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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4204626
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Title of Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 Par Value
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New York Stock Exchange
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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Caring - We care about those we serve and advocate on their behalf.
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•
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Enthusiasm - We enthusiastically address problems and seek creative solutions.
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•
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Respect - We respect each other and value ethical business practices.
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•
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Focus - We focus on our mission.
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•
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Thrift - We are careful with scarce resources.
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•
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Accountability - We are personally accountable for our actions and collaborate to get results.
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•
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Feedback - We strive to improve the organization and achieve meaningful change through feedback and coaching.
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•
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Growth and retention in our existing markets;
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•
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Expansion into new geographies;
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•
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Transitioning members and benefits from fee for service to managed care; and
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•
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Developing and acquiring new products and capabilities.
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•
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Growth and retention in our existing markets.
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◦
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We retained and grew existing business with our re-procurement wins in Michigan and Washington. Our new contract in Michigan expanded our service area across all of the Lower Peninsula, spanning an additional 18 counties. The Washington win, along with the acquisition described below, strengthens our position in the southwestern region of that state.
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◦
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Our Florida and Michigan health plans acquired Medicaid contracts which added approximately
192,000
new members in 2015.
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◦
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We have announced and/or closed on Medicaid contract acquisitions in Illinois, Michigan and Washington that we expect to add approximately
257,000
new members in the first quarter of 2016.
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◦
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Our Marketplace enrollment grew from approximately 15,000 members in 2014, to over 200,000 members as of December 31, 2015.
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◦
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Molina Medicaid Solutions entered into a 10-year contract with the state of New Jersey to design and operate that state's new Medicaid management information system (MMIS).
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•
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Expansion into new geographies.
Our Puerto Rico health plan began serving its first members in April 2015. As of
December 31, 2015
, our Puerto Rico plan enrollment amounted to approximately
348,000
members.
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•
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Transitioning members and benefits from fee for service to managed care.
In 2015, we saw strong growth in our Medicare-Medicaid Plan (MMP) and Aged, Blind or Disabled (ABD) programs. While smaller programs in total membership, they translate to strong revenue growth because these members bring much higher premiums when
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•
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Developing and acquiring new products and capabilities
. We acquired Pathways Health and Community Support LLC (Pathways), formerly known as Providence Human Services, LLC, a division of The Providence Service Corporation. Pathways is one of the largest national providers of accessible, outcome-based behavioral/mental health and social services with operations in 23 states and the District of Columbia. We believe this acquisition will complement our Health Plans segment services with behavioral health and other services that focus on social determinants of health, as we increasingly arrange for healthcare services for members with complex needs.
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•
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Multi-Product Managed Care Organizations - National and regional managed care organizations that have Medicaid members in addition to numerous commercial health plan and Medicare members.
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•
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Medicaid HMOs - National and regional managed care organizations that focus principally on providing health care services to Medicaid beneficiaries, many of which operate in only one city or state.
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•
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Prepaid Health Plans - Health plans that provide less comprehensive services on an at-risk basis or that provide benefit packages on a non-risk basis.
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•
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Primary Care Case Management Programs - Programs established by the states through contracts with primary care providers to provide primary care services to Medicaid beneficiaries, as well as to provide limited oversight of other services.
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•
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Disease Management Programs.
We develop specialized disease management programs that address the particular health care needs of our members. "
motherhood matters!
sm"
is a comprehensive program designed to improve pregnancy outcomes and enhance member satisfaction. "
breathe with ease!"
is a multi-disciplinary disease management program that provides health education resources and case management services to assist physicians caring for asthmatic members between the ages of three and 15. "
Healthy Living with Diabetes"
is a diabetes disease management program. "
Heart Healthy Living"
is a cardiovascular disease management program for members who have suffered from congestive heart failure, angina, heart attack, or high blood pressure.
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•
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Educational Programs.
Educational programs are an important aspect of our approach to health care delivery. These programs are designed to increase awareness of various diseases, conditions, and methods of prevention in a manner that supports our providers while meeting the unique needs of our members. For example, we provide our members with information to guide them through various episodes of care. This information, which is available in several languages, is designed to educate members on the use of primary care physicians, emergency rooms, and nurse call centers.
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•
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Pharmacy Management Programs.
Our pharmacy management programs focus on physician education regarding appropriate medication utilization and encouraging the use of generic medications. Our pharmacists and medical directors work with our pharmacy benefits manager to maintain a formulary that promotes both improved patient care and generic drug use. We employ full-time pharmacists and pharmacy technicians who work with physicians to educate them on the uses of specific drugs, the implementation of best practices, and the importance of cost-effective care.
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•
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Provider Self Services - Providers have the ability to access information regarding their members and claims. Key functionalities include "Check Member Eligibility," "View Claim," and "View/Submit Authorizations."
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•
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Member Self Services
- Members can access information regarding their personal data, and can perform the following key functionalities: "View Benefits," "Request New ID Card," "Print Temporary ID Card," and "Request Change of Address/PCP."
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•
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File Exchange Services - Various trading partners, such as service partners, providers, vendors, management companies, and individual IPAs, are able to exchange data files (such as those that may be required by federal health care privacy regulations, or any other proprietary format) with us using the file exchange functionality.
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•
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We must measure provider access and availability in terms of the time needed to reach the doctor’s office using public transportation;
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•
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Our quality improvement programs must emphasize member education and outreach and include measures designed to promote utilization of preventive services;
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•
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We must have linkages with schools, city or county health departments, and other community-based providers of health care, to demonstrate our ability to coordinate all of the sources from which our members may receive care;
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•
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We must be able to meet the needs of the disabled and others with special needs;
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•
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Our providers and member service representatives must be able to communicate with members who do not speak English or who are deaf; and
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•
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Our member handbook, newsletters, and other communications must be written at the prescribed reading level, and must be available in languages other than English.
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•
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Our provider network is adequate;
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•
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Our quality and utilization management processes comply with state requirements;
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•
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We have adequate procedures in place for responding to member and provider complaints and grievances;
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•
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We can meet requirements for the timely processing of provider claims;
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•
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We can collect and analyze the information needed to manage our quality improvement activities;
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•
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We have the financial resources necessary to pay our anticipated medical care expenses and the infrastructure needed to account for our costs;
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•
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We have the systems required to process enrollment information, to report on care and services provided, and to process claims for payment in a timely fashion; and
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•
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We have the financial resources needed to protect the state, our providers, and our members against the insolvency of one of our health plans.
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•
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Establish the capability to receive and transmit electronically certain administrative health care transactions, like claims payments, in a standardized format;
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•
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Afford privacy to patient health information; and
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•
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Protect the privacy of patient health information through physical and electronic security measures.
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•
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Risks associated with the duals expansion
. Nine million low-income elderly and disabled people are covered under both the Medicare and Medicaid programs. These beneficiaries are more likely than other Medicare beneficiaries to be frail, live with multiple chronic conditions, and have functional and cognitive impairments. Medicare is their primary source of health insurance coverage, as it is for the nearly 50 million elderly and under-65 disabled beneficiaries in 2012. Medicaid supplements Medicare by paying for services not covered by Medicare, such as dental care and long-term care services and support, and by helping to cover Medicare’s premiums and cost-sharing requirements. Together, these two programs help to shield very low-income Medicare beneficiaries from potentially unaffordable out-of-pocket medical and long-term care costs. To coordinate care for those who qualify to receive both Medicare and Medicaid services (the "dual eligible"), and to deliver services to these individuals in a more financially efficient manner, some states have undertaken demonstration programs to integrate Medicare and Medicaid services for dual eligible individuals. The health plans participating in such demonstrations are referred to as Medicare-Medicaid Plans (MMPs). We operate MMPs in six states. Our MMPs in California, Illinois, and Ohio offered coverage beginning in 2014; our MMPs in South Carolina and Texas offered coverage beginning in the first quarter of 2015; and our MMP in Michigan offered coverage beginning in the second quarter of 2015. At
December 31, 2015
, our membership included approximately
51,000
integrated MMP members.
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•
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Risks associated with Medicaid expansion
. In the states that have elected to participate, the ACA provides for the expansion of the Medicaid program to offer eligibility to nearly all low-income people under age 65 with incomes at or below 138% of the federal poverty line. Medicaid expansion membership phased in beginning January 1, 2014. Since that date, our health plans in California, Illinois, Michigan, New Mexico, Ohio, and Washington have participated in Medicaid expansion. At
December 31, 2015
, our membership included approximately
557,000
Medicaid expansion members, or
16%
of total membership. The new enrollees in our health plans represent a population that is different from the population of Medicaid enrollees we have historically managed. All of the risk factors described above with regard to the duals demonstration programs apply equally to Medicaid expansion.
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•
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Risks associated with health insurance marketplaces
. The ACA authorized the creation of Marketplace insurance exchanges, allowing individuals and small groups to purchase health insurance that is federally subsidized, effective January 1, 2014. We participate in the Marketplace in all of the states in which we operate, except Illinois, Puerto Rico and South Carolina. At
December 31, 2015
, our membership included approximately
205,000
Marketplace members, with approximately
133,000
, or
65%
, of those members in Florida. All of the risk factors described above with regard to the duals demonstration programs apply equally to our participation in the insurance marketplaces.
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•
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Risk associated with implementing regulations
. There are many parts of the ACA that require further guidance in the form of regulations. Due to the breadth and complexity of the ACA, the lack of implementing regulations and interpretive guidance, and the phased nature of the ACA’s implementation, the overall impact of the ACA on our business and on the health industry in general over the coming years is difficult to predict and not yet fully known, and implementing regulations could contain provisions that have a material adverse effect on our business, financial condition, cash flows, or results of operations.
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•
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additional employees who are not familiar with our operations or our corporate culture,
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•
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new provider networks which may operate on terms different from our existing networks,
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•
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additional members who may decide to transfer to other health care providers or health plans,
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•
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disparate information, claims processing, and record-keeping systems,
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•
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internal controls and accounting policies, including those which require the exercise of judgment and complex estimation processes, such as estimates of claims incurred but not reported, accounting for goodwill, intangible assets, stock-based compensation, and income tax matters, and
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•
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new regulatory schemes, relationships, practices, and compliance requirements.
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•
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increasing our vulnerability to adverse economic, industry, or competitive developments;
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•
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requiring a substantial portion of our cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flows to fund operations, make capital expenditures, and pursue future business opportunities;
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•
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exposing us to the risk of increased interest rates to the extent of any future borrowings, including borrowings under the revolving credit facility, at variable rates of interest;
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•
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making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the revolving credit facility and our outstanding senior notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the indenture governing our outstanding senior notes and the agreements governing such other indebtedness;
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•
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restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
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•
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limiting our ability to obtain additional financing for working capital, capital expenditures, product and service development, debt service requirements, acquisitions, and general corporate or other purposes; and
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•
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limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our substantial indebtedness may prevent us from exploiting.
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•
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incur additional indebtedness or issue certain preferred equity;
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•
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pay dividends on, repurchase, or make distributions in respect of our capital stock, prepay, redeem, or repurchase certain debt or make other restricted payments;
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•
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make certain investments;
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•
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create certain liens;
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•
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sell assets, including capital stock of restricted subsidiaries;
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•
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enter into agreements restricting our restricted subsidiaries’ ability to pay dividends to us;
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•
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consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets;
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•
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enter into certain transactions with our affiliates; and
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•
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designate our restricted subsidiaries as unrestricted subsidiaries.
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•
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a staggered board of directors, so that it would take three successive annual meetings to replace all directors,
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•
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prohibition of stockholder action by written consent, and
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•
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advance notice requirements for the submission by stockholders of nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting.
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High
|
|
Low
|
||||
2015
|
|
|
|
||||
First Quarter
|
$
|
67.58
|
|
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$
|
49.37
|
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Second Quarter
|
$
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73.98
|
|
|
$
|
57.35
|
|
Third Quarter
|
$
|
82.37
|
|
|
$
|
65.72
|
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Fourth Quarter
|
$
|
70.82
|
|
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$
|
55.49
|
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2014
|
|
|
|
||||
First Quarter
|
$
|
39.21
|
|
|
$
|
32.41
|
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Second Quarter
|
$
|
46.17
|
|
|
$
|
32.86
|
|
Third Quarter
|
$
|
48.03
|
|
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$
|
39.23
|
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Fourth Quarter
|
$
|
54.57
|
|
|
$
|
40.79
|
|
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Total Number
of Shares
Purchased (1)
|
|
Average Price
Paid per Share (1)
|
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Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (2)
|
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Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2)
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||||||
October 1 — October 31
|
94
|
|
|
$
|
66.79
|
|
|
—
|
|
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$
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50,000,000
|
|
November 1 — November 30
|
576
|
|
|
$
|
62.00
|
|
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—
|
|
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$
|
50,000,000
|
|
December 1 — December 31
|
104,222
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|
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$
|
59.15
|
|
|
—
|
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$
|
50,000,000
|
|
|
104,892
|
|
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$
|
59.17
|
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—
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(1)
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During the quarter we withheld 104,892 shares of common stock under our 2011 Equity Incentive Plan to settle our employees' income tax obligations.
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(2)
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Effective as of February 25, 2015, our board of directors authorized the repurchase of up to $50 million in aggregate of our common stock. This repurchase program expired December 31, 2015.
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December 31,
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Name
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2010
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2011
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2012
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2013
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2014
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2015
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||||||||||||
Molina Healthcare, Inc.
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$
|
100.00
|
|
$
|
120.27
|
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$
|
145.75
|
|
$
|
187.16
|
|
$
|
288.31
|
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$
|
323.86
|
|
S&P 500
|
100.00
|
|
102.11
|
|
118.45
|
|
156.82
|
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178.29
|
|
180.75
|
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||||||
Peer Group
|
100.00
|
|
110.25
|
|
131.73
|
|
155.98
|
|
197.59
|
|
189.81
|
|
|
Year Ended December 31,
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||||||||||||||||||
|
2015 (1)
|
|
2014
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|
2013
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2012
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|
2011
|
||||||||||
Statements of Income Data:
|
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||||||||||
Revenue:
|
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||||||||||
Premium revenue
|
$
|
13,241
|
|
|
$
|
9,023
|
|
|
$
|
6,179
|
|
|
$
|
5,544
|
|
|
$
|
4,212
|
|
Service revenue
(1)
|
253
|
|
|
210
|
|
|
205
|
|
|
188
|
|
|
160
|
|
|||||
Premium tax revenue
|
397
|
|
|
294
|
|
|
172
|
|
|
159
|
|
|
155
|
|
|||||
Health insurer fee revenue
|
264
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Investment income
|
18
|
|
|
8
|
|
|
7
|
|
|
5
|
|
|
5
|
|
|||||
Other revenue
|
5
|
|
|
12
|
|
|
26
|
|
|
18
|
|
|
8
|
|
|||||
Total revenue
|
14,178
|
|
|
9,667
|
|
|
6,589
|
|
|
5,914
|
|
|
4,540
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care costs
|
11,794
|
|
|
8,076
|
|
|
5,380
|
|
|
4,991
|
|
|
3,664
|
|
|||||
Cost of service revenue
(1)
|
193
|
|
|
157
|
|
|
161
|
|
|
141
|
|
|
144
|
|
|||||
General and administrative expenses
|
1,146
|
|
|
765
|
|
|
666
|
|
|
519
|
|
|
393
|
|
|||||
Premium tax expenses
|
397
|
|
|
294
|
|
|
172
|
|
|
159
|
|
|
155
|
|
|||||
Health insurer fee expenses
|
157
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
104
|
|
|
93
|
|
|
73
|
|
|
63
|
|
|
48
|
|
|||||
Total operating expenses
|
13,791
|
|
|
9,474
|
|
|
6,452
|
|
|
5,873
|
|
|
4,404
|
|
|||||
Operating income
|
387
|
|
|
193
|
|
|
137
|
|
|
41
|
|
|
136
|
|
|||||
Other expenses, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
66
|
|
|
57
|
|
|
52
|
|
|
17
|
|
|
16
|
|
|||||
Other (income) expense, net
|
(1
|
)
|
|
1
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|||||
Total other expenses, net
|
65
|
|
|
58
|
|
|
56
|
|
|
18
|
|
|
16
|
|
|||||
Income from continuing operations before income taxes
|
322
|
|
|
135
|
|
|
81
|
|
|
23
|
|
|
120
|
|
|||||
Income tax expense
|
179
|
|
|
73
|
|
|
36
|
|
|
10
|
|
|
43
|
|
|||||
Income from continuing operations
|
143
|
|
|
62
|
|
|
45
|
|
|
13
|
|
|
77
|
|
|||||
Income (loss) from discontinued operations, net of tax expense (benefit)
(2)
|
—
|
|
|
—
|
|
|
8
|
|
|
(3
|
)
|
|
(56
|
)
|
|||||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
|
$
|
10
|
|
|
$
|
21
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income per share:
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
2.75
|
|
|
$
|
1.34
|
|
|
$
|
0.98
|
|
|
$
|
0.28
|
|
|
$
|
1.69
|
|
(Loss) income from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.18
|
|
|
(0.07
|
)
|
|
(1.24
|
)
|
|||||
Basic net income per share
|
$
|
2.75
|
|
|
$
|
1.33
|
|
|
$
|
1.16
|
|
|
$
|
0.21
|
|
|
$
|
0.45
|
|
Diluted net income per share:
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
$
|
2.58
|
|
|
$
|
1.30
|
|
|
$
|
0.96
|
|
|
$
|
0.27
|
|
|
$
|
1.67
|
|
(Loss) income from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.17
|
|
|
(0.06
|
)
|
|
(1.22
|
)
|
|||||
Diluted net income per share
|
$
|
2.58
|
|
|
$
|
1.29
|
|
|
$
|
1.13
|
|
|
$
|
0.21
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
52
|
|
|
47
|
|
|
46
|
|
|
46
|
|
|
46
|
|
|||||
Diluted
|
56
|
|
|
48
|
|
|
47
|
|
|
47
|
|
|
46
|
|
|||||
Operating Statistics, Continuing Operations:
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care ratio
(4)
|
89.1
|
%
|
|
89.5
|
%
|
|
87.1
|
%
|
|
90.0
|
%
|
|
87.0
|
%
|
|||||
General and administrative expense ratio
(5)
|
8.1
|
%
|
|
7.9
|
%
|
|
10.1
|
%
|
|
8.8
|
%
|
|
8.7
|
%
|
|||||
Net profit margin
(5)
|
1.0
|
%
|
|
0.6
|
%
|
|
0.7
|
%
|
|
0.2
|
%
|
|
1.7
|
%
|
|||||
Members
(6)
|
3,533,000
|
|
|
2,623,000
|
|
|
1,931,000
|
|
|
1,797,000
|
|
|
1,618,000
|
|
|
December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
2,329
|
|
|
$
|
1,539
|
|
|
$
|
936
|
|
|
$
|
796
|
|
|
$
|
494
|
|
Total assets
(7)
|
6,576
|
|
|
4,435
|
|
|
2,988
|
|
|
1,901
|
|
|
1,631
|
|
|||||
Long-term debt, including current maturities
(7) (8)
|
1,609
|
|
|
887
|
|
|
770
|
|
|
261
|
|
|
216
|
|
|||||
Total liabilities
(7)
|
5,019
|
|
|
3,425
|
|
|
2,095
|
|
|
1,119
|
|
|
876
|
|
|||||
Stockholders’ equity
|
1,557
|
|
|
1,010
|
|
|
893
|
|
|
782
|
|
|
755
|
|
(1)
|
Service revenue and cost of service revenue include revenue and costs generated by our Pathways subsidiary, which was acquired on November 1, 2015.
|
(2)
|
Income (loss) from discontinued operations is presented net of income tax expense (benefit), which was insignificant in 2015 and 2014, and $(10), and $(1), and $1, in 2013, 2012 and 2011, respectively.
|
(3)
|
Source data for calculations in thousands.
|
(4)
|
Medical care ratio represents medical care costs as a percentage of premium revenue. The medical care ratio is a key operating indicator used to measure our performance in delivering efficient and cost effective health care services. Changes in the medical care ratio from period to period result from changes in Medicaid funding by the states, utilization of medical services, our ability to effectively manage costs, contract changes, and changes in accounting estimates related to incurred but not paid claims. See Item 7 in this Form 10-K, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," for further discussion.
|
(5)
|
Computed as a percentage of total revenue.
|
(6)
|
Number of members at end of period.
|
(7)
|
We have reclassified certain amounts in prior periods to conform to the 2015 presentation. Specifically, deferred issuance costs relating to our senior notes are now reported as a direct deduction of the applicable debt liabilities. Additionally, aggregate deferred income taxes are now reported as non-current. Both reclassifications are a result of recently adopted accounting pronouncements. See Item 8 in this Form 10-K, "Financial Statements and Supplementary Data," for further discussion.
|
(8)
|
Includes senior notes, lease financing obligations, and other long-term debt.
|
•
|
Earnings per diluted share nearly doubled in 2015 when compared with 2014, while net income more than doubled. Substantial increases in revenue, along with improved operating efficiency, were responsible for our improved performance. Our after-tax margin increased to
1.0%
in 2015 from
0.6%
in 2014.
|
•
|
Strong enrollment growth across all of our programs, combined with a
5%
increase in premium revenue per member, generated over
$4 billion
, or
47%
, more premium revenue in
2015
compared with
2014
.
|
•
|
Medical care costs as a percentage of premium revenue (the "medical care ratio") decreased to
89.1%
in
2015
, from
89.5%
in
2014
.
|
•
|
General and administrative expenses as a percentage of revenue (the "general and administrative expense ratio") increased slightly to
8.1%
in
2015
, versus
7.9%
in
2014
, primarily as a result of dramatic growth in our Marketplace membership.
Excluding Marketplace broker and exchange fees from both years, the general and administrative expense ratio decreased to 7.5% in 2015 from 7.9% in 2014.
|
•
|
Debt and equity financing transactions generated net cash of
$1,062 million
.
|
|
Year Ended
|
|
|
|
Year Ended
|
|
|
||||||||||||||
|
December 31,
|
|
% Change
|
|
December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
|
2014
|
|
2013
|
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Premium revenue
|
$
|
13,241
|
|
|
$
|
9,023
|
|
|
46.7
|
%
|
|
$
|
9,023
|
|
|
$
|
6,179
|
|
|
46.0
|
%
|
Service revenue
|
253
|
|
|
210
|
|
|
20.5
|
|
|
210
|
|
|
205
|
|
|
2.4
|
|
||||
Premium tax revenue
|
397
|
|
|
294
|
|
|
35.0
|
|
|
294
|
|
|
172
|
|
|
70.9
|
|
||||
Health insurer fee revenue
|
264
|
|
|
120
|
|
|
120.0
|
|
|
120
|
|
|
—
|
|
|
—
|
|
||||
Investment income
|
18
|
|
|
8
|
|
|
125.0
|
|
|
8
|
|
|
7
|
|
|
14.3
|
|
||||
Other revenue
|
5
|
|
|
12
|
|
|
(58.3
|
)
|
|
12
|
|
|
26
|
|
|
(53.8
|
)
|
||||
Total revenue
|
14,178
|
|
|
9,667
|
|
|
46.7
|
|
|
9,667
|
|
|
6,589
|
|
|
46.7
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care costs
|
11,794
|
|
|
8,076
|
|
|
46.0
|
|
|
8,076
|
|
|
5,380
|
|
|
50.1
|
|
||||
Cost of service revenue
|
193
|
|
|
157
|
|
|
22.9
|
|
|
157
|
|
|
161
|
|
|
(2.5
|
)
|
||||
General and administrative expenses
|
1,146
|
|
|
765
|
|
|
49.8
|
|
|
765
|
|
|
666
|
|
|
14.9
|
|
||||
Premium tax expenses
|
397
|
|
|
294
|
|
|
35.0
|
|
|
294
|
|
|
172
|
|
|
70.9
|
|
||||
Health insurer fee expenses
|
157
|
|
|
89
|
|
|
76.4
|
|
|
89
|
|
|
—
|
|
|
—
|
|
||||
Depreciation and amortization
|
104
|
|
|
93
|
|
|
11.8
|
|
|
93
|
|
|
73
|
|
|
27.4
|
|
||||
Total operating expenses
|
13,791
|
|
|
9,474
|
|
|
45.6
|
|
|
9,474
|
|
|
6,452
|
|
|
46.8
|
|
||||
Operating income
|
387
|
|
|
193
|
|
|
100.5
|
|
|
193
|
|
|
137
|
|
|
40.9
|
|
||||
Other expenses, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
66
|
|
|
57
|
|
|
15.8
|
|
|
57
|
|
|
52
|
|
|
9.6
|
|
||||
Other (income) expense, net
|
(1
|
)
|
|
1
|
|
|
(200.0
|
)
|
|
1
|
|
|
4
|
|
|
(75.0
|
)
|
||||
Total other expenses, net
|
65
|
|
|
58
|
|
|
12.1
|
|
|
58
|
|
|
56
|
|
|
3.6
|
|
||||
Income from continuing operations before income tax expense
|
322
|
|
|
135
|
|
|
138.5
|
|
|
135
|
|
|
81
|
|
|
66.7
|
|
||||
Income tax expense
|
179
|
|
|
73
|
|
|
145.2
|
|
|
73
|
|
|
36
|
|
|
102.8
|
|
||||
Income from continuing operations
|
$
|
143
|
|
|
$
|
62
|
|
|
130.6
|
%
|
|
$
|
62
|
|
|
$
|
45
|
|
|
37.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted net income per share, continuing operations (1)
|
$
|
2.58
|
|
|
$
|
1.30
|
|
|
98.5
|
%
|
|
$
|
1.30
|
|
|
$
|
0.96
|
|
|
35.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted weighted average shares outstanding
|
56
|
|
|
48
|
|
|
16.7
|
%
|
|
48
|
|
|
47
|
|
|
2.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP Measures: (2)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income per share, continuing operations (1)(3)
|
$
|
3.11
|
|
|
$
|
1.93
|
|
|
61.1
|
%
|
|
$
|
1.93
|
|
|
$
|
1.55
|
|
|
24.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA
|
$
|
508
|
|
|
$
|
305
|
|
|
66.6
|
%
|
|
$
|
305
|
|
|
$
|
225
|
|
|
35.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Statistics: (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care ratio (4)
|
89.1
|
%
|
|
89.5
|
%
|
|
|
|
89.5
|
%
|
|
87.1
|
%
|
|
|
||||||
Service revenue ratio (5)
|
76.4
|
%
|
|
74.6
|
%
|
|
|
|
74.6
|
%
|
|
79.0
|
%
|
|
|
||||||
General and administrative expense ratio (6)
|
8.1
|
%
|
|
7.9
|
%
|
|
|
|
7.9
|
%
|
|
10.1
|
%
|
|
|
||||||
Premium tax ratio (4)
|
2.9
|
%
|
|
3.2
|
%
|
|
|
|
3.2
|
%
|
|
2.7
|
%
|
|
|
||||||
Effective tax rate
|
55.5
|
%
|
|
53.8
|
%
|
|
|
|
53.8
|
%
|
|
44.8
|
%
|
|
|
||||||
Net profit margin (6)
|
1.0
|
%
|
|
0.6
|
%
|
|
|
|
0.6
|
%
|
|
0.7
|
%
|
|
|
(1)
|
Source data for calculations of per-share amounts and ratios in thousands.
