immediately.

SUMMARY Establishes the California Partnership for Long-Term Care Program. Requires a policy, certificate, or rider to be called a home care, community-based services, and residential care facility only policy, certificate, or rider. Deletes assisted living facility services from the list of required minimum services to be provided under the program. Clarifies that those required minimum services include care in a

residential care facility. To read the current text of the bill click here. POSITION SPONSOR


TITLE Hospices: Palliative Care CODE SECTION An act to amend Sections 1746 and 1749 of the Health and Safety Code, relating to palliative care. SUMMARY Expands the definitions of palliative care, skilled nursing services, and serious illness. Authorizes a

licensed hospice to provide any of the same interdisciplinary hospice services to a patient who is not a hospice patient but has a serious illness. Authorizes the hospice to provide services to the patient even if the patient is continuing to receive curative treatment from other licensed health care professionals. To

read the current text of the bill click here. POSITION SPONSOR CA Hospice & Palliative Care Association and Coalition for Compassionate Care of CA

SB 323 AUTHOR Mitchell (D)

TITLE Medi-Cal: Federally Qualified Health Centers CODE SECTION An act to amend Section 14132.100 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Authorizes specified entities to elect to enroll as a Drug Medi-Cal certified provider to provide Drug

Medi-Cal services pursuant to the terms of a mutually agreed upon contract between those entities and the county or department and sets forth the reimbursement requirements for those services. Authorizes an federally qualified health center or rural health clinic to provide specialty mental health services to Medi-Cal beneficiaries as part of a mental health plan's provider network. Relates to contract. To read


SB 349 AUTHOR Lara (D)

TITLE Chronic Dialysis Clinics: Staffing Requirements CODE SECTION An act to amend Sections 1226 and 1228 of, to add Sections 1226.4, 1240.1, 1240.2, and 1266.2 to, and

to repeal and add the heading of Article 5 (commencing with Section 1240) of Chapter 1 of Division 2 of, the Health and Safety Code, relating to clinics.

SUMMARY Establishes minimum staffing requirements for chronic dialysis clinics and establishes a minimum transition time between patients receiving dialysis services at a treatment station. Requires chronic dialysis clinics to maintain certain information relating to minimum staffing and transition time requirements. Deletes a certain exception for end stage renal disease facilities. Provides for certain

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POSITION SPONSOR

SB 360 AUTHOR Skinner (D)

TITLE Public Social Services: Prosecution for Overpayment CODE SECTION An act to amend Section 10980 of the Welfare and Institutions Code, relating to public social services. SUMMARY Prohibits a person from being subject to criminal prosecution for an overpayment or overissuance of

benefits, obtained under the CalWORKs program or the CalFresh program, for any month in which a county human services agency was in receipt of any Income and Eligibility Verification System data match information indicating any potential for an overpayment or an overissuance and has not provided notice of the overpayment or the overissuance to the person. To read the current text of the bill click

here. POSITION SPONSOR


TITLE Acquired Brain Trauma CODE SECTION An act to amend Sections 4353, 4354.5, 4355, 4357, and 4357.1 of, and to repeal Sections 4359 and

14132.992 of, the Welfare and Institutions Code, relating to acquired brain trauma. SUMMARY Relates to a program of services for persons with acquired traumatic brain injury. Makes that program

operative indefinitely. Requires the Department of Rehabilitation to pursue all sources of funding and by authorizing the department to require that service providers meet specified program and operational certification standards in order to receive ongoing funding. To read the current text of the bill click

here. POSITION SPONSOR


TITLE Health Care Coverage: Pervasive Developmental Disorder CODE SECTION An act to amend Section 1374.73 of the Health and Safety Code, and to amend Section 10144.51 of the

Insurance Code, relating to health care coverage. SUMMARY Relates to coverage for behavioral health treatment for pervasive developmental disorder or autism, and

services of a qualified autism service professional. Provides that certain entities or groups are no longer permitted to be qualified autism service providers. Requires a review of treatment plans. Makes changes

concerning reimbursement for certain school services. To read the current text of the bill click here. POSITION CAHP - Oppose SPONSOR Autism Behavior Services


TITLE Medical Practice: Pain Management CODE SECTION An act to add Section 2242.3 to the Business and Professions Code, relating to controlled substances.

An act to amend Section 2241.6 of, and to add Section 4075.7 to, the Business and Professions Code, and to add Section 11167.7 to the Health and Safety Code, relating to healing arts.

SUMMARY Requires a specified health care practitioner, before prescribing, ordering, or furnishing specified narcotic pain medications, including controlled substances, to a minor, as defined, to educate the guardian of the minor on all other available medical treatments, specified nonopioid treatment alternatives to be tried before and alongside opioid therapy, the risks and benefits of narcotic medications and alternatives to narcotic medications, the safe storage of opioid medications, and other

matters. To read the current text of the bill click here. POSITION SPONSOR

SB 437 AUTHOR Atkins (D)

TITLE Health Care Coverage: Joint Senior Level Working Group CODE SECTION An act to amend Section 14132.01 of the Welfare and Institutions Code, relating to Medi-Cal. 1342.4 of

the Health and Safety Code, and to amend Section 12923.5 of the Insurance Code, relating to health care coverage.

SUMMARY Requires the joint working group to review and examine timely access to care and network adequacy as part of its review of the grievance and consumer complaint processes, and to review and examine the state implementation of federal health care forums, including any changes in federal law, or rules,

regulation, or guidance issued under federal law. To read the current text of the bill click here.

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POSITION SPONSOR


TITLE Medi-Cal Managed Care: Health Centers CODE SECTION An act to add Section 14087.326 to the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Authorizes a federally qualified health center or rural health clinic to enter into an agreement with a

public or private entity to provide services that follow a patient. Defines such services as services that promote continuity of care and contribute to overall patient wellness. Provides for compensation paid to a federally qualified health center or rural health clinics pursuant to such agreements. To read the


SB 508 AUTHOR Roth (D)

TITLE Medi-Cal: Dental Health CODE SECTION An act to amend Section 14149.8 of, and to add Article 2.93 (commencing with Section 14091.40) to

Chapter 7 of Part 3 of Division 9 of of, the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Authorizes the Department of Health Care Services to authorize a Dental Health Collaboration Pilot

Program for Medi-Cal beneficiaries enrolled in Medi-Cal managed care health plans that serve certain counties using a hybrid collaboration model that coordinates the efforts of participating health plans, dental managed care plans, and the department. Requires a Medi-Cal dental managed care plan to work with the department to ensure access to quality dental services to Medi-Cal beneficiaries. To read the



TITLE Health Care Practitioners: Stem Cell Therapy CODE SECTION An act to add Section 684 to the Business and Professions Code, relating to healing arts. SUMMARY Requires a licensed health care practitioner who performs a stem cell therapy that is not approved by

the United States Food and Drug Administration to communicate to his or her patient specified information regarding stem cell therapies on a specified notice in a prominent display in an area visible to patients in his or her office, posted conspicuously in the entrance of his or her office, and provided in writing to the patient prior to providing the stem cell therapy. Provides for exceptions. To read the


SB 515 AUTHOR Fuller (R)

TITLE Health Care Coverage: Individual Market CODE SECTION An act to amend Section 1399.849 of the Health and Safety Code, and to amend Section 10965.3 of the

Insurance Code, relating to health care coverage. SUMMARY Makes technical, nonsubstantive changes to the Knox-Keene Health Care Service Plan Act, which

provides for the licensure and regulation of health care service plans by the Department of Managed

Health Care and provisions relating to enrollment. To read the current text of the bill click here. POSITION SPONSOR

SB 516 AUTHOR Fuller (R)

TITLE Medi-Cal: Disease Management Waiver CODE SECTION An act to amend Section 14132.27 of the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Makes technical, nonsubstantive changes to an existing law which establishes the Medi-Cal program and

which provides for an application for a waiver of federal law to test the efficacy of providing a disease management benefit to specified beneficiaries under the program. To read the current text of the bill

click here. POSITION SPONSOR

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TITLE Emergency Medical Transport Providers: Assurance Fee CODE SECTION An act to add Article 3.91 (commencing with Section 14129) to Chapter 7 of Part 3 of Division 9 of the

Welfare and Institutions Code, relating to Medi-Cal, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

SUMMARY Amends the existing law which establishes the Medi-Cal program. Imposes a quality assurance fee for each emergency medical transport provided by an emergency medical transport provider subject to the quality assurance fee in accordance with a prescribed methodology. Increases the Medi-Cal reimbursement to emergency medical transport providers, including both fee-for-service transports paid by the Department of Health Care Services and managed care transports paid by Medi-Cal managed

care health plans. To read the current text of the bill click here. POSITION SPONSOR


TITLE Hospital Contracts CODE SECTION An act to add Section 513 to the Business and Professions Code, to add Sections 1268.9 and 1367.32 to

the Health and Safety Code, and to add Section 10133.57 to the Insurance Code, relating to hospital contracts.

SUMMARY Prohibits contracts between hospitals and contracting agents or health care service plans from containing certain provisions, including setting payment rates or other terms for nonparticipating affiliates, requiring the agent or plan to keep payment rates secret from any payor that is or may become financially responsible for the payment, and requiring the contracting agent or plan to submit to arbitration certain claims or causes of action arising under antitrust laws. To read the current text of the

bill click here. POSITION LA Care Health Plan - Support SPONSOR Author


TITLE The Healthy California Act CODE SECTION An act to add Title 22.2 (commencing with Section 100600) to the Government Code, relating to health

care coverage, and making an appropriation therefor. SUMMARY Creates the Healthy California program to provide comprehensive universal single-payer health care

coverage and a health care cost control system for the benefit of all residents of the state. Provides that the program incorporates benefits from existing programs. Provides for the participation of health care providers int he program. Creates the Healthy California Trust Fund for financing of the program. Authorizes providers to collectively negotiate rates of payment. To read the current text of the bill click

here. POSITION CAHP - Oppose SPONSOR California Nurses Association

SB 575 AUTHOR Leyva (D)

TITLE Patient Access to Health Records CODE SECTION An act to amend Section 123110 of the Health and Safety Code, relating to public health. SUMMARY Requires health care providers to provide patients with a copy of certain health records at no charge to

support a claim for eligibility for a public benefit program. Specifies additional public benefit programs to which these requirements apply. Makes conforming changes. To read the current text of the bill click

here. POSITION SPONSOR Western Center on Law & Poverty

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SB 636 AUTHOR Bradford (D)

TITLE Addiction Treatment: Advertising and Payment CODE SECTION An act to add Section 1371.33 Sections 1371.33, 11833.1, and 11833.2 to, and to add Chapter 15

(commencing with Section 11859) to Part 2 of Division 10.5 of, the Health and Safety Code, and to add Section 10133.75 to the Insurance Code, relating to public health.

SUMMARY Prohibits alcohol drug treatment program or certified drug counselor from offering, delivering, receiving, or accepting and rebate, refund, commission, preference, patronage dividend, discount, or other consideration as compensation or inducement for referring patients, clients, or customers to any person or certified or license program. Prohibits certain entities, including an alcoholism or drug abuse recovery and treatment program, from giving or receiving remuneration for a referral. To read the

current text of the bill click here. POSITION CAHP - Oppose SPONSOR CA Consortium of Addiction Programs and Professionals


TITLE Controlled Substance Utilization CODE SECTION An act to amend Section 11165 of the Health and Safety Code, relating to controlled substances. SUMMARY Amends existing law which requires the Department of Justice to maintain the Controlled Substance

Utilization Review and Evaluation System (CURES) for the electronic monitoring of the prescribing and dispensing of Schedule II, Schedule III, and Schedule IV controlled substances. Prohibits the release of data obtained from CURES to a law enforcement agency except pursuant to a valid court order. To read



TITLE Health Care Coverage: Consumer Complaints: Reporting CODE SECTION An act to amend Section 511.3 of the Business and Professions Code, to amend Section 1375.7 of the

Health and Safety Code, to amend Section 10178.4 of the Insurance Code, and to amend Section 4611 of the Labor Code, relating to health care providers. add Section 1348.97 to the Health and Safety Code, and to add Section 10191.7 to the Insurance Code, relating to health care coverage.

SUMMARY Requires the Department of Managed Health Care and the Department of Insurance to annually submit to the Legislature, and post on each department's Internet Web site, a record of all complaints received by each department regarding employee welfare benefit plans as defined under the federal Employee

Retirement Income Security Act of 1974. To read the current text of the bill click here. POSITION SPONSOR California Medical Association (CMA) & California Hospital Association (CHA)


TITLE Medi Cal: Family Planning Providers CODE SECTION An act to add Section 14132.07 to the Welfare and Institutions Code, relating to Medi-Cal. SUMMARY Prohibits Medi-Cal Managed Care Plans from restricting the choice of a qualified provider from whom a

beneficiary enrolled in the plan may receive family planning services. Requires a Medi-Cal managed care plan to reimburse an out-of-plan or out-of-network qualified provider at the applicable fee-for-service

rate. To read the current text of the bill click here. POSITION SPONSOR


TITLE Healing Arts Licensee: License Activation Fee: Waiver CODE SECTION An act to amend Section 704 of the Business and Professions Code, relating to workforce development.

healing arts. SUMMARY Requires the license renewal fee to be waived for any healing arts licensee who certifies to his or her

respective board that license restoration is for the sole purpose of providing voluntary, unpaid service to a public agency, not-for-profit agency, institution, or corporation that provides medical services to indigent patients in medically underserved or critical-need population areas of the state. To read the


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SB 792 AUTHOR Wilk (R)

TITLE Local Government: Measure B Oversight Commission CODE SECTION An act to add Article 19 20 (commencing with Section 53997.5) to Chapter 4 of Part 1 of Division 2 of

Title 5 of the Government Code, relating to local government. SUMMARY Requires the County of Los Angeles to establish the Measure B Oversight Commission and requires a

certain report regarding the County of Los Angeles trauma network and the special tax levied on all improved parcels in the County to provide funding for the Countywide System of Trauma Centers, Emergency Medical Services, and Bioterrorism Response. Requires the posting of certain information on

an Internet Web site. To read the current text of the bill click here. POSITION LA County - Oppose SPONSOR

SR 26 AUTHOR Hernandez (D)

TITLE Affordable Care Act CODE SECTION Relative to the Patient Protection and Affordable Care Act. SUMMARY Affirms the Senates strong support for the Affordable Care Act and calls upon the United States Congress

to reject any effort to repeal the Affordable Care Act unless it is simultaneously replaced with an alternative program that meets the standards clearly and consistently articulated by President Trump.

To read the current text of the bill click here. POSITION SPONSOR

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Board of Governors

MOTION SUMMARY

Date: September 7, 2017 Motion No. BOG 100.0917

Committee: Chairperson: Louise McCarthy

Issue: Approval to increase maximum compensation amount for Health Management Services (HMS)

Coordination of Benefits (COB) contract.

New Contract Amendment Sole Source RFP/RFQ was conducted

Background: L.A. Care staff requests approval to increase the maximum amount of compensation

within Coordination of Benefits (COB) contract Schedule A-3 with Health Management Services (HMS) to $10 million. This is an increase of $6.1 million from the existing contract originally executed in 2016 with a maximum compensation amount of $3.9 million. The requested increase is due to this new program generating more savings than originally projected.

To date the vendor has generated over $13.2 million in overall medical savings for L.A. Care ($9.3 million in retrospective recoveries and $3.9 million in prospective savings). The expected total amount to be invoiced by HMS for this contract through August, 2017 is $3.1 million. The current projections for the COB program over the term of the contract expiring at the end of 2020 include over $50 million in savings with estimated total vendor fees of $10 million. The pricing structure of the contract is based on:

1. Retrospective: Vendor receives a 20% contingency fee for overpayments recovered up to $2 million. For recoveries above $2 million annually, the vendor will receive a contingency fee of 18%. This is a fully contingent agreement; fees are paid only when L.A. Care overpayments are recovered.

2. Prospective: Eligibility updates for L.A. Care members with other commercial coverage are charged at $38-$56 per record received. The eligibility updates provide the necessary information to appropriately coordinate claims with other payers.

Member Impact: L.A. Care members will not be directly impacted.

Budget Impact: Expenditures under this contract are offset by retrospective recoveries and

prospective savings.

Motion: To increase funds for the current contract with Health Management Systems (HMS) Coordination of Benefits by $6.1 million for an amount not to exceed $10 million through December 31, 2020.

67

Board of Governors

MOTION SUMMARY



Issue: To amend a contract with TransUnion to provide encounter data collection and processing

services.


Background: L.A. Care is requesting an amendment to add an additional $3.12 million to the current

Trans Union Contract. Trans Union collects and processes provider encounter data for Medi-Cal, IHSS, Healthy Kids, Covered California, and CMC enrollment, and the data is used to determine health plan rates.

In 2016, Motion No. FIN D.0116 was approved, which extended the contract from May 2016 to May 2017 and added $200,000 to the existing contract. The addition of time and dollars was requested to allow enough time and funding for competitive selection process (RFP) to be conducted and to switch to a new vendor if necessary. Trans Union was selected through the RFP and lower rates were negotiated, resulting in an amendment to the current contract at new lower rates early from February 2017 through May 2020. No funding was added at that time because there was sufficient funding for an interim period and encounter volume was to be forecasted based on business needs.

Based on projected new volumes staff requests approval to increase the current contact by $3.12 million with a total not to exceed $4.22 million through May 2020.

Fiscal Year Estimated Encounter Volume Requested Amount

2016-2017 (remaining) 550,000/ month (3 mos remaining) $ 240,000.00

2017-2018 650,000/month (12 mos) $ 1,080,000.00

2018-2019 650,000/month (12 mos) $ 1,080,000.00

2019-2020 650,000/month (8 mos) $ 720,000.00

Member Impact: The collection of clinical information positively impacts all L.A. Care members which

as it is used to drive analysis and develop programs to address member needs.

Budget Impact: The cost was anticipated and included in the approved budget for the Shared

Services/Encounters in fiscal year 2016-17. The balance will be included in future fiscal year budgets.

Motion: To authorize staff to amend a contract with TransUnion to add an additional $3.12 million for a total contract amount not to exceed $4.22 million for the period of July 1, 2017 to May 31, 2020.

68

Board of Governors

MOTION SUMMARY



Issue: Execute a contract with a selected vendor, to provide system configuration and implementation

services for an online Agent/Broker self-service portal.


Background: L.A. Care staff requests approval to execute a contract with a vendor to be selected in

an amount not to exceed $750,000, to design and implement an online Agent and General Agency self-service portal to provide the agent community the platform to access their day-to-day activities with L.A. Care in support of L.A. Care Covered enrollment.

The Agent/Broker portal will provide self-service resources accessible 24/7 and eliminate complex servicing touch-points that now require staff support from multiple departments. The servicing model advantages include:

Access to relevant up-to-date client information versus multiple phone calls, voice mails, emails, and access limited to M-F during business hours

A seamless onboarding process generated by a single point of entry for the agent to become appointed with L.A. Care Health Plan

Provide access to information that would increase L.A. Care Covered membership retention, expand L.A. Care Covered membership base, and increase L.A. Care Health Plan brand awareness

A competitive request for quotes was conducted in July/August of 2017. The three final vendors were Cognizant, Infosys, and Keste. Cognizant has preliminarily been selected due to their competitive start-to-end project schedule, cost, reputation at L.A. Care, and experience in government and public facing portals.

Member Impact: The end product provided by the vendor will add tools and functions that will

help facilitate fast, accurate, and beneficial interactions between the agent and the member.

Budget Impact: The cost of the contract was anticipated and included in the strategic project

budget for Information Technology during FY 2017-18.

Motion: To authorize staff to procure implementation services to provide an online Agent/Broker self-service portal in an amount not to exceed $750,000 through March 31, 2018.

69

Board of Governors

MOTION SUMMARY

Date: September 7, 2017 Motion No. FIN 100.0917

Committee: Finance & Budget Chairperson: Michael Rembis


Issue: Acceptance of the Financial Report for the period ended July 2017.

Background: Attached also is the monthly investment transactions report.

Member Impact: N/A Budget Impact: N/A

Motion: To accept the Financial Report for the period ended July 2017, as

submitted.

70

6/30/2017

Financial Performance June 2017

71

Financial Performance Results Highlights - Year-to-Date June 2017

Overall

MediCal Plan Partners

MediCal Direct SPD-CCI

MediCal Direct TANF-MCE

Cal MediConnect (CMC)

Commercial

L.A. Care Commercial consists of Covered California, PASC-SEIU and Healthy Kids. The member months is 607,828, which is 407 member

months unfavorable to the forecast. The performance is a deficit of $10.5 million and is $1.7 million favorable to forecast. The favorable

variance is primarily driven by lower-than-expected capitation expense and outpatient claims. The favorable variance is mainly offset by

capitation revenue.

The combined member months is 18.8 million year to date, which is 2,517 member months favorable to the forecast. June includes

several significant changes in estimates. Revenue includes the retroactive rate adjustments for CCI duals and MLTSS non-duals based on

revised rates from the DHCS. Revenue and healthcare expenses include increases for supplemental payment adjustments for MCE for the

State fiscal year 2015-16 , and State fiscal year 2016-17. The MCE MLR rebate was decreased as a result of this change. The year-to-

date performance is a surplus of $106.8 million or 1.6% of revenue and is $14.2 million unfavorable to forecast. The unfavorable variance

is primarily driven by higher inpatient incurred claims offset by risk-sharing adjustments.

The member months is 8.9 million, which is 471 member months favorable to the forecast. The performance is a surplus of $88.2 million,

and is $2.3 million unfavorable to forecast. The unfavorable variance is driven by higher than anticipated provider incentives.

The member months is 1.8 million, which is 1,664 member months favorable to the forecast. The performance is a deficit of $3.7 million, and

is $7.3 million favorable to forecast. The forecast includes the updated CCI and MLTSS rates. Favorable surplus variance is primarily driven

by lower-than-expected outpatient claims, and skilled nursing facility expense.

The member months is 7.3 million, which is 821 member months favorable to the forecast. The performance is a surplus of $46.7 million, and

is $17.8 million unfavorable to forecast. The forecast includes the impact of the supplemental payment adjustments. The unfavorable

variance is driven primarily by higher-than-expected inpatient, outpatient, and pharmacy claims.

The member months is 122,049, which is 32 member months unfavorable to the forecast. The performance is a deficit of $100,000, and is

$4.0 million unfavorable to forecast which is driven by higher-than-expected pharmacy and skilled nursing expenses.

72

Consolidated Operations Income Statement ($ in thousands)

($) (PMPM) ($) (PMPM) ($) (PMPM) ($) (PMPM) ($) (PMPM) ($) (PMPM)

Membership

2,132,617 2,130,100 2,517 Member Months 18,840,418 18,837,901 2,517

Revenue

$1,041,115 488.19 $817,143 383.62 $223,971 104.57 Capitation $6,599,943 350.31 $6,375,971 338.47 $223,971 11.84

$315 0.15 $239 0.11 $76 0.04 Pay for Performance $4,052 0.22 $3,976 0.21 $76 0.00

1,041,430 488.33 817,382 383.73 224,048 104.60 Total Revenues 6,603,995 350.52 6,379,947 338.68 224,048 11.85

Healthcare Expenses

669,348 313.86 453,770 213.03 (215,579) (100.84) Capitation 3,534,805 187.62 3,319,226 176.20 (215,579) (11.42)

13,421 6.29 6,305 2.96 (7,116) (3.33) Provider Incentives and Shared Risk 77,149 4.09 70,033 3.72 (7,116) (0.38)

85,273 39.99 67,822 31.84 (17,450) (8.15) Inpatient Claims 582,325 30.91 564,875 29.99 (17,450) (0.92)

139,974 65.63 141,564 66.46 1,590 0.82 Outpatient Claims 1,182,429 62.76 1,184,019 62.85 1,590 0.09

40,332 18.91 43,558 20.45 3,227 1.54 Skilled Nursing Facility 380,946 20.22 384,173 20.39 3,227 0.17

45,003 21.10 39,201 18.40 (5,801) (2.70) Pharmacy 451,169 23.95 445,368 23.64 (5,801) (0.30)

3,923 1.84 5,825 2.73 1,902 0.90 Medical Administrative Expenses 35,639 1.89 37,541 1.99 1,902 0.10

997,273 467.63 758,046 355.87 (239,227) (111.76) Total Healthcare Expenses 6,244,462 331.44 6,005,235 318.78 (239,227) (12.65)

MCR(%)

44,157 20.71 59,336 27.86 (15,179) (7.15) Operating Margin 359,533 19.08 374,712 19.89 (15,179) (0.81)

30,149 14.14 30,642 14.39 493 0.25 Total Operating Expenses 255,204 13.55 255,697 13.57 493 0.03

Admin Ratio(%)

14,008 6.57 28,694 13.47 (14,686) (6.90) Income (Loss) from Operations 104,329 5.54 119,015 6.32 (14,686) (0.78)

(380) (0) (997) (0.47)$ 616 0.29 Other Income/(Expense), net (12,035) (1) (12,652) (0.67) 616 0.03

1,890 0.89 1,583 0.74 307 0.14 Interest Income, net 15,221 0.81 14,914 0.79 307 0.02

(62) (0.03) 0 - (62) (0.03) Realized Gain/Loss (345) (0.02) (283) (0.02) (62) (0.00)

(389) (0.18) 0 - (389) (0.18) Unrealized Gain/Loss (336) (0.02) 53 0.00 (389) (0.02)

1,059 0.50 587 0.28 473 0.22 Total Non-Operating Income (Expense) 2,505 0.13 2,033 0.11 473 0.03

$15,067 7.07 $29,280 13.75 ($14,213) (6.68) Net Surplus (Deficit) $106,834 5.67 $121,048 6.43 ($14,213) (0.76)

Margin(%)

June 2017

Current Current Fav<Unfav> YTD YTD Fav<Unfav>

-0.4%

Actual Forecast Forecast Actual Forecast Forecast

95.8% 92.7% -3.0% 94.6% 94.1%

-0.3%

2.9% 3.7% 0.9% 3.9% 4.0% 0.1%

1.4% 3.6% -2.1% 1.6% 1.9%

73

MediCal Plan Partners Income Statement ($ in thousands)


Membership

1,002,834 1,002,363 471 Member Months 8,936,700 8,936,229 471

Revenue

$303,845 302.99 $312,945 312.21 ($9,100) (9.22) Capitation $2,451,384 274.31 $2,460,483 275.34 ($9,100) (1.03)

303,845 302.99 312,945 312.21 (9,100) (9.22) Total Revenues 2,451,384 274.31 2,460,483 275.34 (9,100) (1.03)

Healthcare Expenses

286,819 286.01 297,025 296.32 10,206 10.32 Capitation 2,301,734 257.56 2,311,940 258.72 10,206 1.16

6,879 6.86 2,374 2.37 (4,504) (4.49) Provider Incentives and Shared Risk 24,154 2.70 19,650 2.20 (4,504) (0.50)

0 - 0 - 0 - Inpatient Claims 177 0.02 177 0.02 (0) 0.00

(893) (0.89) 0 - 893 0.89 Outpatient Claims 336 0.04 1,229 0.14 893 0.10

0 - 0 - 0 - Skilled Nursing Facility 0 - 0 - 0 -

573 0.57 806 0.80 233 0.23 Medical Administrative Expenses 5,391 0.60 5,625 0.63 233 0.03

293,378 292.55 300,205 299.50 6,828 6.95 Total Healthcare Expenses 2,331,792 260.92 2,338,620 261.70 6,828 0.78

MCR(%)


4,812 4.80 4,763 4.75 (49) (0.05) Total Operating Expenses 38,484 4.31 38,435 4.30 (49) (0.01)

Admin Ratio(%)

5,655 5.64 7,976 7.96 (2,321) (2.32) Income (Loss) from Operations 81,108 9.08 83,429 9.34 (2,321) (0.26)

649 0.65 666 0.66 (17) (0.02) Total Non-Operating Income (Expense) 7,046 0.79 7,063 0.79 (17) 0.00

$6,304 6.29 $8,642 8.62 ($2,338) (2.34) Net Surplus (Deficit) $88,154 9.86 $90,492 10.13 ($2,338) (0.26)

Margin(%)

June 2017


-0.1%


96.6% 95.9% -0.6% 95.1% 95.0%

-0.1%

1.6% 1.5% -0.1% 1.6% 1.6% 0.0%

2.1% 2.8% -0.7% 3.6% 3.7%

74

MediCal Direct SPD-CCI Income Statement ($ in thousands)


Membership

210,992 209,328 1,664 Member Months 1,839,858 1,838,194 1,664

Revenue

$260,302 1,233.70 $262,160 1,252.39 ($1,859) (18.69) Capitation $1,917,082 1,041.97 $1,918,941 1,043.93 ($1,859) (1.95)

260,302 1,233.70 262,160 1,252.39 (1,859) (18.69) Total Revenues 1,917,082 1,041.97 1,918,941 1,043.93 (1,859) (1.95)

Healthcare Expenses

(3,813) (18.07) (2,018) (9.64) 1,795 8.43 Capitation 122,752 66.72 124,548 67.76 1,795 1.04

(886) (4.20) (1,931) (9.23) (1,045) (5.03) Provider Incentives and Shared Risk (28,559) (15.52) (29,604) (16.10) (1,045) (0.58)


111,759 529.68 119,239 569.63 7,480 39.95 Outpatient Claims 986,353 536.10 993,833 540.66 7,480 4.55

33,308 157.86 38,257 182.76 4,949 24.90 Skilled Nursing Facility 332,411 180.67 337,360 183.53 4,949 2.86

17,434 82.63 16,095 76.89 (1,339) (5.74) Pharmacy 146,247 79.49 144,907 78.83 (1,339) (0.66)

1,403 6.65 2,350 11.23 947 4.58 Medical Administrative Expenses 12,757 6.93 13,705 7.46 947 0.52

193,613 917.63 203,442 971.88 9,829 54.25 Total Healthcare Expenses 1,823,198 990.94 1,833,027 997.19 9,829 6.24

MCR(%)

66,689 316.07 58,718 280.51 7,970 35.56 Operating Margin 93,885 51.03 85,914 46.74 7,970 4.29

12,619 59.81 11,934 57.01 (685) (2.80) Total Operating Expenses 102,714 55.83 102,029 55.51 (685) (0.32)

Admin Ratio(%)

54,069 256.26 46,784 223.50 7,286 32.77 Income (Loss) from Operations (8,829) (4.80) (16,115) (8.77) 7,285 3.97

458 2.17 469 2.24 (11) (0.07) Total Non-Operating Income (Expense) 5,117 2.78 5,127 2.79 (11) (0.01)

$54,528 258.43 $47,253 225.74 $7,275 32.70 Net Surplus (Deficit) ($3,712) (2.02) ($10,987) (5.98) $7,275 3.96

Margin(%)

June 2017


0.4%


74.4% 77.6% 3.2% 95.1% 95.5%

0.4%

4.8% 4.6% -0.3% 5.4% 5.3% 0.0%

20.9% 18.0% 2.9% -0.2% -0.6%

75

MediCal Direct TANF-MCE Income Statement ($ in thousands)


Membership

830,166 829,345 821 Member Months 7,333,990 7,333,169 821

Revenue

$426,719 514.02 $189,778 228.83 $236,942 285.19 Capitation $1,856,636 253.16 $1,619,695 220.87 $236,942 32.28

426,719 514.02 189,778 228.83 236,942 285.19 Total Revenues 1,856,636 253.16 1,619,695 220.87 236,942 32.28

Healthcare Expenses

360,960 434.81 131,703 158.80 (229,257) (276.00) Capitation 895,772 122.14 666,515 90.89 (229,257) (31.25)

6,358 7.66 5,512 6.65 (846) (1.01) Provider Incentives and Shared Risk 71,754 9.78 70,908 9.67 (846) (0.11)


25,733 31.00 17,176 20.71 (8,557) (10.29) Outpatient Claims 154,467 21.06 145,910 19.90 (8,557) (1.16)

4,468 5.38 3,810 4.59 (658) (0.79) Skilled Nursing Facility 33,864 4.62 33,206 4.53 (658) (0.09)

22,418 27.00 19,249 23.21 (3,169) (3.79) Pharmacy 272,710 37.18 269,540 36.76 (3,169) (0.43)

1,327 1.60 1,875 2.26 547 0.66 Medical Administrative Expenses 12,585 1.72 13,132 1.79 547 0.07

467,194 562.77 211,149 254.60 (256,045) (308.17) Total Healthcare Expenses 1,731,345 236.07 1,475,300 201.18 (256,045) (34.89)

MCR(%)

(40,475) (48.75) (21,371) (25.77) (19,103) (22.99) Operating Margin 125,291 17.08 144,394 19.69 (19,103) (2.61)

9,925 11.96 11,190 13.49 1,265 1.54 Total Operating Expenses 82,389 11.23 83,654 11.41 1,265 0.17

Admin Ratio(%)

(50,400) (60.71) (32,561) (39.26) (17,839) (21.45) Income (Loss) from Operations 42,902 5.85 60,740 8.28 (17,838) (2.43)

441 0.53 451 0.54 (9) (0.01) Total Non-Operating Income (Expense) 3,755 0.51 3,765 0.51 (9) (0.00)

($49,958) (60.18) ($32,111) (38.72) ($17,848) (21.46) Net Surplus (Deficit) $46,657 6.36 $64,505 8.80 ($17,848) (2.43)

Margin(%)

June 2017


-2.2%


109.5% 111.3% 1.8% 93.3% 91.1%

-1.5%

2.3% 5.9% 3.6% 4.4% 5.2% 0.7%

-11.7% -16.9% 5.2% 2.5% 4.0%

76

CMC Income Statement ($ in thousands)


Membership

14,883 14,915 (32) Member Months 122,049 122,081 (32)

Revenue

$24,605 1,653.20 $25,340 1,698.95 ($735) (45.75) Capitation $189,185 1,550.07 $189,920 1,555.69 ($735) (5.62)

24,605 1,653.20 25,340 1,698.95 (735) (45.75) Total Revenues 189,185 1,550.07 189,920 1,555.69 (735) (5.62)

Healthcare Expenses

9,308 625.43 8,785 588.98 (524) (36.45) Capitation 77,810 637.53 77,287 633.08 (524) (4.46)

874 58.70 164 10.98 (710) (47.72) Provider Incentives and Shared Risk 5,938 48.65 5,228 42.83 (710) (5.83)

3,469 233.08 3,051 204.56 (418) (28.52) Inpatient Claims 26,437 216.61 26,019 213.13 (418) (3.48)

3,707 249.07 4,370 292.98 663 43.90 Outpatient Claims 34,401 281.86 35,064 287.22 663 5.36

2,539 170.59 1,492 100.00 (1,047) (70.59) Skilled Nursing Facility 14,465 118.52 13,418 109.91 (1,047) (8.61)

2,361 158.61 1,094 73.36 (1,266) (85.25) Pharmacy 13,298 108.96 12,032 98.56 (1,266) (10.40)

567 38.10 705 47.29 138 9.19 Medical Administrative Expenses 4,284 35.10 4,422 36.22 138 1.12

22,824 1,533.59 19,660 1,318.15 (3,164) (215.44) Total Healthcare Expenses 176,634 1,447.24 173,470 1,420.94 (3,164) (26.30)

MCR(%)


1,019 68.49 881 59.07 (138) (9.42) Total Operating Expenses 12,850 105.29 12,712 104.13 (138) (1.16)

Admin Ratio(%)

761 51.12 4,799 321.73 (4,038) (270.61) Income (Loss) from Operations (300) (2.46) 3,738 30.62 (4,038) (33.08)

17 1.12 (18) (1.24) 35 2.35 Total Non-Operating Income (Expense) 166 1.36 131 1.07 35 0.29

$777 52.23 $4,780 320.49 ($4,003) (268.26) Net Surplus (Deficit) ($134) (1.10) $3,869 31.69 ($4,003) (32.79)

Margin(%)

June 2017


-2.0%


92.8% 77.6% -15.2% 93.4% 91.3%

-2.1%

4.1% 3.5% -0.7% 6.8% 6.7% -0.1%

3.2% 18.9% -15.7% -0.1% 2.0%

77

Commercial Income Statement ($ in thousands)


Membership

73,742 74,149 (407) Member Months 607,828 608,235 (407)

Revenue

$25,645 347.76 $26,921 363.07 ($1,276) (15.31) Capitation $185,663 305.45 $186,939 307.35 ($1,276) (1.89)

25,645 347.76 26,921 363.07 (1,276) (15.31) Total Revenues 185,663 305.45 186,939 307.35 (1,276) (1.89)

Healthcare Expenses

16,074 217.98 18,275 246.47 2,201 28.49 Capitation 136,738 224.96 138,939 228.43 2,201 3.47

197 2.67 186 2.51 (10) (0.16) Provider Incentives and Shared Risk 2,682 4.41 2,671 4.39 (10) (0.02)

1,466 19.88 1,497 20.19 31 0.31 Inpatient Claims 14,292 23.51 14,323 23.55 31 0.04

(332) (4.50) 780 10.51 1,111 15.01 Outpatient Claims 6,880 11.32 7,991 13.14 1,111 1.82

13 0.18 0 - (13) (0.18) Skilled Nursing Facility 202 0.33 189 0.31 (13) (0.02)

2,790 37.83 2,764 37.27 (26) (0.56) Pharmacy 18,579 30.57 18,553 30.50 (26) (0.06)

53 0.71 88 1.19 36 0.48 Medical Administrative Expenses 622 1.02 658 1.08 36 0.06

20,261 274.75 23,590 318.14 3,329 43.39 Total Healthcare Expenses 179,995 296.13 183,324 301.40 3,329 5.28

MCR(%)


760 10.31 798 10.77 38 0.46 Total Operating Expenses 10,393 17.10 10,431 17.15 38 0.05

Admin Ratio(%)

4,624 62.70 2,533 34.16 2,091 28.54 Income (Loss) from Operations (4,725) (7.77) (6,815) (11.20) 2,091 3.43

(506) (6.86) (147) (1.98) (359) (4.87) Total Non-Operating Income (Expense) (5,759) (9.47) (5,400) (8.88) (359) (0.60)

$4,118 55.84 $2,386 32.18 $1,732 23.67 Net Surplus (Deficit) ($10,483) (17.25) ($12,215) (20.08) $1,732 2.84

Margin(%)

June 2017


1.1%


79.0% 87.6% 8.6% 96.9% 98.1%

0.9%

3.0% 3.0% 0.0% 5.6% 5.6% 0.0%

16.1% 8.9% 7.2% -5.6% -6.5%

78

Comparative Balance Sheet

(Dollars in thousands) Jun-16 Sep-16 Dec-16 Mar-17 Apr-17 May-17 Jun-17

ASSETS

Total Current Assets 3,819,961 4,070,794 4,853,489 4,655,277 4,690,516 4,845,275 4,901,250

Capitalized Assets - net 60,496 64,508 65,812 68,225 69,437 70,882 70,448

NON-CURRENT ASSETS $23,465 $842 $519 2,311 2,151 3,706 3,633

TOTAL ASSETS $3,903,923 $4,136,144 $4,919,820 4,725,813 4,762,104 4,919,863 4,975,331

LIABILITIES AND FUND EQUITY

CURRENT LIABILITIES

Total Current Liability $3,337,041 $3,608,653 $4,371,117 4,118,559 4,148,373 4,300,657 4,341,092

Long Term Liability $3,695 $3,679 $3,629 3,607 3,660 3,626 3,592

Total Liabilities $3,340,736 $3,612,332 $4,374,746 4,122,166 4,152,033 4,304,283 4,344,685

FUND EQUITY

Invested in Capital Assets, net of related debt $60,496 $64,508 $65,812 68,225 69,437 70,882 70,448

Restricted Equity $300 $300 $300 300 300 300 300

Minimum Tangible Net Equity $185,931 $192,308 $196,915 197,643 198,203 193,584 194,228

Board Designated Funds $316,459 $266,696 $16,252 15,042 15,042 11,042 11,042

Retained Earnings (undesignated) ($0) ($0) $265,795 322,436 327,090 339,772 354,629

Total Fund Equity $563,187 $523,812 $545,074 $603,646 $610,071 $615,579 $630,646

TOTAL LIABILITIES AND FUND EQUITY $3,903,923 $4,136,144 $4,919,820 $4,725,813 $4,762,104 $4,919,863 $4,975,331

Solvency Ratios

Working Capital Ratio 1.14 1.13 1.11 1.13 1.13 1.13 1.13

Cash to Claims Ratio 0.73 0.89 0.77 0.81 0.79 0.62 0.61

Tangible Net Equity Ratio 3.03 2.72 2.77 3.05 3.08 3.18 3.25

June 2017

79

Cash Flows Statement ($ in thousands)

Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 YTD

Cash Flows from Operating Activities:

Capitation Revenue 585,436$ 13,957$ 591,729$ 682,666$ 717,209$ 1,157,803$ 591,589$ 134,766$ 845,838$ 5,320,994$

Other Income (Expense), net 17 1,071 603 1,088 1,051 2,924 5,647 (2,730) 2,321 11,991

Healthcare Expenses (473,840) (288,339) (736,854) (444,419) (622,572) (887,018) (647,746) (522,017) (883,995) (5,506,799)

Operating Expenses (18,679) (24,484) (41,788) (25,939) (26,030) (26,458) (18,602) (30,376) (29,955) (242,311)

Net Cash Provided By Operating Activities 92,934 (297,794) (186,310) 213,396 69,658 247,252 (69,112) (420,357) (65,791) (416,125)

Cash Flows from Investing Activities

Net Proceeds from Sale of Investments 157,576 51,806 (331,287) 135,715 (53,507) 7,749 19,125 9,204 105,971 102,353

Purchase of Capital Assets (1,529) (3,331) (470) (426) (2,216) (3,737) (2,566) (2,664) (798) (17,737)

Net Cash Provided By Investing Activities 156,048 48,475 (331,756) 135,289 (55,723) 4,012 16,559 6,540 105,173 84,617