|
(2)
|
See reconciliation of non-GAAP financial measures to U.S. GAAP below.
|
(3)
|
Effective January 1, 2016, we will no longer exclude amortization of convertible notes and lease financing obligations from our presentation of adjusted net income and adjusted net income per share. We made this change because various capital transactions that we completed in 2015 reduced our relative reliance on convertible notes and lease financing as sources of capital. We believe that this change will enhance the comparability of these non-GAAP measures with the corresponding non-GAAP measures used by our competitors.
|
(4)
|
Medical care ratio represents medical care costs as a percentage of premium revenue; premium tax ratio represents premium tax expenses as a percentage of premium revenue plus premium tax revenue.
|
(5)
|
Service revenue ratio represents cost of service revenue as a percentage of service revenue.
|
(6)
|
Computed as a percentage of total revenue.
|
|
As of December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Ending Membership by Health Plan:
|
|
|
|
|
|
|||
California
|
620,000
|
|
|
531,000
|
|
|
368,000
|
|
Florida
|
440,000
|
|
|
164,000
|
|
|
89,000
|
|
Illinois
|
98,000
|
|
|
100,000
|
|
|
4,000
|
|
Michigan
|
328,000
|
|
|
242,000
|
|
|
213,000
|
|
New Mexico
|
231,000
|
|
|
212,000
|
|
|
168,000
|
|
Ohio
|
327,000
|
|
|
347,000
|
|
|
255,000
|
|
Puerto Rico (1)
|
348,000
|
|
|
—
|
|
|
—
|
|
South Carolina (2)
|
99,000
|
|
|
118,000
|
|
|
—
|
|
Texas
|
260,000
|
|
|
245,000
|
|
|
252,000
|
|
Utah
|
102,000
|
|
|
83,000
|
|
|
86,000
|
|
Washington
|
582,000
|
|
|
497,000
|
|
|
403,000
|
|
Wisconsin
|
98,000
|
|
|
84,000
|
|
|
93,000
|
|
|
3,533,000
|
|
|
2,623,000
|
|
|
1,931,000
|
|
Ending Membership by Program:
|
|
|
|
|
|
|||
Temporary Assistance for Needy Families (TANF), CHIP (3)
|
2,312,000
|
|
|
1,809,000
|
|
|
1,603,000
|
|
Medicaid Expansion (4)
|
557,000
|
|
|
385,000
|
|
|
—
|
|
Aged, Blind or Disabled (ABD)
|
366,000
|
|
|
347,000
|
|
|
289,000
|
|
Marketplace (4)
|
205,000
|
|
|
15,000
|
|
|
—
|
|
Medicare-Medicaid Plan (MMP) – Integrated (5)
|
51,000
|
|
|
18,000
|
|
|
—
|
|
Medicare Special Needs Plans (Medicare)
|
42,000
|
|
|
49,000
|
|
|
39,000
|
|
|
3,533,000
|
|
|
2,623,000
|
|
|
1,931,000
|
|
(1)
|
Our Puerto Rico health plan began serving members effective April 1, 2015.
|
(2)
|
Our South Carolina health plan began serving members under the state of South Carolina’s new full-risk Medicaid managed care program effective January 1, 2014.
|
(3)
|
CHIP stands for Children's Health Insurance Program.
|
(4)
|
Medicaid expansion membership phased in, and the Marketplace became available for consumers to access coverage, beginning January 1, 2014.
|
(5)
|
MMP members who receive both Medicaid and Medicare coverage from Molina Healthcare.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
Adjustments:
|
|
|
|
|
|
||||||
Depreciation, and amortization of intangible assets and capitalized software
|
120
|
|
|
114
|
|
|
94
|
|
|||
Interest expense
|
66
|
|
|
57
|
|
|
52
|
|
|||
Income tax expense
|
179
|
|
|
72
|
|
|
26
|
|
|||
EBITDA
|
$
|
508
|
|
|
$
|
305
|
|
|
$
|
225
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
|
(In millions, except diluted per-share amounts)
|
||||||||||||||||||||||
Net income, continuing operations
|
$
|
143
|
|
|
$
|
2.58
|
|
|
$
|
62
|
|
|
$
|
1.30
|
|
|
$
|
45
|
|
|
$
|
0.96
|
|
Adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of convertible senior notes and lease financing obligations
|
19
|
|
|
0.33
|
|
|
17
|
|
|
0.36
|
|
|
14
|
|
|
0.31
|
|
||||||
Amortization of intangible assets
|
11
|
|
|
0.20
|
|
|
13
|
|
|
0.27
|
|
|
13
|
|
|
0.28
|
|
||||||
Adjusted net income per diluted share, continuing operations (1)(2)
|
$
|
173
|
|
|
$
|
3.11
|
|
|
$
|
92
|
|
|
$
|
1.93
|
|
|
$
|
72
|
|
|
$
|
1.55
|
|
(1)
|
Beginning in the first quarter of 2015, we revised the calculation of adjusted net income, continuing operations. We no longer subtract "depreciation, and amortization of capitalized software" and "share-based compensation" from net income, continuing operations to arrive at adjusted net income, continuing operations. We have made this change to better reflect how we evaluate financial performance, make financing and business decisions, and forecast and plans for future periods. All periods presented conform to this presentation.
|
(2)
|
Effective January 1, 2016, we will no longer exclude amortization of convertible notes and lease financing obligations from our presentation of adjusted net income and adjusted net income per share. We made this change because various capital transactions that we completed in 2015 reduced our relative reliance on convertible notes and lease financing as sources of capital. We believe that this change will enhance the comparability of these non-GAAP measures with the corresponding non-GAAP measures used by our competitors.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Health Plans:
|
|
|
|
|
|
||||||
Premium revenue
|
$
|
13,241
|
|
|
$
|
9,023
|
|
|
$
|
6,179
|
|
Less: medical care costs
|
11,794
|
|
|
8,076
|
|
|
5,380
|
|
|||
Medical margin
|
$
|
1,447
|
|
|
$
|
947
|
|
|
$
|
799
|
|
|
|
|
|
|
|
||||||
Molina Medicaid Solutions:
|
|
|
|
|
|
||||||
Service revenue
|
$
|
195
|
|
|
$
|
210
|
|
|
$
|
205
|
|
Less: cost of service revenue
|
140
|
|
|
157
|
|
|
161
|
|
|||
Service margin
|
$
|
55
|
|
|
$
|
53
|
|
|
$
|
44
|
|
|
|
|
|
|
|
||||||
Other:
|
|
|
|
|
|
||||||
Service revenue
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Less: cost of service revenue
|
53
|
|
|
—
|
|
|
—
|
|
|||
Service margin
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
PMPM Premiums
|
||||||||||
|
Low
|
|
High
|
|
Consolidated
|
||||||
TANF, CHIP
|
$
|
120.00
|
|
|
$
|
280.00
|
|
|
$
|
180.00
|
|
Medicaid Expansion
|
310.00
|
|
|
500.00
|
|
|
410.00
|
|
|||
ABD
|
470.00
|
|
|
1,470.00
|
|
|
970.00
|
|
|||
Marketplace
|
180.00
|
|
|
400.00
|
|
|
250.00
|
|
|||
MMP – Integrated
|
1,170.00
|
|
|
3,220.00
|
|
|
2,030.00
|
|
|||
Medicare
|
900.00
|
|
|
1,110.00
|
|
|
1,040.00
|
|
•
|
Much of our revenue growth has come from participation in Medicaid programs covering LTSS. Percentage profit margins for LTSS benefits are generally lower than percentage profit margins for acute medical benefits.
|
•
|
Increases to our base premiums in recent years have not kept pace with medical cost trends.
|
•
|
Lack of coordination in the design of profit caps and medical cost floors in some of our state Medicaid contracts is resulting in counterproductive outcomes. In some instances, givebacks due to profitable performance in one program cannot be offset against losses in other programs.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||||||||||||||
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
|||||||||||||||
Fee for service
|
$
|
8,572
|
|
|
$
|
218.35
|
|
|
72.7
|
%
|
|
$
|
5,673
|
|
|
$
|
202.87
|
|
|
70.2
|
%
|
|
$
|
3,612
|
|
|
$
|
160.43
|
|
|
67.1
|
%
|
Pharmacy
|
1,610
|
|
|
41.01
|
|
|
13.7
|
|
|
1,273
|
|
|
45.54
|
|
|
15.8
|
|
|
935
|
|
|
41.54
|
|
|
17.4
|
|
||||||
Capitation
|
982
|
|
|
25.02
|
|
|
8.3
|
|
|
748
|
|
|
26.77
|
|
|
9.3
|
|
|
604
|
|
|
26.83
|
|
|
11.2
|
|
||||||
Direct delivery
|
128
|
|
|
3.26
|
|
|
1.1
|
|
|
96
|
|
|
3.44
|
|
|
1.2
|
|
|
48
|
|
|
2.14
|
|
|
0.9
|
|
||||||
Other
|
502
|
|
|
12.79
|
|
|
4.2
|
|
|
286
|
|
|
10.22
|
|
|
3.5
|
|
|
181
|
|
|
8.05
|
|
|
3.4
|
|
||||||
|
$
|
11,794
|
|
|
$
|
300.43
|
|
|
100.0
|
%
|
|
$
|
8,076
|
|
|
$
|
288.84
|
|
|
100.0
|
%
|
|
$
|
5,380
|
|
|
$
|
238.99
|
|
|
100.0
|
%
|
|
Year Ended December 31, 2015 (1)
|
||||||||||||||||||||||||
|
Member
Months
(2)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(3)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
25.5
|
|
|
$
|
4,483
|
|
|
$
|
175.64
|
|
|
$
|
4,122
|
|
|
$
|
161.50
|
|
|
92.0
|
%
|
|
$
|
361
|
|
Medicaid Expansion
|
5.9
|
|
|
2,389
|
|
|
408.51
|
|
|
1,931
|
|
|
330.18
|
|
|
80.8
|
|
|
458
|
|
|||||
ABD
|
4.3
|
|
|
4,124
|
|
|
966.83
|
|
|
3,784
|
|
|
887.27
|
|
|
91.8
|
|
|
340
|
|
|||||
Marketplace
|
2.6
|
|
|
652
|
|
|
251.96
|
|
|
481
|
|
|
185.85
|
|
|
73.8
|
|
|
171
|
|
|||||
MMP
|
0.5
|
|
|
1,063
|
|
|
2,034.51
|
|
|
974
|
|
|
1,863.93
|
|
|
91.6
|
|
|
89
|
|
|||||
Medicare
|
0.5
|
|
|
530
|
|
|
1,038.15
|
|
|
502
|
|
|
982.50
|
|
|
94.6
|
|
|
28
|
|
|||||
|
39.3
|
|
|
$
|
13,241
|
|
|
$
|
337.28
|
|
|
$
|
11,794
|
|
|
$
|
300.43
|
|
|
89.1
|
%
|
|
$
|
1,447
|
|
(1)
|
Year ended December 31, 2014 and 2013 data not presented due to lack of comparability.
|
(2)
|
A member month is defined as the aggregate of each month's ending membership for the period presented.
|
(3)
|
"MCR" represents medical costs as a percentage of premium revenue.
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
7.1
|
|
|
$
|
2,200
|
|
|
$
|
310.89
|
|
|
$
|
1,926
|
|
|
$
|
272.22
|
|
|
87.6
|
%
|
|
$
|
274
|
|
Florida
|
4.1
|
|
|
1,199
|
|
|
289.85
|
|
|
1,081
|
|
|
261.49
|
|
|
90.2
|
|
|
118
|
|
|||||
Illinois
|
1.2
|
|
|
397
|
|
|
328.93
|
|
|
367
|
|
|
303.72
|
|
|
92.3
|
|
|
30
|
|
|||||
Michigan
|
3.4
|
|
|
1,067
|
|
|
317.15
|
|
|
903
|
|
|
268.27
|
|
|
84.6
|
|
|
164
|
|
|||||
New Mexico
|
2.8
|
|
|
1,237
|
|
|
446.27
|
|
|
1,106
|
|
|
398.98
|
|
|
89.4
|
|
|
131
|
|
|||||
Ohio
|
4.1
|
|
|
2,034
|
|
|
499.34
|
|
|
1,718
|
|
|
421.61
|
|
|
84.4
|
|
|
316
|
|
|||||
Puerto Rico
(1)
|
3.2
|
|
|
567
|
|
|
178.31
|
|
|
505
|
|
|
158.80
|
|
|
89.1
|
|
|
62
|
|
|||||
South Carolina
(1)
|
1.3
|
|
|
348
|
|
|
267.25
|
|
|
278
|
|
|
213.30
|
|
|
79.8
|
|
|
70
|
|
|||||
Texas
|
3.1
|
|
|
1,961
|
|
|
621.37
|
|
|
1,809
|
|
|
573.32
|
|
|
92.3
|
|
|
152
|
|
|||||
Utah
|
1.2
|
|
|
331
|
|
|
286.22
|
|
|
300
|
|
|
259.32
|
|
|
90.6
|
|
|
31
|
|
|||||
Washington
|
6.6
|
|
|
1,602
|
|
|
242.36
|
|
|
1,470
|
|
|
222.36
|
|
|
91.7
|
|
|
132
|
|
|||||
Wisconsin
|
1.2
|
|
|
261
|
|
|
213.48
|
|
|
215
|
|
|
176.01
|
|
|
82.4
|
|
|
46
|
|
|||||
Other
(2)
|
—
|
|
|
37
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|||||
|
39.3
|
|
|
$
|
13,241
|
|
|
$
|
337.28
|
|
|
$
|
11,794
|
|
|
$
|
300.43
|
|
|
89.1
|
%
|
|
$
|
1,447
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
5.6
|
|
|
$
|
1,523
|
|
|
$
|
270.51
|
|
|
$
|
1,269
|
|
|
$
|
225.37
|
|
|
83.3
|
%
|
|
$
|
254
|
|
Florida
|
1.1
|
|
|
439
|
|
|
397.79
|
|
|
419
|
|
|
379.95
|
|
|
95.5
|
|
|
20
|
|
|||||
Illinois
|
0.3
|
|
|
153
|
|
|
498.48
|
|
|
141
|
|
|
456.88
|
|
|
91.7
|
|
|
12
|
|
|||||
Michigan
|
2.8
|
|
|
781
|
|
|
278.68
|
|
|
661
|
|
|
235.81
|
|
|
84.6
|
|
|
120
|
|
|||||
New Mexico
|
2.5
|
|
|
1,076
|
|
|
435.17
|
|
|
996
|
|
|
402.92
|
|
|
92.6
|
|
|
80
|
|
|||||
Ohio
|
3.7
|
|
|
1,553
|
|
|
425.47
|
|
|
1,335
|
|
|
365.87
|
|
|
86.0
|
|
|
218
|
|
|||||
Puerto Rico
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
South Carolina
(1)
|
1.5
|
|
|
381
|
|
|
260.72
|
|
|
323
|
|
|
220.89
|
|
|
84.7
|
|
|
58
|
|
|||||
Texas
|
3.0
|
|
|
1,318
|
|
|
442.32
|
|
|
1,197
|
|
|
401.81
|
|
|
90.8
|
|
|
121
|
|
|||||
Utah
|
1.0
|
|
|
310
|
|
|
310.64
|
|
|
285
|
|
|
286.43
|
|
|
92.2
|
|
|
25
|
|
|||||
Washington
|
5.5
|
|
|
1,305
|
|
|
236.27
|
|
|
1,219
|
|
|
220.75
|
|
|
93.4
|
|
|
86
|
|
|||||
Wisconsin
|
1.0
|
|
|
156
|
|
|
150.87
|
|
|
136
|
|
|
130.91
|
|
|
86.8
|
|
|
20
|
|
|||||
Other
(2)
|
—
|
|
|
28
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|||||
|
28.0
|
|
|
$
|
9,023
|
|
|
$
|
322.68
|
|
|
$
|
8,076
|
|
|
$
|
288.84
|
|
|
89.5
|
%
|
|
$
|
947
|
|
|
Year Ended December 31, 2013
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
4.2
|
|
|
$
|
750
|
|
|
$
|
177.10
|
|
|
$
|
667
|
|
|
$
|
157.46
|
|
|
88.9
|
%
|
|
$
|
83
|
|
Florida
|
1.0
|
|
|
265
|
|
|
272.23
|
|
|
231
|
|
|
237.57
|
|
|
87.3
|
|
|
34
|
|
|||||
Illinois
|
—
|
|
|
8
|
|
|
1,201.34
|
|
|
8
|
|
|
1,164.10
|
|
|
96.9
|
|
|
—
|
|
|||||
Michigan
|
2.6
|
|
|
676
|
|
|
261.91
|
|
|
571
|
|
|
221.09
|
|
|
84.4
|
|
|
105
|
|
|||||
New Mexico
|
1.5
|
|
|
447
|
|
|
299.36
|
|
|
384
|
|
|
257.62
|
|
|
86.1
|
|
|
63
|
|
|||||
Ohio
|
3.0
|
|
|
1,099
|
|
|
365.44
|
|
|
925
|
|
|
307.53
|
|
|
84.2
|
|
|
174
|
|
|||||
Puerto Rico
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
South Carolina
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Texas
|
3.2
|
|
|
1,291
|
|
|
406.27
|
|
|
1,115
|
|
|
350.84
|
|
|
86.4
|
|
|
176
|
|
|||||
Utah
|
1.0
|
|
|
311
|
|
|
299.05
|
|
|
259
|
|
|
249.51
|
|
|
83.4
|
|
|
52
|
|
|||||
Washington
|
4.9
|
|
|
1,168
|
|
|
236.47
|
|
|
1,028
|
|
|
208.10
|
|
|
88.0
|
|
|
140
|
|
|||||
Wisconsin
|
1.1
|
|
|
143
|
|
|
135.40
|
|
|
114
|
|
|
107.91
|
|
|
79.7
|
|
|
29
|
|
|||||
Other
(2)
|
—
|
|
|
21
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|||||
|
22.5
|
|
|
$
|
6,179
|
|
|
$
|
274.48
|
|
|
$
|
5,380
|
|
|
$
|
238.99
|
|
|
87.1
|
%
|
|
$
|
799
|
|
(1)
|
Our Puerto Rico health plan began serving members effective April 1, 2015. Our South Carolina health plan began serving members under the state of South Carolina’s new full-risk Medicaid managed care program effective January 1, 2014.
|
(2)
|
"Other" medical care costs include primarily medically related administrative costs of the parent company, and direct delivery costs.
|
|
Year Ended December 31,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Amount
|
|
% of Total
Revenue
|
|
Amount
|
|
% of Total
Revenue
|
||||||
|
(Dollar amounts in millions)
|
||||||||||||
Depreciation, and amortization of capitalized software, continuing operations
|
$
|
87
|
|
|
0.6
|
%
|
|
$
|
75
|
|
|
0.8
|
%
|
Amortization of intangible assets, continuing operations
|
17
|
|
|
0.1
|
|
|
18
|
|
|
0.2
|
|
||
Depreciation and amortization, continuing operations
|
104
|
|
|
0.7
|
|
|
93
|
|
|
1.0
|
|
||
Amortization recorded as reduction of service revenue
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||
Amortization of capitalized software recorded as cost of service revenue
|
21
|
|
|
0.1
|
|
|
38
|
|
|
0.4
|
|
||
Depreciation and amortization reported in statement of cash flows
|
$
|
126
|
|
|
0.8
|
%
|
|
$
|
134
|
|
|
1.4
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2014
|
|
2013
|
||||||||||
|
Amount
|
|
% of Total
Revenue
|
|
Amount
|
|
% of Total
Revenue
|
||||||
|
(Dollar amounts in millions)
|
||||||||||||
Depreciation, and amortization of capitalized software, continuing operations
|
$
|
75
|
|
|
0.8
|
%
|
|
$
|
55
|
|
|
0.8
|
%
|
Amortization of intangible assets, continuing operations
|
18
|
|
|
0.2
|
|
|
18
|
|
|
0.3
|
|
||
Depreciation and amortization, continuing operations
|
93
|
|
|
1.0
|
|
|
73
|
|
|
1.1
|
|
||
Amortization recorded as reduction of service revenue
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||
Amortization of capitalized software recorded as cost of service revenue
|
38
|
|
|
0.4
|
|
|
18
|
|
|
0.3
|
|
||
Depreciation and amortization reported in statement of cash flows
|
$
|
134
|
|
|
1.4
|
%
|
|
$
|
94
|
|
|
1.4
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015 Change
|
|
2013 to 2014 Change
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Net cash provided by operating activities
|
$
|
1,125
|
|
|
$
|
1,060
|
|
|
$
|
190
|
|
|
$
|
65
|
|
|
$
|
870
|
|
Net cash used in investing activities
|
(1,420
|
)
|
|
(536
|
)
|
|
(543
|
)
|
|
(884
|
)
|
|
7
|
|
|||||
Net cash provided by financing activities
|
1,085
|
|
|
79
|
|
|
493
|
|
|
1,006
|
|
|
(414
|
)
|
|||||
Net increase in cash and cash equivalents
|
$
|
790
|
|
|
$
|
603
|
|
|
$
|
140
|
|
|
$
|
187
|
|
|
$
|
463
|
|
•
|
A decrease in amounts due to government agencies of
$268 million
, primarily due to a fourth quarter 2015 Medicaid expansion-related payment to the state of Washington's Medicaid authority of $247 million. Changes in this account
|
•
|
The change in medical claims and benefits payable, which resulted in the use of
$49 million
, primarily because membership and related medical costs grew at a higher rate in 2014 than in 2015, resulting in a lower year-over-year change in 2015.
|
|
HIF Reimbursement Revenue, Gross
(1)
|
||||||||||||||||||||||
|
Year Ended December 31, 2015
|
||||||||||||||||||||||
|
Recognized
|
|
Necessary for Full Reimbursement
|
||||||||||||||||||||
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
|
Total
|
|
|||||||||||||
2015 HIF:
|
|
||||||||||||||||||||||
California
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
31
|
|
|
$
|
31
|
|
Florida
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
8
|
|
|
8
|
|
||||||
Illinois
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|
4
|
|
||||||
Michigan
|
—
|
|
|
—
|
|
|
21
|
|
|
7
|
|
|
28
|
|
|
28
|
|
||||||
New Mexico
|
7
|
|
|
8
|
|
|
8
|
|
|
7
|
|
|
30
|
|
|
30
|
|
||||||
Ohio
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
48
|
|
|
48
|
|
||||||
South Carolina
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
12
|
|
|
12
|
|
||||||
Texas
|
6
|
|
|
6
|
|
|
6
|
|
|
5
|
|
|
23
|
|
|
23
|
|
||||||
Utah
|
—
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
6
|
|
|
6
|
|
||||||
Washington
|
11
|
|
|
11
|
|
|
6
|
|
|
9
|
|
|
37
|
|
|
37
|
|
||||||
Wisconsin
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
5
|
|
|
5
|
|
||||||
Subtotal, Medicaid
|
43
|
|
|
61
|
|
|
70
|
|
|
58
|
|
|
232
|
|
|
232
|
|
||||||
Marketplace
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||||
Medicare
|
6
|
|
|
4
|
|
|
4
|
|
|
5
|
|
|
19
|
|
|
19
|
|
||||||
|
49
|
|
|
65
|
|
|
75
|
|
|
64
|
|
|
253
|
|
|
$
|
253
|
|
|||||
2014 HIF:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
California
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
|
|||||||
Michigan
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|
|
|||||||
Utah
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
|||||||
|
$
|
49
|
|
|
$
|
77
|
|
|
$
|
83
|
|
|
$
|
64
|
|
|
$
|
273
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recognized in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Health insurer fee revenue
|
$
|
48
|
|
|
$
|
74
|
|
|
$
|
81
|
|
|
$
|
61
|
|
|
$
|
264
|
|
|
|
||
Premium tax revenue
|
1
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
9
|
|
|
|
|||||||
|
$
|
49
|
|
|
$
|
77
|
|
|
$
|
83
|
|
|
$
|
64
|
|
|
$
|
273
|
|
|
|
(1)
|
Amounts in the table include our estimate of the full economic impact of the excise tax including premium tax and the income tax effect.
|
•
|
Health Plans segment medical claims and benefits payable
(see discussion below).
|
•
|
Health Plans segment contractual provisions that may adjust or limit revenue or profit.
For a comprehensive discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Item 8 of this Form 10-K, Notes to Consolidated Financial Statements, in Note
2
, "
Significant Accounting Policies
."
|
•
|
Health Plans segment quality incentives.
For a comprehensive discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Item 8 of this Form 10-K, Notes to Consolidated Financial Statements, in Note
2
, "
Significant Accounting Policies
."
|
•
|
Molina Medicaid Solutions segment revenue and cost recognition.
For a comprehensive discussion of this topic, refer to Item 8 of this Form 10-K, Notes to Consolidated Financial Statements, in Note
2
, "
Significant Accounting Policies
."