Cash Flows from Financing Activities:

Gross Premium Tax (MCO Sales Tax) - Net (73,935) (212) 213 (34,725) 52,952 (15,749) 8,002 2,570 (24,261) (85,146)

Pass through transactions (AB 85, IGT, etc.) 9,102 (17,893) 414,972 (415,312) 20,667 78,788 1,412 (21,458) (61,546) 8,733

Net Cash Provided By Financing Activities (64,833) (18,104) 415,185 (450,037) 73,619 63,039 9,414 (18,888) (85,807) (76,413)

Net Increase in Cash and Cash Equivalents 184,148 (267,424) (102,882) (101,352) 87,554 314,303 (43,138) (432,705) (46,425) (407,921)

Cash and Cash Equivalents, Beginning 642,865 827,013 559,589 456,707 355,355 442,909 757,212 714,074 281,369 642,865

Cash and Cash Equivalents, Ending 827,013$ 559,589$ 456,707$ 355,355$ 442,909$ 757,212$ 714,074$ 281,369$ 234,944$ 234,944$

Reconciliation of Income from Operations to Net Cash Provided By (Used In) Operating Activities:

Excess of Revenues over Expenses 2,153$ 6,619$ 12,490$ 20,946$ 24,163$ 13,464$ 6,425$ 5,508$ 15,067$ 106,834$

Adjustments to Excess of Revenues Over Expenses:

Depreciation 1,349 1,343 1,334 1,322 1,330 1,314 1,354 1,220 1,232 11,798

Realized and Unrealized (Gain)/Loss on Investments (761) 1,132 259 (1,058) (59) 811 (102) 7 451 680

Deferred Rent (8) (21) (21) 1 1 (25) 53 (34) (34) (87)

IGT - - - (331) (728) (161) (81) 41 (81) (1,341)

Gross Premium Tax provision 535 547 1,519 541 702 284 506 465 407 5,506

Total Adjustments to Excess of Revenues over Expenses 1,113 3,002 3,091 476 1,245 2,224 1,730 1,699 1,975 16,556

Changes in Operating Assets and Liabilities:

Capitation Receivable (43,919) (641,623) (83,064) (37,740) (38,406) 445,959 (97,398) (580,608) (204,298) (1,281,096)

Interest and Non-Operating Receivables (450) (417) 65 (516) (652) 809 (698) (222) 295 (1,787)

Prepaids and Other Current Assets 1,613 (4,050) 212 (2,047) 1,320 202 1,459 (6,186) (738) (8,215)

Accounts Payable and Accrued Liabilities 4,646 4,527 (15,659) 5,986 1,433 2,592 5,179 (1,292) (2,494) 4,918

Subcapitation Payable 40,741 224,293 (122,195) 254,554 125,127 (127,074) 76,184 258,251 300,581 1,030,462

MediCal Adult Expansion Payable 110,468 70,750 66,909 3,700 (14,742) (93,815) (56,959) 5,274 (253,483) (161,897)

Deferred Capitation Revenue (13,836) (6,833) 612 (432) 3,523 18,917 (13,937) 776 21,369 10,160

Accrued Medical Expenses (10,554) 5,043 (19,283) (6,770) 7,909 9,953 3,095 (25,925) (4,716) (41,247)

Reserve for Claims (3,202) 37,320 (28,171) (15,174) (24,108) (34,721) 3,000 (19,753) (11,906) (96,714)

Reserve for Provider Incentives 3,744 3,744 (1,538) (10,098) (17,126) 8,858 2,983 (59,724) 72,682 3,526

Grants Payable 415 (170) 221 511 (30) (115) (175) 1,845 (125) 2,377

Net Changes in Operating Assets and Liabilities 89,667 (307,416) (201,891) 191,974 44,250 231,564 (77,266) (427,564) (82,833) (539,514)

Net Cash Provided By Operating Activities 92,934$ (297,794)$ (186,310)$ 213,396$ 69,658$ 247,252$ (69,112)$ (420,357)$ (65,791)$ (416,125)$

$0 $0 $0 $0 $0 $0 $0 $0 $0

80

7/31/2017

Financial Performance July 2017

81

Financial Performance Results Highlights - Year-to-Date July 2017

Overall

MediCal Plan Partners

MediCal Direct SPD-CCI

MediCal Direct TANF-MCE

Cal MediConnect (CMC)

Commercial

L.A. Care Commercial consists of Covered California, PASC-SEIU and Healthy Kids. The member months are 681,772, which is 687 member months unfavorable to the forecast. The performance is a deficit of $10.2 million and is $1.9 million favorable to forecast. The favorable variance is primarily driven by lower-than-expected capitation expense and inpatient and outpatient claims.

The combined member months are 21.0 million year to date, which is 5,082 member months favorable to the forecast. The year-to-date performance is a surplus of $126.2 million or 1.7% of revenue and is $9.1 million unfavorable to forecast, however meets the $125M original budget target. The unfavorable variance is primarily driven by higher-than-expected inpatient claims.

The member months are 9.9 million, which is 928 member months favorable to the forecast. The performance is a surplus of $98.3 million, and is $0.2 million unfavorable to forecast, which is not significant.

The member months are 2.1 million, which is 2,024 member months favorable to the forecast. The performance is a surplus of $39.2 million, and is $56.6 million favorable to forecast. The forecast includes the updated CCI and MLTSS rates. Favorable surplus variance is primarily driven by lower-than-expected outpatient claims, and several changes in estimate that favorably impacted revenue.

The member months are 8.2 million, which is 2,795 member months favorable to the forecast. The performance is a surplus of $10.7 million, and is $66.2 million unfavorable to forecast. The unfavorable variance is driven primarily by several changes in estimate that unfavorably impacted revenue in the month of July.

The member months are 137,252, which is 21 member months favorable to the forecast. The performance is a surplus of $2.1 million, and is $3.3 million unfavorable to forecast which is driven by higher-than-expected health care costs primarily inpatient claims, and skilled nursing expenses.

82

Consolidated Operations Income Statement ($ in thousands)


Membership2,135,057 2,132,493 2,564 Member Months 20,975,476 20,970,394 5,082

Revenue$681,181 319.05 $722,635 338.87 ($41,454) (19.82) Capitation $7,281,123 347.13 $7,098,606 338.51 $182,517 8.62

$790 0.37 $239 0.11 $551 0.26 Pay for Performance $4,842 0.23 $4,215 0.20 $627 0.03 681,971 319.42 722,874 338.98 (40,903) (19.56) Total Revenues 7,285,965 347.36 7,102,821 338.71 183,144 8.65

Healthcare Expenses328,133 153.69 364,970 171.15 36,836 17.46 Capitation 3,862,938 184.16 3,684,196 175.69 (178,742) (8.48)

6,786 3.18 6,256 2.93 (530) (0.24) Provider Incentives and Shared Risk 83,936 4.00 76,290 3.64 (7,646) (0.36) 74,703 34.99 68,400 32.07 (6,303) (2.91) Inpatient Claims 657,028 31.32 633,274 30.20 (23,754) (1.13)

129,725 60.76 142,116 66.64 12,390 5.88 Outpatient Claims 1,312,154 62.56 1,326,135 63.24 13,981 0.68 49,358 23.12 43,857 20.57 (5,502) (2.55) Skilled Nursing Facility 430,304 20.51 428,029 20.41 (2,275) (0.10) 42,709 20.00 47,634 22.34 4,925 2.33 Pharmacy 493,878 23.55 493,002 23.51 (876) (0.04)

4,050 1.90 5,746 2.69 1,696 0.80 Medical Administrative Expenses 39,689 1.89 43,287 2.06 3,598 0.17 635,465 297.63 678,978 318.40 43,513 20.76 Total Healthcare Expenses 6,879,927 328.00 6,684,213 318.75 (195,714) (9.25)

MCR(%)

46,506 21.78 43,896 20.58 2,610 1.20 Operating Margin 406,039 19.36 418,608 19.96 (12,569) (0.60)

28,558 13.38 30,291 14.20 1,733 0.83 Total Operating Expenses 283,762 13.53 285,988 13.64 2,226 0.11 Admin Ratio(%)

17,948 8.41 13,605 6.38 4,343 2.03 Income (Loss) from Operations 122,277 5.83 132,620 6.32 (10,343) (0.49)

(841) (0) (996) (0.47) 155 0.07 Other Income/(Expense), net (12,876) (1) (13,647) (0.65) 771 0.04 1,897 0.89 1,583 0.74 314 0.15 Interest Income, net 17,118 0.82 16,497 0.79 621 0.03 (306) (0.14) 0 - (306) (0.14) Realized Gain/Loss (651) (0.03) (283) (0.01) (368) (0.02) 641 0.30 0 - 641 0.30 Unrealized Gain/Loss 305 0.01 53 0.00 252 0.01

1,390 0.65 587 0.28 803 0.38 Total Non-Operating Income (Expense) 3,895 0.19 2,620 0.12 1,275 0.06

$19,338 9.06 $14,192 6.66 $5,146 2.40 Net Surplus (Deficit) $126,172 6.02 $135,240 6.45 ($9,068) (0.43) Margin(%)

July 2017Current Current Fav<Unfav> YTD YTD Fav<Unfav>

-0.3%


93.2% 93.9% 0.7% 94.4% 94.1%

-0.2%

4.2% 4.2% 0.0% 3.9% 4.0% 0.1%

2.8% 2.0% 0.9% 1.7% 1.9%

83

MediCal Plan Partners Income Statement ($ in thousands)


Membership1,003,026 1,002,569 457 Member Months 9,939,726 9,938,798 928

Revenue$257,112 256.34 $272,058 271.36 ($14,946) (15.02) Capitation $2,708,495 272.49 $2,732,541 274.94 ($24,046) (2.44)

257,112 256.34 272,058 271.36 (14,946) (15.02) Total Revenues 2,708,495 272.49 2,732,541 274.94 (24,046) (2.44)

Healthcare Expenses241,494 240.77 256,875 256.22 15,381 15.45 Capitation 2,543,228 255.86 2,568,815 258.46 25,587 2.60

1,327 1.32 2,375 2.37 1,047 1.05 Provider Incentives and Shared Risk 25,482 2.56 22,025 2.22 (3,457) (0.35) 0 - 0 - 0 - Inpatient Claims 177 0.02 177 0.02 (0) 0.00

(2) (0.00) 0 - 2 0.00 Outpatient Claims 334 0.03 1,229 0.12 895 0.09 581 0.58 788 0.79 207 0.21 Medical Administrative Expenses 5,972 0.60 6,413 0.65 441 0.04

243,400 242.67 260,038 259.37 16,637 16.71 Total Healthcare Expenses 2,575,192 259.08 2,598,658 261.47 23,466 2.39 MCR(%)

13,711 13.67 12,020 11.99 1,691 1.68 Operating Margin 133,303 13.41 133,883 13.47 (580) (0.06)

4,493 4.48 4,666 4.65 173 0.18 Total Operating Expenses 42,976 4.32 43,101 4.34 125 0.01 Admin Ratio(%)

9,219 9.19 7,354 7.34 1,865 1.86 Income (Loss) from Operations 90,327 9.09 90,782 9.13 (455) (0.05)

974 0.97 666 0.66 308 0.31 Total Non-Operating Income (Expense) 8,020 0.81 7,729 0.78 291 (0.03)

$10,193 10.16 $8,020 8.00 $2,172 2.16 Net Surplus (Deficit) $98,346 9.89 $98,511 9.91 ($165) (0.02) Margin(%)


0.0%


94.7% 95.6% 0.9% 95.1% 95.1%

0.0%

1.7% 1.7% 0.0% 1.6% 1.6% 0.0%

4.0% 2.9% 1.0% 3.6% 3.6%

84

MediCal Direct SPD-CCI Income Statement ($ in thousands)


Membership211,835 211,475 360 Member Months 2,051,693 2,049,669 2,024

Revenue$266,404 1,257.60 $229,214 1,083.88 $37,190 173.72 Capitation $2,183,486 1,064.24 $2,148,155 1,048.05 $35,331 16.19

266,404 1,257.60 229,214 1,083.88 37,190 173.72 Total Revenues 2,183,486 1,064.24 2,148,155 1,048.05 35,331 16.19

Healthcare Expenses18,146 85.66 17,209 81.38 (937) (4.28) Capitation 140,898 68.67 141,756 69.16 858 0.49 (3,608) (17.03) (1,982) (9.37) 1,625 7.66 Provider Incentives and Shared Risk (32,167) (15.68) (31,587) (15.41) 580 0.27 32,549 153.65 31,982 151.23 (566) (2.42) Inpatient Claims 283,786 138.32 280,260 136.73 (3,526) (1.58)

105,509 498.07 119,726 566.15 14,217 68.08 Outpatient Claims 1,091,861 532.18 1,113,559 543.29 21,698 11.11 43,278 204.30 38,532 182.21 (4,745) (22.09) Skilled Nursing Facility 375,688 183.11 375,892 183.39 204 0.28 15,041 71.00 16,484 77.95 1,443 6.95 Pharmacy 161,288 78.61 161,392 78.74 104 0.13

1,372 6.48 2,322 10.98 950 4.50 Medical Administrative Expenses 14,129 6.89 16,026 7.82 1,897 0.93 212,286 1,002.13 224,274 1,060.52 11,988 58.39 Total Healthcare Expenses 2,035,483 992.10 2,057,298 1,003.72 21,815 11.62

MCR(%)


11,840 55.89 11,785 55.73 (55) (0.17) Total Operating Expenses 114,554 55.83 113,814 55.53 (740) (0.31) Admin Ratio(%)

42,278 199.58 (6,845) (32.37) 49,122 231.94 Income (Loss) from Operations 33,449 16.30 (22,957) (11.20) 56,406 27.50

689 3.25 469 2.22 220 1.04 Total Non-Operating Income (Expense) 5,806 2.83 5,596 2.73 210 0.10

$42,967 202.83 ($6,376) (30.15) $49,343 232.98 Net Surplus (Deficit) $39,255 19.13 ($17,361) (8.47) $56,616 27.60 Margin(%)


2.5%


79.7% 97.8% 18.2% 93.2% 95.8%

2.6%

4.4% 5.1% 0.7% 5.2% 5.3% 0.1%

16.1% -2.8% 18.9% 1.8% -0.8%

85

MediCal Direct TANF-MCE Income Statement ($ in thousands)


Membership831,049 829,075 1,974 Member Months 8,165,039 8,162,244 2,795

Revenue$111,425 134.08 $175,715 211.94 ($64,290) (77.86) Capitation $1,968,062 241.04 $1,795,409 219.97 $172,653 21.07

111,425 134.08 175,715 211.94 (64,290) (77.86) Total Revenues 1,968,062 241.04 1,795,409 219.97 172,653 21.07

Healthcare Expenses43,101 51.86 65,188 78.63 22,087 26.76 Capitation 938,873 114.99 731,703 89.64 (207,170) (25.34)

8,269 9.95 5,512 6.65 (2,758) (3.30) Provider Incentives and Shared Risk 80,024 9.80 76,420 9.36 (3,604) (0.44) 37,089 44.63 31,821 38.38 (5,268) (6.25) Inpatient Claims 327,282 40.08 307,910 37.72 (19,372) (2.36) 19,646 23.64 17,171 20.71 (2,476) (2.93) Outpatient Claims 174,113 21.32 163,081 19.98 (11,032) (1.34)

3,792 4.56 3,809 4.59 18 0.03 Skilled Nursing Facility 37,656 4.61 37,015 4.53 (640) (0.08) 24,479 29.46 27,273 32.90 2,794 3.44 Pharmacy 297,189 36.40 296,813 36.36 (376) (0.03)

1,430 1.72 1,851 2.23 421 0.51 Medical Administrative Expenses 14,015 1.72 14,983 1.84 968 0.12 137,806 165.82 152,624 184.09 14,818 18.27 Total Healthcare Expenses 1,869,151 228.92 1,627,925 199.45 (241,227) (29.48)

MCR(%)

(26,381) (31.74) 23,091 27.85 (49,472) (59.60) Operating Margin 98,910 12.11 167,484 20.52 (68,574) (8.41)

10,019 12.06 11,117 13.41 1,098 1.35 Total Operating Expenses 92,408 11.32 94,771 11.61 2,363 0.29 Admin Ratio(%)

(36,400) (43.80) 11,974 14.44 (48,373) (58.24) Income (Loss) from Operations 6,502 0.80 72,713 8.91 (66,211) (8.11)

440 0.53 451 0.54 (11) (0.01) Total Non-Operating Income (Expense) 4,195 0.51 4,215 0.52 (20) 0.00

($35,960) (43.27) $12,425 14.99 ($48,384) (58.26) Net Surplus (Deficit) $10,697 1.31 $76,928 9.42 ($66,231) (8.11) Margin(%)


-4.3%


123.7% 86.9% -36.8% 95.0% 90.7%

-3.7%

9.0% 6.3% -2.7% 4.7% 5.3% 0.6%

-32.3% 7.1% -39.3% 0.5% 4.3%

86

CMC Income Statement ($ in thousands)


Membership15,203 15,150 53 Member Months 137,252 137,231 21

Revenue$24,302 1,598.49 $22,431 1,480.59 $1,871 117.90 Capitation $213,487 1,555.43 $212,351 1,547.40 $1,136 8.04

24,302 1,598.49 22,431 1,480.59 1,871 117.90 Total Revenues 213,487 1,555.43 212,351 1,547.40 1,136 8.04

Healthcare Expenses9,265 609.42 8,923 588.98 (342) (20.44) Capitation 87,075 634.42 86,210 628.21 (865) (6.21)

593 39.03 166 10.98 (427) (28.04) Provider Incentives and Shared Risk 6,532 47.59 5,395 39.31 (1,137) (8.28) 4,543 298.80 3,099 204.56 (1,444) (94.24) Inpatient Claims 30,980 225.71 29,118 212.18 (1,861) (13.53) 4,296 282.55 4,439 292.98 143 10.43 Outpatient Claims 38,697 281.94 39,502 287.85 806 5.91 2,273 149.50 1,515 100.00 (758) (49.50) Skilled Nursing Facility 16,738 121.95 14,933 108.82 (1,805) (13.14)

787 51.78 1,111 73.36 324 21.58 Pharmacy 14,086 102.63 13,143 95.78 (942) (6.85) 552 36.32 696 45.94 144 9.62 Medical Administrative Expenses 4,836 35.23 5,118 37.29 282 2.06

22,309 1,467.40 19,950 1,316.80 (2,359) (150.59) Total Healthcare Expenses 198,943 1,449.47 193,420 1,409.45 (5,523) (40.03) MCR(%)

1,993 131.10 2,481 163.79 (488) (32.69) Operating Margin 14,543 105.96 18,931 137.95 (4,388) (31.99)

(240) (15.77) 868 57.29 1,108 73.06 Total Operating Expenses 12,611 91.88 13,579 98.95 968 7.07 Admin Ratio(%)

2,233 146.87 1,613 106.50 619 40.37 Income (Loss) from Operations 1,933 14.08 5,352 39.00 (3,419) (24.92)

26 1.73 (19) (1.25) 45 2.98 Total Non-Operating Income (Expense) 192 1.40 112 0.82 80 0.59

$2,259 148.59 $1,594 105.24 $665 43.35 Net Surplus (Deficit) $2,125 15.48 $5,464 39.82 ($3,339) (24.33) Margin(%)


-2.1%


91.8% 88.9% -2.9% 93.2% 91.1%

-1.6%

-1.0% 3.9% 4.9% 5.9% 6.4% 0.5%

9.3% 7.1% 2.2% 1.0% 2.6%

87

Commercial Income Statement ($ in thousands)


Membership73,944 74,224 (280) Member Months 681,772 682,459 (687)

Revenue$21,938 296.68 $23,218 312.81 ($1,280) (16.13) Capitation $207,601 304.50 $210,158 307.94 ($2,557) (3.44)

21,938 296.68 23,218 312.81 (1,280) (16.13) Total Revenues 207,601 304.50 210,158 307.94 (2,557) (3.44)

Healthcare Expenses16,128 218.11 16,775 226.01 647 7.90 Capitation 152,866 224.22 155,714 228.17 2,848 3.95

204 2.76 186 2.51 (18) (0.25) Provider Incentives and Shared Risk 2,886 4.23 2,857 4.19 (29) (0.05) 523 7.07 1,497 20.17 975 13.10 Inpatient Claims 14,815 21.73 15,821 23.18 1,006 1.45 278 3.76 780 10.51 502 6.75 Outpatient Claims 7,158 10.50 8,771 12.85 1,614 2.35

14 0.18 0 - (14) (0.18) Skilled Nursing Facility 216 0.32 189 0.28 (27) (0.04) 2,402 32.48 2,766 37.26 364 4.78 Pharmacy 20,981 30.77 21,318 31.24 338 0.46

114 1.55 88 1.19 (26) (0.36) Medical Administrative Expenses 736 1.08 746 1.09 9 0.01 19,662 265.91 22,092 297.65 2,430 31.74 Total Healthcare Expenses 199,657 292.85 205,417 300.99 5,759 8.14

MCR(%)


1,428 19.31 797 10.74 (631) (8.58) Total Operating Expenses 11,821 17.34 11,227 16.45 (594) (0.89) Admin Ratio(%)

847 11.46 329 4.43 519 7.03 Income (Loss) from Operations (3,877) (5.69) (6,486) (9.50) 2,609 3.82

(539) (7.29) (147) (1.98) (392) (5.31) Total Non-Operating Income (Expense) (6,298) (9.24) (5,547) (8.13) (751) (1.11)

$308 4.17 $182 2.45 $127 1.72 Net Surplus (Deficit) ($10,175) (14.92) ($12,033) (17.63) $1,857 2.71 Margin(%)


1.6%


89.6% 95.2% 5.5% 96.2% 97.7%

0.8%

6.5% 3.4% -3.1% 5.7% 5.3% -0.4%

1.4% 0.8% 0.6% -4.9% -5.7%

88

Comparative Balance Sheet

(Dollars in thousands) Jul-16 Sep-16 Dec-16 Mar-17 Jun-17 Jul-17ASSETS

CURRENT ASSETS Total Current Assets 3,713,789 4,070,794 4,853,489 4,655,277 4,901,250 5,023,043 Capitalized Assets - net 60,745 64,508 65,812 68,225 70,448 70,369NON-CURRENT ASSETS $24,663 $842 $519 2,311 3,633 3,359 TOTAL ASSETS $3,799,197 $4,136,144 $4,919,820 4,725,813 4,975,331 5,096,770

LIABILITIES AND FUND EQUITY

CURRENT LIABILITIES Total Current Liability $3,242,886 $3,608,653 $4,371,117 4,118,559 4,341,092 4,443,228 Long Term Liability $3,693 $3,679 $3,629 3,607 3,592 3,559 Total Liabilities $3,246,579 $3,612,332 $4,374,746 4,122,166 4,344,685 4,446,786

FUND EQUITYInvested in Capital Assets, net of related debt $60,745 $64,508 $65,812 68,225 70,448 70,369 Restricted Equity $300 $300 $300 300 300 300 Minimum Tangible Net Equity $190,427 $192,308 $196,915 197,643 194,228 195,008 Board Designated Funds $301,146 $266,696 $16,252 15,042 11,042 10,842 Retained Earnings (undesignated) ($0) ($0) $265,795 322,436 354,629 373,465 Total Fund Equity $552,618 $523,812 $545,074 $603,646 $630,646 $649,984

TOTAL LIABILITIES AND FUND EQUITY $3,799,197 $4,136,144 $4,919,820 $4,725,813 $4,975,331 $5,096,770

Solvency Ratios

Working Capital Ratio 1.15 1.13 1.11 1.13 1.13 1.13 Cash to Claims Ratio 0.91 0.89 0.77 0.81 0.57 0.54 Tangible Net Equity Ratio 2.90 2.72 2.77 3.05 3.25 3.33

July 2017

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Cash Flows Statement ($ in thousands) Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 YTD

Cash Flows from Operating Activities: Capitation Revenue 585,436$ 13,957$ 591,729$ 682,666$ 717,209$ 1,157,803$ 591,589$ 134,766$ 845,838$ 485,203$ 5,806,197$ Other Income (Expense), net 17 1,071 603 1,088 1,051 2,924 5,647 (2,730) 2,321 2,686 14,677 Healthcare Expenses (473,840) (288,339) (736,854) (444,419) (622,572) (887,018) (647,746) (522,017) (883,995) (527,048) (6,033,847) Operating Expenses (18,679) (24,484) (41,788) (25,939) (26,030) (26,458) (18,602) (30,376) (29,955) (18,896) (261,207) Net Cash Provided By Operating Activities 92,934 (297,794) (186,310) 213,396 69,658 247,252 (69,112) (420,357) (65,791) (58,055) (474,180)

Cash Flows from Investing Activities Net Proceeds from Sale of Investments 157,576 51,806 (331,287) 135,715 (53,507) 7,749 19,125 9,204 105,971 284,948 387,301 Purchase of Capital Assets (1,529) (3,331) (470) (426) (2,216) (3,737) (2,566) (2,664) (798) (1,352) (19,089) Net Cash Provided By Investing Activities 156,048 48,475 (331,756) 135,289 (55,723) 4,012 16,559 6,540 105,173 283,596 368,213

Cash Flows from Financing Activities: Gross Premium Tax (MCO Sales Tax) - Net (73,935) (212) 213 (34,725) 52,952 (15,749) 8,002 2,570 (24,261) (3,570) (88,716)

Pass through transactions (AB 85, IGT, etc.) 9,102 (17,893) 414,972 (415,312) 20,667 78,788 1,412 (21,458) (61,546) 107 8,840 Net Cash Provided By Financing Activities (64,833) (18,104) 415,185 (450,037) 73,619 63,039 9,414 (18,888) (85,807) (3,463) (79,876)

Net Increase in Cash and Cash Equivalents 184,148 (267,424) (102,882) (101,352) 87,554 314,303 (43,138) (432,705) (46,425) 222,078 (185,843)

Cash and Cash Equivalents, Beginning 642,865 827,013 559,589 456,707 355,355 442,909 757,212 714,074 281,369 234,944 642,865 Cash and Cash Equivalents, Ending 827,013$ 559,589$ 456,707$ 355,355$ 442,909$ 757,212$ 714,074$ 281,369$ 234,944$ 457,022$ 457,022$

Reconciliation of Income from Operations to Net Cash Provided By (Used In) Operating Activities

Excess of Revenues over Expenses 2,153$ 6,619$ 12,490$ 20,946$ 24,163$ 13,464$ 6,425$ 5,508$ 15,067$ 19,338$ 126,172$

Adjustments to Excess of Revenues Over Expenses: Depreciation 1,349 1,343 1,334 1,322 1,330 1,314 1,354 1,220 1,232 1,431 13,229 Realized and Unrealized (Gain)/Loss on Investments (761) 1,132 259 (1,058) (59) 811 (102) 7 451 (334) 346 Deferred Rent (8) (21) (21) 1 1 (25) 53 (34) (34) (34) (121) IGT - - - (331) (728) (161) (81) 41 (81) 329 (1,012) Gross Premium Tax provision 535 547 1,519 541 702 284 506 465 407 313 5,819Total Adjustments to Excess of Revenues over Expenses 1,113 3,002 3,091 476 1,245 2,224 1,730 1,699 1,975 1,705 18,261

Changes in Operating Assets and Liabilities: Capitation Receivable (43,919) (641,623) (83,064) (37,740) (38,406) 445,959 (97,398) (580,608) (204,298) (173,606) (1,454,702) Interest and Non-Operating Receivables (450) (417) 65 (516) (652) 809 (698) (222) 295 48 (1,739) Prepaids and Other Current Assets 1,613 (4,050) 212 (2,047) 1,320 202 1,459 (6,186) (738) 1,098 (7,117) Accounts Payable and Accrued Liabilities 4,646 4,527 (15,659) 5,986 1,433 2,592 5,179 (1,292) (2,494) 4,851 9,769 Subcapitation Payable 40,741 224,293 (122,195) 254,554 125,127 (127,074) 76,184 258,251 300,581 102,616 1,133,078 MediCal Adult Expansion Payable 110,468 70,750 66,909 3,700 (14,742) (93,815) (56,959) 5,274 (253,483) (6,914) (168,811) Deferred Capitation Revenue (13,836) (6,833) 612 (432) 3,523 18,917 (13,937) 776 21,369 (15,690) (5,530) Accrued Medical Expenses (10,554) 5,043 (19,283) (6,770) 7,909 9,953 3,095 (25,925) (4,716) 7,476 (33,771) Reserve for Claims (3,202) 37,320 (28,171) (15,174) (24,108) (34,721) 3,000 (19,753) (11,906) (2,127) (98,841) Reserve for Provider Incentives 3,744 3,744 (1,538) (10,098) (17,126) 8,858 2,983 (59,724) 72,682 3,000 6,526 Grants Payable 415 (170) 221 511 (30) (115) (175) 1,845 (125) 150 2,527 Net Changes in Operating Assets and Liabilities 89,667 (307,416) (201,891) 191,974 44,250 231,564 (77,266) (427,564) (82,833) (79,098) (618,612)

Net Cash Provided By Operating Activities 92,934$ (297,794)$ (186,310)$ 213,396$ 69,658$ 247,252$ (69,112)$ (420,357)$ (65,791)$ (58,055)$ (474,180)$

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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Board of Governors

MOTION SUMMARY

Date: September 7, 2017 Motion No. FIN 101.0917

Committee: Finance & Budget Chairperson: Michael Rembis

Issue: Recommend the draft FY 2017-18 Capital and Operating Budget for Board Consideration.

Background: Please see the cover memorandum and Budget documents for detailed information.

Member Impact: Discussion by the Committee members to recommend a financial plan for the

fiscal year that outlines appropriate use of revenue for the effective implementation of programs to serve L.A. Care members.

Budget Impact: Not applicable.

Motion: To approve the Fiscal Year 2017-18 Capital and Operating Budget, as submitted.

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.

DATE: July 26, 2017

TO: Finance & Budget Committee

FROM: Marie Montgomery, Chief Financial Officer

SUBJECT: Fiscal Year 2017-18 Operating & Capital Budget The enclosed package contains a draft of the fiscal year (FY) 2017-18 Budget for your review and consideration. Also included are select sections covering Membership, Revenue, Cost of Health Care, Administrative Costs, Meeting Expenses, Staffing & Total Cost of Labor, Community Health Improvement Programs, Sales & Marketing Strategy, Capital Projects and Financial Statements. At this time, we hope the committee recommends the Budget move forward to the Board of Governors for approval in September 2017. The proposed FY 2017-18 Operating Budget, with revenues of $7.5 billion, represents a 12.6 percent decrease over the FY 2016-17 forecasted revenue of $8.5 billion. The proposed budget surplus is $143.4 million or 1.9 percent of revenue, which represents a $1.5 million increase from FY 2016-17 forecast. This upcoming fiscal year marks the end of a rapid growth period that began in 2014, with the launch of products and programs including Medi-Cal expansion, the Coordinated Care Initiative (CCI), Cal MediConnect (CMC), and LA Care Covered (LACC). Opportunities exist for continued growth in CMC and LACC, although the LACC membership outlook is unclear, given uncertainty around the mandate to purchase insurance, the availability of cost-sharing reduction funding, and pricing. We are projecting slow growth of 1.0 percent, to reach 2,153,162 members by September 2018. Member redeterminations impacted us more in January 2017 than the expected July/August 2016 timeframe. Our upcoming budget assumes a reduction of membership due to redeterminations with a similar pattern as the previous year, beginning in January 2018. Membership is projected to be essentially flat but there are a number of factors exerting downward pressure on member retention and future growth for Medi-Cal segments. In August, 2016, we implemented our new core system (QNXT). Over the remainder of the current fiscal year, our focus was on stabilizing the core system. The Budget assumes continued investment in technology to build upon our core system to a more integrated core administrative system. These investments include IT infrastructure, the VOICE program to improve customer service tools and capabilities, and medical management to improve care coordination and utilization management. Our revenue and healthcare costs are expected to be significantly reduced due to the removal of IHSS from managed care effective January 1, 2018. The CMS Medicaid Regulation, "Mega Reg" took effect July 1, 2017. The impact of the prospective rating requirements for the directed payments are not yet known at this time. If there are significant changes for the implementation of

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these requirements or other significant changes we will bring a revised budget for your consideration.

Key FY 2017-18 budget assumptions include:

• A net reduction of 25,000 Medi-Cal members (9,000 MCE lives and 16,000 TANF lives split 50/50 between Plan Partners and MCLA) in 2018 due to the member eligibility redetermination process.

• Community Programs are budgeted at $20.6 million of which $4.0 million is earmarked for programming that addresses homelessness.

• Medi-Cal revenue reflects the following rate changes:

· Legacy Rating Categories: Change as percent of July 2017-June 2018 (SFY) revenue

The revenue rates are based on SFY 2017-18 rates from the California Department of Health Care Services (DHCS).

· CCI (Non-CMC) Duals Rating Categories: DHCS has not released CY 2017 or CY 2018 rates for CCI (Non CMC) Duals and SFY 2017-18 MTLSS for non-duals; the budget assumes conservative increases in revenue rates based on trend analysis.

• Health care costs are based on current trends and actuarial estimates.

• In-home Supportive Services (IHSS) was removed from managed care as of January 1, 2018.

• Provider incentives are based on a flat per member per month (PMPM) and budgeted to follow current trends.

L.A. Care membership is flattening with slow growth and is projected to reach 2,153,162 by September 2018. This represents an increase of 1.0 percent or 21,000 members over the fiscal year. Enrollment in the direct lines of business remained flat year to year at roughly 53 percent of total membership in FY 2017-18.

Rating CategoryPercent Change

MCE (6.1%)SPD+ 5.6%

Family Adult 2.9%Family Child 0.5%

Maternity 2.9%BCCTP 1.5%

Disabled Dual (<21) 2.3%

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Revenue and healthcare expenses decrease significantly compared to the prior fiscal year due primarily to the removal of IHSS from managed care as of January 1, 2018.

Administrative expenses are budgeted to be 5.0 percent of revenue. This increases from the 4.1 percent forecasted for FY 2016-17, primarily from the impact of the IHSS revenue reduction. We expect that other comparable plans such as CalOptima and IEHP will experience increases to their administrative ratios as this change occurs. As a result, we are focusing more on the PMPM administrative expense. On that basis, we are increasing from $13.75 PMPM based on the FY 2016-17 forecast to $14.50 PMPM for the FY 2017-18 Budget. This is a result of our continued investment in technology in addition to the previous core system investments where efficiencies

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have not yet been fully realized. The core system implementation focused on the claims adjudication platform but there are many dependent processes that also require improvement. It is critical we improve our operations to be efficient to respond to the pressures that will likely stem from funding reductions from Washington. We aspire to continue to be a good partner to LA County and the State in driving efficiency when the cost pressures intensify. Our preparation and investments now, position us for that goal.

The proposed budget surplus brings the end-of-year fund balance to $809.2 million. Included in the fund balance is the DMHC’s required reserve known as minimum tangible net equity (TNE). L.A. Care holds TNE at 130 percent of the required level. Health plans with reserves within 130 percent of the requirement may be subject to a financial review and additional reporting requirements. While the removal of IHSS from managed care increases our administrative expense ratio, it also decreases our required minimum tangible net equity. This in turn increases the ratio as TNE is calculated using fee for service health care expenses, which includes IHSS expenses. At the end of FY 2017-18 we are projecting to be at 526% of required TNE.

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OPERATING AND CAPITAL BUDGET FISCAL YEAR 2017-18

Board of Governors September 7, 2017

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Table of Contents

I. EXECUTIVE SUMMARY........................................................................................................................................... 2

- Environmental Overview ........................................................................................................................................ 3

- L.A. Care Strategic Vision (2015-2018) ................................................................................................................ 4

- Operating Assumptions .......................................................................................................................................... 6

- Combined Operations & Financials ...................................................................................................................... 8

- Membership .............................................................................................................................................................. 9

- Revenue ................................................................................................................................................................... 10

- Healthcare Expenses ............................................................................................................................................. 10

- Provider Incentives ................................................................................................................................................ 12

- Administrative Expenses ...................................................................................................................................... 13

- Non-Travel Meeting, Food, and Other Expenses ............................................................................................ 15

- Staffing and Total Cost of Labor ......................................................................................................................... 18

- Sales, Marketing and Advertising Strategy .......................................................................................................... 19

- Community Health Improvement Programs ..................................................................................................... 23

- Capital Expenditures and Other Projects ........................................................................................................... 27

II. FINANCIAL STATEMENTS ................................................................................................................................... 28

EXECUTIVE SUMMARY

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Environmental Overview With the election of a Republican president and congress, the Affordable Care Act (ACA) is under threat, creating a challenging environment for L.A. Care moving forward. On May 4, 2017, the House passed the American Health Care Act (AHCA) and the Senate is currently drafting their version of the bill. While the final version of the bill is uncertain, it will likely result in significant cuts to Medicaid and destabilization of the exchange market.

The biggest risk to L.A. Care are the proposed changes to Medicaid, which represent a major restructuring of the program. Per capita block grants are being proposed, with the rate of increase projected to be significantly lower than the increase in health care costs. Since its inception, Medicaid funding has been actuarially determined. This proposed funding reduction would leave states with a series of poor options – increasing State and local taxes, reducing benefits, reducing managed care reimbursement, reducing provider reimbursement, or eliminating coverage for certain populations.

Changes to the exchanges are also being proposed, which create much uncertainty for L.A. Care Covered. Funding for cost sharing reductions has not been committed, and changes to the subsidy structure may result in higher premiums for high-need groups, potentially low income and older individuals. Elimination or non-enforcement of the individual mandate, combined with possible elimination or relaxation of pre-existing condition and Essential Health Benefits coverage, will negatively affect the risk pool.

To the extent that any reform legislation is able to be enacted, it seems likely that more control would lie at the State level. Covered California has been a strong exchange and may well serve as part of a statewide health reform solution. It will be important to follow the gubernatorial election for 2018 and see what changes a new governor will bring to California’s health insurance market. One candidate, Gavin Newsom, has already been talking about a single payor system modeled on Healthy San Francisco.

L.A. Care Segments During the last fiscal year, L.A. Care surpassed the 2 million member mark for Medi-Cal membership. Medi-Cal membership has grown steadily, with some dips resulting from redeterminations. Undocumented children have been enrolled into Medi-Cal as a result of SB 75, and correspondingly, Healthy Kids members have transitioned into TANF Medi-Cal. Anecdotally, the call center and advocates report that immigration fear is making people reluctant to enroll in Medi-Cal, despite their eligibility, if there is an undocumented member in the family. Under normal circumstances, we would anticipate continued growth in Medi-Cal for the upcoming fiscal year although at a slower pace (the Governor’s budget projects a 2 percent growth rate for FY 2017-18) since there are fewer uninsured left to enroll. Any changes to Medi-Cal resulting from ACA replacement will not take effect until 2020 or later. However, uncertainty in the health care, social service, and immigration landscape may depress membership. L.A. Care Covered (LACC) membership increased significantly last fiscal year, growing to roughly 25,000 members. The increase is likely attributed to favorable pricing and a good marketing campaign. More than three-fourths of LACC members are in the Silver metal tier. The population is on the older side with almost half between ages 40-59 (18.5% 40-49, 30.6% 50-59). Membership for this fiscal year is unclear, given uncertainty around the mandate to purchase insurance, the availability of cost-sharing reduction funding, and pricing.

Cal MediConnect membership has increased steadily over the fiscal year, growing to almost 15,000 members. L.A. Care also continues to operate its PASC-SEIU sub-segment for in-home supportive services (IHSS) workers. Membership has remained steady at roughly 49,000 members.

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L.A. Care Strategic Vision (2015-2018) Now that L.A. Care has more experience with its new products and with its new Medi-Cal populations, we have the opportunity to refine our approach so that our products best meet our members’ needs. With L.A. Care’s new matrix organization and completion of the product line Executive Directors and other organizational restructuring, L.A. Care is prepared to improve its business operations and approach to product lines. The Strategic Vision is outlined in this budget document. The major areas of priority include promoting clear lines of accountability to drive efficiency and excellence, aligning reimbursement to member risk and provider performance, tailoring models of care to the specific needs of our member populations and maintaining leadership in improving health outcomes for low income and vulnerable populations. L.A. Care wants to ensure that our members receive excellent care that is accessible to all and managed in a manner that promotes good health outcomes.

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Strategic Direction

Tactics

SD 1: A highly-functioning health plan with clear lines of accountability, authority and communication, and with processes and people that drive efficiency and excellence

1.1 Implement the core business transformation strategy to achieve the goal of becoming the highest quality Managed Care Organization for our members.

1.2 Build a high performance workforce through the attraction, training and retention of high quality talent, capable of meeting the evolving needs of a large and complex heath plan.

1.3 Drive product line performance by establishing clear lines of accountability to support high-quality service and financial sustainability across all product lines.

1.4 Enable product line performance through operational improvements and increased functionality.

1.5 Increase use of data to drive decision-making across product lines and functional areas by centralizing data governance, management, and analytics and establishing tools that facilitate access to data.

1.6 Optimize the financially responsible growth potential of Cal MediConnect and L.A. Care Covered.

SD 2: A network that aligns reimbursement with member risk and provider performance in support of high-quality, cost-efficient, member-centric care

2.1 Optimize shared risk, dual risk and full risk contracting arrangements by product segment to align reimbursement with the specific needs and risk type of the population segment.

2.2 Develop and implement strategies to promote quality performance in the provider network.

SD 3: Tailored models of care for the specific needs of our member populations

3.1 Develop and implement direct networks for subpopulations within our membership to improve access and quality.

3.2 Develop tailored population health management programs for the unique needs of our vulnerable, high-risk, and other subpopulations.

SD 4: Recognized leader in improving health outcomes for low income and vulnerable populations in Los Angeles County

4.1 Develop an L.A. Care brand that articulates our value proposition.

4.2 Actively support safety net providers’ ability to perform their delegated functions and succeed in a managed care environment.