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Fee-for-service claims incurred but not paid (IBNP)
|
$
|
1,191
|
|
|
$
|
871
|
|
|
$
|
424
|
|
Pharmacy payable
|
88
|
|
|
71
|
|
|
45
|
|
|||
Capitation payable
|
140
|
|
|
28
|
|
|
20
|
|
|||
Other (1)
|
266
|
|
|
231
|
|
|
181
|
|
|||
|
$
|
1,685
|
|
|
$
|
1,201
|
|
|
$
|
670
|
|
(1)
|
"Other" medical claims and benefits payable include amounts payable to certain providers for which we act as an intermediary on behalf of various state agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. As of
December 31, 2015
,
2014
and
2013
, we recorded non-risk provider payables relating to such intermediary arrangements of approximately
$167 million
,
$119 million
and
$151 million
, respectively.
|
Increase (Decrease) in Estimated Completion Factors
|
Increase (Decrease) in
Medical Claims and
Benefits Payable
|
||
(6)%
|
$
|
348
|
|
(4)%
|
232
|
|
|
(2)%
|
116
|
|
|
2%
|
(116
|
)
|
|
4%
|
(232
|
)
|
|
6%
|
(348
|
)
|
(Decrease) Increase in Trended Per member Per Month Cost Estimates
|
(Decrease) Increase in
Medical Claims and
Benefits Payable
|
||
(6)%
|
$
|
(202
|
)
|
(4)%
|
(135
|
)
|
|
(2)%
|
(67
|
)
|
|
2%
|
67
|
|
|
4%
|
135
|
|
|
6%
|
202
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(Dollars in millions, except
per-member amounts)
|
||||||||||
Balances at beginning of period
|
$
|
1,201
|
|
|
$
|
670
|
|
|
$
|
495
|
|
Components of medical care costs related to:
|
|
|
|
|
|
||||||
Current period
|
11,935
|
|
|
8,123
|
|
|
5,434
|
|
|||
Prior periods (1)
|
(141
|
)
|
|
(46
|
)
|
|
(53
|
)
|
|||
Total medical care costs
|
11,794
|
|
|
8,077
|
|
|
5,381
|
|
|||
|
|
|
|
|
|
||||||
Change in non-risk provider payables
|
48
|
|
|
(32
|
)
|
|
111
|
|
|||
|
|
|
|
|
|
||||||
Payments for medical care costs related to:
|
|
|
|
|
|
||||||
Current period
|
10,448
|
|
|
7,064
|
|
|
4,932
|
|
|||
Prior periods
|
910
|
|
|
450
|
|
|
385
|
|
|||
Total paid
|
11,358
|
|
|
7,514
|
|
|
5,317
|
|
|||
Balances at end of period
|
$
|
1,685
|
|
|
$
|
1,201
|
|
|
$
|
670
|
|
|
|
|
|
|
|
||||||
Benefit from prior periods as a percentage of:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
11.8
|
%
|
|
6.9
|
%
|
|
10.7
|
%
|
|||
Premium revenue
|
1.1
|
%
|
|
0.5
|
%
|
|
0.9
|
%
|
|||
Medical care costs
|
1.2
|
%
|
|
0.6
|
%
|
|
1.0
|
%
|
|||
|
|
|
|
|
|
||||||
Claims Data:
|
|
|
|
|
|
||||||
Days in claims payable, fee for service
|
48
|
|
|
49
|
|
|
43
|
|
|||
Number of members at end of period
|
3,533,000
|
|
|
2,623,000
|
|
|
1,931,000
|
|
|||
Number of claims in inventory at end of period
|
380,800
|
|
|
307,700
|
|
|
145,800
|
|
|||
Billed charges of claims in inventory at end of period
|
$
|
816
|
|
|
$
|
719
|
|
|
$
|
277
|
|
Claims in inventory per member at end of period
|
0.11
|
|
|
0.12
|
|
|
0.08
|
|
|||
Billed charges of claims in inventory per member end of period
|
$
|
230.91
|
|
|
$
|
273.92
|
|
|
$
|
143.19
|
|
Number of claims received during the period
|
40,173,300
|
|
|
27,597,000
|
|
|
21,317,500
|
|
|||
Billed charges of claims received during the period
|
$
|
46,211
|
|
|
$
|
30,316
|
|
|
$
|
21,415
|
|
|
Total
(1)
|
|
2016
|
|
2017-2018
|
|
2019-2020
|
|
2021 and Beyond
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Medical claims and benefits payable
|
$
|
1,685
|
|
|
$
|
1,685
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Principal amount of senior notes (2)
|
1,552
|
|
|
—
|
|
|
—
|
|
|
550
|
|
|
1,002
|
|
|||||
Amounts due government agencies
|
729
|
|
|
729
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest on long-term debt
|
424
|
|
|
49
|
|
|
97
|
|
|
91
|
|
|
187
|
|
|||||
Lease financing obligations
|
403
|
|
|
15
|
|
|
32
|
|
|
33
|
|
|
323
|
|
|||||
Operating leases
|
232
|
|
|
49
|
|
|
88
|
|
|
56
|
|
|
39
|
|
|||||
Purchase commitments
|
15
|
|
|
11
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
5,040
|
|
|
$
|
2,538
|
|
|
$
|
221
|
|
|
$
|
730
|
|
|
$
|
1,551
|
|
(1)
|
As of December 31, 2015
, we have recorded approximately $9 million of unrecognized tax benefits. The table does not contain this amount because we cannot reasonably estimate when or if such amount may be settled. For further information, refer to Item 8 of this Form 10-K, Notes to Consolidated Financial Statements, in Note
14
, "
Income Taxes
."
|
(2)
|
Represents the principal amounts due on our 5.375% Senior Notes due 2022, 1.125% Cash Convertible Senior Notes due 2020, and our 1.625% Convertible Senior Notes due 2044 (1.625% Notes). The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, as described in Item 8 of this Form 10-K, Notes to Consolidated Financial Statements, Note
12
, "
Debt
."
|
|
Page
|
MOLINA HEALTHCARE, INC.
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(Amounts in millions,
except per-share data)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,329
|
|
|
$
|
1,539
|
|
Investments
|
1,801
|
|
|
1,019
|
|
||
Receivables
|
597
|
|
|
596
|
|
||
Income taxes refundable
|
13
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
192
|
|
|
49
|
|
||
Derivative asset
|
374
|
|
|
—
|
|
||
Total current assets
|
5,306
|
|
|
3,203
|
|
||
Property, equipment, and capitalized software, net
|
393
|
|
|
341
|
|
||
Deferred contract costs
|
81
|
|
|
54
|
|
||
Intangible assets, net
|
122
|
|
|
89
|
|
||
Goodwill
|
519
|
|
|
272
|
|
||
Restricted investments
|
109
|
|
|
102
|
|
||
Derivative asset
|
—
|
|
|
329
|
|
||
Deferred income taxes
|
18
|
|
|
15
|
|
||
Other assets
|
28
|
|
|
30
|
|
||
|
$
|
6,576
|
|
|
$
|
4,435
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Medical claims and benefits payable
|
$
|
1,685
|
|
|
$
|
1,201
|
|
Amounts due government agencies
|
729
|
|
|
527
|
|
||
Accounts payable and accrued liabilities
|
362
|
|
|
242
|
|
||
Deferred revenue
|
223
|
|
|
196
|
|
||
Income taxes payable
|
—
|
|
|
9
|
|
||
Current maturities of long-term debt
|
449
|
|
|
—
|
|
||
Derivative liability
|
374
|
|
|
—
|
|
||
Total current liabilities
|
3,822
|
|
|
2,175
|
|
||
Senior notes
|
962
|
|
|
690
|
|
||
Lease financing obligations
|
198
|
|
|
157
|
|
||
Lease financing obligations - related party
|
—
|
|
|
40
|
|
||
Derivative liability
|
—
|
|
|
329
|
|
||
Other long-term liabilities
|
37
|
|
|
34
|
|
||
Total liabilities
|
5,019
|
|
|
3,425
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value; 150 shares authorized; outstanding: 56 shares at December 31, 2015 and 50 shares at December 31, 2014
|
—
|
|
|
—
|
|
||
Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
803
|
|
|
396
|
|
||
Accumulated other comprehensive loss
|
(4
|
)
|
|
(1
|
)
|
||
Retained earnings
|
758
|
|
|
615
|
|
||
Total stockholders’ equity
|
1,557
|
|
|
1,010
|
|
||
|
$
|
6,576
|
|
|
$
|
4,435
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions, except per-share data)
|
||||||||||
Revenue:
|
|
|
|
|
|
||||||
Premium revenue
|
$
|
13,241
|
|
|
$
|
9,023
|
|
|
$
|
6,179
|
|
Service revenue
|
253
|
|
|
210
|
|
|
205
|
|
|||
Premium tax revenue
|
397
|
|
|
294
|
|
|
172
|
|
|||
Health insurer fee revenue
|
264
|
|
|
120
|
|
|
—
|
|
|||
Investment income
|
18
|
|
|
8
|
|
|
7
|
|
|||
Other revenue
|
5
|
|
|
12
|
|
|
26
|
|
|||
Total revenue
|
14,178
|
|
|
9,667
|
|
|
6,589
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Medical care costs
|
11,794
|
|
|
8,076
|
|
|
5,380
|
|
|||
Cost of service revenue
|
193
|
|
|
157
|
|
|
161
|
|
|||
General and administrative expenses
|
1,146
|
|
|
765
|
|
|
666
|
|
|||
Premium tax expenses
|
397
|
|
|
294
|
|
|
172
|
|
|||
Health insurer fee expenses
|
157
|
|
|
89
|
|
|
—
|
|
|||
Depreciation and amortization
|
104
|
|
|
93
|
|
|
73
|
|
|||
Total operating expenses
|
13,791
|
|
|
9,474
|
|
|
6,452
|
|
|||
Operating income
|
387
|
|
|
193
|
|
|
137
|
|
|||
Other expenses, net:
|
|
|
|
|
|
||||||
Interest expense
|
66
|
|
|
57
|
|
|
52
|
|
|||
Other (income) expense, net
|
(1
|
)
|
|
1
|
|
|
4
|
|
|||
Total other expenses, net
|
65
|
|
|
58
|
|
|
56
|
|
|||
Income from continuing operations before income tax expense
|
322
|
|
|
135
|
|
|
81
|
|
|||
Income tax expense
|
179
|
|
|
73
|
|
|
36
|
|
|||
Income from continuing operations
|
143
|
|
|
62
|
|
|
45
|
|
|||
Income from discontinued operations, net of tax expense (benefit) of $0, $0, and $(10), respectively
|
—
|
|
|
—
|
|
|
8
|
|
|||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Basic net income per share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
2.75
|
|
|
$
|
1.34
|
|
|
$
|
0.98
|
|
(Loss) income from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.18
|
|
|||
Basic net income per share
|
$
|
2.75
|
|
|
$
|
1.33
|
|
|
$
|
1.16
|
|
Diluted net income per share:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
2.58
|
|
|
$
|
1.30
|
|
|
$
|
0.96
|
|
(Loss) income from discontinued operations
|
—
|
|
|
(0.01
|
)
|
|
0.17
|
|
|||
Diluted net income per share
|
$
|
2.58
|
|
|
$
|
1.29
|
|
|
$
|
1.13
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
52
|
|
|
47
|
|
|
46
|
|
|||
Diluted
|
56
|
|
|
48
|
|
|
47
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized investment loss
|
(5
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Effect of income tax benefit
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive loss, net of tax
|
(3
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Comprehensive income
|
$
|
140
|
|
|
$
|
62
|
|
|
$
|
52
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
|
|||||||||||||||
|
Outstanding
|
|
Amount
|
|
|
|
|
|
Total
|
|||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||||
Balance at January 1, 2013
|
47
|
|
|
$
|
—
|
|
|
$
|
285
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
(3
|
)
|
|
$
|
782
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
||||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Purchase of treasury stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
(53
|
)
|
||||||
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
||||||
Issuance of warrants
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||||
Share-based compensation
|
1
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||||
Tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Balance at December 31, 2013
|
46
|
|
|
—
|
|
|
341
|
|
|
(1
|
)
|
|
553
|
|
|
—
|
|
|
893
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||||
Convertible senior notes transactions, including issuance costs
|
2
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||
Share-based compensation
|
2
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||||
Tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Balance at December 31, 2014
|
50
|
|
|
—
|
|
|
396
|
|
|
(1
|
)
|
|
615
|
|
|
—
|
|
|
1,010
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
143
|
|
||||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Common stock offering, including issuance costs
|
6
|
|
|
—
|
|
|
373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
373
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||||
Tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Balance at December 31, 2015
|
56
|
|
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
(4
|
)
|
|
$
|
758
|
|
|
$
|
—
|
|
|
$
|
1,557
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
126
|
|
|
134
|
|
|
94
|
|
|||
Deferred income taxes
|
(7
|
)
|
|
(2
|
)
|
|
(32
|
)
|
|||
Share-based compensation
|
23
|
|
|
22
|
|
|
29
|
|
|||
Amortization of convertible senior notes and lease financing obligations
|
30
|
|
|
27
|
|
|
23
|
|
|||
Other, net
|
19
|
|
|
7
|
|
|
18
|
|
|||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
||||||
Receivables
|
56
|
|
|
(298
|
)
|
|
(149
|
)
|
|||
Prepaid expenses and other current assets
|
(35
|
)
|
|
(20
|
)
|
|
(23
|
)
|
|||
Medical claims and benefits payable
|
482
|
|
|
531
|
|
|
175
|
|
|||
Amounts due government agencies
|
202
|
|
|
470
|
|
|
28
|
|
|||
Accounts payable and accrued liabilities
|
84
|
|
|
11
|
|
|
33
|
|
|||
Deferred revenue
|
24
|
|
|
74
|
|
|
(20
|
)
|
|||
Income taxes
|
(22
|
)
|
|
42
|
|
|
(39
|
)
|
|||
Net cash provided by operating activities
|
1,125
|
|
|
1,060
|
|
|
190
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Purchases of investments
|
(1,923
|
)
|
|
(953
|
)
|
|
(770
|
)
|
|||
Proceeds from sales and maturities of investments
|
1,126
|
|
|
633
|
|
|
400
|
|
|||
Purchases of equipment
|
(132
|
)
|
|
(115
|
)
|
|
(98
|
)
|
|||
Increase in restricted investments
|
(6
|
)
|
|
(34
|
)
|
|
(19
|
)
|
|||
Net cash paid in business combinations
|
(450
|
)
|
|
(44
|
)
|
|
(62
|
)
|
|||
Other, net
|
(35
|
)
|
|
(23
|
)
|
|
6
|
|
|||
Net cash used in investing activities
|
(1,420
|
)
|
|
(536
|
)
|
|
(543
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from senior notes offerings, net of issuance costs
|
689
|
|
|
123
|
|
|
538
|
|
|||
Proceeds from common stock offering, net of issuance costs
|
373
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale-leaseback transactions
|
—
|
|
|
—
|
|
|
159
|
|
|||
Purchase of call option
|
—
|
|
|
—
|
|
|
(149
|
)
|
|||
Proceeds from issuance of warrants
|
—
|
|
|
—
|
|
|
75
|
|
|||
Contingent consideration liabilities settled
|
—
|
|
|
(50
|
)
|
|
—
|
|
|||
Treasury stock purchases
|
—
|
|
|
—
|
|
|
(53
|
)
|
|||
Principal payments on term loan
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||
Repayment of amount borrowed under credit facility
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||
Proceeds from employee stock plans
|
18
|
|
|
14
|
|
|
9
|
|
|||
Principal payments on convertible senior notes
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||
Other, net
|
5
|
|
|
2
|
|
|
2
|
|
|||
Net cash provided by financing activities
|
1,085
|
|
|
79
|
|
|
493
|
|
|||
Net increase in cash and cash equivalents
|
790
|
|
|
603
|
|
|
140
|
|
|||
Cash and cash equivalents at beginning of period
|
1,539
|
|
|
936
|
|
|
796
|
|
|||
Cash and cash equivalents at end of period
|
$
|
2,329
|
|
|
$
|
1,539
|
|
|
$
|
936
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(Amounts in millions)
|
||||||||||
|
|
||||||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
197
|
|
|
$
|
30
|
|
|
$
|
95
|
|
Interest
|
$
|
38
|
|
|
$
|
29
|
|
|
$
|
35
|
|
|
|
|
|
|
|
||||||
Schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Senior notes exchange transaction
|
$
|
—
|
|
|
$
|
177
|
|
|
$
|
—
|
|
Retirement of treasury stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56
|
|
Increase in non-cash lease financing obligation - related party
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
27
|
|
Common stock used for stock-based compensation
|
$
|
(15
|
)
|
|
$
|
(9
|
)
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
||||||
Details of business combinations:
|
|
|
|
|
|
||||||
Fair value of assets acquired
|
$
|
(389
|
)
|
|
$
|
(52
|
)
|
|
$
|
(122
|
)
|
Fair value of liabilities assumed
|
41
|
|
|
—
|
|
|
—
|
|
|||
Fair value of contingent consideration liabilities incurred
|
—
|
|
|
—
|
|
|
60
|
|
|||
Payable to seller
|
—
|
|
|
8
|
|
|
—
|
|
|||
Amounts advanced for acquisitions
|
(102
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash paid in business combinations
|
$
|
(450
|
)
|
|
$
|
(44
|
)
|
|
$
|
(62
|
)
|
|
|
|
|
|
|
||||||
Details of change in fair value of derivatives, net:
|
|
|
|
|
|
||||||
Gain on 1.125% Notes Call Option
|
$
|
45
|
|
|
$
|
143
|
|
|
$
|
37
|
|
Loss on 1.125% Notes Conversion Option
|
(45
|
)
|
|
(143
|
)
|
|
(37
|
)
|
|||
Loss on 1.125% Warrants
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Change in fair value of derivatives, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
•
|
The determination of medical claims and benefits payable of our Health Plans segment;
|
•
|
Health plan contractual provisions that may limit revenue recognition based upon the costs incurred or the profits realized under a specific contract;
|
•
|
Health plan quality incentives that allow us to recognize incremental revenue if certain quality standards are met;
|
•
|
Molina Medicaid Solutions segment revenue and cost recognition;
|
•
|
Settlements under risk or savings sharing programs;
|
•
|
The assessment of deferred contract costs, deferred revenue, long-lived and intangible assets, and goodwill for impairment;
|
•
|
The determination of professional and general liability claims, and reserves for potential absorption of claims unpaid by insolvent providers;
|
•
|
The determination of reserves for the outcome of litigation;
|
•
|
The determination of valuation allowances for deferred tax assets; and
|
•
|
The determination of unrecognized tax benefits.
|
•
|
Amortization of purchased intangibles relating to customer relationships is reported as amortization within the heading "Depreciation and amortization;"
|
•
|
Amortization of purchased intangibles relating to contract backlog is recorded as a reduction of "Service revenue;" and
|
•
|
Amortization of capitalized software is recorded within the heading "Cost of service revenue."
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Depreciation, and amortization of capitalized software, continuing operations
|
$
|
87
|
|
|
$
|
75
|
|
|
$
|
55
|
|
Amortization of intangible assets, continuing operations
|
17
|
|
|
18
|
|
|
18
|
|
|||
Depreciation and amortization, continuing operations
|
104
|
|
|
93
|
|
|
73
|
|
|||
Amortization recorded as reduction of service revenue
|
1
|
|
|
3
|
|
|
3
|
|
|||
Amortization of capitalized software recorded as cost of service revenue
|
21
|
|
|
38
|
|
|
18
|
|
|||
Depreciation and amortization reported in the statement of cash flows
|
$
|
126
|
|
|
$
|
134
|
|
|
$
|
94
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
|||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
California
|
$
|
2,200
|
|
|
16.6
|
%
|
|
$
|
1,523
|
|
|
16.9
|
%
|
|
$
|
750
|
|
|
12.1
|
%
|
Florida
|
1,199
|
|
|
9.0
|
|
|
439
|
|
|
4.9
|
|
|
265
|
|
|
4.3
|
|
|||
Illinois
|
397
|
|
|
3.0
|
|
|
153
|
|
|
1.7
|
|
|
8
|
|
|
0.1
|
|
|||
Michigan
|
1,067
|
|
|
8.1
|
|
|
781
|
|
|
8.7
|
|
|
676
|
|
|
11.0
|
|
|||
New Mexico
|
1,237
|
|
|
9.3
|
|
|
1,076
|
|
|
11.9
|
|
|
447
|
|
|
7.2
|
|
|||
Ohio
|
2,034
|
|
|
15.4
|
|
|
1,553
|
|
|
17.2
|
|
|
1,099
|
|
|
17.8
|
|
|||
Puerto Rico
|
567
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
South Carolina
|
348
|
|
|
2.6
|
|
|
381
|
|
|
4.2
|
|
|
—
|
|
|
—
|
|
|||
Texas
|
1,961
|
|
|
14.8
|
|
|
1,318
|
|
|
14.6
|
|
|
1,291
|
|
|
20.9
|
|
|||
Utah
|
331
|
|
|
2.5
|
|
|
310
|
|
|
3.4
|
|
|
311
|
|
|
5.0
|
|
|||
Washington
|
1,602
|
|
|
12.1
|
|
|
1,305
|
|
|
14.5
|
|
|
1,168
|
|
|
18.9
|
|
|||
Wisconsin
|
261
|
|
|
2.0
|
|
|
156
|
|
|
1.7
|
|
|
143
|
|
|
2.3
|
|
|||
Direct delivery
|
37
|
|
|
0.3
|
|
|
28
|
|
|
0.3
|
|
|
21
|
|
|
0.4
|
|
|||
|
$
|
13,241
|
|
|
100.0
|
%
|
|
$
|
9,023
|
|
|
100.0
|
%
|
|
$
|
6,179
|
|
|
100.0
|
%
|
•
|
Permanent risk adjustment program: Under this permanent program, our health plans' risk scores are compared to the overall average risk score for the relevant state and market pool. Generally, our health plans will pay into the pool if their risk scores are below the average risk score, and will receive funds from the pool if their risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income.
|
•
|
Transitional reinsurance program: This program is designed to provide reimbursement to insurers for high cost members. Our health plans pay an annual contribution on a per-member basis, and are eligible for recoveries if claims for individual members exceed a specified threshold, up to a maximum amount. This three-year program will end on December 31, 2016. We recognize the assessments to fund the transitional reinsurance program as a reduction to premium revenue in our consolidated statements of income. We recognize recoveries under the reinsurance program as a reduction to medical care costs in our consolidated statements of income.
|
•
|
Temporary risk corridor program: This program is intended to limit gains and losses of insurers by comparing allowable costs to a target amount as defined by the U.S. Department of Health and Human Services (HHS). Variances from the target amount exceeding certain thresholds may result in amounts due to or receivables due from HHS. This three-year program will end on December 31, 2016. Due to uncertainties as to the amount of federal funding available to support the risk corridor program, we do not recognize amounts receivable under this program. All liabilities are recognized as incurred. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk corridor program as an adjustment to premium revenue in our consolidated statements of income.
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Risk adjustment
|
$
|
(214
|
)
|
|
$
|
(5
|
)
|
Reinsurance
|
36
|
|
|
5
|
|
||
Risk corridor
|
(10
|
)
|
|
—
|
|
||
Minimum MLR
|
(3
|
)
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Maximum available quality incentive premium - current period
|
$
|
118
|
|
|
$
|
90
|
|
|
$
|
63
|
|
|
|
|
|
|
|
||||||
Amount of quality incentive premium revenue recognized in current period:
|
|
|
|
|
|
||||||
Earned current period
|
$
|
66
|
|
|
$
|
40
|
|
|
$
|
46
|
|
Earned prior periods
|
13
|
|
|
4
|
|
|
9
|
|
|||
Total
|
$
|
79
|
|
|
$
|
44
|
|
|
$
|
55
|
|
|
|
|
|
|
|
||||||
Total premium revenue recognized for state health plans with quality incentive premiums
|
$
|
11,107
|
|
|
$
|
7,084
|
|
|
$
|
2,980
|
|
•
|
Fee-for-service expenses:
Nearly all hospital services and the majority of our primary care and physician specialist services and LTSS costs are paid on a fee-for-service basis. Under fee-for-service arrangements, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of services. Such expenses are recorded in the period in which the related services are dispensed. The costs of drugs administered in a physician or hospital setting that are not billed through our pharmacy benefit manager are included in fee-for-service costs.
|
•
|
Pharmacy expenses:
All drug, injectibles, and immunization costs paid through our pharmacy benefit manager are classified as pharmacy expenses. As noted above, drugs and injectibles not paid through our pharmacy benefit manager are included in fee-for-service costs, except in those limited instances where we capitate drug and injectible costs.
|
•
|
Capitation expenses:
Many of our primary care physicians and a small portion of our specialists and hospitals are paid on a capitated basis. Under capitation arrangements, we pay a fixed amount PMPM to the provider without regard to the frequency, extent, or nature of the medical services actually furnished. Under capitated arrangements, we remain liable for the provision of certain health care services. Capitation payments are fixed in advance of the periods covered and are not subject to significant accounting estimates. These payments are expensed in the period the providers are obligated to provide services. The financial risk for pharmacy services for a small portion of our membership is delegated to capitated providers.
|
•
|
Direct delivery expenses:
All costs associated with our direct delivery of medical care are separately identified.
|
•
|
Other medical expenses:
All medically related administrative costs, certain provider incentive costs, and other health care expenses are classified as other medical expenses. Medically related administrative costs include, for example, expenses relating to health education, quality assurance, case management, care coordination, disease management,
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||||||||||||||
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
|||||||||||||||
Fee-for-service
|
$
|
8,572
|
|
|
$
|
218.35
|
|
|
72.7
|
%
|
|
$
|
5,673
|
|
|
$
|
202.87
|
|
|
70.2
|
%
|
|
$
|
3,612
|
|
|
$
|
160.43
|
|
|
67.1
|
%
|
Pharmacy
|
1,610
|
|
|
41.01
|
|
|
13.7
|
|
|
1,273
|
|
|
45.54
|
|
|
15.8
|
|
|
935
|
|
|
41.54
|
|
|
17.4
|
|
||||||
Capitation
|
982
|
|
|
25.02
|
|
|
8.3
|
|
|
748
|
|
|
26.77
|
|
|
9.3
|
|
|
604
|
|
|
26.83
|
|
|
11.2
|
|
||||||
Direct delivery
|
128
|
|
|
3.26
|
|
|
1.1
|
|
|
96
|
|
|
3.44
|
|
|
1.2
|
|
|
48
|
|
|
2.14
|
|
|
0.9
|
|
||||||
Other
|
502
|
|
|
12.79
|
|
|
4.2
|
|
|
286
|
|
|
10.22
|
|
|
3.5
|
|
|
181
|
|
|
8.05
|
|
|
3.4
|
|
||||||
Total
|
$
|
11,794
|
|
|
$
|
300.43
|
|
|
100.0
|
%
|
|
$
|
8,076
|
|
|
$
|
288.84
|
|
|
100.0
|
%
|
|
$
|
5,380
|
|
|
$
|
238.99
|
|
|
100.0
|
%
|
•
|
Each contract calls for the provision of its own specific set of services. While all contracts support the system of record for state MMIS, the actual services we provide vary significantly between contracts; and
|
•
|
The nature of the MMIS installed varies significantly between our older contracts (proprietary mainframe systems) and our new contracts (commercial off-the-shelf technology solutions).
|
•
|
Transaction processing costs;
|
•
|
Employee costs incurred in performing transaction services;
|
•
|
Vendor costs incurred in performing transaction services;
|
•
|
Costs incurred in performing required monitoring of and reporting on contract performance;
|
•
|
Costs incurred in maintaining and processing member and provider eligibility; and
|
•
|
Costs incurred in communicating with members and providers.
|
|
December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
|
(In millions)
|
|||||||
Shares outstanding at the beginning of the period
|
49
|
|
|
46
|
|
|
47
|
|
Weighted-average number of shares:
|
|
|
|
|
|
|||
Issued:
|
|
|
|
|
|
|||
Common stock offering
|
3
|
|
|
—
|
|
|
—
|
|
Convertible senior notes
|
—
|
|
|
1
|
|
|
—
|
|
Repurchased
|
—
|
|
|
—
|
|
|
(1
|
)
|
Denominator for basic net income per share
|
52
|
|
|
47
|
|
|
46
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|||
Share-based compensation
|
1
|
|
|
—
|
|
|
1
|
|
Convertible senior notes (1)
|
1
|
|
|
1
|
|
|
—
|
|
1.125% Warrants (1)
|
2
|
|
|
—
|
|
|
—
|
|
Denominator for diluted net income per share
|
56
|
|
|
48
|
|
|
47
|
|
|
|
|
|
|
|
|||
Potentially dilutive common shares excluded from calculations (2):
|
|
|
|
|
|
|||
1.125% Warrants
|
—
|
|
|
13
|
|
|
12
|
|
(1)
|
For more information regarding the convertible senior notes, including the 1.625% Notes, 3.75% Notes, and 3.75% Exchange, refer to Note
12
, "
Debt
." For more information regarding the 1.125% Warrants, refer to Note
13
, "
Derivatives
."