4.3 Mobilize our community resources to ensure that we are responsive and accountable to the needs of our members and constituents.

4.4 Foster innovative approaches to improving the quality of care provided by the safety net.

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Operating Assumptions The proposed Operating Budget for FY 2017-18 outlines the financial resources and personnel needed to meet L.A. Care’s strategic objectives established for the coming year. The primary focus of the budget will be to sustain the existing business while stabilizing the core operating system, grow the Commercial and CMC products, and continue navigating the complexities of the Coordinated Care Initiative. A summary of proposed objectives and operating assumptions are as follows:

• Membership remains relatively flat with 1.0 percent growth to reach 2,153,162 members by September 2018 from 2,132,183 forecasted at the close of the FY 2016-17.

• A net reduction of 25,000 Medi-Cal members (9,000 MCE lives and 16,000 TANF lives split 50/50 between Plan Partners and MCLA) in 2018 due to the member eligibility redetermination process.

• Community Programs are budgeted at $20.6 million of which $4.0 million is earmarked for programming that addresses homelessness.

• In-home Supportive Services (IHSS) was removed from managed care as of January 1, 2018.

• Healthcare expenses are based on current trends and actuarial estimates.

• Provider incentives are based on a flat rate per member per month (PMPM) and budgeted to follow current trends.

Budget Presentation The proposed operating budget combines L.A. Care’s on-going baseline operating costs with infrastructure expenses to support regulatory compliance as well as incremental costs associated with strategic projects. The proposed operating budget also supports the strategic vision for the operating plan, reorganization, and contracting options for providers. L.A. Care organizes its population segments based on risk and reimbursement. Executive Directors are in place to lead these segments and execute on strategic priorities. The segments consists of Plan Partners, TANF-MCE, SPD-CCI, Cal MediConnect, Commercial Products. Community Programs are managed at the direction of the Executive Office. Product lines for each segment are also shown below:

*Includes both LACC and LACC-Direct

Plan Partners Plan Partners budget consists of the operating revenue and costs required to support all aid categories under Medi-Cal, delivered through the contracted Plan Partners (Anthem, Care1st, and Kaiser) health care networks.

Plan Partners

Anthem, Kaiser, Care1st (all aid

codes)

Medi-Cal Direct

TANF-MCE SPD-CCI

CMC

CMC Medical CMC Medicare

Commerical Products

PASC-SEIU LACC*

Community Programs

CHIF and Grants

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TANF-MCE (Medi-Cal Direct) Temporary Assistance for Needy Families (TANF) – consists primarily of members in family-adult, family-child, and BCCTP aid categories. Medi-Cal Expansion (MCE) – covers budget for Medi-Cal Direct expansion members. The MCE program expanded Medi-Cal coverage starting January 2014 to adults (ages 19-64) without children. Eligibility is based on a few factors including a modified adjusted gross income (MAGI) requirement below 138 percent federal poverty level (FPL).

SPD-CCI (Medi-Cal Direct) Seniors and Persons with Disabilities (SPD) – includes Medi-Cal members in aged, disabled, partial dual, and long term care aid categories. SPDs have represented a sizable portion of L.A. Care’s direct membership since mandatory managed care enrollment of this group in 2011. Coordinated Care Initiative (CCI) – is the pilot program developed in conjunction with California’s Department of Health Care Services to integrate medical care, long-term care, behavioral health care and social services for people eligible for both Medicare and Medi-Cal. The CCI population consists of CCI (Non CMC) Dual members primarily in the aged-dual, disabled-dual, and long-term care dual aid categories. The CCI pilot has been extended through 2020, however IHSS benefits are removed as of January 1, 2018.

Cal MediConnect (CMC) The Cal MediConnect program aims to improve care coordination for dual eligible beneficiaries and drive high quality care that helps people stay healthy and in their homes for as long as possible. Additionally, shifting services out of institutional settings and into the home and community helps create a person-centered health care system that is also sustainable. The Cal MediConnect program is part of California’s larger Coordinated Care Initiative (CCI). This includes members for Medi-Cal and Medicare. CMC has been extended through year 2020.

Commercial Products PASC-SEIU program provides administrative services for the health care of in-home supportive services (IHSS) workers in Los Angeles County. Among the administrative services provided are: claims processing, member services and information technology services. L.A. Care Covered (LACC) program started in January 2014 and represents L.A. Care members that join the Health Benefit Exchange Qualified Health Plan (QHP) which offers all metal coverage levels (Platinum, Gold, Silver and Bronze) and a Catastrophic Plan. In addition, there is a L.A. Care Covered Direct product that launched in February 2015 for consumers to purchase insurance privately ‘Off-the-Exchange’. This plan mirrors the L.A. Care Covered with two main differences: premium assistance is not available for ‘Off Exchange’ plans and members must apply for coverage directly to L.A. Care.

Community Programs Community Programs include all direct funding and L.A. Care administrative costs required to fulfill the Board of Governors’ approved initiatives and community support. Funding for the Community Programs will be drawn from L.A. Care’s existing financial reserves. This element of the annual operating budget earmarks the funding level

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of L.A. Care’s financial reserves, which are anticipated to be disbursed in this fiscal year. TCPI (Transforming Clinical Practice Initiative) is included in Community Programs and the project is grant funded.

Combined Operations & Financials Combined operations are budgeted to produce a net operating surplus of $143.4 million, which includes the $20.6 million in support of community programs.

Plan Partners TANF-MCE SPD-CCI CMC Commercial

Community Programs* Total

Revenues $2,869.2 $2,074.8 $1,919.1 $272.4 $312.4 $4.1 $7,452.0Healthcare Expenses 2,728.1 1,842.0 1,816.9 254.9 286.7 0.0 6,928.6MCR (%) 95.1% 88.8% 94.7% 93.6% 91.8% 0.0% 93.0%

Operating Margin 141.1 232.8 102.2 17.5 25.7 4.1 523.4

Administrative Expenses 58.4 130.3 144.9 15.2 10.0 14.7 373.4Admin Ratio (%) 2.0% 6.3% 7.6% 5.6% 3.2% 358.3% 5.0%

Operating Margin 82.7 102.5 (42.7) 2.3 15.7 (10.6) 150.0

Community Investments 0.0 0.0 0.0 0.0 0.0 (10.0) (10.0)Managed Care Tax, net 0.0 0.0 0.0 0.0 (6.6) 0.0 (6.6)Investment Income, net 4.2 2.8 3.0 0.0 0.0 0.0 10.0

Net Surplus /(Deficit) $86.9 $105.3 ($39.7) $2.3 $9.1 ($20.6) $143.4Margin (%) 3.0% 5.1% -2.1% 0.8% 2.9% -502.2% 1.9%

*Includes Community Programs and TCPI

Consolidated Income Statement Fiscal Year 2017-18(dollars in millions)

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Membership Direct membership represented approximately 20 percent of the total in FY 2011-12 and has steadily grown to reach 53 percent of total membership in fiscal year 2016. Overall, the projected membership growth between FY 2016-17 and FY 2017-18 is expected to be 21,000 members or 1.0 percent, with member months growing by 524,000 or 2.1 percent. Combined segment membership is projected to be 2,153,162 at September 30, 2018.

FY 16-17Forecast

FY 17-18Budget Members Percent

FY 16-17Forecast

FY 17-18Budget Members Percent

Medi-CalPlan Partners 1,003 1,010 7 0.7% 11,944 12,092 148 1.2%TANF-MCE 828 827 (1) (0.1%) 9,820 9,928 108 1.1%SPD-CCI 211 218 7 3.5% 2,471 2,597 126 5.1%Total Medi-Cal 2,042 2,055 13 0.7% 24,235 24,617 382 1.6%

Cal MediConnect 16 19 3 19.2% 168 204 36 21.3%Commercial

Healthy Kids 0-5 - - - 0.0% 1 - (1) (100.0%)PASC-SEIU 49 49 (0) (0.7%) 584 592 8 1.3%LACC* 25 30 5 20.0% 246 345 99 40.4%

Total 2,132 2,153 21 1.0% 25,234 25,758 524 2.1%

MEMBERSHIP BY FISCAL YEAR(in thousands)

Membership Change Member Months Change

MEMBERSHIP BY SEGMENTFiscal Year 2017-2018

MonthPlan

Partners TANF - MCE SPD - CCI CMC PASC-SEIU LACC* TotalOct-17 1,004,590 830,025 210,718 15,767 49,338 25,036 2,135,474 Nov-17 1,006,200 831,515 210,778 15,658 49,338 25,036 2,138,525 Dec-17 1,007,810 833,005 210,838 15,655 49,338 25,036 2,141,682 Jan-18 1,003,150 821,273 218,048 16,100 49,338 30,036 2,137,945 Feb-18 1,004,760 822,763 218,108 16,602 49,338 30,036 2,141,607 Mar-18 1,006,370 824,253 218,168 16,917 49,338 30,036 2,145,082 Apr-18 1,007,980 825,743 218,228 17,243 49,338 30,036 2,148,568 May-18 1,009,590 827,233 218,288 17,488 49,338 30,036 2,151,973 Jun-18 1,011,200 828,723 218,348 17,760 49,338 30,036 2,155,405 Jul-18 1,010,670 828,189 218,408 18,024 49,338 30,036 2,154,665 Aug-18 1,010,139 827,655 218,468 18,281 49,338 30,036 2,153,917 Sep-18 1,009,609 827,121 218,528 18,530 49,338 30,036 2,153,162 Member Months 12,092,066 9,927,498 2,596,926 204,025 592,056 345,432 25,758,003

* Includes both LACC and LACC Direct

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Revenue

Medi-Cal Capitation Rates (Legacy Rating & Non Duals Categories) This category reflects the following rate changes:

Legacy Rating Categories: Change as percent of SFY 2016-17 revenue

The revenue rates are based on July 2017-June 2018 rates from the California Department of Health Care Services (DHCS).

Medi-Cal CCI (Non CMC) Dual Eligible Rating Categories DHCS has not released CY 2017 or CY 2018 rates for CCI (Non CMC) Duals and SFY 2017-18 MTLSS for non-duals; the budget assumes conservative increases in revenue rates based on trend analysis.

Cal MediConnect The revenue for this pilot program is based on rates received from DHCS and the Centers for Medicare and Medicaid Services (CMS); current rate levels were projected to FY 2017-18.

PASC-SEIU PASC-SEIU revenue rate assumes an eleven percent increase from the previous fiscal year.

L.A. Care Covered L.A. Care Covered rates are based on the CY 2017 rates and the CY 2018 rates submitted to Covered California.

Healthcare Expenses

Medi-Cal Plan Partners The delegated contract with the three Plan Partners (Anthem, Care 1st, and Kaiser) was negotiated in FY 2015-16 and they reflect both a capitation rate for the Medi-Cal benefit and an incentive program. The agreements with all three Plan Partners will be renegotiated in 2020. The acquisition of Care 1st Health Plan by Blue Shield of California was finalized in 2015. Plan Partners (with the exception of Kaiser) will be eligible for an incentive program based on measurement year 2017 (payable in 2018). The incentive is designed to align quality goals among L.A. Care and its subcontracted health plans and target specific performance measures that impact member auto assignment, health outcomes and patient

Rating CategoryPercent Change

MCE (6.1%)SPD+ 5.6%

Family Adult 2.9%Family Child 0.5%

Maternity 2.9%BCCTP 1.5%

Disabled Dual (<21) 2.3%

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satisfaction. Anthem and Care 1st are eligible for an annual per member per month financial incentive for meeting eligibility and performance criteria.

Direct Segments L.A. Care’s direct segments consist of TANF-MCE, SPD-CCI, CMC, and Commercial (PASC & L.A. Care Covered). The health care budget for these segments is based on current trends and actuarial estimates. Consistent with a maturing health care delivery network, the utilization growth and the consumption of health care services has become more complex. L.A. Care’s management team remains focused on utilization management processes, provider contracting and claims payment management. The fundamental goal is to assure that L.A. Care’s members have access to an appropriate health care provider at the most cost effective venue.

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Provider Incentives

L.A. Care Quality Score Investments (Provider Incentive Programs) L.A. Care’s provider incentives are an essential part of L.A. Care’s interventions to maximize clinical quality and member satisfaction. In addition to rewarding excellent performance and improvement on multiple measures, these programs provide a business case for provider investment in quality improvement and use industry standard metrics such as HEDIS (Healthcare Effectiveness Data and Information Set) clinical measures to promote accountability for quality. L.A. Care’s provider-level incentives are designed to advance L.A. Care’s collaboration with key business partners, and to align the quality improvement goals of Plan Partners, IPAs, and physicians.

Plan Partner Quality Score Investments (Incentives) The Plan Partner Incentive Program aligns the efforts of L.A. Care with those of its strategic partners as a critical point for improving the outcomes and satisfaction of members. In the program’s clinical quality domain, participating plans are rewarded for defined improvement in core HEDIS auto-assignment measures. Plans are also rewarded and responsible for the encounter data submission performance of their largest IPAs as well as their own encounter performance.

IPA Quality Score Investments (Incentives) VIIP+P4P (Value Initiative for IPA Performance + Pay-for-Performance) measures, reports and rewards IPA performance in multiple domains that affect quality of care, including HEDIS, access and availability, utilization management, encounter timeliness and member satisfaction. In addition to rewarding performance and driving quality improvement, VIIP+P4P reports and promotes meaningful improvement in encounter volume data submission. Performance-based incentive payments in VIIP+P4P are adjusted based on IPA encounter submission rates.

Physician Quality Score Investments (Incentives) The Physician Pay-for-Performance (P4P) Program provides financial rewards to physicians and community clinics for outstanding performance and year-over-year improvement on multiple HEDIS measures. In addition, performance-based payments are adjusted based on compliance in access and availability criteria. The program is closely aligned with incentives available to IPAs.

Incentive Level Programs

Plan Partners (1) TANF-MCE SPD-CCI (2) CMC Commercial Total

Plan Partners $10,860 $0 $0 $0 $0 $10,860

PPG 9,050 11,062 1,658 204 345 22,319

Physician 9,050 7,902 926 929 345 19,152

Member 0 1,175 138 41 195 1,549

Total $28,960 $20,139 $2,722 $1,174 $885 $53,880Note:(1) Excludes Kaiser(2) CCI members not eligible for incentive level programs

Provider Incentive BudgetFY 2017-18

(dollars in thousands)

Segments

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L.A. Care also operates provider incentives in support of completing Medicare Annual Wellness Exams and conducting behavioral health screenings using the eManagement system. The goal of these programs are to maximize Hierarchical Condition Category (HCC) coding, HEDIS/STAR attainment and improve patient care for those experiencing depression, anxiety and/or substance use issues. Additionally, L.A. Care’s member incentives advance L.A. Care’s priorities related to member experience, health education and promoting important medical services.

Administrative Expenses

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Comparative Administrative Cost – FY 2016-17 vs. FY 2017-18 L.A. Care has undergone significant growth and change over the past several years. The complexity of products and benefits have also dramatically increased with the shift in membership mix from predominantly mothers and children under TANF to the more complex seniors and people with disabilities and dual eligible populations. L.A. Care continues to develop the infrastructure required to efficiently manage these products and populations while maintaining regulatory compliance, serving the needs of the members, and adding value to the community. The following is a summary of the administrative forecast and budget between the fiscal years.

(dollars in thousands)Forecast

FY 2016-17 PMPMBudget

FY 2017-18 PMPMFTEs (at year end) 2,008 2,082

Salaries and Benefits $190,613 $7.55 $200,895 $7.80Temporary Labor and Recruitment 6,957 0.28 5,829 0.23 Professional Fees 27,193 1.08 29,607 1.15 Purchased Services 70,280 2.79 75,539 2.93 Advertising and Promotions 8,407 0.33 10,013 0.39 Business Fees and Insurance 27,525 1.09 32,262 1.25 Occupancy and Leases 16,172 0.64 19,257 0.75 Supplies and Other 28,452 1.13 25,289 0.98 Medical Administrative Expenses (44,424) (1.76) (44,310) (1.72) Depreciation and Amortization 16,612 0.66 19,000 0.74 Total Administrative Expenses $347,787 $13.78 $373,380 $14.50Admin Ratio (%) 4.1% 5.0%

Administrative ExpensesComparative Statement

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Non-Travel Meeting, Food, and Other Expenses

Proposed Programs:

Continuing Medical Education (CME) Training Program L.A. Care is a continuing education provider accredited by the Institute for Medical Quality, a subsidiary of the California Medical Association, and also the Board of Registered Nursing and the Board of Behavioral Sciences for CME activities and events provided by the Provider Continuing Education Program. The CME activities and

Proposed Programs Non-Travel

Food Expenses Other* Total

1. Continuing Medical Education (CME) Training Program $86,700 $93,800 $180,5003. Sacramento Advocacy Day 10,000 27,665 37,665 4. Legislative In-House Briefings 4,200 800 5,000 5. Board of Governors and Committee Meetings Refreshments 10,000 - 10,000 6. Board of Governors Retreat 4,500 2,000 6,500 7. Pharmacy Quality and Oversight Committee 2,400 2,250 4,650 8. Quarterly Joint PICC/PQC 1,800 5,300 7,100 9. Monthly Behavioral Health Steering Committee Meeting 4,347 - 4,347 10. Community Benefits Grant Review Committees 800 7,200 8,000 11. Monthly Credentialing Committee Meeting 4,480 10,600 15,080 12. Stakeholder Advisory Committee Meeting 850 - 850 13. Utilization Management Committee Meetings 3,900 6,000 9,900 14. CEO Business Development 10,000 - 10,000 15. Community Events at FRCs 26,400 90,000 116,400 16. Coordinated Care Initiatives and Health Promoters Program 43,000 31,900 74,900 17. CO&E events including RCAC & ECAC Meetings and RCAC Conferences 19,000 16,000 35,000 18. Safety Net Initiatives Business Development Initiatives 8,960 35,480 44,440 19. CHCF Grant - Safe Med L.A. 6,540 - 6,540 20. Fresh Fruit Fridays, Biometrics Screenings and Flu Vaccinations 98,800 57,100 155,900 21. New Employee Orientation 6,750 11,000 17,750 22. Recognizing Excellence Awards Program, Intranet Engagement Activities - 92,000 92,000 23. Service Award Program, Staff Engagement Summit 2,445 64,471 66,916 24. Weight Watchers, Toastmasters, and Wellness Employee Programs 1,600 67,540 69,140 25. Power Maintenance Event and Annual Disaster Recovery Test 1,550 - 1,550 26. Compliance Week, Nurses Week, Customer Service Week, and Social Work Month 10,259 26,861 37,121 27. Annual Strategic Planning Meeting 357 2,000 2,357 28. Autism Spectrum Disorder Benefits Meeting 1,920 - 1,920 29. Introduction to NCQA Delegation and On-Site NCQA Mock Survey 1,905 - 1,905

$373,464 $649,967 $1,023,431

*"Other" expenses include stipends for guest speakers, participants, and members; promotional items and training kits; facility costs; miscellaneous costs for community and employee events; event transportation and parking validations; gift cards to recognize employee excellence; and biometric screenings, flu vaccinations and employee wellness programs.

L.A. Care Health PlanNon-Travel Meeting, Food, and Other Expenses

for Fiscal Year 2017-2018

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events specifically target the low performing primary care physicians related to their HEDIS scores and Star Performance to improve quality of patient care and physician-patient relationships. The CME program will hold activities throughout the year, with emphasis on the identified needs of the providers through conducted surveys and ongoing feedback. The program topics include but are not limited to childhood and adult chronic diseases, cultural awareness and competency, behavioral health, eHealth and preventive health care. The success of the program will depend on providing activities on content areas that are important for improving providers’ competency, performance and patient outcomes. Event expenses will include stipends for guest speakers to cover travel and preparatory costs. Advocacy Strategy Events In order to develop a more proactive and comprehensive advocacy strategy, several events are planned to preserve and promote the value of the Two-Plan Model by providing education on meeting local community and safety-net needs to internal and external stakeholders and to the Local Initiative. One of these events is Advocacy Day held in Sacramento to ensure access to care for low income and vulnerable populations. Another event is the Legislative Briefing meeting, which will be held to provide updates to legislative staff. Meetings with Providers and Other External Stakeholders Various mandatory, regulatory and advisory meetings are held at L.A. Care’s facilities, including committee meetings, trainings, and educational conferences, the goal of which are to support and strengthen L.A. Care’s ability to provide a safety net for the communities we serve. Such meetings include:

· Board of Governors and other Governing Committees · The Pharmacy and Quality Oversight Committee · Performance and Improvement Collaborative Committee (PICC) · Physician Quality Committee (PQC) · Behavioral Health Steering Committee · Credentialing Committee · Stakeholder Advisory Committee · Utilization Management Committee · Autism Spectrum Disorder Benefits Meeting · Safe Med L.A. Coalition – CHCF Grant · NCQA Delegation and Audit

Business Development Many community events are held annually to strengthen L.A. Care’s relationship with its members. Furthermore, L.A. Care representatives are engaged in business development activities related to the sales and promotion of the various products offered. Collaborative meetings with sister health plans, the Department of Health Services, providers, and members all contribute to the expansion of L.A. Care’s Safety Net Initiatives. Continuation of these development activities are an integral part of the messaging and branding strategy in relationship building with providers, members, and external stakeholders. Events and programs include:

· Community Events at the Family Resource Centers (FRCs) · CEO Business Development · Annual Strategic Planning Meeting · Coordinated Care Initiatives · Health Promoters Program · Community Outreach & Engagement Events including RCAC & ECAC meetings and RCAC Conferences

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· Safety Net Initiatives Business Development · Provider Network Management Joint Operations Meetings · Direct Network Outreach and Expansion · Community Benefits Grant Review Committees

Staff Recognition and Retention, and Extenuating Circumstances Programs have been designed to recognize and reward the staff at L.A. Care for going above and beyond their normal job duties or to further the L.A. Care mission. New employees are welcomed to L.A. Care with an orientation at which they receive welcome/training packets and light refreshments. Additional programs such as Toastmasters are offered to further training or career development. Fresh Fruit Fridays, biometric screenings, and flu vaccinations serve to bolster employee health and connection with L.A. Care through minimal expenditure. Other benefits that promote employee health include discounts for gym memberships and the Weight Watchers and Fit-4-Life programs. Meals may be provided to employees working mandatory overtime in extenuating circumstances such as the Yearly Disaster Recovery Test where employees work over the weekend. Employees can be rewarded with a small gift card or promotional item for providing exceptional service or participating in engagement events, and the Service Award Program event recognizes employees who have reached a milestone of 5, 10, or 15 years of service at L.A. Care. Events such as Social Work Month, Customer Service Week, Nurses Week, and Compliance Week serve to recognize L.A. Care staff and educate departments about different service areas within the company.