|
(2)
|
The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the years ended December 31,
2014
and
2013
, the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock.
|
|
November 1, 2015
|
||
|
(In millions)
|
||
Assets:
|
|
||
Cash and cash equivalents
|
$
|
20
|
|
Receivables
|
52
|
|
|
Prepaid expenses and other current assets
|
4
|
|
|
Property and equipment
|
14
|
|
|
Intangible assets
|
19
|
|
|
Goodwill
|
155
|
|
|
Other assets
|
1
|
|
|
Liabilities:
|
|
||
Medical claims and benefits payable
|
(2
|
)
|
|
Accounts payable and accrued liabilities
|
(23
|
)
|
|
Deferred revenue
|
(2
|
)
|
|
Other long-term liabilities
|
(7
|
)
|
|
Total purchase price
|
$
|
231
|
|
|
Fair Value
|
|
Life (years)
|
||
|
(In millions)
|
||||
Intangible asset type
|
|
|
|
||
Health Plans:
|
|
|
|
||
Contract rights - member list
|
$
|
23
|
|
|
5
|
Provider network
|
9
|
|
|
10
|
|
Other:
|
|
|
|
||
Contract licenses
|
5
|
|
|
2
|
|
Contract rights - member list
|
14
|
|
|
5
|
|
|
$
|
51
|
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,184
|
|
|
$
|
—
|
|
|
$
|
1,184
|
|
|
$
|
—
|
|
Government-sponsored enterprise securities (GSEs)
|
211
|
|
|
211
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
185
|
|
|
—
|
|
|
185
|
|
|
—
|
|
||||
Certificates of deposit
|
80
|
|
|
—
|
|
|
80
|
|
|
—
|
|
||||
U.S. treasury notes
|
78
|
|
|
78
|
|
|
—
|
|
|
—
|
|
||||
Asset-backed securities
|
63
|
|
|
—
|
|
|
63
|
|
|
—
|
|
||||
Subtotal - current investments
|
1,801
|
|
|
289
|
|
|
1,512
|
|
|
—
|
|
||||
1.125% Call Option derivative asset
|
374
|
|
|
—
|
|
|
—
|
|
|
374
|
|
||||
Total assets measured at fair value on a recurring basis
|
$
|
2,175
|
|
|
$
|
289
|
|
|
$
|
1,512
|
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
||||||||
1.125% Conversion Option derivative liability
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
374
|
|
Total liabilities measured at fair value on a recurring basis
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
374
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
641
|
|
|
$
|
—
|
|
|
$
|
641
|
|
|
$
|
—
|
|
GSEs
|
122
|
|
|
122
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
127
|
|
|
—
|
|
|
127
|
|
|
—
|
|
||||
Certificates of deposit
|
69
|
|
|
—
|
|
|
69
|
|
|
—
|
|
||||
U.S. treasury notes
|
60
|
|
|
60
|
|
|
—
|
|
|
—
|
|
||||
Subtotal - current investments
|
1,019
|
|
|
182
|
|
|
837
|
|
|
—
|
|
||||
1.125% Call Option derivative asset
|
329
|
|
|
—
|
|
|
—
|
|
|
329
|
|
||||
Total assets measured at fair value on a recurring basis
|
$
|
1,348
|
|
|
$
|
182
|
|
|
$
|
837
|
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
||||||||
1.125% Conversion Option derivative liability
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
329
|
|
Total liabilities measured at fair value on a recurring basis
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
329
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Carrying
|
|
Total Fair Value
|
|
Carrying
|
|
Total Fair Value
|
||||||||
|
Amount
|
|
|
Amount
|
|
||||||||||
|
(In millions)
|
||||||||||||||
5.375% Notes
|
$
|
689
|
|
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1.125% Convertible Notes
|
448
|
|
|
865
|
|
|
426
|
|
|
767
|
|
||||
1.625% Convertible Notes
|
273
|
|
|
365
|
|
|
264
|
|
|
337
|
|
||||
|
$
|
1,410
|
|
|
$
|
1,930
|
|
|
$
|
690
|
|
|
$
|
1,104
|
|
|
December 31, 2015
|
||||||||||||||
|
Amortized
|
|
Gross
Unrealized
|
|
Estimated
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,189
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
1,184
|
|
GSEs
|
212
|
|
|
—
|
|
|
1
|
|
|
211
|
|
||||
Municipal securities
|
186
|
|
|
—
|
|
|
1
|
|
|
185
|
|
||||
Certificates of deposit
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||
U.S. treasury notes
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||
Asset-backed securities
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||
|
$
|
1,808
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
1,801
|
|
|
December 31, 2014
|
||||||||||||||
|
Amortized
|
|
Gross
Unrealized
|
|
Estimated
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
643
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
641
|
|
GSEs
|
122
|
|
|
—
|
|
|
—
|
|
|
122
|
|
||||
Municipal securities
|
127
|
|
|
—
|
|
|
—
|
|
|
127
|
|
||||
Certificates of deposit
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
||||
U.S. treasury notes
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||
|
$
|
1,021
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1,019
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
830
|
|
|
$
|
829
|
|
Due after one year through five years
|
967
|
|
|
962
|
|
||
Due after five years through ten years
|
11
|
|
|
10
|
|
||
|
$
|
1,808
|
|
|
$
|
1,801
|
|
|
In a Continuous Loss Position
for Less than 12 Months
|
|
In a Continuous Loss Position
for 12 Months or More
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total Number of Positions
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total Number of Positions
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
Corporate debt securities
|
$
|
825
|
|
|
$
|
4
|
|
|
588
|
|
|
$
|
119
|
|
|
$
|
1
|
|
|
87
|
|
GSEs
|
182
|
|
|
1
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
128
|
|
|
1
|
|
|
181
|
|
|
5
|
|
|
—
|
|
|
12
|
|
||||
Certificates of deposit
|
53
|
|
|
—
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
U.S. treasury notes
|
53
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Asset-backed securities
|
55
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
1,296
|
|
|
$
|
6
|
|
|
1,143
|
|
|
$
|
124
|
|
|
$
|
1
|
|
|
99
|
|
|
In a Continuous Loss Position
for Less than 12 Months
|
|
In a Continuous Loss Position
for 12 Months or More
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total Number of Positions
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total Number of Positions
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
Corporate debt securities
|
$
|
379
|
|
|
$
|
1
|
|
|
265
|
|
|
$
|
29
|
|
|
$
|
1
|
|
|
10
|
|
GSEs
|
75
|
|
|
—
|
|
|
22
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Municipal securities
|
54
|
|
|
—
|
|
|
64
|
|
|
11
|
|
|
—
|
|
|
13
|
|
||||
Certificates of deposit
|
13
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
U.S. treasury notes
|
19
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
540
|
|
|
$
|
1
|
|
|
416
|
|
|
$
|
43
|
|
|
$
|
1
|
|
|
26
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In millions)
|
||||||
California
|
$
|
104
|
|
|
$
|
311
|
|
Florida
|
22
|
|
|
2
|
|
||
Illinois
|
35
|
|
|
32
|
|
||
Michigan
|
39
|
|
|
20
|
|
||
New Mexico
|
51
|
|
|
50
|
|
||
Ohio
|
66
|
|
|
45
|
|
||
Puerto Rico
|
33
|
|
|
—
|
|
||
South Carolina
|
6
|
|
|
4
|
|
||
Texas
|
56
|
|
|
29
|
|
||
Utah
|
18
|
|
|
6
|
|
||
Washington
|
53
|
|
|
43
|
|
||
Wisconsin
|
22
|
|
|
8
|
|
||
Direct delivery and other
|
6
|
|
|
11
|
|
||
Total Health Plans segment
|
511
|
|
|
561
|
|
||
Molina Medicaid Solutions segment
|
37
|
|
|
35
|
|
||
Other segment
|
49
|
|
|
—
|
|
||
|
$
|
597
|
|
|
$
|
596
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In millions)
|
||||||
Land
|
$
|
16
|
|
|
$
|
15
|
|
Building and improvements
|
153
|
|
|
195
|
|
||
Furniture and equipment
|
250
|
|
|
141
|
|
||
Capitalized software
|
336
|
|
|
267
|
|
||
|
755
|
|
|
618
|
|
||
Less: accumulated depreciation and amortization on building and improvements, furniture and equipment
|
(167
|
)
|
|
(129
|
)
|
||
Less: accumulated amortization for capitalized software
|
(195
|
)
|
|
(148
|
)
|
||
|
(362
|
)
|
|
(277
|
)
|
||
Property, equipment, and capitalized software, net
|
$
|
393
|
|
|
$
|
341
|
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|||||||||
|
(In millions)
|
|||||||||||||||||||||
Future minimum rentals
|
$
|
4
|
|
|
4
|
|
|
4
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
$
|
17
|
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
Balance
|
||||||
|
(In millions)
|
||||||||||
Intangible assets:
|
|
|
|
|
|
||||||
Contract rights and licenses
|
$
|
224
|
|
|
$
|
120
|
|
|
$
|
104
|
|
Customer relationships
|
25
|
|
|
23
|
|
|
2
|
|
|||
Contract backlog
|
24
|
|
|
24
|
|
|
—
|
|
|||
Provider networks
|
27
|
|
|
11
|
|
|
16
|
|
|||
Balance at December 31, 2015
|
$
|
300
|
|
|
$
|
178
|
|
|
$
|
122
|
|
Intangible assets:
|
|
|
|
|
|
||||||
Contract rights and licenses
|
$
|
182
|
|
|
$
|
105
|
|
|
$
|
77
|
|
Customer relationships
|
25
|
|
|
23
|
|
|
2
|
|
|||
Contract backlog
|
24
|
|
|
23
|
|
|
1
|
|
|||
Provider networks
|
18
|
|
|
9
|
|
|
9
|
|
|||
Balance at December 31, 2014
|
$
|
249
|
|
|
$
|
160
|
|
|
$
|
89
|
|
|
December 31, 2014
|
|
Acquisitions by Segment
|
|
December 31, 2015
|
||||||||||
|
|
Health Plans
|
|
Other
|
|
||||||||||
|
(In millions)
|
||||||||||||||
Goodwill, gross
|
$
|
330
|
|
|
$
|
90
|
|
|
$
|
157
|
|
|
$
|
577
|
|
Accumulated impairment losses
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
||||
Goodwill, net
|
$
|
272
|
|
|
$
|
90
|
|
|
$
|
157
|
|
|
$
|
519
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In millions)
|
||||||
Florida
|
$
|
34
|
|
|
$
|
29
|
|
Michigan
|
1
|
|
|
1
|
|
||
New Mexico
|
43
|
|
|
35
|
|
||
Ohio
|
12
|
|
|
13
|
|
||
Puerto Rico
|
10
|
|
|
5
|
|
||
South Carolina
|
—
|
|
|
6
|
|
||
Texas
|
4
|
|
|
3
|
|
||
Utah
|
4
|
|
|
4
|
|
||
Wisconsin
|
1
|
|
|
—
|
|
||
Other
|
—
|
|
|
1
|
|
||
Total Health Plans segment
|
109
|
|
|
97
|
|
||
Molina Medicaid Solutions segment
|
—
|
|
|
5
|
|
||
|
$
|
109
|
|
|
$
|
102
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
100
|
|
|
$
|
100
|
|
Due one year through five years
|
9
|
|
|
9
|
|
||
|
$
|
109
|
|
|
$
|
109
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Fee-for-service claims incurred but not paid (IBNP)
|
$
|
1,191
|
|
|
$
|
871
|
|
|
$
|
424
|
|
Pharmacy payable
|
88
|
|
|
71
|
|
|
45
|
|
|||
Capitation payable
|
140
|
|
|
28
|
|
|
20
|
|
|||
Other
|
266
|
|
|
231
|
|
|
181
|
|
|||
|
$
|
1,685
|
|
|
$
|
1,201
|
|
|
$
|
670
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(Dollars in millions)
|
||||||||||
Balances at beginning of period
|
$
|
1,201
|
|
|
$
|
670
|
|
|
$
|
495
|
|
Components of medical care costs related to:
|
|
|
|
|
|
||||||
Current period
|
11,935
|
|
|
8,123
|
|
|
5,434
|
|
|||
Prior periods
|
(141
|
)
|
|
(46
|
)
|
|
(53
|
)
|
|||
Total medical care costs
|
11,794
|
|
|
8,077
|
|
|
5,381
|
|
|||
|
|
|
|
|
|
||||||
Change in non-risk provider payables
|
48
|
|
|
(32
|
)
|
|
111
|
|
|||
|
|
|
|
|
|
||||||
Payments for medical care costs related to:
|
|
|
|
|
|
||||||
Current period
|
10,448
|
|
|
7,064
|
|
|
4,932
|
|
|||
Prior periods
|
910
|
|
|
450
|
|
|
385
|
|
|||
Total paid
|
11,358
|
|
|
7,514
|
|
|
5,317
|
|
|||
Balances at end of period
|
$
|
1,685
|
|
|
$
|
1,201
|
|
|
$
|
670
|
|
•
|
A new version of diagnosis codes was required for all claims with dates of service October 1, 2015 and later. As a result, payment was delayed for a significant number of claims due to the use of diagnosis codes that were no longer valid. Due to the resulting variability in the ratio of paid to billed amounts, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
At our Illinois, Puerto Rico and Wisconsin health plans, we overpaid certain provider and outpatient facility claims due to a system configuration error. For this reason, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
Our Michigan health plan added approximately
68,000
new members under an acquisition in the third quarter of 2015. Because these new members may have different utilization patterns than our legacy members, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
Our Puerto Rico health plan started operations on April 1, 2015. Because we lack sufficient historical claims data, our reserves as of December 31, 2015 are based on a combination of claims payment experience and the expected claims in the pricing assumptions. For this reason, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
At our Ohio and California health plans, approximately
61,000
and
100,000
members, respectively, were enrolled in the new Medicaid expansion program during 2014. Also in Ohio, approximately
17,000
members were enrolled in the new MMP program in 2014. Because we lacked sufficient historical claims data, we initially estimated the reserves for these new members based upon a number of factors that included pricing assumptions provided by the state; our expectations regarding pent up demand; our beliefs about the speed at which new members would utilize health care services; and other factors. Our actual costs were ultimately less than expected.
|
•
|
At our New Mexico health plan, the state implemented a retroactive increase to the provider fee schedules in mid-2014. As a result, many claims that were previously settled were reopened, and subject to, additional payment. Because our reserving methodology is most accurate when claims payment patterns are consistent and predictable, the payment of additional amounts on claims that in some cases had been settled more than six months before added a substantial degree of complexity to our liability estimation process. Due to the difficulties in addressing that added complexity, liabilities recorded as of December 31, 2014, were in excess of amounts ultimately paid.
|
•
|
At our Washington health plan, in 2015 we collected amounts related to certain claims paid in 2013. Such collections were not anticipated in our reserves as of December 31, 2014.
|
•
|
At our Ohio health plan, we entered new regions in the state, and a new product, ABD Kids, in July 2013. Because we lacked sufficient historical claims data, we initially estimated the reserves for these new members based upon a number of factors that included pricing assumptions provided by the state; our expectations regarding pent up demand; our beliefs about the speed at which new members would utilize health care services; and other factors. Our actual costs were ultimately less than expected.
|
•
|
At our Michigan health plan, we overestimated the impact of certain unpaid potentially high-dollar claims. In addition, we overestimated the impact of the flu season on the outpatient claims for November and December 2013, which caused an overestimation in our outpatient reserve liability as of December 31, 2013.
|
•
|
At our Washington health plan certain high-cost newborns, as well as other high-cost disabled members, were covered by the health plan effective July 1, 2012. Because we lacked sufficient historical claims data, we initially estimated the reserves for these new members based upon a number of factors. Our actual costs were ultimately less than expected.
|
•
|
At our New Mexico health plan, we overestimated the impact of certain high-dollar outstanding claim payments as of December 31, 2012.
|
•
|
At our Ohio health plan, we overestimated the impact of several potential high-dollar claims relating to our ABD members.
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
5.375% Notes
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
700
|
|
1.125% Convertible Notes
|
550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
550
|
|
|
—
|
|
|||||||
1.625% Convertible Notes (1)
|
302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
302
|
|
|||||||
Other
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
$
|
1,553
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
550
|
|
|
$
|
1,002
|
|
(1)
|
The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes.
|
|
Principal Balance
|
|
Unamortized Discount
|
|
Unamortized Issuance Costs
|
|
Net Carrying Amount
|
||||||||
|
(In millions)
|
||||||||||||||
December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
5.375% Notes
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
689
|
|
1.125% Convertible Notes
|
550
|
|
|
95
|
|
|
7
|
|
|
448
|
|
||||
1.625% Convertible Notes
|
302
|
|
|
25
|
|
|
4
|
|
|
273
|
|
||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
$
|
1,553
|
|
|
$
|
120
|
|
|
$
|
22
|
|
|
$
|
1,411
|
|
December 31, 2014:
|
|
|
|
|
|
|
|
||||||||
1.125% Convertible Notes
|
$
|
550
|
|
|
$
|
115
|
|
|
$
|
9
|
|
|
$
|
426
|
|
1.625% Convertible Notes
|
302
|
|
|
33
|
|
|
5
|
|
|
264
|
|
||||
|
$
|
852
|
|
|
$
|
148
|
|
|
$
|
14
|
|
|
$
|
690
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Interest cost recognized for the period relating to:
|
|
|
|
|
|
||||||
Contractual interest coupon rate
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
13
|
|
Amortization of the discount
|
29
|
|
|
26
|
|
|
22
|
|
|||
|
$
|
46
|
|
|
$
|
39
|
|
|
$
|
35
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on
June 30, 2013
(and only during such calendar quarter), if the last reported sale price of the common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period immediately after any
five
consecutive trading day period (the measurement period) in which the trading price per
$1,000
principal amount of 1.125% Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
|
•
|
upon the occurrence of specified corporate events; or
|
•
|
at any time on or after
July 15, 2019
until the close of business on the second scheduled trading day immediately preceding the maturity date.
|
•
|
during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.625% Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
|
•
|
upon the occurrence of specified corporate events;
|
•
|
if we call any 1.625% Notes for redemption, at any time until the close of business on the business day immediately preceding the redemption date;
|
•
|
during the period from, and including, May 15, 2018 to the close of business on the business day immediately preceding August 19, 2018; or
|
•
|
at any time on or after February 15, 2044 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 1.625% Notes, in integral multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.
|
|
|
|
December 31,
|
||||||
|
Balance Sheet Location
|
|
2015
|
|
2014
|
||||
|
|
|
(In millions)
|
||||||
Derivative asset:
|
|
|
|
|
|
||||
1.125% Call Option
|
Current assets: Derivative asset
|
|
$
|
374
|
|
|
$
|
—
|
|
|
Non-current assets: Derivative asset
|
|
$
|
—
|
|
|
$
|
329
|
|
|
|
|
|
|
|
||||
Derivative liability:
|
|
|
|
|
|
||||
1.125% Conversion Option
|
Current liabilities: Derivative liability
|
|
$
|
374
|
|
|
$
|
—
|
|
|
Non-current liabilities: Derivative liability
|
|
$
|
—
|
|
|
$
|
329
|
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Statutory federal tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
2.4
|
|
|
0.4
|
|
|
(0.5
|
)
|
Change in unrecognized tax benefits
|
0.9
|
|
|
(0.1
|
)
|
|
(3.7
|
)
|
Nondeductible health insurer fee (HIF)
|
17.0
|
|
|
22.9
|
|
|
—
|
|
Nondeductible compensation
|
0.6
|
|
|
(4.1
|
)
|
|
9.6
|
|
Nondeductible fair value of 1.125% Warrants
|
—
|
|
|
—
|
|
|
2.4
|
|
Other
|
(0.4
|
)
|
|
(0.3
|
)
|
|
2.0
|
|
Effective tax rate
|
55.5
|
%
|
|
53.8
|
%
|
|
44.8
|
%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In millions)
|
||||||
Accrued expenses
|
$
|
37
|
|
|
$
|
13
|
|
Reserve liabilities
|
14
|
|
|
4
|
|
||
Other accrued medical costs
|
5
|
|
|
4
|
|
||
Net operating losses
|
7
|
|
|
3
|
|
||
Unrealized losses
|
2
|
|
|
1
|
|
||
Unearned premiums
|
21
|
|
|
22
|
|
||
Lease financing obligation
|
35
|
|
|
34
|
|
||
Deferred compensation
|
8
|
|
|
10
|
|
||
Tax credit carryover
|
8
|
|
|
8
|
|
||
Valuation allowance
|
(9
|
)
|
|
(6
|
)
|
||
Total deferred income tax assets, net of valuation allowance
|
128
|
|
|
93
|
|
||
Prepaid expenses
|
(9
|
)
|
|
(6
|
)
|
||
Depreciation and amortization
|
(83
|
)
|
|
(57
|
)
|
||
Basis in debt
|
(18
|
)
|
|
(15
|
)
|
||
Total deferred income tax liabilities
|
(110
|
)
|
|
(78
|
)
|
||
Net deferred income tax asset - long term
|
$
|
18
|
|
|
$
|
15
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Gross unrecognized tax benefits at beginning of period
|
$
|
(3
|
)
|
|
$
|
(8
|
)
|
|
$
|
(11
|
)
|
Increases in tax positions for current year
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Increases in tax positions for prior years
|
(5
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Decreases in tax positions for prior years
|
—
|
|
|
—
|
|
|
5
|
|
|||
Settlements
|
—
|
|
|
6
|
|
|
—
|
|
|||
Gross unrecognized tax benefits at end of period
|
$
|
(9
|
)
|
|
$
|
(3
|
)
|
|
$
|
(8
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
|
Pretax
Charges
|
|
Net-of-Tax
Amount
|
|
Pretax
Charges
|
|
Net-of-Tax
Amount
|
|
Pretax
Charges
|
|
Net-of-Tax
Amount
|
||||||||||||
Restricted stock and performance awards
|
$
|
19
|
|
|
$
|
13
|
|
|
$
|
19
|
|
|
$
|
12
|
|
|
$
|
26
|
|
|
$
|
23
|
|
Employee stock purchase plan and stock options
|
4
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
2
|
|
||||||
|
$
|
23
|
|
|
$
|
16
|
|
|
$
|
22
|
|
|
$
|
14
|
|
|
$
|
29
|
|
|
$
|
25
|
|
•
|
The ongoing activities of the VIE—collecting and remitting interest and fees and NMTC compliance—were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIE;
|
•
|
Contractual arrangements obligate us to comply with NMTC rules and regulations and provide various other guarantees to Investment Fund and CDEs;
|
•
|
Wells Fargo lacks a material interest in the underling economics of the project; and
|
•
|
We are obligated to absorb losses of the VIE.
|
|
Lease Financing Obligations
|
|
Operating Leases
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
2016
|
$
|
15
|
|
|
$
|
49
|
|
|
$
|
64
|
|
2017
|
16
|
|
|
47
|
|
|
63
|
|
|||
2018
|
16
|
|
|
41
|
|
|
57
|
|
|||
2019
|
16
|
|
|
32
|
|
|
48
|
|
|||
2020
|
17
|
|
|
24
|
|
|
41
|
|
|||
Thereafter
|
323
|
|
|
39
|
|
|
362
|
|
|||
|
$
|
403
|
|
|
$
|
232
|
|
|
$
|
635
|
|
|
|
Health Plans
|
|
Molina Medicaid Solutions
|
|
Other
|
|
Consolidated
|
||||||||
|
|
|
|
|
||||||||||||
|
|
(In millions)
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Total revenue (1)
|
|
$
|
13,917
|
|
|
$
|
195
|
|
|
$
|
66
|
|
|
$
|
14,178
|
|
Gross margin
|
|
1,447
|
|
|
55
|
|
|
5
|
|
|
1,507
|
|
||||
Depreciation and amortization (2)
|
|
95
|
|
|
25
|
|
|
6
|
|
|
126
|
|
||||
Goodwill, and intangible assets, net
|
|
393
|
|
|
73
|
|
|
175
|
|
|
641
|
|
||||
Total assets
|
|
4,707
|
|
|
213
|
|
|
1,656
|
|
|
6,576
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2014
|
|
|
|
|
|
|
|
|
||||||||
Total revenue (1)
|
|
9,449
|
|
|
210
|
|
|
8
|
|
|
9,667
|
|
||||
Gross margin
|
|
947
|
|
|
53
|
|
|
—
|
|
|
1,000
|
|
||||
Depreciation and amortization (2)
|
|
83
|
|
|
46
|
|
|
5
|
|
|
134
|
|
||||
Goodwill, and intangible assets, net
|
|
286
|
|
|
75
|
|
|
—
|
|
|
361
|
|
||||
Total assets
|
|
3,355
|
|
|
185
|
|
|
895
|
|
|
4,435
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2013
|
|
|
|
|
|
|
|
|
||||||||
Total revenue (1)
|
|
6,376
|
|
|
205
|
|
|
8
|
|
|
6,589
|
|
||||
Gross margin
|
|
799
|
|
|
44
|
|
|
—
|
|
|
843
|
|
||||
Depreciation and amortization (2)
|
|
60
|
|
|
28
|
|
|
6
|
|
|
94
|
|
||||
Goodwill, and intangible assets, net
|
|
249
|
|
|
81
|
|
|
—
|
|
|
330
|
|
||||
Total assets
|
|
1,921
|
|
|
176
|
|
|
891
|
|
|
2,988
|
|
(1)
|
Total revenues consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments.
|
(2)
|
Depreciation and amortization reported in accompanying consolidated statements of cash flows.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Gross margin:
|
|
|
|
|
|
||||||
Health Plans
|
$
|
1,447
|
|
|
$
|
947
|
|
|
$
|
799
|
|
Molina Medicaid Solutions
|
55
|
|
|
53
|
|
|
44
|
|
|||
Other
|
5
|
|
|
—
|
|
|
—
|
|
|||
Other operating revenues (1)
|
684
|
|
|
434
|
|
|
205
|
|
|||
Other operating expenses (2)
|
1,804
|
|
|
1,241
|
|
|
911
|
|
|||
Operating income
|
387
|
|
|
193
|
|
|
137
|
|
|||
Other expenses, net
|
65
|
|
|
58
|
|
|
56
|
|
|||
Income from continuing operations before income tax expense
|
$
|
322
|
|
|
$
|
135
|
|
|
$
|
81
|
|
(1)
|
Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue.
|
(2)
|
Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization.
|
|
For The Quarter Ended
|
||||||||||||||
|
March 31,
2015 |
|
June 30,
2015 |
|
September 30, 2015
|
|
December 31,
2015 |
||||||||
|
(In millions, except per-share data)
|
||||||||||||||
Premium revenue
|
$
|
2,971
|
|
|
$
|
3,304
|
|
|
$
|
3,377
|
|
|
$
|
3,589
|
|
Service revenue
|
52
|
|
|
47
|
|
|
47
|
|
|
107
|
|
||||
Operating income
|
82
|
|
|
116
|
|
|
113
|
|
|
76
|
|
||||
Income from continuing operations
|
28
|
|
|
39
|
|
|
46
|
|
|
30
|
|
||||
Net income
|
28
|
|
|
39
|
|
|
46
|
|
|
30
|
|
||||
Net income per share (1):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.58
|
|
|
$
|
0.78
|
|
|
$
|
0.84
|
|
|
$
|
0.54
|
|
Diluted
|
$
|
0.56
|
|
|
$
|
0.72
|
|
|
$
|
0.77
|
|
|
$
|
0.52
|
|
|
For The Quarter Ended
|
||||||||||||||
|
March 31,
2014 |
|
June 30,
2014 |
|
September 30, 2014
|
|
December 31,
2014 |
||||||||
|
(In millions, except per-share data)
|
||||||||||||||
Premium revenue
|
$
|
1,940
|
|
|
$
|
2,167
|
|
|
$
|
2,317
|
|
|
$
|
2,599
|
|
Service revenue
|
54
|
|
|
50
|
|
|
52
|
|
|
54
|
|
||||
Operating income
|
24
|
|
|
32
|
|
|
40
|
|
|
97
|
|
||||
Income from continuing operations
|
4
|
|
|
8
|
|
|
16
|
|
|
34
|
|
||||
Net income
|
4
|
|
|
8
|
|
|
16
|
|
|
34
|
|
||||
Net income per share (1):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.10
|
|
|
$
|
0.17
|
|
|
$
|
0.34
|
|
|
$
|
0.70
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.16
|
|
|
$
|
0.33
|
|
|
$
|
0.69
|
|
(1)
|
The dilutive effect of all potentially dilutive common shares is calculated using the treasury-stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income per share because to do so would be anti-dilutive. For the year ended December 31,
2014
, the 1.125% Warrants were excluded from diluted shares outstanding because the exercise price exceeded the average market price of our common stock.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Revenue:
|
|
|
|
|
|
||||||
Management fees and other operating revenue
|
$
|
928
|
|
|
$
|
704
|
|
|
$
|
599
|
|
Investment income
|
3
|
|
|
2
|
|
|
3
|
|
|||
Total revenue
|
931
|
|
|
706
|
|
|
602
|
|
|||
Expenses:
|
|
|
|
|
|
|
|||||
Medical care costs
|
55
|
|
|
46
|
|
|
38
|
|
|||
General and administrative expenses
|
797
|
|
|
583
|
|
|
504
|
|
|||
Depreciation and amortization
|
82
|
|
|
73
|
|
|
51
|
|
|||
Total operating expenses
|
934
|
|
|
702
|
|
|
593
|
|
|||
Operating (loss) income
|
(3
|
)
|
|
4
|
|
|
9
|
|
|||
Interest expense
|
66
|
|
|
57
|
|
|
51
|
|
|||
Other expense
|
—
|
|
|
1
|
|
|
4
|
|
|||
Loss before income taxes and equity in net income of subsidiaries
|
(69
|
)
|
|
(54
|
)
|
|
(46
|
)
|
|||
Income tax benefit
|
(21
|
)
|
|
(27
|
)
|
|
(16
|
)
|
|||
Net loss before equity in net income of subsidiaries
|
(48
|
)
|
|
(27
|
)
|
|
(30
|
)
|
|||
Equity in net income of subsidiaries
|
191
|
|
|
89
|
|
|
83
|
|
|||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Net income
|
$
|
143
|
|
|
$
|
62
|
|
|
$
|
53
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized investment loss
|
(5
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Effect of income tax benefit
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive loss, net of tax
|
(3
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Comprehensive income
|
$
|
140
|
|
|
$
|
62
|
|
|
$
|
52
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In millions)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
113
|
|
|
$
|
74
|
|
|
$
|
63
|
|
Investing activities:
|
|
|
|
|
|
|
|||||
Capital contributions to subsidiaries
|
(770
|
)
|
|
(292
|
)
|
|
(166
|
)
|
|||
Dividends received from subsidiaries
|
142
|
|
|
—
|
|
|
24
|
|
|||
Purchases of investments
|
(244
|
)
|
|
(129
|
)
|
|
(363
|
)
|
|||
Proceeds from sales and maturities of investments
|
118
|
|
|
263
|
|
|
98
|
|
|||
Purchases of equipment
|
(91
|
)
|
|
(94
|
)
|
|
(77
|
)
|
|||
Change in amounts due to/from affiliates
|
(68
|
)
|
|
16
|
|
|
(6
|
)
|
|||
Other, net
|
—
|
|
|
8
|
|
|
(6
|
)
|
|||
Net cash used in investing activities
|
(913
|
)
|
|
(228
|
)
|
|
(496
|
)
|
|||
Financing activities:
|
|
|
|
|
|
|
|||||
Proceeds from senior notes offerings, net of issuance costs
|
689
|
|
|
123
|
|
|
538
|
|
|||
Proceeds from common stock offering, net of issuance costs
|
373
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale-leaseback transactions
|
—
|
|
|
—
|
|
|
159
|
|
|||
Purchase of call option
|
—
|
|
|
—
|
|
|
(149
|
)
|
|||
Proceeds from issuance of warrants
|
—
|
|
|
—
|
|
|
75
|
|
|||
Treasury stock repurchases
|
—
|
|
|
—
|
|
|
(53
|
)
|
|||
Principal payment on term loan of subsidiary
|
—
|
|
|
—
|
|
|
(47
|
)
|
|||
Repayment of amount borrowed under credit facility
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||
Proceeds from employee stock plans
|
18
|
|
|
14
|
|
|
9
|
|
|||
Principal payments on convertible senior notes
|
—
|
|
|
(11
|
)
|
|
—
|
|
|||
Other, net
|
5
|
|
|
3
|
|
|
2
|
|
|||
Net cash provided by financing activities
|
1,085
|
|
|
129
|
|
|
494
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
285
|
|
|
(25
|
)
|
|
61
|
|
|||
Cash and cash equivalents at beginning of year
|
75
|
|
|
100
|
|
|
39
|
|
|||
Cash and cash equivalents at end of year
|
$
|
360
|
|
|
$
|
75
|
|
|
$
|
100
|
|
|
/s/ ERNST & YOUNG LLP
|
Plan Category
|
Number of Securities to be
Issued Upon Exercise of Outstanding Options, Warrants and Rights
(a)
|
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
|
|
Number of Securities
Remaining Available for Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected in Column (a))
(c)
|
|
||||
Equity compensation plans approved by security holders
|
121,711
|
|
(1)
|
$
|
25.40
|
|
|
4,058,668
|
|
(2)
|
(1)
|
Options to purchase shares of our common stock issued under the 2002 Equity Incentive Plan and 2011 Equity Incentive Plan. Further grants under the 2002 Equity Incentive Plan have been suspended.
|
(2)
|
Includes shares remaining available to issue under the 2011 Equity Incentive Plan, and the 2011 Employee Stock Purchase Plan.
|
(a)
|
The consolidated financial statements and exhibits listed below are filed as part of this report.
|
(1)
|
The financial statements included in Item 8 of this Form 10-K, Financial Statements and Supplementary Data, above are filed as part of this annual report.
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
|
MOLINA HEALTHCARE, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Joseph M. Molina
|
|
|
|
Joseph M. Molina, M.D. (Dr. J. Mario Molina)
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Joseph M. Molina
|
|
Chairman of the Board, Chief Executive Officer, and President
|
|
February 26, 2016
|
Joseph M. Molina, M.D.
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ John C. Molina
|
|
Director, Chief Financial Officer, and Treasurer
|
|
February 26, 2016
|
John C. Molina, J.D.
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Joseph W. White
|
|
Chief Accounting Officer
|
|
February 26, 2016
|
Joseph W. White
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Garrey E. Carruthers
|
|
Director
|
|
February 26, 2016
|
Garrey E. Carruthers, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ Daniel Cooperman
|
|
Director
|
|
February 26, 2016
|
Daniel Cooperman
|
|
|
|
|
|
|
|
|
|
/s/ Charles Z. Fedak
|
|
Director
|
|
February 26, 2016
|
Charles Z. Fedak
|
|
|
|
|
|
|
|
|
|
/s/ Steven G. James
|
|
Director
|
|
February 26, 2016
|
Steven G. James
|
|
|
|
|
|
|
|
|
|
/s/ Frank E. Murray
|
|
Director
|
|
February 26, 2016
|
Frank E. Murray, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ Steven J. Orlando
|
|
Director
|
|
February 26, 2016
|
Steven J. Orlando
|
|
|
|
|
|
|
|
|
|
/s/ Ronna E. Romney
|
|
Director
|
|
February 26, 2016
|
Ronna E. Romney
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Schapiro
|
|
Director
|
|
February 26, 2016
|
Richard M. Schapiro
|
|
|
|
|
|
|
|
|
|
/s/ Dale B. Wolf
|
|
Director
|
|
February 26, 2016
|
Dale B. Wolf
|
|
|
|
|
|
|
|
|
|
Number
|
|
Description
|
|
Method of Filing
|
2.1
|
|
Membership Interest Purchase Agreement, dated as of September 3, 2015, by and among The Providence Service Corporation, Ross Innovative Employment Solutions Corp., and Molina Healthcare, Inc.
|
|
Filed as Exhibit 2.1 to registrant's Form 8-K filed September 8, 2015.
|
2.2
|
|
Amendment to Membership Interest Purchase Agreement, dated as of October 30, 2015, by and among The Providence Service Corporation, Ross Innovative Employment Solutions Corp., and Molina Pathways, LLC, as assignee of all rights and obligations of Molina Healthcare, Inc.
|
|
Filed herewith.
|
3.1
|
|
Certificate of Incorporation
|
|
Filed as Exhibit 3.2 to registrant's Registration Statement on Form S-1 filed December 30, 2002.
|
3.2
|
|
Certificate of Amendment to Certificate of Incorporation
|
|
Filed as Exhibit 3.1 to registrant’s Form 8-K filed July 24, 2013.
|
3.3
|
|
Third Amended and Restated Bylaws of Molina Healthcare, Inc.
|
|
Filed as Exhibit 3.1 to registrant's Form 10-Q filed July 30, 2014.
|
4.1
|
|
Indenture, dated as of February 15, 2013, by and between Molina Healthcare, Inc. and U.S. Bank, National Association
|
|
Filed as Exhibit 4.1 to registrant's Form 8-K filed February 15, 2013.
|
4.2
|
|
Form of 1.125% Cash Convertible Senior Note due 2020
|
|
Included in Exhibit 4.1 to registrant's Form 8-K filed February 15, 2013.
|
4.3
|
|
Indenture, dated as of September 5, 2014, by and between Molina Healthcare, Inc. and U.S. Bank National Association
|
|
Filed as Exhibit 4.1 to registrant’s Form 8-K filed September 8, 2014.
|
4.4
|
|
Form of 1.625% Convertible Senior Note due 2044
|
|
Included in Exhibit 4.1 to registrant’s Form 8-K filed September 8, 2014.
|
4.5
|
|
Form of 1.625% Convertible Senior Notes Due 2044
Note Purchase Agreement, dated as of September 11, 2014, by and between Molina Healthcare, Inc. and certain institutional investors
|
|
Filed as Exhibit 10.1 to registrant’s Form 8-K filed September 12, 2014.
|
4.6
|
|
First Supplemental Indenture, dated as of September 16, 2014, by and between Molina Healthcare, Inc. and the U.S. Bank National Association
|
|
Filed as Exhibit 4.1 to registrant’s Form 8-K filed
September 17, 2014.
|
4.7
|
|
Form of 1.625% Convertible Senior Note due 2044
|
|
Included in Exhibit 4.1 to registrant’s Form 8-K filed September 17, 2014.
|
4.8
|
|
Indenture dated November 10, 2015, by and among Molina Healthcare, Inc., the guarantor parties thereto and U.S. Bank National Association, as Trustee.
|
|
Filed as Exhibit 4.1 to registrant's Form 8-K filed November 10, 2015.
|
4.9
|
|
Form of 5.375% Senior Notes due 2022.
|
|
Filed as Exhibit 4.1 to registrant's Form 8-K filed November 10, 2015.
|
4.10
|
|
Form of Guarantee pursuant to Indenture dated November 10, 2015, by and among Molina Healthcare, Inc., the guarantor parties thereto and U.S. Bank National Association, as Trustee.
|
|
Filed as Exhibit 4.1 to registrant's Form 8-K filed November 10, 2015.
|
Number
|
|
Description
|
|
Method of Filing
|
4.11
|
|
Registration Rights Agreement dated November 10, 2015, by and among Molina Healthcare, Inc., the guarantor parties thereto and SunTrust Robinson Humphrey, Inc., as representative of the Initial Purchasers (as defined therein).
|
|
Filed as Exhibit 4.1 to registrant's Form 8-K filed November 10, 2015.
|
4.12
|
|
First Supplemental Indenture, dated February 18, 2016, by and among Molina Healthcare, Inc., the guarantor parties thereto and U.S. Bank National Association, as trustee.
|
|
Filed as Exhibit 4.1 to registrant’s Form 8-K filed February 18, 2016.
|
*10.1
|
|
2002 Equity Incentive Plan
|
|
Filed as Exhibit 10.13 to registrant's Form S-1 filed December 30, 2002.
|
*10.2
|
|
Molina Healthcare, Inc. Amended and Restated Deferred Compensation Plan (2013)
|
|
Filed as Exhibit 10.5 to registrant’s Form 10-K filed February 26, 2014.
|
*10.3
|
|
Amendment No. 1 to the Molina Healthcare, Inc.
Amended and Restated Deferred Compensation
Plan (2013)
|
|
Filed as Exhibit 10.6 to registrant’s Form 10-K filed February 26, 2014.
|
*10.4
|
|
Amendment No. 2 to the Molina Healthcare, Inc.
Amended and Restated Deferred Compensation Plan (2013)
|
|
Filed as Exhibit 10.4 to registrant's Form 10-K filed February 26, 2015.
|
*10.5
|
|
2011 Equity Incentive Plan
|
|
Filed as Exhibit 10.8 to registrant’s Form 10-K filed February 26, 2014.
|
*10.6
|
|
2011 Employee Stock Purchase Plan
|
|
Filed as Exhibit 10.6 to registrant's Form 10-K filed February 26, 2015.
|
*10.7
|
|
Form of Restricted Stock Award Agreement (Executive Officer) under Molina Healthcare, Inc. Equity Incentive Plan
|
|
Filed as Exhibit 10.1 to registrant's Form 10-Q filed August 9, 2005.
|
*10.8
|
|
Form of Restricted Stock Award Agreement (Outside Director) under Molina Healthcare, Inc. Equity Incentive Plan
|
|
Filed as Exhibit 10.1 to registrant's Form 10-Q filed August 9, 2005.
|
*10.9
|
|
Form of Restricted Stock Award Agreement (Employee) under Molina Healthcare, Inc. Equity Incentive Plan
|
|
Filed as Exhibit 10.1 to registrant's Form 10-Q filed August 9, 2005.
|
*10.10
|
|
Form of Stock Option Agreement under Equity Incentive Plan
|
|
Filed as Exhibit 10.3 to registrant's Form 10-K filed March 14, 2007.
|
*10.11
|
|
Amended and Restated Employment Agreement with J. Mario Molina, M.D. dated as of December 31, 2009
|
|
Filed as Exhibit 10.1 to registrant's Form 8-K filed January 7, 2010.
|
*10.12
|
|
Amended and Restated Employment Agreement with John C. Molina dated as of December 31, 2009
|
|
Filed as Exhibit 10.2 to registrant's Form 8-K filed January 7, 2010.
|
*10.13
|
|
Employment Agreement with Terry Bayer dated June 14, 2013
|
|
Filed as Exhibit 10.1 to registrant’s Form 8-K filed June 14, 2013.
|
*10.14
|
|
Employment Agreement with Joseph White dated June 14, 2013
|
|
Filed as Exhibit 10.2 to registrant’s Form 8-K filed June 14, 2013.
|
*10.15
|
|
Employment Agreement with Jeff Barlow, dated June 14, 2013
|
|
Filed as Exhibit 10.3 to registrant’s Form 8-K filed June 14, 2013.
|
*10.16
|
|
Amended and Restated Change in Control Agreement with Terry Bayer, dated as of December 31, 2009
|
|
Filed as Exhibit 10.4 to registrant's Form 8-K filed January 7, 2010.
|
*10.17
|
|
Amended and Restated Change in Control Agreement with Joseph W. White, dated as of December 31, 2009
|
|
Filed as Exhibit 10.6 to registrant's Form 8-K filed January 7, 2010.
|
*10.18
|
|
Change in Control Agreement with Jeff D. Barlow, dated as of September 18, 2012
|
|
Filed as Exhibit 10.16 to registrant’s Form 10-K filed February 28, 2013.
|
10.19
|
|
Form of Indemnification Agreement
|
|
Filed as Exhibit 10.14 to registrant's Form 10-K filed March 14, 2007.
|
10.20
|
|
Base Call Option Transaction Confirmation, dated as of February 11, 2013, between Molina Healthcare, Inc. and JPMorgan Chase Bank, National Association, London Branch
|
|
Filed as Exhibit 10.1 to registrant's Form 8-K filed February 15, 2013.
|
10.21
|
|
Base Call Option Transaction Confirmation, dated as of February 11, 2013, between Molina Healthcare, Inc. and Bank of America, N.A.
|
|
Filed as Exhibit 10.2 to registrant's Form 8-K filed February 15, 2013.
|
10.22
|
|
Base Warrants Confirmation, dated as of February 11, 2013, between Molina Healthcare, Inc. and JPMorgan Chase Bank, National Association, London Branch
|
|
Filed as Exhibit 10.3 to registrant's Form 8-K filed February 15, 2013.
|
Number
|
|
Description
|
|
Method of Filing
|
10.23
|
|
Base Warrants Confirmation, dated as of February 11, 2013, between Molina Healthcare, Inc. and Bank of America, N.A.
|
|
Filed as Exhibit 10.4 to registrant's Form 8-K filed February 15, 2013.
|
10.24
|
|
Amendment to Base Call Option Transaction Confirmation, dated as of February 13, 2013, between Molina Healthcare, Inc. and JPMorgan Chase Bank, National Association, London Branch
|
|
Filed as Exhibit 10.5 to registrant's Form 8-K filed February 15, 2013.
|
10.25
|
|
Amendment to Base Call Option Transaction Confirmation, dated as of February 13, 2013, between Molina Healthcare, Inc. and Bank of America, N.A.
|
|
Filed as Exhibit 10.6 to registrant's Form 8-K filed February 15, 2013.
|
10.26
|
|
Additional Base Warrants Confirmation, dated as of February 13, 2013, between Molina Healthcare, Inc. and JPMorgan Chase Bank, National Association, London Branch
|
|
Filed as Exhibit 10.7 to registrant's Form 8-K filed February 15, 2013.
|
10.27
|
|
Additional Base Warrants Confirmation, dated as of February 13, 2013, between Molina Healthcare, Inc. and Bank of America, N.A.
|
|
Filed as Exhibit 10.8 to registrant's Form 8-K filed February 15, 2013.
|
10.28
|
|
Amended and Restated Base Warrants Confirmation, dated as of April 22, 2013, between Molina Healthcare, Inc. and JPMorgan Chase Bank, National Association, London Branch
|
|
Filed as Exhibit 10.1 to registrant's Form 10-Q filed May 3, 2013.
|
10.29
|
|
Amended and Restated Base Warrants Confirmation, dated as of April 22, 2013, between Molina Healthcare, Inc. and Bank of America, N.A.
|
|
Filed as Exhibit 10.2 to registrant's Form 10-Q filed May 3, 2013.
|
10.30
|
|
Additional Amended and Restated Base Warrants Confirmation, dated as of April 22, 2013, between Molina Healthcare, Inc. and JPMorgan Chase Bank, National Association, London Branch
|
|
Filed as Exhibit 10.3 to registrant's Form 10-Q filed May 3, 2013.
|
10.31
|
|
Additional Amended and Restated Base Warrants Confirmation, dated as of April 22, 2013, between Molina Healthcare, Inc. and Bank of America, N.A.
|
|
Filed as Exhibit 10.4 to registrant's Form 10-Q filed May 3, 2013.
|
10.32
|
|
Lease Agreement, dated as of February 27, 2013, by and between 6th & Pine Development, LLC and Molina Healthcare, Inc.
|
|
Filed as Exhibit 10.32 to registrant’s Form 10-K filed February 28, 2013.
|
10.33
|
|
First Amendment to Office Building Lease, effective as of
October 31, 2014, by and between 6
th
& Pine Development,
LLC and Molina Healthcare, Inc.
|
|
Filed as Exhibit 10.1 to registrant’s Form 8-K filed November 5, 2014.
|
10.34
|
|
Second Amendment to Office Building Lease, effective as of November 2, 2015, by and between 6th & Pine Development, LLC and Molina Healthcare, Inc.
|
|
Filed as Exhibit 10.1 to registrant's Form 8-K filed November 6, 2015.
|
10.35
|
|
Settlement Agreement entered into on October 30, 2013, by and between the Department of Health Care Services and Molina Healthcare of California and Molina Healthcare of California Partner Plan, Inc.
|
|
Filed as Exhibit 10.1 to registrant's Form 10-Q filed October 30, 2013.
|
10.36
|
|
Agreement of Purchase and Sale, dated as of June 12, 2013, by and between Molina Healthcare, Inc. and Molina Center, LLC, and AG Net Lease Acquisition Corp.
|
|
Filed as Exhibit 10.1 to registrant's Form 10-Q filed July 25, 2013.
|
10.37
|
|
Lease Agreement, dated as of June 13, 2013, by and between AGNL Clinic, L.P., and Molina Healthcare, Inc.
|
|
Filed as Exhibit 10.2 to registrant's Form 10-Q filed July 25, 2013.
|
10.38
|
|
Form of Exchange Agreement, dated August 11, 2014, by and between Molina Healthcare, Inc. and certain beneficial owners of Molina Healthcare, Inc.’s 3.75% Convertible Senior Notes due 2014
|
|
Filed as Exhibit 10.1 to registrant’s Form 8-K filed August 12, 2014.
|
10.39
|
|
Credit Agreement, dated as of June 12, 2015, by and among Molina Healthcare, Inc., Molina Information Systems, LLC, Molina Medical Management, Inc., certain lenders named on the signature pages thereto and SunTrust Bank, as Administrative Agent, Swingline Lender and Issuing Bank
|
|
Filed as Exhibit 10.1 to registrant's Form 8-K filed June 16, 2015.
|
10.40
|
|
Guarantor Joinder Agreement, dated February 18, 2016, by and among the guarantor parties thereto and SunTrust Bank, as Administrative Agent.
|
|
Filed as Exhibit 10.1 to registrant’s Form 8-K filed February 18, 2016.
|
Number
|
|
Description
|
|
Method of Filing
|
10.41
|
|
Purchase Agreement, dated as of February 11, 2013, among Molina Healthcare, Inc. and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Representatives of the Initial Purchasers
|
|
Filed as Exhibit 1.1 to registrant's Form 8-K filed February 15, 2013.
|
10.42
|
|
Capitated Medical Group/IPA Provider Services Agreement, effective May 1, 2013, by and between Molina Healthcare of California and Pacific Healthcare IPA.
|
|
Filed herewith.
|
10.43
|
|
Regulatory Amendment for the Capitated Financial Alignment Demonstration Product to Molina Healthcare of California Group/IPA Provider Services Agreement(s), effective September 26, 2014, by and between Molina Healthcare of California and Pacific Healthcare IPA Associates, Inc.
|
|
Filed herewith.
|
10.44
|
|
Capitated Financial Alignment Demonstration Amendment to Molina Healthcare of California Group/IPA Provider Services Agreement, effective as of July 1, 2014, by and between Molina Healthcare of California and Pacific Healthcare IPA Associates, Inc.
|
|
Filed herewith.
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
Filed herewith.
|
21.1
|
|
List of subsidiaries
|
|
Filed herewith.
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
|
Filed herewith.
|
31.1
|
|
Section 302 Certification of Chief Executive Officer
|
|
Filed herewith.
|
31.2
|
|
Section 302 Certification of Chief Financial Officer
|
|
Filed herewith.
|
32.1
|
|
Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith.
|
32.2
|
|
Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith.
|
101.INS
|
|
XBRL Taxonomy Instance Document
|
|
Filed herewith.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith.
|
*
|
Management contract or compensatory plan or arrangement required to be filed (and/or incorporated by reference) as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K.
|
A.
|
Health Plan arranges for the provision of certain Health Care services to Members pursuant to contracts with various government sponsored health programs. Health Plan intends to participate in additional government sponsored health programs and offer other health products as the opportunities become available.
|
B.
|
Health Plan arranges for the provision of certain Health Care services to Members by entering into provider service agreements with individual physicians, groups of physicians, individual practice associations, hospitals, clinics, ancillary health providers, and other health providers.
|
C.
|
Provider is licensed to render certain Health Care services and desires to provide such services to Health Plan’s Members in connection with Health Plan’s contractual obligations to provide and/or arrange for Health Care Services for Health Plan’s Members.
|
1.1
|
Provider means the health care professional(s), or entity(ies) identified in
Attachment A
to this Agreement.
|
1.2
|
Capitalized words or phrases in this Agreement shall have the meaning set forth in
Attachment B
.
|
2.1
|
Serving as a Panel Provider.
Provider shall serve on Health Plan’s panel of providers for the products specified in
Attachment C
. Provider agrees that its practice information may be used in Health Plan’s provider directories, promotional materials, advertising and other informational material made available to the public and Members. Practice Information includes, but is not limited to, name, address, telephone number, hours of operation, type of practice, and ability to accept new patients. Provider shall promptly notify Health Plan of any changes in this practice information.
|
2.2
|
Standards for Provision of Care.
|
a.
|
Provision of Covered Services.
Provider shall provide Covered Services to Members, within the scope of Provider’s business and practice, in accordance with this Agreement, Health Plan’s policies and procedures, the terms and conditions of the Health Plan product which covers the Member, and the requirements of any applicable government sponsored program.
|
b.
|
Standard of Care.
Provider shall provide Covered Services to Members at a level of care and competence that equals or exceeds the generally accepted and professionally recognized standard of practice at the time of treatment, all applicable rules and/or standards of professional conduct, and any controlling governmental licensing requirements.
|
c.
|
Facilities, Equipment, and Personnel.
Provider’s facilities, equipment, personnel and administrative services shall be at a level and quality as necessary to perform Provider’s duties and responsibilities under this
|
d.
|
Prior Authorization.
If Provider determines that it is Medically Necessary to consult or obtain services from other health professionals that are Medically Necessary, Provider shall obtain the prior authorization of Health Plan in accordance with Health Plan’s Provider Manual unless the situation is one involving the delivery of Emergency Services. Upon and following such referral, Provider shall coordinate the provision of such Covered Services to Members and ensure continuity of care.
|
e.
|
Contracted Providers.