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Staffing and Total Cost of Labor L.A. Care’s forecasted full time equivalent (FTE) staffing is 2,008 positions at the end of FY 2016-17. During FY 2017-18, the budget provides for up to 74 additional FTEs, raising the total FTE count to 2,082 by the end of FY 2017-18. The additional FTEs are in support of infrastructure support and network growth, which includes new family resource centers to serve the complex populations including the Coordinated Care Initiative, Cal MediConnect, Medi-Cal Expansion and L.A. Care Covered. Salaries and Benefits, budgeted at $200.9 million for FY 2017-18, include merit increases budgeted at 3.25 percent. In an effort to focus employees on organizational goals and objectives, L.A. Care will reward most employees with bonus incentives based on criteria established in its Organizational Incentive Program. The incentive program is not a guaranteed bonus for employees, but rather a reward for excellent performance, either at the organizational or individual level. Incentive compensation earned by an employee is paid as a lump sum and does not become a part of the employee’s base pay rate. The chart below depicts current staff, positions currently being recruited, and open positions needed for this fiscal year:

Forecast FY 2016-2017

Budget FY 2017-2018

Beginning of the Year 1,839 2,008

2017 - 2018 New Positions Membership/Network Growth 75 32 Infrastructure support (Strategic Projects) 34 8 Infrastructure support (Other) 60 34

Total Additions 2017 - 2018 169 74

End of the Year 2,008 2,082

FTEs FTEs per(at year end) 000 Members

FY 2013-14 (Actual) 1,294 0.81FY 2014-15 (Actual) 1,707 0.92FY 2015-16 (Actual) 1,839 0.92FY 2016-17 (Forecast) 2,008 0.94FY 2017-18 (Budget) 2,082 0.97

FTE History

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Sales, Marketing and Advertising Strategy FY 2017-18 Marketing Narrative Telling the L.A. Care story through the Parent Brand Initiative Overview On the heels of major milestones for L.A. Care, the Marketing Department will continue to drive efforts for the organization to become a recognized leader for health outcomes in L.A. County. Celebrating the organization’s 20 Year Anniversary and reaching the 2 million member mark for Medi-Cal are two significant events that coincided with the launch of the Parent Brand Initiative in FY 2016-17. The Parent Brand Initiative has established a brand message platform for the L.A. Care story to be told through our external marketing efforts as we go into FY 2017-18 and beyond. L.A. Care continues to be a critical player in serving one of the most complex metropolitan areas in the nation. Our mission and vision will always be the driving forces that position the organization as an advocate protecting access to care in L.A. County. The essence of the Parent Brand Initiative is summarized by the following characteristics: Inclusiveness - The initiative reflects the community we serve. It represents our members, employees, providers, stakeholders and prospective members. The look, feel and people we present in the campaign will continue to evolve over time to represent the many different faces of Los Angeles. Aspirational - The initiative is aspirational, as we are committed to being a part of the solutions to the many problems healthcare deterents in L.A. County. We aim to elevate the quality of care through the work we do in the community with our partners and stakeholders, and as employees every day. Rooted - This campaign is rooted in our mission and vision, and it speaks to the fact that we are here to serve the needs of our fellow Angelenos. The concepts, images and words used in the campaign are a product of the many thoughts and ideas that our employees brought forward during the conceptual stages of the project. Journey - This initiative is a journey, and we are in this together. Every day we will work as one to find solutions to the healthcare challenges in our neighborhoods and communities. Building from the launch of the Parent Brand Initiative will be our next step in FY 2017-18. First we will utilize the initiative to revitalize external advertising and sales communication for products and programs, including Cal MediConnect, L.A. Care Covered and our growing Family Resource Centers. Internally, the Parent Brand Initiative will have multiple connection points and synergies. It will grow through the organization as employee development opportunities are identified. This will create intersections for performance excellence and employee engagement to foster each other’s growth in the spirit of “Elevating Healthcare”. From an employee engagement perspective it means that we must continue to build new systems and processes to better serve our members.

As a department we are committed to being the central point of activity for programs, projects and initiatives intended to create more awareness for L.A. Care’s products and services. One of our operating objectives is to impact growth in our direct business segments and drive brand growth that aligns with our strategic priorities. We are also invested in being a full service workgroup, providing marketing support for a growing employee base and services to a wide range of business units. We will continue to be on the frontlines with consumers and influencers alike and will be a barometer for understanding beliefs, behaviors and consumer attitudes regarding health care in Los Angeles County.

While our competitors spend heavily in the market, our nimble and innovative marketing efforts create results amidst a competitive landscape as seen in the enrollment growth in Cal MediConnect and L.A. Care Covered. The

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insights, learnings and data from marketing campaigns over the last five (5) years has enabled the Marketing Team to be cost effective and resourceful. This in turn helped us develop strategies and implement tactics that have created growth for our products. The missing component of previous work is now being implemented via the Parent Brand Initiative. Over the course of the next Fiscal Year, we will roll out a more cohesive marketing program that integrates brand and product. Success will continue to be predicated on metrics used previously, this includes but is not limited to:

· A growing Medi-Cal choice rate, with 47 percent of consumers choosing L.A. Care during FY 2016-17 · Growth in Cal MediConnect and L.A. Care Covered, two products that are competitively marketed and sold

against a large contingent of product choices · A growing media footprint – 800+ million media impressions garnered over a 12-month timeframe across

all media channels – Out of Home, Print, Radio, TV Integration and Digital in support of multiple products and projects (LACC, CMC, Family Resource Centers).

· A baseline for awareness of L.A. Care as a brand, with EMC and Maricich Health having conducted our first ever brand awareness survey for the health plan in the spring of 2017

· An extensive marketing presence in the community, with over 300 events being directed by the Sales and Marketing team in FY 2016-17

The following strategies are an overview that will guide the planning and resource allocation decisions throughout the year: Strategy#1: Continue Development of the Parent Brand Initiative The Parent Brand Initiative will continue to work to achieve the following goals:

1) Unify consumers, stakeholder and public perception of L.A. Care Health Plan through a single voice and visual identity for the organization

2) Connect all segments and marketing programs to this identity so consumers will have the same brand experience, regardless of their interaction point (segments, FRC’s, events, etc.)

3) Create synergy within the organization for the development of employee-focused connection points to the initiative, creating opportunities to maximize performance excellence by elevating the quality of work. This gives every employee an opportunity to impact the quality of care we provide to our members and the community, both directly and indirectly.

Goal 1: Use an internal workgroup to continue to drive the internal launch and integration of the Parent Brand Initiative into the culture of L.A. Care Goal 2: Integrate the Parent Brand Initiative into product campaigns and collateral Goal 3: Refine the look and feel of the campaign to reflect our members, employees, stakeholders and providers over the course of year 2 of the initiative Strategy #2: Data Driven Product Campaigns We will prioritize the understanding of consumer trends and behavior, primarily through learnings from previous marketing projects. Developing institutional knowledge specific to products will enable the marketing team to be

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more efficient and create a more targeted approach for campaigns aimed at growing our membership. Leadership direction and trends in the healthcare industry will also be critical to the future direction of these efforts. Goal 1: Leverage internal data and market insights to create a second phase of marketing and sales efforts aimed at growing our CMC segment. Goal 2: Build on success of past OEP campaigns to retain and grow L.A. Care Covered sub-segment, utilize our “no wrong door” approach to continue to offer consumer choices in our product offerings – beneficial to Medi-Cal eligible and the churn population. Goal 3: Identify and capitalize on marketing opportunities for our Community Access Network and Direct Networks. Strategy #3 Expansion of Multicultural Marketing and Accessible Marketing Materials The dynamics of the market place continue to evolve and our marketing efforts will adapt. Our external marketing efforts will take into account growth opportunities with not only demographic and lifestyle market segments (Asian, Armenian, Hispanic, African American and LGBTQ) but also those limited through physical handicaps. We will expand on our subject matter expertise for making all of the organization’s documents accessible to people who have disabilities as in line with WCAG industry standards. Goal 1: Develop staff to implement a full range of WCAG resources, and procure an outsourced vendor for additional support Goal 2: Refine messaging and tactics that are aimed at growth segments, ensuring that this marketing is culturally competent both in language and appearance Goal 3: Create partnerships through media partners, providers and CBO’s that expand our footprint in multicultural communities Strategy #4: Research We will leverage the use of future enterprise database management tools to create a 360 degree view of marketing activity. This includes garnering a better understanding of consumer engagement, conversion and our return on investment. In addition, creating a baseline for the growth in awareness for our products and services will be a key priority of the Parent Brand Initiative. Goal 1: Integrate measurement tools and processes into a future enterprise CRM, and develop a digital marketing tool focused on utilizing current data to influence future advertising efforts Goal 2: Oversee a second brand survey to measure levels of awareness for our products and services as a whole. This data would be compared to previous surveys to index potential growth Goal 3: Host marketing data and reporting in a third party platform to better understand consumer trends and behavior

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Conclusion The Parent Brand Initiative is the principle project the Marketing Team will be leading in the next fiscal year. The initiative is meant to be flexible, with the understanding that priorities and needs would shift depending on trends, current and future products and external factors. The initiative also reflects a shift in the organization to be more consumer focused and capitalize on opportunities by being marketing-centric. The department is ready and poised to be an integral part of our Organization’s growth with a keen understanding that we must do our part to elevate healthcare in L.A. County.

FY 2017-18 Sales Business Development Strategy Overview The FY 2016-17 has been a good year for the L.A. Care Sales Department. While all of L.A. Care’s membership is a priority, the main focus of the department has been on new membership growth for the Cal MediConnect (CMC) product. This segment launched in 2014 through a passive enrollment program managed by DHCS and the enrollment broker, Health Choice Options. CMC offers L.A. Care the opportunity for greater growth with the Dual Eligible population. However, all products benefit from the education and outreach programs delivered to members, prospects and our contracted provider network. Cal MediConnect The Cal MediConnect segment is the channel through which L.A. Care can reach and serve a highly underserved community of individuals eligible for Medicare and Medi-Cal. L.A. Care’s Medi-Cal, CCI and ageing-in members provide significant enrollment opportunities for Cal MediConnect. The Sales Teams are aligned with the strategy development for these products through collaboration with Medicare Operations, Provider Network Management and Segment Executive Directors. The Sales Team will continue to focus on building the new enrollment pipeline through the Member and Provider Development and Provider Marketing Programs aligned with planned Marketing and Advertising campaigns. The program is beginning to show net increase with membership exceeding 15,000 and enrollments exceeding 700 plus each month. L.A. Care Covered California This Commercial sub-segment holds a different and unique challenge for L.A. Care due to the limited enrollment period and the aggressive competition from other health plans. This product is driven mainly by price and/or the premium subsidy available to lower income individuals. L.A. Care is favorably placed in this product as a result of our utilization of the CalHEERS eligibility and enrollment program, servicing L.A. Care Covered and Medi-Cal. L.A. Care contracts with five General Agencies to work with this sub-segment in addition to L.A. Care sales staff. The budget supports the multiple field activities including meeting costs, booth fees, promotional material and items used to attract enrollees, and the development of the Agent Portal to assist our General Agencies and agents in improving communications and streamlining business development. The FY 2016-17 enrollment season produced in excess of 18,000 new members to this sub-segment, which almost tripled our existing membership.

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Medi-Cal The Medi-Cal program is the central program for the sales department, as most providers are contracted for all of L.A. Care’s direct segments. It allows our team access to providers and clinics to establish and sustain good relationships with physicians and office staff that bring mutual value. L.A. Care is currently the choice of 47 percent of individuals when selecting a health plan. This selection rate in combination with the 69 percent assignment rate by the state offers an excellent growth opportunity for Medi-Cal. FY 2017-18 Sales Budget Strategy The FY 2016-17 has seen continued growth in Medi-Cal due to the expansion population under the Affordable Care Act and to 47 percent of the eligible population selecting L.A. Care as their health plan provider. The Sales and Outreach plan will continue as filed with DMHC for the FY 2017-18 and will include continued provider outreach and education, field education and enrollment events supported by the tactical promotion budget. The Cal MediConnect segment has experienced new membership growth to over 15,000 members as of June 2017. New member enrollments are forecasted to grow to approximately 5,200 by the end of FY 2016-17 and we are forecasting 8,400 new enrollments FY 2017-18. The enrollment growth is generated by the Field Sales and Enrollment Support Services teams through member in-reach marketing, provider marketing outreach & education, tele-sales, community sponsored events and seminars. The projected budget will support the new vision for the management of the product that is associated with marketing, member/prospect mailings, provider in-services, outreach, booth and event fees and promotional costs along with promotional items for marketing events. We have also budgeted, created and placed addition support staff to assist Field Sales and ESS representatives identifying training needs to increase and improve membership growth for FY 2017-18. DHCS implemented a streamlined enrollment process in July 2016. This process currently accounts for approximately 60 percent of our enrollments monthly. We welcome this improvement as an opportunity to educate and seamlessly transition eligible members and consumers into the product and help them get the care they need without the time-consuming Health Care Options process. We will continue to look for more ways to improve processes for FY 2017-18. L.A. Care Covered is set to enter its fourth open enrollment period for new members with an effective date of January 1, 2018. Covered California encourages the Qualified Health Plans to offer competitive rates as well as the opportunity for members to “shop the plans”. As a result, LACC is price competitive among the other qualified health plans. Members expect excellent service and administration of their policy, benefits, billing and available subsidies. LACC is demanding on L.A. Care’s current operating systems and customer service channels. The sub-segment experienced a planned 300 percent gain in membership during the FY 2016-17 enrollment period as a result of the competitive pricing, scheduled community events and joint partnerships with contracted agencies. We were pleased to deliver a membership growth of approximately 18,000 members with 85 percent placed in the Silver metal tier. The Sales Team will evaluate the competitive rate positioning for the FY 2017-18 enrollment period and will focus on the opportunities associated with the Silver Metal Tier. The marketing and sales budgets support a continued brand and enrollment campaign similar to the successful campaign strategy utilized for the 2017 enrollment period. The Sales Department is positioning L.A. Care to be prominent in over 250 local events by utilizing our five contracted agencies with over 1,100 brokers to present and enroll members into L.A. Care Covered. We are also working with the California Endowment and other plan partners to train and certify their Navigators to enroll for L.A. Care Medi-Cal and L.A. Care Covered. The Family Resource Centers will continue to be engaged as enrollment support sites with a mix of Field Sales Representatives and contracted agents.

Community Health Improvement Programs

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The proposed Community Health Improvement Program budget for FY 2017-18 allocates $20.6 million of L.A. Care’s financial reserves for selected projects to be funded throughout the fiscal year. Community Health Improvement Programs include the Community Health Investment Fund (CHIF), Transforming Clinical Practice Initiative (TCPI) Federal Grant and Community Programs (which includes eManagement, California Technical Assistance Program (CTAP), Family Resource Centers (FRCs), Community Clinic Program, Community Benefits Program, Promotoras and Sponsorships).

Community Health Investment Fund (CHIF) $10.0 Million The Board of Governors established the CHIF program to improve access and quality of care by filling gaps and supporting infrastructure to benefit the underserved and the safety net that serves them. CHIF is managed by the Community Benefits Program, and the four overarching goals of this program include: (1) Support safety net clinics’ infrastructure to provide high quality and coordinated services to help the safety net

thrive in a managed care environment. (2) Expand access to high-barrier services for low-income and vulnerable populations. (3) Improve community health for underserved populations by addressing the social determinants that lead to poor

health outcomes.

CommunityCHIF TCPI Programs * Total

Grant Revenues $0.0 $4.1 $0.0 $4.1Healthcare Expenses - - - - Operating Margin - 4.1 - 4.1 Administrative Expenses - 4.1 10.6 14.7 Income (Loss) from Operations - 0.0 (10.6) (10.6) Community Investments (10.0) - - (10.0) Net Surplus (Deficit) ($10.0) $0.0 ($10.6) ($20.6)

Statement of Community Health Improvement ProgramsFiscal Year 2017-2018

(dollars in millions)

* Community Programs include eManagement, CTAP, FRCs, Community Clinic Program, Community Benef its Program, Promotoras, and Sponsorships

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(4) Provide housing support for high-risk homeless individuals with multiple, complex or chronic conditions. Each year, staff presents to the Board a recommended budget allocation for CHIF grant-making, which is divided between funds for predetermined initiatives and for those in response to external requests. The CHIF forecast for FY 2016-17 was $10.2 million, and $10.0 million is recommended for FY 2017-18. A total of $6.0 million of the proposed CHIF funding level is recommended to be invested in initiatives that improve community and public health, expand access to care and strengthen the safety net. This may include projects that improve clinical delivery systems such as care coordination and integration of medical, behavioral health and oral care as well as those systems that connect primary and tertiary care. It will also support community efforts designed to improve physical and social environments that address the social determinants that most impact health, creating environments that enable individuals and communities to live in optimal health. A total of $4.0 million is recommended for programming that addresses homelessness and provides social support services to complement Los Angeles County’s Whole Person Care initiative under the California Medi-Cal waiver. This investment has two benefits to L.A. Care: 1) provide specific support to secure and offer non-Medi-Cal covered housing and related supportive services to homeless Medi-Cal beneficiaries, many of whom are L.A. Care members, through the Department of Health Services Flexible Housing Pool; and 2) allow Los Angeles County to secure federal matching funds through the Whole Person Care initiative to create and deploy highly needed new community resources necessary to address and/or mitigate the social determinants of health that impact L.A. Care’s ability to improve health outcomes of its frequent utilizers and high-cost members. The Los Angeles County Whole Person Care Pilot initiative could generate as much as $90.0 million per year over the next five years, to create an infrastructure of community field-based outreach teams, including teams of community health workers, recuperative care bed expansion, sobering center capacity, expansion of data sharing technologies for integrated care management among multiple agencies, and other intensive services.

Transforming Clinical Practice Initiative (TCPI) In 2015, L.A. Care was one of 39 health care collaborative networks selected by CMS to participate in the Transforming Clinical Practice Initiative (TCPI). L.A. Care received a grant of up to $15.8 million over four years to develop Los Angeles Practice Transformation Network (LAPTN) which helps 3,200 L.A. County clinicians serving approximately two million patients improve care for diabetes and/or depression and also transform their practices. LAPTN provides onsite and remote support to help clinicians more effectively treat patients at high risk for hospitalization, optimize transitions to community care settings after acute hospitalization, increase frequency of medication reconciliation, and improve patient medication education and management in all care settings. In 2016 LAPTN reached its enrollment goal of 3,200 clinicians. In 2017 TCPI proceeded as planned with 30 coaches helping clinicians progress through CMS defined phases of practice transformation, improve quality measures for diabetes and depression, and reduce hospital admissions.

eManagement (formerly eConsult) $504,000 L.A. Care’s eConsult program was developed to improve access to quality specialty care for L.A. County residents focusing on low-income and vulnerable populations by allowing HIPAA secure conversations between primary care providers and specialists using an online platform. The second phase called eManagement consists of expansion to improve care delivery by enhancing collaboration between primary care providers and mental health specialists, improve co-management of complicated patients, reduce unnecessary office visits, improve medication management, and optimize specialist visits. As of early 2017 the eManagement pilot was implemented with 92 providers reaching 101,000 members. Over 4,300 depression, anxiety, and substance abuse screenings and 28 eManagement consultations were conducted for L.A. Care members. Providers were paid $51,000 in incentives. Grantors CHCF and BSCF continue to provide select support.