Except in the case of Emergency Services or upon prior authorization of Health Plan, Provider shall use only those health professionals, hospitals, laboratories, skilled nursing and other facilities and providers which have contracted with Health Plan (“Participating Providers”).
|
f.
|
Member Eligibility Verification.
Provider shall verify eligibility of Members prior to rendering services.
|
g.
|
Admissions.
Provider shall cooperate with and comply with Health Plan’s hospital admission and prior authorization procedures.
|
h.
|
Emergency Room Referral.
If Provider refers a Member to an emergency room for Covered Services, Provider shall provide notification to Health Plan within twenty-four (24) hours of the referral.
|
i.
|
Prescriptions.
Except with respect to prescriptions and pharmaceuticals ordered for in-patient hospital services, Provider shall abide by Health Plan’s drug formularies and prescription policies, including those regarding the prescription of generic or lowest cost alternative brand name pharmaceuticals. Provider shall obtain prior authorization from Health Plan if Provider believes a generic equivalent or formulary drug should not be dispensed. Provider acknowledges the authority of Health Plan contracting pharmacists to substitute generics for brand name pharmaceuticals unless counter indicated on the prescription by the Provider.
|
j.
|
Subcontract Arrangements.
Any subcontract arrangement entered into by Provider for the delivery of Covered Services to Members shall be in writing and shall bind Provider’s subcontractors to the terms and conditions of this Agreement including, but not limited to, terms relating to licensure, insurance, and billing of Members for Covered Services.
|
k.
|
Availability of Services.
Provider shall make necessary and appropriate arrangements to assure the availability of Covered Services to Members on a twenty-four (24) hours a day, seven (7) days a week basis, including arrangement to assure coverage of Member patient visits after hours. Provider shall meet the applicable standards for timely access to care and services, taking into account the urgency of the need for the services.
|
l.
|
Treatment Alternatives.
Health Plan encourages open Provider-Member communication regarding appropriate treatment alternatives. Health Plan promotes open discussion between Provider and Members regarding Medically Necessary or appropriate patient care, regardless of Covered Services limitations. Provider is free to communicate any and all treatment options to Members regardless of benefit coverage limitations.
|
2.3
|
Promotional Activities.
At the request of Health Plan, Provider shall (a) display Health Plan promotional materials in its offices and facilities as practical, and (b) shall cooperate with and participate in all reasonable Health Plan's marketing efforts. Provider shall not use Health Plan’s name in any advertising or promotional materials without the prior written permission of Health Plan.
|
a.
|
Enrollment.
Provider shall not differentiate or discriminate in providing Covered Services to Members because of race, color, religion, national origin, ancestry, age, sex, marital status, sexual orientation, physical, sensory or mental handicap, socioeconomic status, or participation in publicly financed programs of health care. Provider shall render Covered Services to Members in the same location, in the same manner, in accordance with the same standards, and within the same time availability regardless of payor.
|
b.
|
Employment.
Provider shall not differentiate or discriminate against any employee or applicant for employment, with respect to their hire, tenure, terms, conditions or privileges of employment, or any matter directly or indirectly related to employment, because of race, color, religion, national origin, ancestry, age, sex, height, weight, marital status, physical, sensory or mental disability unrelated to the individual’s ability to perform the duties of the particular job or position.
|
2.5
|
Recordkeeping.
|
a.
|
Maintaining Member Medical Records.
Provider shall maintain a medical record for each Member to whom Provider renders health care services. Provider shall open each Member’s medical record upon the Member’s first encounter with Provider. The Member’s medical record shall contain all information required by state and federal law, generally accepted and prevailing professional practice, applicable government sponsored health programs, and all Health Plan policies and procedures. Provider shall retain all such records for at least ten (10) years.
|
b.
|
Confidentiality of Member Health Information.
Provider shall comply with all applicable state and federal laws, Health Plan’s policies and procedures, government sponsored program requirements regarding privacy and confidentiality of Members’ health information and medical records, including mental health records. Provider shall not disclose or use Member names, addresses, social security numbers, identities, other personal information, treatment modalities, or medical records without obtaining appropriate authorization to do so. This provision shall not affect or limit Provider’s obligation to make available medical records, encounter data and information concerning Member care to Health Plan, any authorized state or federal agency, or other Providers of health care upon authorized referral.
|
c.
|
HIPAA.
To the extent Provider is considered a covered entity under the Health Insurance Portability and Accountability Act (“HIPAA”), Provider shall comply with all provisions of HIPAA including, but not limited to, provisions addressing privacy, security, and confidentiality.
|
d.
|
National Provider Identification (“NPI”).
In accordance with applicable statutes and regulations of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, Provider shall comply with the Standard Unique Identifier for Health Care Provider regulations promulgated under HIPAA (45 CFR Section 162.402, et seq.) and use only the NPI to identify HIPAA covered health care providers in standard transactions. Provider shall obtain an NPI from the National Plan and Provider Enumeration System (“NPPES”) for itself or for any subpart of the Provider. Provider shall make best efforts to report its NPI and any subparts to Health Plan. Provider shall report any changes in its NPI or subparts to Health Plan within thirty (30) days of the change. Provider shall use its NPI to identify itself on all claims and encounters (both electronic and paper formats) submitted to Health Plan.
|
e.
|
Delivery of Patient Care Information.
Provider shall promptly deliver to Health Plan, upon request and/or as may be required by state or federal law, Health Plan’s policies and procedures, applicable government sponsored health programs, Health Plan’s contracts with the government agencies, or third party payers, any information, statistical data, encounter data, or patient treatment information pertaining to Members served by Provider, including but not limited to, any and all information requested by Health Plan in conjunction with utilization review and management, grievances, peer review, HEDIS Studies, Health Plan’s Quality Improvement Program, or claims payment. Provider shall further provide direct access at reasonable times to said patient care information as requested by Health Plan and/or as required to any governmental agency or any appropriate state and federal authority having jurisdiction over Health Plan. Health Plan shall have the right to withhold compensation from Provider in the event that Provider fails or refuses to promptly provide any such information to Health Plan.
|
f.
|
Member Access to Health Information.
Provider shall give Health Plan and Members access to Members’ health information including, but not limited to, medical records and billing records, in accordance with the requirements of state and federal law, applicable government sponsored health programs, and Health Plan’s policies and procedures.
|
a.
|
Participation in Grievance Program.
Provider shall participate in Health Plan’s Grievance Program and shall cooperate with Health Plan in identifying, processing, and promptly resolving all Member complaints, grievances, or inquiries.
|
b.
|
Participation in Quality Improvement Program.
Provider shall participate in Health Plan’s Quality Improvement Program and shall cooperate with Health Plan in conducting peer review and audits of care rendered by Provider.
|
c.
|
Participation in Utilization Review and Management Program.
Provider shall participate in and comply with Health Plan’s Utilization Review and Management Program, including all policies and procedures regarding prior authorizations, and shall cooperate with Health Plan in audits to identify, confirm, and/or assess utilization levels of Covered Services. If Provider is a medical group or IPA, Provider shall accept delegation of utilization management responsibilities from Health Plan at Health Plan’s request. If delegation of utilization management responsibilities is revoked, Health Plan shall reduce any otherwise applicable payments owing to Provider by the Utilization Payment Reduction Amount specified in
Attachment D
.
|
d.
|
Participation in Credentialing.
Provider shall participate in Health Plan’s credentialing and re-credentialing process and shall satisfy, throughout the term of this Agreement, all credentialing and re-credentialing criteria established by the Health Plan. Provider shall immediately notify Health Plan of any change in the information submitted or relied upon by Provider to achieve credentialed status. If Provider’s credentialed status is revoked, suspended or limited by Health Plan, Health Plan may at its discretion terminate this Agreement and/or reassign Members to another provider. If Provider is a medical group or IPA, Provider shall accept delegation of credentialing responsibilities at Health Plan’s request and shall cooperate with Health Plan in establishing and maintaining appropriate credentialing mechanisms within Provider’s organization. If delegation of credentialing responsibilities to a group or IPA is revoked, Health Plan shall reduce any otherwise applicable payments owing to group or IPA by the Credentialing Reduction Amount specified in
Attachment D
.
|
e.
|
Provider Manual.
Provider shall comply and render Covered Services in accordance with the contents, instructions and procedures set forth in Health Plan’s Provider Manual, which may be amended from time to time. Health Plan’s Provider Manual is incorporated in this Agreement by this reference.
|
f.
|
Health Education/Training.
Provider shall participate in and cooperate with Health Plan’s Provider education and training efforts as well as Member education and efforts. Provider shall also comply with all Health Plan health education, cultural and linguistic standards, policies, and procedures, and such standards, policies, and procedures as may be necessary for Health Plan to comply with its contracts with employers, the state, or federal government. Provider shall ensure that Provider promptly delivers to Provider’s constituent providers, if any, all informational, promotional, educational, or instructional materials prepared by Health Plan regarding any aspect of providing Covered Services to Members.
|
2.7
|
Licensure and Standing.
|
a.
|
Licensure.
Provider warrants and represents that it is appropriately licensed to render health care services within the scope of Provider’s practice, including having and maintaining a current narcotics number, where appropriate, issued by all proper authorities. Provider shall provide evidence of licensure to Health Plan upon request. Provider shall maintain its licensure in good standing, free of disciplinary action, and in unrestricted status throughout the term of this Agreement. Provider shall immediately notify Health Plan of any change in Provider’s licensure status, including any disciplinary action taken or proposed by any licensing agency responsible for oversight of Provider.
|
b.
|
Unrestricted Status.
Provider warrants and represents that it has not been convicted of crimes as specified in Section 1128 of the Social Security Act (42 U.S.C. 1320a-7), excluded from participation in the Medicare or Medicaid program, assessed a civil penalty under the provisions of Section 1128, entered into a contractual relationship with an entity convicted of a crime specified in Section 1128, or taken any other action that would prohibit it from participation in Medicaid and/or state health care programs.
|
c.
|
Malpractice and Other Actions.
Provider shall give immediate notice to Health Plan of: (a) any malpractice claim asserted against it by a Member, any payment made by or on behalf of Provider in settlement or compromise of such a claim, or any payment made by or on behalf of Provider pursuant to a judgment rendered upon such a claim; (b) any criminal investigations or proceedings against Provider; (c) any convictions of Provider for crimes involving moral turpitude or felonies; and (d) any civil claim asserted against Provider that may jeopardize Provider’s financial soundness.
|
d.
|
Staffing Privileges for Providers.
Consistent with community standards, every physician Provider shall have staff privileges with at least one Health Plan contracted Hospital as necessary to provide services to members under this Agreement, and shall authorize each hospital at which he/she maintains staff privileges to notify Health Plan should any disciplinary or other action of any kind be initiated against such provider which could result in any suspension, reduction or modification of his/her hospital privileges.
|
e.
|
Liability Insurance.
Provider shall maintain premises and professional liability insurance in coverage amounts appropriate for the size and nature of Provider’s facility and the nature of Provider’s health care activities. Every physician Provider shall maintain, at a minimum, professional liability insurance with limits of not less than one million dollars ($1,000,000) per occurrence and three million dollars ($3,000,000) in the aggregate for the policy year and for each physician comprising Provider. If the coverage is claims made or reporting, Provider agrees to purchase similar “tail” coverage upon termination of the Provider’s present or subsequent policy. Provider shall deliver copies of such insurance policies to Health Plan within five business days of a written request by Health Plan.
|
2.8
|
Claims Payment.
|
a.
|
Submitting Claims.
If applicable
,
Provider shall promptly submit to Health Plan claims for Covered Services rendered to Members. All claims shall be submitted in a form acceptable to and approved by Health Plan, and shall include any and all medical records pertaining to the claim if requested by Health Plan or otherwise required by Health Plan’s policies and procedures. Except as otherwise provided by law or provided by government sponsored
|
b.
|
Compensation.
When applicable,
Health Plan shall pay Provider for Clean Claims for Covered Services provided to Members, including Emergency Services, in accordance with applicable law and regulations and in accordance with the compensation schedule set forth in
Attachment D
. Provider shall accept such payment, applicable co-payments, deductibles, and coordination of benefits collections as payment in full for services provided under this Agreement. Provider shall not balance bill Members for any Covered Services.
|
c.
|
Co-payments and Deductibles.
Provider is responsible for collection of co-payments and deductibles, if any.
|
d.
|
Coordination of Benefits.
Health Plan is a secondary payer in any situation where there is another payer as primary carrier. Provider shall make reasonable inquiry of Members to learn whether Member has health insurance or health benefits other than from Health Plan or is entitled to payment by a third party under any other insurance or plan of any type, and Provider shall immediately notify Health Plan of said entitlement. In the event that coordination of benefits occurs, Provider shall be compensated in an amount equal to the allowable Clean Claim less the amount paid by other health plans, insurance carriers and payers, not to exceed the amount specified in
Attachment D
.
|
e.
|
Offset.
In the event that Health Plan determines that a claim has been overpaid or paid in duplicate, or that funds were paid which were not provided for under this Agreement, Provider shall make repayment to Health Plan within thirty (30) working days of written notification by Health Plan of the overpayment, duplicate payment, or other excess payment. In addition to any other contractual or legal remedy, Health Plan may recover the amounts owed by way of offset or recoupment from current or future amounts due Provider by giving Provider not less than thirty (30) working days notice in which to exercise Provider’s appeal rights under this Agreement. As a material
|
f.
|
Claims Review and Audit.
Provider acknowledges Health Plan’s right to review Provider’s claims prior to payment for appropriateness in accordance with industry standard billing rules, including, but not limited to, current UB manual and editor, current CPT and HCPCS coding, CMS billing rules, CMS bundling/unbundling rules, National Correct Coding Initiatives (NCCI) Edits, CMS multiple procedure billing rules, and FDA definitions and determinations of designated implantable devices and/or implantable orthopedic devices. Provider acknowledges Health Plan’s right to conduct such review and audit on a line-by-line basis or on such other basis as Health Plan deems appropriate, and Health Plan’s right to exclude inappropriate line items to adjust payment and reimburse Provider at the revised allowable level. Provider also acknowledges Health Plan’s right to conduct utilization reviews to determine medical necessity and to conduct post-payment billing audits. Provider shall cooperate with Health Plan’s audits of claims and payments by providing access at reasonable times to requested claims information, all supporting medical records, Provider’s charging policies, and other related data. Health Plan shall use established industry claims adjudication and/or clinical practices, state and federal guidelines, and/or Health Plan’s policies and data to determine the appropriateness of the billing, coding and payment.
|
g.
|
Payments which are the Responsibility of a Capitated Provider.
Provider agrees that if Provider is or becomes a party to a subcontract or other agreement with another provider contracted with Health Plan; who receives capitation from Health Plan and is responsible for arranging for Covered Services through subcontract arrangements (“Capitated Provider”), Provider shall look solely to the Capitated Provider, and not Health Plan, for payment of Covered Services provided to Members that are covered by Health Plan’s agreements with such Capitated Providers.
|
2.9
|
Compliance with Applicable Law.
Provider shall comply with all applicable state and federal laws governing the delivery of Covered Services to Members including, but not limited to, title VI of the Civil Rights Act of 1964; title IX of the Education Amendments of 1972 (regarding education programs and activities); the Age Discrimination Act of 1975; the Rehabilitation act of 1973; the Balanced Budget Act of 1997; and the Americans with Disabilities Act:
|
a.
|
Provider acknowledges that this Agreement and all Covered Services rendered pursuant to this Agreement are subject to state licensing statutes and regulations set forth in
Attachment E
and all applicable sub-attachments to
Attachment E
.
|
b.
|
Provider acknowledges that all Covered Services rendered in conjunction with the state Medicaid program are subject to the additional provisions set forth in
Attachment F
and all applicable sub-attachments to
Attachment F
, the effect of which provisions is limited solely to activities and Covered Services related to the state Medicaid program.
|
c.
|
Provider acknowledges that all Covered Services rendered in conjunction with the Medicare program are subject to the Medicare provisions set forth in
Attachment H
, the effect of which provisions is limited solely to activities and Covered Services related to the Medicare program.
|
2.10
|
Provider Non-solicitation Obligations.
Provider shall not unilaterally assign or transfer patients served under this Agreement to another medical group, IPA, or provider without the prior written approval of Health Plan. Nor shall Provider solicit or encourage Members to select another health plan for the primary purpose of securing financial gain for Provider. Nothing in this provision is intended to limit Provider’s ability to fully inform Members of all available health care treatment options or modalities.
|
2.11
|
Fraud and Abuse Reporting.
Provider shall report to Health Plan’s compliance officer all cases of suspected fraud and/or abuse, as defined in Title 42, of the Code of Federal Regulations, Section 455.2, where there is reason to believe that an incident of fraud and/or abuse has occurred, by subcontractors, Members, providers, or employees within ten (10) state working days of the date when Provider first becomes aware of, or is on notice of, such activity. Provider shall
|
2.12
|
Advance Directive.
Provider shall document all patient records with respect to the existence of an Advance Directive in compliance with the Patient Self-Determination Act (Section 4751 of the Omnibus Reconciliation Act of 1990), as amended, and other appropriate laws.
|
2.13
|
Reciprocity Agreements.
Provider shall cooperate with Health Plan’s Participating Providers and affiliates of Health Plan and agrees to provide Covered Services to Members enrolled in various government sponsored health programs and other health products, and various government sponsored health programs and other health products of affiliates, and to assure reciprocity of health care services. Without limiting the foregoing, if any Member receives services or treatment constituting Covered Services from Provider and a capitated Participating Provider is financially responsible for such services, such Participating Provider shall be solely responsible for compensating Provider for any Covered Services provided by the Provider in accordance with the applicable Payments which are the Responsibility of a Capitated Provider provisions of this Agreement. Payment by the Participating Provider shall be at; (i) the rates agreed by the Participating Provider and Provider, or (ii) if there is no applicable agreement, at the lesser of Provider’s billed charges or an amount equivalent to one hundred percent (100%) of the governing rates provided by applicable State and Federal Law specific to the Member's enrolled benefit plan (i.e. Medicaid, Medicare, etc) in place at the time services are rendered, or (iii) at the election of the Participating Provider, at the rates set forth in this Agreement. Provider agrees that the applicable provisions of the Compensation section of this Agreement shall continue to be binding upon Provider, especially in that Provider shall not balance bill Members for any Covered Services. Provider shall comply with the procedures established by Health Plan or its affiliates and this Agreement for reimbursement of such services or treatment. Provider shall not encourage Members to receive Covered Services from non-Participating Providers. Breach of this section shall constitute breach of a material term of the Agreement and will give rise to cause for termination of this Agreement pursuant to the applicable Termination with Cause provisions of this Agreement. Provider shall abide by all
|
2.14
|
Reassignment of Members.
Health Plan reserves the right to reassign Members from Provider to another provider or to limit or deny the assignment or selection of new Members to Provider during any termination notice period or if Health Plan determines that assignment to Provider poses a threat to the Members’ health and safety. If Provider requests reassignment of a Member, Health Plan, in its sole discretion, will make the determination regarding reassignment based upon good cause shown by the Provider. When the Health Plan reassigns Member(s), Provider shall forward copies of the Member’s medical records to the new provider within ten (10) business days of receipt of the Plan’s or the Member’s request to transfer the records.
|
2.15
|
Notification of Network Change.
Where Provider constitutes specialists, is a medical group, IPA, or any other similar entity/organization, Provider shall provide Health Plan and Member with timely written notification in the event a constituent specialty provider terminates its contract with Provider. Said written notification shall be in compliance with all state and federal laws or government sponsored program requirements.
|
3.1
|
Compensation.
Health Plan shall pay Provider in accordance with the terms and conditions of this Agreement and the compensation schedule set forth in
Attachment D
.
|
3.2
|
Member Eligibility Determination.
Health Plan shall maintain data on Member eligibility and enrollment. Health Plan shall promptly verify Member eligibility at the request of Provider.
|
3.3
|
Prior Authorization Review.
Health Plan shall timely respond to requests for prior authorization and/or determination of Covered Services.
|
3.4
|
Medical Necessity Determination.
Health Plan’s determination with regard to Medically Necessary services and scope of Covered Services, including determinations of level of care and length of stay benefits available under the Member’s health program shall govern. The primary concern with respect to all medical determination shall be the interest of the Member.
|
3.5
|
Member Services.
Health Plan will provide services to Members including, but not limited to, assisting Members in selecting a primary care physician, processing Member complaints and grievances, informing Members of the Health Plan’s policies and procedures, providing Members with membership cards, providing Members with information about Health Plan, and providing Members with access to Health Plan’s Provider Directory, updated from time to time, identifying the professional status, specialty, office address, and telephone number of Health Plan contracted providers.
|
3.6
|
Provider Services.
Health Plan will maintain a Provider Manual describing Health Plan’s policies and procedures, Covered Services, limitations and exclusions, and coordination of benefits information. Health Plan will maintain a Provider Services Department available to educate Provider regarding Health Plan’s policies and procedures.
|
3.7
|
Medical Director.
Health Plan will employ a physician as medical director who shall be responsible for the management of both the; (i) medical, and (ii) medically-related scientific and technical, aspects of Health Plan.
|
4.1
|
Term.
This Agreement shall commence on the effective date indicated by Health Plan on the signature page of this Agreement (“Effective Date”) and shall continue in effect for one year; thereafter, it shall automatically renew for successive one (1) year terms unless and until terminated by either party in accordance with the provisions of this Agreement or in accordance with applicable provisions set forth in the attachments.
|
4.2
|
Termination without Cause.
This Agreement may be terminated without cause by either party on at least one hundred and fifty (150) days written notice to the other party.
|
4.3
|
Termination with Cause.
In the event of a breach of any material provision of this Agreement, the party claiming the breach will give the other party written notice of termination setting forth the facts underlying its claim(s) that the other party has breached the Agreement. The party receiving the notice of termination shall have thirty (30) days from the date of receipt of such notice to remedy or cure the claimed breach to the satisfaction of the other party. During this thirty (30) day period, the parties agree to meet as reasonably necessary and to confer in good faith in an attempt to resolve the claimed breach. If the party receiving the notice of termination has not remedied or cured the breach within such thirty (30) day period, the party who provided the notice of termination shall have the right to immediately terminate this Agreement.
|
4.4
|
Immediate Termination.
Notwithstanding any other provision of this Agreement, Health Plan may immediately terminate this Agreement and transfer Member(s) to another provider by giving notice to Provider in the event of any of the following:
|
a.
|
Provider’s license or certificate to render health care services is limited, suspended or revoked, or disciplinary proceedings are commenced against Provider by the state licensing authority;
|
b.
|
Provider fails to maintain insurance required by this Agreement;
|
c.
|
Provider loses credentialed status;
|
d.
|
Provider becomes insolvent or files a petition to declare bankruptcy or for reorganization under the bankruptcy laws of the United States, or a trustee in bankruptcy or receiver for Provider is appointed by appropriate authority;
|
e.
|
If Provider is capitated and Health Plan determines Provider to be financially incapable of bearing capitation or other applicable risk-sharing compensation
|
f.
|
Health Plan determines that Provider’s facility and/or equipment is insufficient to render Covered Services to Members;
|
g.
|
Provider is excluded from participation in Medicare and state health care programs pursuant to Section 1128 of the Social Security Act or otherwise terminated as a provider by any state or federal health care program;
|
h.
|
Provider engages in fraud or deception, or knowingly permits fraud or deception by another in connection with Provider’s obligations under this Agreement;
|
i.
|
Health Plan determines that health care services are not being properly provided, or arranged for, and that such failure poses a threat to Members’ health and safety.
|
4.5
|
Notice to Members of Termination.
In the event one of the parties to this Agreement provides notification of termination of this Agreement, Health Plan shall provide affected Members with timely written notification, of such termination, prior to the effective date of specialist termination, as required for compliance with any state and federal laws, government sponsored program requirement, or accreditation requirement. Notification to affected members shall comply with the notification requirements set forth in Health and Safety Code section 1373.65(f).
|
5.1
|
Indemnification.
Each party shall indemnify and hold harmless the other party and its officers, directors, shareholders, employees, agents, and representatives from any and all liabilities, losses, damages, claims, and expenses of any kind, including costs and attorneys’ fees, which result from the duties and obligations of the indemnifying party and/or its officers, directors, shareholders, employees, agents, and representatives under this Agreement.
|
5.2
|
Relationship of the Parties.
Nothing contained in this Agreement is intended to create, nor shall it be construed to create, any relationship between the parties other than that of independent parties contracting with each other solely for the purpose of effectuating the provisions of this Agreement. This Agreement is not intended to create a relationship of agency, representation, joint venture, or employment between the parties. Nothing herein contained shall prevent any of the parties from entering into similar arrangements with other parties. Each of the parties shall maintain separate and independent management and shall be responsible for its own operations. Nothing contained in this Agreement is intended to create, nor shall be construed to create, any right in any third party, including but not limited to Health Plan’s Members. Nor shall any third party have any right to enforce the terms of this Agreement.
|
5.3
|
Entire Agreement.
This Agreement, together with Attachments and incorporated documents or materials, contains the entire agreement between Health Plan and Provider relating to the rights granted and obligations imposed by this Agreement. The contract between the state and the Health Plan is incorporated herein by reference and shall be the guiding and controlling document when interpreting the terms of this Agreement. Any prior agreements, promises, negotiations, or representations, either oral or written, relating to the subject matter of this Agreement are of no force or effect.
|
5.4
|
Severability.
If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated as a result of such decision.
|
5.5
|
Non-exclusivity.
This Agreement shall not be construed to be an exclusive Agreement between Health Plan and Provider. Nor shall it be deemed to be an Agreement requiring Health Plan to refer Members to Provider for health care services.
|
5.6
|
Amendment.
Health Plan may, without Provider’s consent, amend this Agreement to maintain consistency and/or compliance with any state or federal law, policy, directive, or government sponsored program requirement upon forty-five (45) business days’ notice to Provider unless a shorter timeframe is necessary for compliance. Health Plan may otherwise materially amend this Agreement
|
5.7
|
Assignment.
Provider may not assign, transfer, subcontract or delegate, in whole or in part, any rights, duties, or obligations under this Agreement without the prior written consent of Health Plan. Subject to the foregoing, this Agreement is binding upon, and inures to the benefit of the Health Plan and Provider and their respective successors in interest and assigns. Neither the acquisition of Health Plan nor a change of its legal name shall be deemed an assignment.
|
5.8
|
Arbitration.