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California Technical Assistance Program (CTAP) $2.2 Million In 2015 L.A. Care was awarded a contract from the California Department of Health Care Services for $10.8 million over three years to provide EHR technical assistance to 2,165 Medi-Cal providers in L.A. County. The program helps Medi-Cal providers reach further stages of meaningful use on EHRs. The program enables continued assistance provided by Health IT Regional Extension Centers such as HITEC-LA and expands current scope to include additional provider types. By early 2017 the program reached its enrollment goal and has earned over $2.4 million through meaningful use milestone achievements. A two-year no-cost extension is expected through 2020.

Family Resource Centers $5.8 Million The Family Resource Centers (FRC) are aimed at addressing health disparities by creating a single point of service where the community can turn to for help with health education, assistance with navigating the health care delivery system and available programs and resources. Dedicated L.A. Care staff and contracted health education vendors provide a number of activities for community residents including health education, disease prevention, promotion of self-management tools and education on establishing or maintaining health coverage. Five Family Resource Centers (FRCs) have successfully been launched in Lynnwood, Inglewood, Boyle Heights, Pacoima and Palmdale. Since the opening of the first FRC in November 2007, the project has been successful in delivering well-integrated health education resources and services that address important health topics such as asthma, diabetes and obesity. The sixth FRC located in East Los Angeles and San Gabriel Valley locations are expected to open in FY 2017-18.

Community Clinic Program/ (SCOPE) Plan $500,000 The Strengthening Clinic Operations and Patient Experience (SCOPE) Plan is a L.A. Care strategic initiative that provides contracted Federally Qualified Health Centers (FQHCs) and Community Clinics additional support, in the form of programs and services aimed at strengthening their operational performance. Guided by IHI’s Triple Aim Framework, the SCOPE Plan’s three main objectives are to (1) improve patient experience, (2) improve health outcomes and (3) reduce unnecessary health care costs. Toward this end, the SCOPE Plan’s current activities are focused on addressing several strategic areas:

Strategic Partnership and Alignment Workforce Development Training and Education Support Patient Experience and Retention Operations Transformation

Examples of program activities currently underway include: the Community Clinic Physician Leadership Program, the Care Navigator Apprenticeship Pilot, and Patient Experience Survey development and implementation.

Community Benefits Program Administration $445,000 The Community Benefit Program's department staff is responsible for managing all aspects of L.A. Care’s CHIF grant making activities. Every year L.A. Care commits a portion of its revenues to community benefit activities. Staff researches gaps in healthcare, especially for vulnerable and uninsured individuals. Program initiatives are developed and announced to the community. Proposals are reviewed by staff and external experts. Grantee management includes review and support of grantee programs to assure that all funds are appropriately used. In addition to L.A. Care-developed initiatives, staff reviews proposals which are submitted for targeted needs. Ad-hoc proposals that meet our mission and the themes developed for funding in the Board approved Community Investment Strategy are presented to Leadership, Executive Committee and finally the Board of Governors for funding approval.

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Capital Expenditures and Other Projects The list reflects projects proposed and may include amount to be spent over multiple fiscal years. Projects primarily support infrastructure and systems improvements while allowing L.A. Care the flexibility to achieve Strategic Goals.

Core Business Transformation (CBT) Category Capital

Expense Operating Expense Total

Provider Network 8,940$ 2,950$ 11,890$ Data and Technology 8,520$ 1,925$ 10,445$ Customer Service 4,880$ 2,150$ 7,030$ Membership and Eligibility 4,400$ 1,350$ 5,750$ Medical Management 4,020$ 1,000$ 5,020$ Operations 5,500$ 1,825$ 7,325$ Performance 1,920$ 600$ 2,520$ Financial 1,580$ 500$ 2,080$ Leasehold Improvements (Placeholder including FRC, 2nd Floor Garland, etc.) 13,000$ -$ 13,000$

52,760$ 12,300$ 65,060$

L.A. Care Health PlanProposed Projects

Fiscal Year 2017-2018(dollars in thousands)

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FINANCIAL STATEMENTS

Actual as of Forecast as of Budget as ofSeptember 30, 2016 September 30, 2017 September 30, 2018

Combined Balance SheetCurrent Assets

Cash & cash equivalents $642,865 $330,170 $374,104Investments, at fair value 2,060,639 2,214,027 1,335,000 Other current assets 1,343,176 1,975,765 1,475,765 Total current assets 4,046,680 4,519,962 3,184,869

Capital Assets, net 64,508 66,482 69,482 Other Assets

Non-current Assets 24,955 27,819 29,819 Total Assets $4,136,143 $4,614,263 $3,284,170Current Liabilities

A/P and accrued liabilities $70,947 $38,797 $38,797Subcapitation payable 1,087,602 1,950,986 1,713,280 Medi-Cal Adult Expansion Payable 1,538,346 1,179,932 - Reserves for Provider Incentives 62,808 75,334 70,794 Reserves for claims 579,834 475,000 450,000 Deferred Revenue 45,197 50,988 39,988 Other accrued medical expenses 221,221 164,705 154,705 Grants payable 2,697 9,232 4,232

Total current liabilities 3,608,652 3,944,974 2,471,797

Non-Current Liabilities 3,679 3,506 3,146 Total Liabilities 3,612,331 3,948,480 2,474,943 Fund Equity

Invested in Capital Assets 64,508 66,482 69,482 Restricted 300 300 300 Designated by Board of Governors 266,696 403,512 585,656 TNE (130% of Required) 192,308 195,489 153,789

Total Fund Equity 523,812 665,783 809,227 Total Liabilities and Fund Equity $4,136,143 $4,614,263 $3,284,170

L.A. Care Health PlanBalance Sheet


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FY 2015-2016 FY 2016-2017 FY 2017-2018Actual Forecast* Budget

Member Months 23,821,720 25,234,181 25,758,003

RevenuesCapitation $7,755,317 $8,521,805 $7,447,910Pay for Performance 2,290 4,692 4,102

Total Revenues 7,757,607 8,526,497 7,452,012

Healthcare ExpensesCapitation $3,888,706 $4,434,058 $4,121,092Provider Incentives and Shared Risks 44,503 88,875 80,879Inpatient Claims 995,680 751,184 700,147Outpatient Claims 1,543,436 1,610,844 824,320Skilled Nursing Facility 436,030 515,758 552,314Pharmacy 472,633 587,761 594,324

Medical Administrative Expenses 51,789 54,992 55,497

Healthcare Expenses 7,432,775 8,043,472 6,928,573

MCR (%) 95.8% 94.3% 93.0%

Operating Margin 324,832 483,025 523,43975 75 Total Administrative Expenses 298,419 347,786 373,380Administrative Ratio (%) 3.8% 4.1% 5.0%

Income (Loss) from Operations 26,413 135,239 150,059

Non-Operating Income (Expenses)Provision for Community Investments (4,155) (11,153) (10,000) Managed Care Tax, net (1,722) (1,552) (6,615) Investment Income, net 10,336 19,438 10,000

Net Surplus (Deficit) $30,872 $141,971 $143,444Margin (%) 0.4% 1.7% 1.9%

*The Fiscal Year 2016-2017 forecast is based on 8 months of actual financial results through May 2017 and 4 months of forecast through September 2017.

L.A. Care Health PlanComparative Income Statements

(dollars in thousands)

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Budget as ofSeptember 30, 2018

Tangible Net Equity (TNE) Calculation

Healthcare expenses:

1. 8% of first 150 million of $12,000 annualized healthcare expenses, except those paid on a capitated or managed hospital basis 2. 4 % of the annualized health 62,201 care expenses, except those paid on a capitated or managed hospital basis

3. 4 % of the annualized hospital 44,098 expenditures paid on a managed hospital basis

Calculated TNE based on healthcare expenses 118,299

TNE (at 130% of State Required Level) 153,789

Fund equity 809,227

Excess equity over required TNE $655,438

L. A. Care Health PlanRequired Tangible Net Equity Calculation


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OPERATING AND CAPITAL BUDGET FISCAL YEAR 2017-18

Supplemental Information

Board of Governors September 7, 2017

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FINANCIAL OVERVIEW

COMBINED OPERATIONS & FINANCIALS

Combined operations are budgeted to produce a net operating surplus of $143.4 million, which includes $20.6 million in support of community programs.

(dollars in thousands)Forecast*FY 16-17 PMPM

% of Revenue

BudgetFY 17-18 PMPM

% of Revenue

Member Months 25,234,181 25,758,003

RevenuesCapitation $8,521,805 $337.71 99.9% $7,447,910 $289.15 99.9%Pay for Performance 4,692 0.19 0.1% 4,102 0.16 0.1%

Total Revenues $8,526,497 $337.89 100.0% $7,452,012 $289.31 100.0%

Healthcare ExpensesCapitation $4,434,058 $175.72 52.0% $4,121,092 $159.99 55.3%Provider Incentives and Shared Risk 88,875 3.52 1.0% 80,879 3.14 1.1%Inpatient Claims 751,184 29.77 8.8% 700,147 27.18 9.4%Outpatient Claims 1,610,844 63.84 18.9% 824,320 32.00 11.1%Skilled Nursing Facility 515,758 20.44 6.0% 552,314 21.44 7.4%Pharmacy 587,761 23.29 6.9% 594,324 23.07 8.0%Medical Administrative Expenses 54,992 2.18 0.6% 55,497 2.15 0.7%

Total Healthcare Expenses $8,043,472 $318.75 94.3% $6,928,573 $268.99 93.0%

Operating Margin $483,025 $19.14 5.7% $523,439 $20.32 7.0%

Administrative ExpensesSalaries and Benefits $190,613 $7.55 2.2% $200,895 $7.80 2.7%Temporary Labor and Recruitment 6,957 0.28 0.1% 5,829 0.23 0.1%Professional Fees 27,193 1.08 0.3% 29,607 1.15 0.4%Purchased Services 70,280 2.79 0.8% 75,539 2.93 1.0%Advertising and Promotions 8,407 0.33 0.1% 10,012 0.39 0.1%Business Fees and Insurance 27,525 1.09 0.3% 32,262 1.25 0.4%Occupancy and Leases 16,172 0.64 0.2% 19,257 0.75 0.3%Supplies and Other 28,452 1.13 0.3% 25,289 0.98 0.3%Medical Administrative Expenses (44,424) (1.76) (0.5%) (44,310) (1.72) (0.6%)Depreciation and Amortization 16,612 0.66 0.2% 19,000 0.74 0.3%

Total Administrative Expenses $347,787 $13.78 4.1% $373,380 $14.50 5.0%

Income (Loss) from Operations $135,238 $5.36 1.6% $150,059 $5.83 2.0%

Total Non-Operating Income (Expenses) $6,733 $0.27 0.1% ($6,615) ($0.26) (0.1%)

Net Surplus (Deficit) $141,971 $5.63 1.7% $143,444 $5.57 1.9%Margin (%) 1.7% 1.9%

* Forecast is based on 8 months of actual financial results through May 2017 and 4 months of forecast through September 2017.

Consolidated Income StatementL.A. Care Health Plan

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Medi-Cal Plan Partners The delegated contracts with the three Plan Partners (Anthem, Care 1st, and Kaiser) have been negotiated in FY2015-16 and they reflect both a capitation rate for the Medi-Cal benefit and an incentive program. The agreements with all three Plan Partners will be renegotiated in 2020. The acquisition of Care 1st Health Plan by Blue Shield of California was finalized in 2015. Plan Partners (with the exception of Kaiser) will be eligible for an incentive program based on measurement year 2017 (payable in 2018). The incentive is designed to align quality goals among L.A. Care and its subcontracted health plans and target specific performance measures that impact member auto assignment, health outcomes and patient satisfaction. Plan Partners are eligible for an annual per member per month financial incentive for meeting eligibility and performance criteria.


% of Revenue

BudgetFY 17-18 PMPM

% of Revenue

Member Months 11,944,553 12,092,066

RevenuesCapitation $3,277,474 $274.39 100.0% $2,869,214 $237.28 100.0%Total Revenues $3,277,474 $274.39 100.0% $2,869,214 $237.28 100.0%

Healthcare ExpensesCapitation $3,084,769 $258.26 94.1% $2,690,719 $222.52 93.8%Provider Incentives and Shared Risk 26,774 2.24 0.8% 28,959 2.39 1.0%Medical Administrative Expenses 8,023 0.67 0.2% 8,407 0.70 0.3%Total Healthcare Expenses $3,119,566 $261.17 95.2% $2,728,085 $225.61 95.1%


*Forecast is based on 8+4

Plan Partners Income StatementL.A. Care Health Plan

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TANF-MCE (Medi-Cal Direct) TANF-MCE segment establishes accountability for product line performance and financial sustainability as part of the Strategic Vision. The Temporary Assistance for Needy Families (TANF) population consists primarily of members in the family-adult, family-child, and BCCTP aid categories. The Medi-Cal Expansion (MCE) sub-segment consists of members in the adult-expansion population. The MCE program expanded Medi-Cal coverage starting January 2014 to childless adults (ages 19-64). MCE eligibility is based on modified adjusted gross income (MAGI) at or below 138 percent of the federal poverty level (FPL).

Senate Bill 75 (SB75) provides undocumented children with full scope Medi-Cal benefits, which may result in modest TANF membership growth. The annual redetermination process, however, continues to contribute to disenrollment, primarily in the TANF and MCE segments.


% of Revenue

BudgetFY 17-18 PMPM

% of Revenue

Member Months 9,819,584 9,927,498

RevenuesCapitation $2,146,740 $218.62 100.0% $2,074,815 $209.00 100.0%Total Revenues $2,146,740 218.62 100.0% $2,074,815 209.00 100.0%

Healthcare ExpensesCapitation $875,173 $89.13 40.8% $860,238 $86.65 41.5%Provider Incentives and Shared Risk 87,443 8.90 4.1% 60,139 6.06 2.9%Inpatient Claims 358,670 36.53 16.7% 311,612 31.39 15.0%Outpatient Claims 197,407 20.10 9.2% 197,432 19.89 9.5%Skilled Nursing Facility 44,634 4.55 2.1% 49,073 4.94 2.4%Pharmacy 351,347 35.78 16.4% 340,835 34.33 16.4%Medical Administrative Expenses 18,755 1.91 0.9% 22,733 2.29 1.1%Total Healthcare Expenses $1,933,429 $196.90 90.1% $1,842,062 $185.55 88.8%



TANF-MCE Income StatementL.A. Care Health Plan

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SPD-CCI (Medi-Cal Direct) This segment was also created to establish accountability for product line performance and financial sustainability as part of the Strategic Vision. The Affordable Care Act brought significant growth in Medi-Cal membership through the mandatory enrollment of Dual Eligible beneficiaries (individuals receiving Medi-Cal and Medicare benefits) who are required to join a managed care plan for their Medi-Cal benefits. These Coordinated Care Initiative Dual Eligibles receive the majority of their healthcare through Medicare, while L.A. Care predominantly coordinates their Managed Long-Term Services and Supports such as In-Home Supportive Services (IHSS) and Room and Board in a Skilled Nursing Facility. The IHSS benefit will be removed from managed care effective January 1, 2018. Seniors and Persons with Disabilities (SPD) – sub-segment include Medi-Cal members in aged, disabled, partial dual, and long term care aid categories. Coordinated Care Initiative (CCI) – is the program developed in conjunction with California’s Department of Health Care Services to integrate medical care, long-term care, behavioral health care and social services for people eligible for both Medicare and Medi-Cal.


% of Revenue

BudgetFY 17-18 PMPM

% of Revenue

Member Months 2,470,683 2,596,926

RevenuesCapitation $2,582,675 $1,045.33 100.0% $1,919,088 $738.98 100.0%Total Revenues $2,582,675 $1,045.33 100.0% $1,919,088 $738.98 100.0%

Healthcare ExpensesCapitation $181,725 $73.55 7.0% $221,675 $85.36 11.6%Provider Incentives and Shared Risk (35,487) (14.36) (1.4%) (17,278) (6.65) (0.9%)Inpatient Claims 338,070 136.83 13.1% 327,035 125.93 17.0%Outpatient Claims 1,353,283 547.74 52.4% 589,035 226.82 30.7%Skilled Nursing Facility 452,903 183.31 17.5% 482,838 185.93 25.2%Pharmacy 193,804 78.44 7.5% 196,834 75.79 10.3%Medical Administrative Expenses 20,737 8.39 0.8% 16,716 6.44 0.9%Total Healthcare Expenses $2,505,035 $1,013.90 97.0% $1,816,855 $699.62 94.7%



SPD-CCI Income StatementL.A. Care Health Plan

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Cal MediConnect The Centers for Medicare and Medicaid Services (CMS) and the California Department of Health Care Services (DHCS) developed a three-year pilot program, which commenced in April 2014, to integrate medical care, long-term care, behavioral health care and social services under a health plan for people who are dually eligible for Medicare and Medi-Cal. L.A. Care Health Plan, Health Net, Molina, CareMore and Care1st are the health plans participating in the program in Los Angeles County. In 2017, the Cal MediConnect program was extended per the Governor’s budget and will continue to 2020. The vision of Cal MediConnect is to deliver patient-centered care through a system that is easy to navigate. Under this program both beneficiaries and physicians will experience a streamlined process: one benefit package, one responsible and accountable health plan, and one payer. Beneficiaries will be able to access all the services they need under one health plan.


% of Revenue

BudgetFY 17-18 PMPM

% of Revenue

Member Months 168,236 204,025

RevenuesCapitation $258,256 $1,535.08 100.0% $272,435 $1,335.30 100.0%Total Revenues $258,256 $1,535.08 100.0% $272,435 $1,335.30 100.0%

Healthcare ExpensesCapitation $104,471 $620.98 40.5% $138,006 $676.42 50.7%Provider Incentives and Shared Risk 5,735 34.09 2.2% 5,174 25.36 1.9%Inpatient Claims 35,461 210.78 13.7% 40,916 200.54 15.0%Outpatient Claims 48,600 288.88 18.8% 27,729 135.91 10.2%Skilled Nursing Facility 18,033 107.19 7.0% 20,403 100.00 7.5%Pharmacy 15,418 91.64 6.0% 16,256 79.68 6.0%Medical Administrative Expenses 6,554 38.96 2.5% 6,414 31.44 2.4%Total Healthcare Expenses $234,272 $1,392.52 90.7% $254,898 $1,249.35 93.6%



CMC Income StatementL.A. Care Health Plan

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Commercial

PASC-SEIU The PASC-SEIU Homecare Workers Health Care Plan (PASC-SEIU Plan) transitioned from CHP to L.A. Care in February 2012. The In-Home Supportive Services (IHSS) Program pays for services that enable individuals who are disabled (including children) and seniors to remain in their homes. These In-Home Services are provided by PASC-SEIU Homecare Workers. L.A. Care provides administrative services for the health care of PASC-SEIU workers in Los Angeles County. Among the administrative services provided are: claims processing, member services, COBRA/Cal-COBRA billing and information technology services. L.A. Care Covered L.A. Care Health Plan is among eleven health plans selected by Covered California to offer health insurance on the California State Exchange known as Covered California. L.A. Care Covered offers all metal coverage levels (Platinum, Gold, Silver, and Bronze) and a Catastrophic Plan for enrollees within Los Angeles County in Regions 15 and 16 on the Exchange. Consistent with its Mission, L.A. Care will focus outreach and enrollment activities on communities that are at or below 250 percent of the Federal Poverty Level (FPL). Individuals and families at or below this FPL can maximize federal subsidies by purchasing Silver level coverage which offers plan designs incorporating cost-share reductions (CSRs). For 2017, L.A. Care Covered was the second lowest priced Silver Plan in both rating regions in Los Angeles*. Our pricing strategy has been designed to continue to attract more Silver members and provide more value because of cost sharing subsidies. This strategy continues to improve L.A. Care’s position related to risk adjustment transfers. There is uncertainty around the availability of the cost-sharing, reduction funding, and the individual mandate to purchase health insurance. This may significantly impact our membership, the mix by metal tier, and ultimately our financial performance. In addition, L.A. Care offers our L.A. Care Covered Direct which is available to consumers who would like to purchase insurance privately ‘Off-the-Exchange’. The L.A. Care Covered Direct plan portfolio are mirror plans to those offered through Covered CA with two main differences: premium assistance is not available for ‘Off Exchange’ plans and members must apply for coverage directly with L.A. Care.