Any claim or controversy arising out of or in connection with this Agreement shall be resolved, to the extent possible, within forty-five (45) days through informal meetings and discussions held in good faith between appropriate representatives of the parties. Any remaining claim or controversy shall be settled by binding arbitration administered by the American Arbitration Association (“AAA”) in accordance with its Commercial Arbitration Rules then in effect by a single arbitrator in Los Angeles County; provided, however, that binding arbitration shall not be utilized to adjudicate matters that primarily involve review of Provider’s professional competence or professional conduct, and shall not be available as a mechanism for appeal of any determinations made as to such matters. If possible, the arbitrator shall be an attorney with at least fifteen (15) years of experience, including at least five (5) years of experience in managed health care. The parties shall conduct a mandatory settlement conference at the initiation of arbitration, to be administered by AAA. The arbitrator shall have no authority to provide a remedy or award damages that would not be available to such prevailing party in a court of law, nor shall the arbitrator have the authority to award punitive damages. Each party shall bear its own costs and expenses, including its own attorneys’ fees, and shall bear an equal share of the arbitrator’s and administrative fees of arbitration. The parties agree to accept any decision by the arbitrator as a final determination of the matter in dispute, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Arbitration must be initiated within one year of the earlier of the date the claim or controversy arose, was discovered, or should have been discovered with reasonable diligence; otherwise it shall be deemed waived. The use of binding arbitration shall not preclude a request for equitable and injunctive relief made to a court of appropriate jurisdiction.
|
5.9
|
Attachments.
Each of the Attachments identified below is hereby made a part of this Agreement:
Attachment A – Provider Identification Sheet Attachment B – Definitions Attachment C – Products/Programs Attachment D – Compensation Schedule Attachment E – Licensing Provisions Attachment E-1 – Financial Solvency Provisions Attachment E-2 – Provider Claims Processing Provisions Attachment F – Medicaid Program Provisions Attachment F-1 – Emergency Services Provisions Attachment G – Acknowledgment of Receipt of Provider Manual Attachment H – Medicare Program Provisions Attachment I – Disclosure Form Attachment J – Certificate of Ownership Attachment K – Matrix of Financial Responsibility Attachment L – Business Associate Addendum |
5.10
|
Notice.
All notices required or permitted by this Agreement shall be in writing and may be delivered in person or may be sent by registered or certified mail or U.S. Postal Service Express Mail, with postage prepaid, or by Federal Express or other overnight courier that guarantees next day delivery, or by facsimile transmission, and shall be deemed sufficiently given if served in the manner specified in this Section. The addresses below shall be the particular party’s address for delivery or mailing of notice purposes:
If to Health Plan: Molina Healthcare of California 200 Oceangate, Suite 100, Long Beach, California, 90802 Attention: President/CEO If to Provider: Pacific Healthcare IPA Associates, Inc. |
Provider Signature:
|
/s/ Faustino Bernadett
|
Molina Signature:
|
/s/ Teri Lauenstein
|
Signatory Name (Printed):
|
Faustino Bernadett, M.D.
|
Signatory Name (Printed):
|
Teri Lauenstein
|
Signatory Title (Printed):
|
President
|
Signatory Title (Printed):
|
Vice President, Network Management & Operations
|
Signature Date:
|
3/12/2013
|
Signature Date:
|
3/28/13
|
|
|
Effective Date:
|
(To be completed by Health Plan)
May 1, 2013
|
Y
|
Group/IPA
(a list of constituent members with their License No., UPIN and DEA numbers is attached and incorporated herein)
|
Provider Name
|
Pacific Healthcare IPA
|
Billing Address: 5000 Airport Plaza Drive #150, Long Beach, CA 90815
|
Telephone No.
|
(562) 766-2000
|
|
Facsimile No.
|
( 562) 766-2008
|
|
Tax I.D. No. (TIN)
|
20-4396324
|
|
License No.
|
|
|
NPI
|
1265785323
|
Physical Address (if different than above):
5000 Airport Plaza Drive #150, Long Beach, CA 90815
|
NPI Taxonomy
|
|
|
DEA No.
|
|
|
|
|
1.
|
Advance Directive
is a Member’s written instructions, recognized under state law, relating to the provision of health care when the Member is not competent to make a health care decision as determined under state law. Examples of Advance Directives are living wills and durable powers of attorney for health care.
|
2.
|
Agreement
means this Provider Services Agreement, all Attachments, and incorporated documents or materials.
|
3.
|
Claim
means an invoice for services rendered to a Member by Provider, submitted in a format approved by Health Plan, and with all service and encounter information required by Health Plan.
|
4.
|
Clean
Claim
means a claim for Covered Services that has no defect, impropriety, lack of any required substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim.
|
5.
|
CMS
means the Centers for Medicare and Medicaid Services, an administrative agency of the United States Government, responsible for administering the Medicare program.
|
6.
|
CMS Agreement
means the Medicare Advantage contract between Health Plan and CMS.
|
7.
|
Covered Services
means those health care services that are Medically Necessary, are within the normal scope of practice and licensure of Provider, and are benefits of the Health Plan product or a Health Plan affiliate’s product which covers the Member.
|
8.
|
Credentialing Payment Reduction Amount
means that amount by which payments otherwise owing to Provider are reduced in the event Provider is dedelegated responsibility for credentialing.
|
9.
|
Emergency Services
are Covered Services necessary to evaluate or stabilize a medical or psychiatric condition manifesting itself by acute symptoms of sufficient severity (including severe pain) so as to cause a prudent layperson, who possesses an average knowledge of health and medicine, to reasonably expect the absence of immediate medical attention to result in: (a) placement of the Member’s health (or the health of the Member’s unborn child) in serious jeopardy; (b) serious impairment to bodily functions; or (c) serious dysfunction of any bodily organ or part. For Health Plan’s Medicaid / Medi-Cal members, Emergency Services also includes any services defined as emergency services under 42 C.F.R. §438.114.
|
10.
|
Grievance Program
means the procedures established by Health Plan to timely address Enrollee and Provider complaints or grievances.
|
11.
|
Health Plan
means Molina Healthcare of California.
|
12.
|
HEDIS Studies
means Health Employer Data and Information Set.
|
13.
|
IPA
means Independent Practice Association.
|
14.
|
Medically Necessary
means those medical services and supplies which are provided in accordance with professionally recognized standards of practice which are determined to be: (a) appropriate and necessary for the symptoms, diagnosis or treatment of the Member’s medical condition; (b) provided for the diagnosis and direct care and treatment of such condition; (c) not furnished primarily for the convenience of the Member, the Member’s family, the treating provider, or other provider; (d) furnished at the most appropriate level which can be provided consistent
|
15.
|
Medicare
means the Hospital Insurance Plan (Part A) and the Supplementary Medical Insurance Plan (Part B) provided under Title XVIII of the Social Security Act, as amended.
|
16.
|
Medicare Advantage
means the managed care program established by the Medicare Modernization Act of 2003 to serve Medicare-eligible beneficiaries. Medicare Advantage plans generally cover Part A and Part B services and may also include Part D Services.
|
17.
|
Medicare Advantage Special Needs Plan (MA-SNP)
means the managed care program established by the Medicare Modernization Act of 2003 which allows health plans to create specialized plans for beneficiaries who are eligible for Medicare and Medicaid.
|
18.
|
Member(s)
means a person(s) enrolled in one of Health Plan’s benefit products or a Health Plan affiliate’s benefit product and who is eligible to received Covered Services.
|
19.
|
Provider
means the person(s) and/or entity identified in
Attachment A
to this Agreement. Where Provider is a Group/IPA or Hospital, Provider means and includes all constituent physicians, allied health professionals and staff persons who provide health care services to Members by and/or through the Group/IPA or Hospital. All of said persons are bound by the terms of this Agreement.
|
20.
|
Provider Manual
means the compilation of Health Plan policies, procedures, standards and specimen documents, as may be unilaterally amended or modified from time to time by Health Plan or mutually amended or modified from time to time by the parties, that have been compiled by Health Plan for the use and instruction of Provider, and to which Provider must adhere.
|
21.
|
Quality Improvement Program
means the policies, procedures and systems developed by Health Plan for monitoring, assessing and improving the accessibility, quality and continuity of care provided to Members.
|
22.
|
Utilization Review and Management Program
means the policies, procedures and systems developed by Health Plan for monitoring the utilization of Covered Services by Members, including but not limited to under-utilization and over-utilization.
|
23.
|
Utilization Management Reduction Amount
means that amount by which payments otherwise owing to Provider are reduced in the event that Provider is de-delegated responsibility for utilization management.
|
Y
|
CFAD (Medicare Capitated Financial Alignment Demonstration and successor(s))
|
6.1
|
Definitions.
The following terms shall have the meanings attributed below for purposes of this attachment. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
|
a.
|
Capitation Payments
are the monthly payments made to Provider on a prepaid basis for Covered Services provided or arranged by Provider under this Agreement. Capitation Payments to Provider shall be made to the Provider by the fifteenth (15th) day of each month. In the event the fifteenth (15th) day of the month is not a business day, the Capitation Payment shall be due and payable on the next business day following the fifteenth (15th) day of the month.
|
b.
|
Medicare Program Members
are the Members enrolled in the following Medicare program(s) as specified in
Attachment C
and checked below:
Y MA-SNP (Molina Medicare Options Plus)) Y CFAD (Capitated Financial Alignment Demonstration and successor(s) |
c.
|
Medicare Program Revenue
is the Part A and B Monthly CMS Payment that Health Plan receives from CMS for Medicare Program Members assigned to Provider.
|
6.2
|
Capitation Payment Terms.
|
a.
|
Matrix of Financial Responsibility.
For each Health Plan program or set of programs (ie. Medicaid Programs, Medicare Programs, etc) that Provider is reimbursed on a Capitation Payment basis, there is an attached Matrix of Financial Responsibility at
Attachment K
specifying the financial responsibility for Covered Services between Health Plan and Provider.
|
b.
|
Capitation Payments for Medicare Program Members
assigned to Provider shall be made based upon a per Member per month capitation rate.
|
c.
|
Collection of Copayments.
Provider shall be responsible for the collection of copayments and deductibles (if any) upon rendering Covered Services to Members. Any copayments or deductibles which are stated as a percentage shall be calculated utilizing the fee-for-service rates set forth in the "Non-Capitated Services Submission of Claims/Claims Payment" provisions in this Attachment, applicable to Member’s Health Plan program, for such Covered Services. Provider shall not refuse to provide Covered Services in the event a Member is unable to pay their copayment or deductible except as may be specifically permitted in the Provider Manual or as approved in advance by Health Plan.
|
d.
|
Coordination of Benefits for Capitated Providers.
Notwithstanding any other provisions of this Agreement, if Provider is reimbursed on a capitated basis and a coordination of benefits occurs, Provider shall not be eligible for additional compensation from Health Plan beyond the applicable Capitation Payments or Non-Capitated Services Submission of Claims/Claims Payments.
|
e.
|
Retroactive Adjustments.
Capitation Payments shall be subject to retroactive adjustments due to retroactive changes in the following; (i) for those programs based on a percent of premium capitation payment method, the amounts related to such premium adjustments for each program as demographic (ie. age, gender, hospice, ESRD, part A/B coverage, institutionalized, working aged, Medicaid, etc) and/or risk adjustments (ie. CMS Hierarchical Condition Category “HCC” adjustments), if any, which Health Plan receives in government funding sources for each Member assigned to Provider, and/or (ii) for all capitation payment methods, whether on a per Member per month or percent of premium basis, the retroactive changes in the number of Members assigned to Provider for each program.
|
f.
|
Character of Payments.
Capitation Payments to Provider pursuant to this Agreement are for the primary purpose of compensating Provider for the value of Covered Services provided pursuant to this Agreement. Provider shall assure that claims and compensation for Covered Services provided or arranged pursuant to this Agreement are paid from the Capitation Payments from Health Plan to Provider as may be necessary for Provider to satisfy its financial obligations under this Agreement. Health Plan shall have the right, but not the obligation, to pay claims which Provider fails to pay for Covered Services provided to Members. Provider specifically agrees that Health Plan may recover such owed amounts by way of offset or recoupment in accordance with the Offset provisions of this Agreement.
|
g.
|
Legislation Regulating Provider Risk.
Provider recognizes that the compensation terms set forth in this Attachment are established in exchange for Provider’s provision of Covered Services that are the financial responsibility of Provider, as outlined in the applicable Matrix of Financial Responsibility. In the event that any state or federal law, policy, directive, or government sponsored program requirement requires Health Plan to assume financial risk for certain Covered Services previously assigned to Provider, Health Plan may, without Provider’s consent, amend this Agreement to comply. Health Plan will provide Provider with forty-five (45) business days’ notice of the change unless a shorter timeframe is necessary for compliance.
Health Plan will present Provider with its actuarial valuation of the services that will no longer be the financial risk of Provider. Provider will have the opportunity to either present Health Plan with its expense data or an independent actuarial valuation of the same services. If Provider chooses to retain an independent actuary at its expense, the selection of the actuary must be mutually agreeable to both parties. If the independent actuary’s findings indicate that the value of the services is less than Health Plan’s valuation and if Health Plan and Provider reach mutual agreement on a lower valuation, then an adjustment corresponding to the mutually agreed upon valuation shall be made to the Health Plan’s compensation as of the effective date of Health Plan’s implementation of the legislation. The negotiated rate will be documented via an amendment of the Agreement by the parties. |
h.
|
Non-Capitated Services Submission of Claims/Claims Payment.
For Clean Claims for Covered Services rendered to Members which are provided
|
(1)
|
Non-Capitated Services Payment Rate for Medicare Program Members.
An amount equivalent to one hundred percent (100%) of the payment Provider would otherwise have been entitled to had the Covered Services been billed directly under the prevailing local and geographically adjusted Medicare Fee-For-Service program payment rates as of the date(s) of service.
If there is no payment rate in the prevailing local and geographically adjusted Medicare Fee-For-Service program as of the date(s) of service, payment shall be at thirty percent (30%) of Provider’s billed charges. |
(2)
|
Non-Capitated Services Payment Rate for all other Members not otherwise designated above.
An amount equivalent to sixty-five percent percent (65%) of the payment Provider would otherwise have been entitled to had the Covered Services been billed directly under the prevailing local and geographically adjusted Medicare Fee-For-Service program payment rates as of the date(s) of service.
If there is no payment rate in the prevailing local and geographically adjusted Medicare Fee-For-Service program as of the date(s) of service, payment shall be at thirty percent (30%) of Provider’s billed charges. |
i.
|
Adequacy of Compensation.
Provider shall accept payments as provided herein, along with any applicable co-payments, deductibles, and coordination of benefits collections as payment in full for providing or arranging Covered Services under this Agreement. Provider shall not balance bill Members for
|
7.1
|
Revocation of Delegated Responsibilities.
If applicable, Health Plan shall reduce any otherwise applicable payments owing to Provider by the amounts specified below in the event delegation of the responsibilities set forth in the applicable Program Participation sections in this Agreement are revoked.
|
a.
|
Utilization Management Payment Reduction Amount.
If delegation of utilization management responsibilities is revoked, Health Plan shall reduce any otherwise applicable payments owing to Provider by sixty-five cents ($0.65) per Member per month.
|
b.
|
Credentialing Payment Reduction Amount.
If delegation of credentialing responsibilities is revoked, Health Plan shall reduce any otherwise applicable payments owing to Provider by sixty-five cents ($0.65) per Member per month.
|
1.
|
In the event that Health Plan fails to pay Provider for Covered Services, the Member or subscriber shall not be liable to Provider for any sums owed by Health Plan.
|
2.
|
To the extent that any of Health Plan’s quality of care review functions or systems are administered by Provider, Provider shall deliver to Health Plan any information requested in order to monitor or require compliance with Health Plan’s quality of care review system. (Rule 1300.51, J-5)
|
3.
|
Provider is responsible for coordinating the provision of Health Care Services to Members who select Provider if Provider is a primary care physician. (Rule 1300.67.1(a))
|
4.
|
Provider shall maintain Member medical records in a readily available manner that permits sharing within Health Plan of all pertinent information relating to the health care of Members. (Rule 1300.67.1(c))
|
5.
|
Provider shall maintain reasonable hours of operation and make reasonable provisions for after-hour services. (Rule 1300.67.2(b))
|
6.
|
To the extent Provider has any role in rendering Emergency Services, Provider shall make such Emergency Services available and accessible twenty-four (24) hours a day, seven days a week. (Rule 1300.67.2(c))
|
7.
|
Provider shall participate in Plan’s system for monitoring and evaluating accessibility of care including but not limited to waiting times and appointment availability, and addressing problems that may develop. Provider shall timely notify Health Plan of any changes to address or inability to maintain Health Plan’s access standards. (Rule 1300.67(f))
|
8.
|
Health Plan is subject to the requirements of the Knox-Keene Health Care Service Plan Act of 1975, as amended (Chapter 2.2 of Division 2 of the Health and Safety Code), and the Regulations promulgated hereunder (subchapter 5.5 of Chapter 3 of Title 28 of the California Code of Regulations). Any provision of the aforementioned statutes or regulation that is required to be in this Agreement shall bind the Health Plan whether or not expressly set forth in this Agreement. (Rule 1300.67.4(a)(9))
|
9.
|
Upon the termination of this Agreement, Health Plan shall be liable for Covered Services rendered by Provider (other than for copayments as defined in subdivision (g) of Section 1345 of the Health and Safety Code) to a subscriber or Member who retains eligibility under the applicable plan contract or by operation of law under the care of Provider at the time of termination of the Agreement until the services being rendered to the subscriber or Member by Provider are completed, unless the Health Plan makes reasonable and medically appropriate provision for the assumption of services by a contracting provider. (Health and Safety Code section 1373.96) (Rule 1300.67.4(a)(10))
|
10.
|
Any written communications to Members that concern a termination of this agreement shall comply with the notification requirements set forth in Health and Safety Code section 1373.65(f)
|
11.
|
Provider shall maintain all records and provide all information to the Health Plan or the DMHC as may be necessary for compliance by the Health Plan with the provisions of the Knox-Keene Health Care Service Plan Act of 1975, as amended and any regulations promulgated thereunder. To the extent feasible, all such records shall be located in this state. Provider shall retain such records for at least two years: this obligation shall not terminate upon termination of the Agreement, whether by rescission or otherwise. (Health and Safety Code section 1381) (Rule 1300.67.8(b))
|
12.
|
Provider shall afford Health Plan and the DMHC access at reasonable times upon demand to the books, records and papers of Provider relating to health services provided to Members and subscribers, to the cost thereof, to payments received by Provider from Members and subscribers of the Health Plan (or from others on their behalf), and, unless Provider is compensated on a fee-for-services basis, to the
|
13.
|
Provider shall not and is hereby prohibited from demanding surcharges from Members for Covered Services. Should Health Plan receive notice of any such surcharges by Provider, Health Plan may take any action it deems appropriate including but not limited to demanding repayment by Provider to Members of any surcharges, terminating this Agreement, repaying surcharges to Members and offsetting the cost of the same against any amounts otherwise owing to Provider. (Rule 1300.67.8(d))
|
14.
|
Upon Health Plan’s request, provider shall report all co-payments paid by Members to provider. (Health and Safety Code section 1385)
|
15.
|
To the extent that any of Health Plan’s quality assurance functions are delegated to Provider, Provider shall promptly deliver to Health Plan all information requested for the purpose of monitoring and evaluating Provider’s performance of those quality assurance functions. (Rule 1300.70)
|
16.
|
Provider may utilize Health Plan’s Provider Dispute Resolution Process by phoning or writing the Provider Services Department, Molina Medical Centers, Third Floor, One Golden Shore Drive, Long Beach, CA 90802 (800) 526-8196, ext. 1249. The Provider Dispute Resolution Process, however, does not and cannot serve as an appeal process from any fair hearing proceeding held pursuant to Health and Safety Code Section 809, et. seq. Please see the Provider Manual for more information regarding the dispute resolution process. (Health and Safety Code Section 1367(h).) (Rule 1300.71.38)
|
17.
|
Provider shall display in each reception and waiting area a notice informing Members how to contact their health plan, file a complaint with their plan, obtain assistance from the DMHC, and seek an independent medical review. (Rule 1300.67.8(f))
|
18.
|
Provider shall provide grievance forms and assist Members in filing grievances. Provider shall cooperate with Health Plan in responding to Member grievances and requests for independent medical reviews. (Rule 1300.68(b))
|
19.
|
In the event a Member seeks and obtains a recovery from a third party or a third party’s insurer for injuries caused to that Member, and only to the extent permitted by the Member’s evidence of coverage and by California law, Provider may have the right to assert a third party lien for and to recover from the Member the reasonable value of Covered Services provided to the Member by Provider for the injuries caused by the third party. Health Plan shall similarly have the right to assert a lien for and recover for payments made by Health Plan for such injuries. Provider shall cooperate with Health Plan in identifying such third party liability claims and in providing such information. Pursuit and recovery of under third party liens shall be conducted in accordance with California Civil Code section 3040.
|
20.
|
The Provider Manual may be unilaterally amended or modified by Health Plan to maintain consistency and/or compliance with any state or federal law, policy, directive, or government sponsored program requirement upon forty-five (45) business days’ notice to Provider unless a shorter timeframe is necessary for compliance. Health Plan may otherwise materially amend the Provider Manual only after forty-five (45) business days prior written notice to Provider and only if mutually agreed to by the parties as evidenced by the amendment being executed by each party.
|
21.
|
Notwithstanding any other provision in this Agreement, if Health Plan or Health Plan’s capitated provider is not the primary payer under coordination of benefits, Provider may submit claims to Health Plan or Health Plan’s capitated provider within ninety (90) days from the date of payment or date of contest, denial or notice from the primary payer. Except as otherwise provided by law or provided by government sponsored program requirements, any claims that are not submitted by Provider to Health Plan within ninety (90) days from the date of payment or date of contest, denial or notice from the primary payer shall not be eligible for payment, and Provider hereby waives any right to payment therefore.
|
22.
|
Notwithstanding any other provision in this Agreement, if Health Plan or Health Plan’s capitated provider denies a claim because it was filed beyond the claim filing deadline, Health Plan will, upon Provider’s submission of a provider dispute pursuant to Title 28, California Code of Regulations, section 1300.71.38 and the demonstration of good cause for the delay, accept, and adjudicate the claim according to California Health & Safety Code section 1371 or 1371.35, whichever is applicable, and the California Code of Regulations.
|
1.1
|
“Cash-to-Claims Ratio”
is Provider’s cash, readily available marketable securities and receivables, excluding all risk pool, risk-sharing, incentive payment program and pay-for-performance receivables, reasonably anticipated to be collected within sixty (60) days divided by Provider’s unpaid claims liability. Unpaid claims liability is claims payable plus incurred but not reported claims (“IBNR”).
|
1.2
|
“Contracted Plans”
means
all full-service health care service plans as defined in Section 1345(f) of the California Health & Safety Code with which Provider has contracts involving a Risk Arrangement.
|
1.3
|
“Corrective Action Plan" (“CAP”)
means a plan reflected in a document containing requirements for correcting and monitoring Provider's efforts to correct any financial solvency deficiencies in the Grading Criteria, financial deficiencies or other claims payment deficiencies, determined through the DMHC’s review or audit process, indicating that Provider may lack the capacity to meets its contractual obligations consistent with the requirements of Rule 1300.70(b)(2)(H)(1).
|
1.4
|
“DMHC”
means the California Department of Managed Health Care.
Whenever the Solvency Regulations reference the Department, that reference includes the DMHC or its External Party.
|
1.5
|
“External Party”
means the DMHC or its designated agent, which may be contracted or appointed to fulfill the functions stated in these Solvency Regulations.
|
1.6
|
“Grading Criteria”
means the four grading/reviewing criteria specified in Health and Safety Code sections 1375.4(b)(1)(A)(i), (ii), (iii), and (iv) and the C
ash-to-Claims Ratio as defined above
.
|
1.7
|
“Risk Arrangement”
is defined to include both "risk-sharing arrangement" and "risk-shifting arrangement," which are defined as follows:
|
(a)
|
Risk-Sharing Arrangement means any compensation arrangement between Provider and Health Plan under which Provider shares the risk of financial gain or loss with Health Plan.
|
(b)
|
Risk-Shifting Arrangement means a contractual arrangement between Provider and Health Plan under which Health Plan pays Provider on a fixed, periodic or capitated basis, and the financial risk for the cost of services provided pursuant to the contractual arrangement is assumed by Provider.
|
1.8
|
"Solvency Regulations"
means Rules 1300.75.4 through 1300.75.4.8 .
|
2.1
|
Monthly Membership Reports
. Notwithstanding any different provisions of the Agreement, Health Plan will provide the following information to Provider on a monthly basis for members assigned to Provider, within ten (10) calendar days following the start of each month:
|
(a)
|
Membership information containing at least the following elements for each member: i) identification number; ii) name; iii) birth date; iv) gender; v) address (including zip code); vi) benefit plan selected; vii) employer group identification (name and number); viii) identity of other third party coverage (if known); ix) dates of enrollment/disenrollment from Provider; x) Provider number; xi) primary care physician selected; xii) primary care physician effective date; xiii) type of change to coverage; xiv) co-payment amounts; xv) deductible (if applicable); xvi) amount of monthly capitation payment.
|
(b)
|
The following additional information: i) member additions and terminations for the month (including at least: member name, member identification number); ii) number of additional members under each managed care plan; iii) number of terminated members under each managed care plan.
|
(c)
|
Health Plan shall submit the information from Section 2.1(a) and 2.1(b) to Provider electronically, unless both Health Plan and Provider agree in writing that hard copy reports will be submitted instead.
|
(d)
|
If the information from Section 2.1(a) and 2.1(b) above is provided to Provider in more than one report, all reports shall be processed by Health Plan on the same date.
|
(e)
|
Within forty-five (45) calendar days of the close of each calendar quarter, Health Plan shall disclose to Provider a reconciliation of any variances between the reports for information listed in sections 2.1(a) and 2.1(b) above through electronic transmission, or in hard copy if mutually agreed upon by Provider and Health Plan.
|
2.2
|
Intentionally Left Blank.
|
2.3
|
Intentionally Left Blank.
|
2.4
|
Annual Financial Risk Disclosure
. On the Agreement anniversary date each year, Health Plan shall disclose to Provider the financial risk assumed under the Agreement by providing to Provider the following information for each and every type of Risk Arrangement (including, but not limited to, Medicare Advantage, Medi-Cal, commercial, point of service, small group, and individual plans) covered under the Agreement:
|
(a)
|
A matrix of responsibility for medical expenses (physician, institutional, ancillary, and pharmacy) which will be allocated to Provider, a hospital(s) or Health Plan under the Risk Arrangement.
|
(b)
|
Expected/projected utilization rates and unit costs for each major expense service group (inpatient, outpatient, primary care physician, specialist, pharmacy, injectables, home health, durable medical equipment, ambulance and other), as well as the source of the data and the actuarial methods employed in determining the utilization rates and unit costs by each and every type of Risk Arrangement.
|
2.5
|
Annual Disclosure of Capitation Payments
. On the Agreement anniversary date each year, Health Plan shall disclose to Provider the amount of capitation payments to be paid per member per month.