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% of Revenue

BudgetFY 17-18 PMPM

% of Revenue

Member Months 831,132 937,488

RevenuesCapitation $256,667 $308.82 100.0% $312,358 $333.19 100.0%

Total Revenues $256,667 $308.82 100.0% $312,358 $333.19 100.0%

Healthcare ExpensesCapitation $189,328 $227.80 73.8% $210,453 $224.49 67.4%Provider Incentives and Shared Risk 3,229 3.89 1.3% 3,885 4.14 1.2%Inpatient Claims 18,818 22.64 7.3% 20,585 21.96 6.6%Outpatient Claims 10,333 12.43 4.0% 10,123 10.80 3.2%Skilled Nursing Facility 189 0.23 0.1% - 0.00 0.0%Pharmacy 26,856 32.31 10.5% 40,399 43.09 12.9%Medical Administrative Expenses 923 1.11 0.4% 1,228 1.31 0.4%

Total Healthcare Expenses $249,676 $300.40 97.3% $286,673 $305.79 91.8%



Commercial Income StatementL.A. Care Health Plan

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Appendix I - Membership

MEMBERSHIP BY SEGMENTFiscal Year 2017-2018

MonthPlan

Partners TANF - MCE SPD - CCI CMC PASC-SEIU LACC* TotalOct-17 1,004,590 830,025 210,718 15,767 49,338 25,036 2,135,474 Nov-17 1,006,200 831,515 210,778 15,658 49,338 25,036 2,138,525 Dec-17 1,007,810 833,005 210,838 15,655 49,338 25,036 2,141,682 Jan-18 1,003,150 821,273 218,048 16,100 49,338 30,036 2,137,945 Feb-18 1,004,760 822,763 218,108 16,602 49,338 30,036 2,141,607 Mar-18 1,006,370 824,253 218,168 16,917 49,338 30,036 2,145,082 Apr-18 1,007,980 825,743 218,228 17,243 49,338 30,036 2,148,568 May-18 1,009,590 827,233 218,288 17,488 49,338 30,036 2,151,973 Jun-18 1,011,200 828,723 218,348 17,760 49,338 30,036 2,155,405 Jul-18 1,010,670 828,189 218,408 18,024 49,338 30,036 2,154,665 Aug-18 1,010,139 827,655 218,468 18,281 49,338 30,036 2,153,917 Sep-18 1,009,609 827,121 218,528 18,530 49,338 30,036 2,153,162 Member Months 12,092,066 9,927,498 2,596,926 204,025 592,056 345,432 25,758,003

* Includes both LACC and LACC Direct

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APPROVED

BOARD OF GOVERNORS Finance & Budget Committee Regular and Special Supplemental Meeting Minutes – July 26, 2017 1055 W. 7th Street, Los Angeles, CA 90017

Members Management/Staff Michael Rembis, Chairperson John Baackes, Chief Executive Officer Mark Gamble Phinney Ahn, Chief of Staff Louise McCarthy Ellin Davtyan, Associate General Counsel Hilda Perez Dino Kasdagly, Chief Operations Officer Kimberly Uyeda, MD Marie Montgomery, Chief Financial Officer

*Absent ** Via Teleconference Richard Seidman, MD, Chief Medical Officer



ACTION TAKEN CALL TO ORDER Louise McCarthy

Louise McCarthy, Board Chairperson, called the meeting to order at 1:05 p.m.

She announced that members of the public may address the Committee on each matter listed on the agenda before or during the Committee’s consideration of the item, or on any other topic at the Public Comment section.

APPROVE MEETING AGENDA

Michael Rembis

(Chair Rembis joined the meeting.) The regular and special supplemental meeting Agendas for today’s meetings were approved.

Approved unanimously. 4 AYES (Gamble, McCarthy, Perez and Rembis)

PUBLIC COMMENTS There were no public comments.

APPROVE MEETING MINUTES

The minutes of the June 28, 2017 meeting were approved as presented.

Approved unanimously. 4 AYES

APPROVE CONSENT AGENDA

· Quarterly Investment Report Motion FIN 100.0717 To accept the Quarterly Investment Report for the quarter ending June 30, 2017, as submitted.

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Finance and Budget Committee Meeting Minutes July 26, 2017, Page 2 of 11 APPROVED



ACTION TAKEN · PaySpan to provide check and remittances services

Motion FIN 101.0717 To execute a contract in the amount of $1.5 million with PaySpan to provide check and remittances services for the period of September 1, 2017 to August 31, 2020.

· Alchemy Communications, Inc. Contract Amendment Motion FIN 102.0717 To authorize staff to add six server racks with 30A/208V upgraded electric service in the L.A. Care data center by amending the service agreement with Alchemy Communications, Inc. in an amount not to exceed $670,000.

· Revised Edmund Jung & Associates Contract Amendment Motion FIN A.0717 To authorize staff to amend a contract with Edmund Jung & Associates in the amount of $487,625, contract total not to exceed $1,627,250, and to use $124,375 previously authorized funds (Motion FIN 103.0616) for the Process Communications Tracking systems application to provide support services for the period of July 1, 2017 to December 31, 2018.

· Sungard Contract Amendment to Upgrade Business Continuity and Disaster Recovery Services Motion FIN B.0717 To authorize staff to amend a contract in an amount not to exceed $230,000 with SunGard to upgrade Business Continuity and Disaster Recovery services through October 31, 2019.

· Pamela Gossman Consulting Contract Motion FIN C.0717 To authorize staff to execute a contract not to exceed $275,000.00 with Pamela Gossman to provide consulting services for the period of August 1, 2017 through July 31, 2018.

· SafetyNet Connect Inc. Contract for eConsult/eManagement Programs (Member McCarthy may have financial interests in Plans, Plan Participating Providers or other programs and refrained from the discussion of and vote on this motion.)

Approved unanimously, except for conflicts where noted. Member McCarthy abstained from voting on FIN D.0717 4 AYES The Committee approved to include motions FIN 100, FIN 101 and FIN 102 to the Consent Agenda for the July 26, 2017, Board of Governors meeting.

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ACTION TAKEN Motion FIN D.0717 To authorize staff to execute a contract with SafetyNet Connect Inc., to provide software and technical support for the eConsult/eManagement programs for an amount not to exceed $500,000.00, conditional upon HIT department’s funding, for the period of October 1, 2017 through September 30, 2018.

CHAIRPERSON’S REPORT

There was no report from the Chairperson.

CHIEF EXECUTIVE OFFICER REPORT

John Baackes, Chief Executive Officer, deferred his report to the Board meeting that immediately followed this meeting.

COMMITTEE ITEMS

CHIEF FINANCIAL OFFICER REPORT

Marie Montgomery

Marie Montgomery, Chief Financial Officer, provided highlights on the FY 2016-17 Financial Report for the period ended June 30, 2017. (A copy of the report can be obtained by contacting Board Services). · Net surplus for the month of $15 million and year to date almost $107 million. · June 2017 year to date financial performance is $14 million behind the FY 2016-17

forecast. · There was a very high volume of claims paid in June of approximately $190 million.

Claims reserves were conservatively adjusted until additional research can be completed. · Member months are slightly ahead of forecast.

(Member Uyeda joined the meeting.)

Approval of Financial Report FY 2016-17

Marie Montgomery

Motion FIN 103.0917 To accept the Financial Report for the period ended June 30, 2017, as submitted.

Approved unanimously. 5 AYES (Gamble, McCarthy, Perez, Rembis and Uyeda)

Review and Recommendation to Approve Budget for Fiscal Year 2017-18

Ms. Montgomery summarized the Budget Assumptions for Fiscal Year 2017-18. · The FY 2017-18 budget outlines an MCR of 93%, administrative ratio of 5%, which is

impacted by the decrease in In Home Supportive Services (IHSS) revenue. The surplus revenue is expected to be 1.9%. This is compared to the FY 2016-17 forecast of MCR

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ACTION TAKEN (FIN 104)

94.3%, administrative ratio 4.1%, and surplus of 1.7%. FY 2017-18 budget target for administrative expenses is $14.50 per member/per month (PMPM).

· There are several opportunities to increase the surplus including Coordinated Care Initiative (CCI) recoveries, duals reclassification, and rate adjustments. There are also risks including a lack of membership growth, duals overpayments, IHSS reconciliation, CCI risk corridor, Medi-Cal Expansion (MCE) loss rebate, and L.A. Care Covered (LACC) membership.

· Assuming conservative rate increases for CCI Duals for 2017-18 in the absence of finalized rates. Managed Long Term Supportive Services (MLTSS) rates for 2016-17 were just received and staff is estimating for 2017-18.

· Revenue of $7.5 billion is a $1.1 billion decrease from the current fiscal year primarily due to the removal of the IHSS from managed care effective January 1, 2018.

· Investment income is projected at $10 million. The state recoupment of MCE rate overpayments has a large impact on investment income.

· Community Programs budget includes an increase in operating expenses related to new Family Resource Centers (FRC).

· The tangible net equity (TNE) ratio is projected to improve from 325% as of June 2017 to 526% by the end of FY 2017-18. This reflects the impact of removing IHSS revenue from the calculation and an expected net surplus for the rest of the current fiscal year.

· There is approximately $65 million in capital projects budgeted for 2017-18, which includes $13 million for leasehold improvements.

Mr. Baackes noted that the most vulnerable program is Covered California due to lack of clarity about the federal subsidies and individual mandate. No significant changes are expected for Medi-Cal and Medicare programs.

Ms. Montgomery reported on improvements in CCI Duals payments and in the claims system for crossover claims.

Dino Kasdagly, Chief Operating Officer, summarized L.A. Care’s achievements in improving operations during 2016-17, noting significant improvements in Claims and Customer Solution Center performance measures. L.A. Care’s Core Business Transformation is driven by technology and should also be business driven. Staff will focus on cross functional projects in 2017-18. He summarized 2017-18 Capital Projects and Programs.

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ACTION TAKEN Chair Rembis asked if a return on investments is assumed for each capital project. Mr. Kasdagly confirmed that return on investment is assumed. Projects require qualitative and quantitative improvements, with fewer manual tasks, and the focus will be on continued quality improvements.

Members McCarthy, Perez, and Uyeda may have financial interests in Plans, Plan Participating Providers or other programs and as such should consider refraining from the discussion of those issues identified below. In order to expedite the process, such members’ vote on the Budget reflects a vote concerning the entire budget excluding those items for which the member is abstaining, as identified:

Members McCarthy and Uyeda Community Health Investment Fund, HITEC-LA/TCPI, eManagement Sponsorships/In-Kind and Ad Hoc Grants

Member McCarthy CTAP, Community Clinic Program/(SCOPE) Plan

Member Perez Health Promoters/Promotoras Program

Motion FIN 104.0717 To recommend the draft Fiscal Year 2017-18 Capital and Operating Budget for consideration by the Board of Governors at the September 7, 2017 meeting.

Approved unanimously, except for conflicts where noted, those members abstained from discussion and voting. 5 AYES

Investment Transactions Marie Montgomery

Ms. Montgomery referred to the report on investment transactions included in the meeting materials for Committee member review. (A copy of the report can be obtained by contacting Board Services). As of June 30, 2017, L.A. Care’s total investment market value was $2.1 billion. · $2 billion managed by Paydel & Rygel · $65 million in Local Agency Investment Fund · $71 million in Los Angeles County Pooled Investment Fund

Motions in Compliance with Policy AFS 004 (Non-Travel and Other Related Expenses)

Expense Policy AFS-004 requires Board approval of expenses for non-travel expense requests related to various L.A. Care programs.

· Member Advocacy Day (Member Perez may have financial interests in Plans, Plan Participating Providers or other programs and refrained from the discussion of and vote on this motion.)

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ACTION TAKEN Motion FIN 105.0717 To approve the allocation of funds for L.A. Care’s Sacramento Advocacy Day in the amount of $37,665 for FY 2017-18.

· Coordinated Care Initiative Consumer Advisory Councils meetings

Motion FIN 106.0717 To approve the allocation of funds for catering and stipends for L.A. Care CCI Consumer Advisory Council member meetings from October 1, 2017 to September 30, 2018 in the amount of $37,400.

· Safety Net Initiatives Community Events

Motion FIN 107.0717 To approve the allocation of funds for stakeholder and community engagement events for safety net programs in the amount of $44,440 for the period of October 1, 2017 through September 30, 2018.

· Provider Continuing Education Program

Motion FIN 108.0717 To approve the allocation of funds for L.A. Care’s Continuing Medical Education and Continuing Education programs, in the amount of $180,500, for the period of October 1, 2017 through September 30, 2018.

· Credentialing Committee Meetings

Motion FIN 109.0717 To approve the allocation of funds for L.A. Care Credentialing/Peer Review Committee monthly meetings in the amount of $15,080, for the period of October 1, 2017 through September 30, 2018.

· Health Promoters Program (Member Perez may have financial interests in Plans, Plan Participating Providers or other programs and refrained from the discussion of and vote on this motion.)

Motions FIN 105, 106, 107, 108, 109 and 110 were simultaneously approved unanimously, except members abstained from voting due to conflicts where noted. 5 AYES

The Committee approved the motions to be included on the Consent Agenda for the July 26, 2017, Board of Governors meeting.

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ACTION TAKEN Motion FIN 110.0717 To approve allocation of funds for catering for Health Promoters Program activities in the amount of $31,000, for the period of October 1, 2017 through September 30, 2018.

Cognizant Contract Amendment for Healthcare Effectiveness Data and Information Set (HEDIS) Full Service

Richard Seidman, Chief Medical Officer, summarized the motion requesting approval to amend the contract with Cognizant for HEDIS reporting required by Centers for Medicare and Medicaid Services (CMS), Department of Health Care Services (DHCS), California Covered, and National Commission on Quality Assurance (NCQA) for Accreditation.

L.A. Care has engaged Cognizant under a master services agreement since July 2013. IT, Provider Network Management, and Sales and Marketing departments have engaged this vendor for a variety of enterprise-wide projects including QNXT implementation, CSP Plus, Salesforce Provider Network Management, IT support and services.

A request for proposal process was conducted March through June 2017 for this work. Five vendors were evaluated, including our current vendor, Inovalon. Cognizant was selected because they best met L.A. Care’s needs relating to HEDIS software utilization and dashboard components that will help L.A. Care provide useful timely data to our providers and PPGs proactively throughout the year. Cognizant was less expensive than our current vendor for the services requested. The next request for proposal will be conducted in March 2020.

Dr. Seidman corrected the amount being requested to $2,915,948.

Motion FIN 111.0717 To authorize staff to execute an amendment to our current contract in the amount of $2,915,948 with Cognizant to provide new Healthcare Effectiveness Data and Information Set (HEDIS) services and HEDIS required software for the period of October 1, 2017 to September 30, 2020.


Optum Contracts

Dino Kasdagly, Chief Operating Officer, presented and summarized the following motions:

Approval is requested for a claims editing system and ongoing support to identify provider overpayments arising from inappropriate coding edits, duplicate billings, and Medi-Cal specific edits prior to claims being paid. Historically, L.A. Care has not proactively reviewed claims to flag or correct claims pre-payment. The claims editing solution is projected to

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ACTION TAKEN generate over $50 million in medical cost savings over the term of the contract, and an annual savings of $10 million once fully deployed, based on L.A. Care’s medical cost volume of $1.7 billion.

Optum has been performing claims credit balance auditing since 2014. Although a formal RFP was not conducted for this work, multiple vendor proposals were evaluated. Optum was selected due to L.A. Care’s history of success working with this vendor, and competitive overall pricing.

Motion FIN 112.0717 To authorize staff to execute a contract not to exceed $3.5 million with Optum to provide a prospective claims editing system for the period of October 1, 2017 to December 31, 2023.

Staff is requesting approval to execute a contract with Optum in the estimated amount of $7.5 million over the term of the five year contract. The pricing structure is based on the vendor receiving 30% contingency fee for claims overpayments recovered. This is a fully contingent agreement as fees are only paid when L.A. Care overpayments are recovered.

Optum will provide 2nd Pass Data Mining services to identify provider overpayments. Historically, L.A. Care has not proactively identified claims overpayment opportunities to pursue for recovery. Based on expenses of $1.7 billion annually, the 2nd Pass Data Mining solution is projected to generate $25 million of overpayment recoveries over the term of the contract, and annual recovery of $5 million once fully deployed.

Optum has been performing other Payment Integrity related services since 2014. Although a formal RFP was not conducted, multiple vendor proposals were evaluated. Optum was selected due to L.A. Care’s history of success working with this vendor and the competitive overall pricing.

Motion FIN 113.0717 To authorize staff to execute a contract not to exceed $7.5 million with Optum to provide 2nd Pass Data Mining services for the period of September 1, 2017 to December 31, 2022.

Motions FIN 112 and 113 were simultaneously approved unanimously. 5 AYES

Edifecs, Inc. Contract Mr. Kasdagly presented a motion to contract with Edifecs, Inc. to purchase a pre-processing claims data management software which would enable L.A. Care staff to track and monitor claims received from a clearinghouse and vendors before they are loaded into QNXT for

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ACTION TAKEN adjudication. The California Department of Health Care Services (DHCS) and Centers for Medicare and Medicaid Services (CMS) require timely and complete submission of encounter data and timely re-submission of rejected records, to calculate capitation rates for managed care plans.

A motion was previously approved for this work for a term of two years. This motion is for a contract term of five years. The longer contract term allows L.A. Care to realize a significant cost savings on licensing based on the minimum five-year commitment.

Motion FIN 114.0717 To authorize staff to execute a contract in the amount of $10,200,000 with Edifecs, Inc. to purchase pre-processing claims data management software, end-to-end encounter data management software, implementation services, and maintenance for the period of October 1, 2017 to September 30, 2022.


Maricich Contract Extension

Mr. Baackes presented a request for approval of a contract with Maricich for work associated with the Parent Brand Initiative for L.A. Care’s entire portfolio of products and services. To leverage the benefits of investment in new member and consumer facing marketing, the Parent Brand Initiative adds value to support L.A. Care’s direct lines of business, Family Resource Centers and companywide initiatives.

In July 2013, Maricich was among 19 agencies that responded to a request for proposals to provide creative direction, branding, and comprehensive community marketing campaigns, media planning and placement. Maricich has provided L.A. Care with award winning and cost effective marketing support and significant value added negotiations with traditional and non-traditional media outlets. Maricich has consistently delivered quality work that has helped L.A. Care achieve its Sales and Marketing goals.

A formal bid solicitation for marketing, media and advertising management services will be developed and launched in late 2017.

Motion FIN 115.0717 To authorize staff to extend and execute the Master Service Agreement with Maricich Healthcare Communications in the amount of $7,085,000 (total contract amount not to exceed $7,085,000) for the period of September 1, 2017 through September 30, 2018.


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ACTION TAKEN Delegation to CEO for Tenant Improvements for 2nd Floor Garland Building

The Board authorized staff to extend the lease in the Garland building, including tenant improvements for the 2nd floor. The 2nd floor’s current configuration is not to L.A. Care standard and does not provide an optimally efficient layout.

The Board delegated to the Finance & Budget committee the final approval of renovations for the 2nd floor Garland building. The motion provides authority for the CEO, on a discretionary basis, to enter into contracts for capital improvements, office furniture and other required equipment, fees or services to renovate the 2nd floor Garland.

Motion FIN E.0717 To delegate to John Baackes, Chief Executive Officer, discretionary authority to approve vendors and enter into contractual agreements for certain capital improvements, furniture and equipment to renovate the 2nd Floor Garland building in an amount not to exceed $4,336,225 which includes a 6.5% contingency for potential unknown conditions.


ADJOURN TO CLOSED SESSION

Ellin Davtyan, Associate General Counsel, announced the items that the Committee will discuss in closed session. There was no public comment on the Closed Session items, and the meeting adjourned to closed session at 1:55 p.m.

CONTRACT RATES Pursuant to Welfare and Institutions Code Section 14087.38(m) · Plan Partner Rates · Provider Rates · DHCS Rates

REPORT INVOLVING TRADE SECRET Pursuant to Welfare and Institutions Code Section 14087.38(n) Discussion Concerning New Product Lines Estimated date of public disclosure: July 2019

CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: 5139 Pacific Blvd., Vernon Agency Negotiator: John Baackes, CEO Negotiating Parties: Joshua Shadpour, Vice President Property Management. Elizabeth Pueblo, LLC Under Negotiation: Price and Terms of Payment

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ACTION TAKEN CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: Suite 1950, 1201 K Street, Sacramento Agency Negotiator: John Baackes, CEO Negotiating Parties: John McKee, Property Manager, CDA Rotunda Partners, LLC Under Negotiation: Price and Terms of Payment

CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: 1055 W. 7th St., 1st Floor, Los Angeles Agency Negotiator: John Baackes Negotiating Parties: Jamison Services, Inc. Under Negotiation: Price and Terms of Payment

From the Special Supplemental Meeting Agenda CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Section 54956.8 of the Ralph M. Brown Act Property: 4803 E. Whittier Boulevard, Los Angeles Agency Negotiator: John Baackes, CEO Negotiating Parties: Joshua Shadpour, Vice President Property Management. Elizabeth Pueblo, LLC Under Negotiation: Price and Terms of Payment


The meeting reconvened in open session at 2:00 p.m. No reportable actions were taken during the closed session.

ADJOURNMENT The meeting was adjourned at 2:00 p.m.

APPROVED BY:

Respectfully submitted by: Malou Balones, Committee Liaison, Board Services __________________________________________ Linda Merkens, Manager, Board Services Michael Rembis, Chair Date Signed _____________________________________

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Documents

BOARD OF GOVERNORS RETREAT/MEETING - L.A. … BoG...Board of Governors Retreat/Meeting Agenda September 7, 2017 Page 2 of 2 9/1/2017 12:08 PM Presentation 13. Parent Brand Initiative