|
2.6
|
Capitation Deduction Detail
. Health Plan shall provide to Provider sufficient details to allow Provider to verify the accuracy and appropriateness of any deductions from capitation payments made by Health Plan including, but not
|
3.1
|
Cash-to-Claims Ratio
. Provider shall maintain at least the following Cash-to-Claims Ratio:
|
(a)
|
0.60 – January 1, 2006 through June 30, 2006
|
(b)
|
0.65 – July 1, 2006 through December 31, 2006
|
(c)
|
0.75 – January 1, 2007 and thereafter
|
3.2
|
Quarterly Financial Survey
. No later than forty-five (45) calendar days following the close of each quarter of its fiscal year beginning on or after July 1, 2005, Provider agrees to submit a quarterly financial survey report in an electronic format to the DMHC as required by Rule 1300.41.8 of Title 28 of the California Code of Regulations as set forth below:
|
(a)
|
The quarterly financial survey report shall include the following if Provider has at least 10,000 covered lives under all Risk Arrangements as of December 31 of the preceding calendar year:
|
(i)
|
A Financial survey report, (including a balance sheet, an income statement and a statement of cash flows), or comparable financial statements if Provider is a nonprofit entity, and supporting schedule information (including, but not limited to, aging of receivable information), reflecting the results of operations for the immediately preceding quarter, prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). Financial survey reports must be on a combining basis with an affiliate, if Provider or such Provider affiliate is legally or financially responsible for payment of Provider’s claims. Any affiliated entity included in this
|
(ii)
|
A claims report, which includes the percentage of claims that have been timely reimbursed, contested or denied during the quarter by Provider in accordance with the requirements of sections 1371 and 1371.35 of the California Health & Safety Code, Rule 1300.71, and any other applicable state and federal laws and regulations. If less than ninety-five percent (95%) of all complete claims have been reimbursed, contested or denied on a timely basis, the claims report must also describe the reasons why Provider’s claims adjudication process is not meeting the requirements of applicable law, any actions taken to correct the deficiency, and any results of the actions. This claims report is for the purpose of monitoring the financial solvency of Provider and is not intended to change or alter existing state and federal laws and regulations relating to claims payment settlement practices and timeliness.
|
(iii)
|
A statement as to whether or not Provider has estimated and documented, on a monthly basis, its liability for (“IBNR”) claims in accordance with Rule 1300.77.2 ("IBNR Statement") and that these estimates are the basis for the quarterly financial survey report submitted to the DMHC. If the estimated and documented liability is not in compliance with Rule 1300.77.2 in any way, the IBNR Statement shall describe in detail for each deficiency the nature of the deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and any results of those actions. Provider’s failure to: (1) estimate and document, on a monthly basis, its liability for IBNR claims or (2) maintain its books and records on an accrual accounting basis shall result in Provider’s failure to maintain, at all times, positive tangible net equity (“TNE”) and positive working capital as set forth in section 3.2(a)(iv) below.
|
(iv)
|
A statement as to whether or not Provider has maintained at all times throughout the quarter (1) a positive TNE as defined in Rule 1300.76(e) and (2) a positive level of working capital, calculated according to GAAP (“TNE/Working Capital Statement”). If either the required TNE or the required working capital has not been maintained at all times, a statement must be included in the quarterly financial survey report that describes in detail the nature of the deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and any results of those actions. Provider may reduce its liabilities or increase its cash for purposes of calculating its TNE, working capital and Cash-to-Claim Ratio in a manner allowed by Health and Safety Code Section 1375.4(b)(1)(B) so long as the sponsoring organization has filed with the DMHC: (1) its audited annual financial statements within one hundred twenty (120) calendar days of the end of the sponsoring organization’s fiscal year and (2) a copy of the written guarantee meeting the requirements of Health and Safety Code Rule 1375.4(b)(1)(B). For purposes of the Health and Safety Code Rule 1375.4(b)(1)(B), a sponsoring organization shall have a TNE of at least twice the total of all amounts that it has guaranteed to all persons and entities, or TNE in a lesser amount approved by the DMHC, in situations where Provider can demonstrate to the DMHC’s satisfaction that a lesser amount of TNE is sufficient. If Provider has a sponsoring organization, Provider shall provide a statement demonstrating the capacity of the sponsoring organization to guarantee Provider’s debts as well as the nature and scope of the guarantee provided consistent with Health and Safety Code Section 1375.4(b)(1)(B).
|
(v)
|
For the quarter beginning on or after January 1, 2006, a statement as to whether or not Provider has, at all times during the quarter, maintained a Cash-to-Claims Ratio as required in section 3.1 above, calculated in a manner consistent with GAAP. If the required Cash-to-Claims Ratio has not been maintained at all times, a statement shall be included in the quarterly financial survey report that describes in detail the nature of the deficiency, the reasons for the deficiency, any action taken to correct the deficiency, and any results of that action.
|
(b)
|
The quarterly financial survey report shall include the following if Provider has fewer than 10,000 covered lives under all Risk Arrangements as of December 31 of the preceding calendar year:
|
(i)
|
The disclosure statements set forth in sections 3.2(a)(ii),(iii), (iv) and (v) above.
|
(ii)
|
In the event Provider serves fewer than 10,000 covered lives under all Risk Arrangements and it: (i) fails to satisfactorily demonstrate its compliance with the Grading Criteria; (ii) experiences an event that materially alters its ability to remain compliant with the Grading Criteria; (iii) is found, by the DMHC’s (or the DMHC’s designee’s) review or audit activities, to potentially lack sufficient financial capacity to continue to accept financial risk for the delivery of health care services consistent with the requirements of Rule 1300.70(b)(2)(H)(1); or (iv) is found, through the DMHC’s HMO Help Center, medical audits and surveys, or any other source, to be delaying referrals, authorizations, or access to basic health care services based on financial considerations, Provider shall, within thirty (30) calendar days of the DMHC’s written request, begin submitting all quarterly financial survey reports set forth in sections 3.2(a) above.
|
3.3
|
Annual Financial Survey
. Provider agrees to submit to the DMHC on a yearly basis, not more than one hundred fifty (150) calendar days after the close of Provider’s fiscal year beginning on or after January 1, 2005, annual financial survey reports, in an electronic format determined by the DMHC as required by Rule 1300.41.8, based upon Provider’s annual audited financial statement prepared in accordance with generally accepted auditing standards and containing all of the following:
|
(a)
|
An annual financial survey report, based upon Provider’s annual audited financial statements, (including at least a balance sheet, an income statement, a statement of cash flows, and footnote disclosures) or comparable financial statements if Provider is a nonprofit entity, and supporting schedule information, (including, but not limited to, aging of receivable information
|
(b)
|
The financial survey reports of Provider shall be on a combining basis with an affiliate if Provider or such affiliate is legally or financially responsible for the payment of Provider’s claims. Any affiliated entity included in the report shall be separately identified. Provider’s use of: (1) a “sponsoring organization” arrangement to reduce its liabilities for the purposes of calculating TNE and working capital or (2) an affiliated entity to provide claims processing services shall not be construed to automatically create a legal or financial obligation to pay Provider’s claims liability. When combined financial statements are required, the independent accountant's report or opinion must address all the entities included in the combined financial statements. If the accountant's report or opinion makes reference to the fact that another auditor performed a part of the examination, Provider shall also file the report or opinion issued by the other auditor.
|
(c)
|
Opinion of an independent certified public accountant indicating whether Provider’s annual audited statements present fairly, in all material respects, the financial position of Provider and whether the financial statements were prepared in accordance with GAAP. If the opinion is qualified in any way, the survey report shall include an explanation regarding the nature of the qualification.
|
(d)
|
An IBNR Statement consistent with the requirements outlined in section 3.2(a)(iii) of this Amendment. If the estimated and documented liability is not in compliance with Rule 1300.77.2 in any way, the IBNR Statement shall describe in detail for each deficiency the nature of the deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and any results of those actions. Provider’s failure to: (1) estimate and document, on a monthly basis, its liability for IBNR claims or (2) maintain its books and
|
(e)
|
A TNE/Working Capital Statement consistent with the TNE reporting requirements as outlined in Section 3.2(a)(iv) of this Amendment. If either the required TNE or the required working capital has not been maintained at all times, the TNE/Working Capital Statement shall describe in detail the nature of the deficiency, the reasons for the deficiency, any actions taken to correct the deficiency, and any results of those actions. Provider may reduce its liabilities for purposes of calculating its TNE and working capital in a manner as required by Rule 1300.41.8 and as outlined in section 3.2(a)(iv) of this Amendment.
|
(f)
|
For fiscal years beginning on or after January 1, 2006, a statement as to whether or not Provider has at all times during the year maintained a Cash-to Claims Ratio as required in section 3.1 above, calculated in a manner consistent with GAAP. If the required Cash-to-Claims Ratio has not been maintained at all times, a statement shall be included in the quarterly financial survey report that describes in detail the nature of the deficiency, the reasons for the deficiency, any action taken to correct the deficiency, and any results of that action.
|
(g)
|
A statement as to whether Provider maintains reinsurance and/or professional stop-loss coverage.
|
(h)
|
A copy of Provider’s complete annual audited financial statement, including footnotes and the certificate or opinion of the independent certified public accountant.
|
3.4
|
Annual Statement of Organization Survey
. Provider shall submit to the DMHC a "Statement of Organization," in an electronic format determined by the DMHC to be filed with Provider's annual financial survey report. Such Statement of
|
(a)
|
Name and address of Provider;
|
(b)
|
Financial
and
public contact person, with title, address, telephone, fax and e-mail address;
|
(c)
|
A list of all health plans with which Provider has Risk Arrangements;
|
(d)
|
Type of Provider: Independent Practice Association (IPA), Medical Group, Foundation or other entity, or some combination. If Provider is a foundation, identify each and every medical group within the foundation and whether any of those medical groups independently qualifies as a risk-bearing organization as defined in Health and Safety Code Section 1375.4(g).
|
(e)
|
Corporate status: professional corporation, partnership, not-for-profit corporation, sole proprietor or other form of business;
|
(f)
|
The name, address and principal officer of each of Provider’s affiliates as defined in Rule 1300.45(c)(1) and (2);
|
(g)
|
Whether Provider is partially or wholly owned by a hospital or hospital system;
|
(h)
|
A matrix listing all major categories of medical care offered by Provider, including but not limited to anesthesiology, cardiology, orthopedics, ophthalmology, oncology, obstetrics/gynecology, and radiology, and next
|
(i)
|
An approximation of the number of enrollees served by Provider through Risk Arrangements, pursuant to a list of ranges developed by the DMHC;
|
(j)
|
The name of any Management Services Organization (“MSO”) that Provider contracts with for administrative services;
|
(k)
|
Total number of contracted physicians in employment and/or contractual arrangements with Provider;
|
(l)
|
Disclosure by California county or counties of Provider’s primary service area (excluding out-of-area tertiary facilities and providers);
|
(m)
|
Provider’s address, telephone number and website link, if available, where providers may access written information and instructions for filing of provider disputes with Provider’s dispute resolution mechanism consistent with requirements of Rule 1300.71.38;
|
(n)
|
Any other information which the DMHC deems reasonable and necessary, as permitted by law, to understand the operational structure and finances of Provider.
|
3.5
|
Attestation
. Provider shall submit a written verification for each report made under Sections 3.2, 3.3, and 3.4 of this Amendment stating that the report is true and correct to the best knowledge and belief of a principal officer of Provider, and signed by a principal officer, as defined by Rule 1300.45(o).
|
3.6
|
Notification to DMHC & Health Plan
. Provider agrees to notify the DMHC and Health Plan no later than five (5) business days from discovering that Provider has experienced any event that materially alters its financial situation or threatens its solvency.
|
3.7
|
DMHC Evaluation of Provider
. Provider shall:
|
(a)
|
Permit the DMHC to make any examination that it deems reasonable and necessary to implement section 1375.4 of the Health and Safety Code, and provide to the DMHC for inspection and copying, upon request, any books or records that the DMHC deems relevant or useful in such examination, as permitted by law.
|
(b)
|
Comply with the DMHC’s review and audit process that is used to determine Provider’s compliance with the Grading Criteria.
|
(c)
|
Permit the DMHC to obtain and evaluate supplemental financial information pertaining to Provider when:
|
(i)
|
Provider fails to satisfactorily demonstrate its compliance with the Grading Criteria;
|
(ii)
|
Provider experiences an event that materially alters its ability to remain compliant with the Grading Criteria;
|
(ii)
|
The External Party’s review or audit process indicates that Provider may have insufficient financial capacity to continue to accept financial risk for the delivery of health care services consistent with the requirements of Rules 1300.70(b)(2)(H)(1);
|
(iv)
|
The DMHC receives information from complaints submitted to the HMO Help Center, Health Plan reporting, medical audits and surveys or any other source that indicates Provider may be delaying referrals or authorizations or failing to meet access standards for basic health care services based on financial considerations.
|
4.1
|
Corrective Action Plans
. Provider and Health Plan shall comply with the DMHC’s Corrective Action Plan (“CAP”) process as set forth below.
|
(a)
|
Beginning with the financial survey submission filed for the third quarter of calendar year 2005, in the event Provider has deficiencies in any of the Grading Criteria, it shall simultaneously submit a self-initiated CAP proposal, in an electronic format developed by the DMHC, to the DMHC and Health Plan that meets the following requirements:
|
(i)
|
Identifies the Grading Criteria that Provider has failed to meet;
|
(ii)
|
Identifies the amount by which Provider has failed to meet the Grading Criteria;
|
(ii)
|
Identifies Health Plan and other Contracted Plans, including the identification of the name, title, telephone and facsimile numbers, and postal and e-mail addresses for the person responsible at Health Plan and each Contracted Plan for monitoring compliance with the CAP;
|
(iv)
|
Describes the specific actions Provider has taken or will take to correct the identified deficiencies, including any written representations made by Health Plan and/or other Contracted Plans to assist Provider in the implementation of its CAP. The actions shall be appropriate and reasonable in scope and breadth depending upon the nature and degree of the deficiency, and acceptable to the DMHC;
|
(v)
|
Describes the timeframe for completing the corrective action and specifies a schedule for submitting progress reports to the DMHC, Health Plan and all other Contracted Plans. All corrective actions must be completed within the following timeframes, unless an extension is approved in writing by the DMHC:
|
(A)
|
Timeframes for correcting working capital deficiencies shall not exceed 12 months;
|
(B)
|
Timeframes for correcting TNE deficiencies shall not exceed 12 months;
|
(C)
|
Timeframes for correcting IBNR deficiencies shall not exceed three (3) months;
|
(D)
|
Timeframes for correcting claims timeliness deficiencies shall not exceed six (6) months;
|
(E)
|
Timeframes for correcting cash-to-claims ratio deficiencies shall not exceed twelve (12) months.
|
(vi)
|
Identifies the name, title, telephone and facsimile numbers, and postal and e-mail addresses for the person responsible at Provider for ensuring compliance with the CAP;
|
(vii)
|
Describes:
|
(A)
|
Provider’s patient record retention and storage policies;
|
(B)
|
The procedures and the steps Provider will take to ensure that patient medical records are appropriately stored and maintained;
|
(C)
|
The procedures and the steps Provider will take to ensure that patient medical records will be readily available and transferable to patients in the event Provider ceases operations or Provider fails to meet its obligations set forth in the CAP. At a minimum, Provider’s patient medical records policies and procedures shall be consistent with existing laws relating to the responsibilities for the preservation and maintenance of medical records and the protection of the confidentiality of medical information.
|
(b)
|
Notwithstanding section 4.1(a) above, Provider shall not be required to submit a CAP if Provider proactively demonstrates to the DMHC’s written satisfaction that necessary and prudent capital investments have or may cause a temporary deficiency in Provider’s TNE, working capital or Cash-to-Claims Ratios and that Provider has implemented an appropriate business plan that will correct the deficiency within a reasonable time period without causing a deficiency in its claim payment timeliness.
|
(c)
|
To the extent possible, the self-initiated CAP proposal shall be set forth in a single document that addresses the concerns of Health Plan and all other Contracted Plans.
|
(d)
|
The self-initiated CAP shall be considered a final CAP, subject to the DMHC’s approval process as set forth in section 4.1(j) below, unless, within fifteen (15) calendar days of the receipt of Provider’s self-initiated CAP proposal, Health Plan or another Contracted Plan provides written notice to the DMHC and Provider stating the reason for its objections and recommendations for revisions,
|
(e)
|
In the event that Health Plan or another Contracted Plan files a written objection with the DMHC and Provider, Provider shall within twenty (20) calendar days: (1) implement all corrective action strategies contained in its self-initiated CAP proposal that were not objected to by Health Plan or another Contracted Plan; and (2) submit to Health Plan, all other Contracted Plans and the DMHC a revised CAP proposal that addresses the concerns raised by the objecting Contracted Plan(s), including Health Plan. To the extent possible, the revised CAP proposal shall be prepared as a single document that addresses the concerns of Health Plan and all other Contracted Plans.
|
(f)
|
Health Plan shall have ten (10) calendar days to submit to Provider and the DMHC its objections and recommended revisions, in an electronic format determined by the DMHC, to the self-initiated revised CAP proposal.
|
(g)
|
Within fifteen (15) calendar days of receipt of Health Plan’s or any other Contracted Plan’s objections and recommended revisions to the revised CAP proposal, the DMHC shall schedule a meeting (“CAP Settlement Conference”) with Provider, Health Plan and all other Contracted Plans to discuss and reconcile the differences.
|
(h)
|
Within seven (7) calendar days of the CAP Settlement Conference, Provider shall submit a final self-initiated CAP proposal to Health Plan and the DMHC.
|
(i)
|
Within ten (10) calendar days of receipt of Provider’s final self-initiated CAP proposal, the External Party shall submit its recommendation to the DMHC to approve, disapprove or modify Provider’s final self-initiated CAP proposal.
|
(j)
|
Within ten (10) calendar days of receipt of the External Party’s recommendation, the DMHC shall approve, disapprove or modify Provider’s final self-initiated CAP proposal, which shall then become the final CAP. If the DMHC does not act upon the recommendations of the External Party within ten (10) calendar days, the External Party’s recommendation shall be deemed approved.
|
(k)
|
A final CAP shall remain in effect until Provider demonstrates compliance with the requirements of the CAP, or the CAP expires in accordance with its own terms.
|
(l)
|
In addition to the CAP requirements specified in section 4.1(a) above, the DMHC may direct Provider to initiate a CAP whenever it determines that Provider has experienced an event that materially alters its ability to remain compliant with the Grading Criteria or when the DMHC’s review process indicates that Provider may lack sufficient financial capacity to meet its contractual obligations consistent with the requirements of Rule 1300.70(b)(2)(11)(1).
|
(m)
|
Provider shall submit to the DMHC and Health Plan each periodic progress report prepared pursuant to a final CAP, and shall include a written verification stating that the periodic progress report is true and correct to the best knowledge and belief of a principal officer of Provider, as defined by Rule 1300.45(o) of Title 28 California Code of Regulations.
|
(n)
|
Provider shall advise Health Plan and the DMHC in writing within five (5) calendar days if Provider experiences an event that materially alters Provider’s ability to remain compliant with the requirements of a final CAP.
|
(o)
|
Upon request from the DMHC, Provider shall provide additional documentation to the DMHC and Health Plan to demonstrate Provider’s progress towards fulfilling the requirements of a CAP.
|
(p)
|
All draft, preliminary and final CAPs and all CAP compliance reports required by a final CAP, including supporting documentation and supplemental financial information, submitted to the DMHC shall be received and maintained on a confidential basis by Health Plan and shall not be disclosed, except as allowed or required under this Amendment.
|
(1)
|
Provider shall accept and adjudicate claims for health care services provided to plan enrollees in accordance with the provisions of sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.38, 1371.4, and 1371.8 of the Health and Safety Code and Rules 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4.
|
(2)
|
Provider shall establish and maintain a fair, fast and cost-effective dispute resolution mechanism to process and resolve provider disputes in accordance with the provisions of sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.38, 1371.4, and 1371.8 of the Health and Safety Code and Rules 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4.
|
(3)
|
Provider shall submit a Quarterly Claims Payment Performance Report (“Quarterly Claims Report") to Health Plan within thirty (30) days of the close of each calendar quarter. The Quarterly Claims Report shall, at a minimum, disclose Provider's compliance status with sections 1371, 1371.1, 1371.2, 1371.22, 1371.35, 1371.36, 1371.37, 1371.4, and 1371.8 of the Health and Safety Code and Rules 1300.71, 1300.71.38, 1300.71.4, and 1300.77.4.
|
(4)
|
Provider shall make available to Health Plan and the DMHC all records, notes and documents regarding its provider dispute resolution mechanism(s) and the resolution of its provider disputes.
|
(5)
|
Any provider that submits a claim dispute to Provider's dispute resolution mechanism(s) involving an issue of medical necessity or utilization review shall have an unconditional right of appeal for that claim dispute to Health Plan's dispute resolution process for a de novo review and resolution for a period of 60 working days from Provider's Date of Determination, pursuant to the provisions of Rule 1300.71.38(a)(4).
|
(6)
|
In the event Provider fails to timely and accurately reimburse its claims (including the payment of interest and penalties), Health Plan and Provider shall attempt to establish an approved corrective action plan consistent with section 1375.4(b)(4) of the Health and Safety Code. Health Plan shall have the authority to assume processing and timely reimbursement of Provider’s claims while the parties are attempting to establish a corrective action plan. In the event Health Plan and Provider fail to agree upon an approved corrective action plan or if Provider fails to comply with the corrective action plan, Health Plan shall have the authority to assume responsibility for the processing and timely reimbursement of Provider’s claims. Health Plan shall recover any such amounts paid by way of offset or recoupment from current or future amounts due Provider.
|
(7)
|
In the event Provider fails to timely resolve its provider disputes including the issuance of a written decision, Health Plan and Provider shall attempt to establish an approved corrective action plan consistent with section 1375.4(b)(4) of the Health and Safety Code. Health Plan shall have the authority to assume responsibility for the administration of the Provider's dispute resolution mechanism(s) and for the timely resolution of provider disputes while the parties are attempting to establish a corrective action plan. In the event Health Plan and Provider fail to agree upon an approved corrective action plan or if Provider fails to comply with the corrective action plan, Health Plan shall have the authority to assume responsibility for the administration of the Provider's dispute resolution mechanism(s) and for the timely resolution of provider disputes.
|
1.
|
All Medicaid covered services are set forth in Attachment C and the Provider Manual as set forth in this Agreement. (Rule 53250(c)(1))
|
2.
|
This Agreement shall be governed by and construed in accordance with all laws, regulations and contractual obligations incumbent upon the Health Plan. (Rule 53250(c)(2))
|
3.
|
This Agreement shall become effective upon approval by the Department of Health Care Services (“DHCS”) in writing, or by operation of law where the DHCS has acknowledged receipt of this Agreement and has failed to approve or disapprove the Agreement within 60 days of receipt. (Rule 53250(c)(3))
|
4.
|
Amendments to this Agreement shall be submitted to the DHCS, for prior approval, at least thirty (30) days before the effective date of any proposed changes governing compensation, services or term. Proposed changes which are neither approved nor disapproved by the DHCS, shall become effective by operation of law thirty (30) days after the DHCS has acknowledged receipt, or upon the date specified in the Amendment, whichever is later. (Rule 53250(c)(3))
|
5.
|
Provider agrees to submit all reports required and requested by Health Plan, in a form acceptable to Health Plan. (Rule 53250(c)(5))
|
6.
|
Provider shall make all of its books and records, pertaining to the goods and services furnished under the terms of this Agreement, available for inspection, examination or copying:
|
a.
|
By the DHCS, the United States Department of Health and Human Services, the DMHC, and the Department of Justice;
|
b.
|
At all reasonable times, at Provider’s place of business or at such other mutually agreeable location in California;
|
c.
|
In a form maintained in accordance with the general standards applicable to such book or record keeping;
|
d.
|
For a term of at least five years from the close of the fiscal year in which the date of service occurred, in which the record or data was created or applied, and for which the financial record was created;
|
e.
|
Including all encounter data for a period of at least five years. (Rule 53250(e)(1))
|
7.
|
Provider agrees to notify the DHCS in the event that this Agreement is amended or terminated. Notice to the DHCS shall be considered given when properly addressed and deposited in the United States Postal Service as First Class Registered Mail, postage attached. (Rule 53250(e)(4))
|
8.
|
Provider shall maintain and make available to the DHCS, upon request, copies of all subcontracts and shall ensure that all subcontracts are in writing and require that subcontractors:
|
a.
|
Make all applicable books and records available at all reasonable times for inspection, examining or copying by the DHCS, the U.S. Department of Health and Human Services, the DMHC, and the Department of Justice;
|
b.
|
Retain such books and records for a term of at least five years from the fiscal year in which the date of service occurred, in which the record or data was created or applied, and for which the financial record was created. (Rule 53250(e)(3))
|
9.
|
Provider agrees that any assignment or delegation of this Agreement shall be void unless prior written approval is obtained from the DHCS in those instances where prior approval by the DHCS is required. (Rule 53250(e)(5))
|
10.
|
Provider agrees to hold harmless both the State of California and Health Plan members in the event that Health Plan cannot or will not pay for services performed by Provider pursuant to this Agreement. (Rule 53250(e)(6))
|
11.
|
Provider shall assist Health Plan in the transfer of care in the event Health Plan’s Two-Plan Model Contract with the DHCS expires or terminates. Providers shall assist Health Plan in the transfer and care in the event this Agreement expires or terminates for any reason.
|
12.
|
Provider shall not attempt recovery in circumstances involving casualty insurance, tort liability or workers’ compensation. Provider shall report to the DHCS within ten (10) days after discovery any circumstances which may result in casualty insurance payments, tort liability payments, or workers’ compensation award. (Rule 53222(b))
|
13.
|
Provider shall disclose the names of the officers and owners of Provider, stockholders owning more than ten percent (10%) of the stock issued by Provider, if any, and major creditors holding more than five percent (5%) of the debt of Provider. For that purpose, Provider shall use the Disclosure Form made available by Health Plan. (W&I Code section 14452(a))
|
14.
|
Provider acknowledges that Health Plan bears significant risk by assuming financial responsibility for all in-patient hospitalization expenditures, including expenditures for services connected with the period of hospitalization. (Rule 53251(c) & (e))
|
15.
|
Non-Discrimination Clause.
|
16.
|
Provider agrees to arrange for the provision of interpreter services for Members at all provider sites.
|
17.
|
Nothing in this Agreement shall be interpreted in any manner to terminate or diminish Health Plan’s independent obligations to the State of California under one or more of its contracts with the Department of Health Care Services.
|
A.
|
Provider shall pay for Emergency Services received by a Member from non-contracting providers. Payments to non-contracting providers shall be for the treatment of the emergency medical condition including Medically Necessary services rendered to a Member until the Member's condition has stabilized sufficiently to permit discharge, or referral and transfer in accordance with instructions from Health Plan. Emergency Services shall not be subject to Prior Authorization by Provider or Health Plan. The attending emergency physician, or the provider treating the Member is responsible for determining when the Member is sufficiently stabilized for transfer or discharge. Emergency Services shall not be subject to Prior Authorization by Provider.
|
B.
|
At a minimum, Provider must reimburse the non-contracting emergency department and, if applicable, its affiliated providers for Physician services at the lowest level of emergency department evaluation and management CPT (Physician's Current Procedural Terminology) codes, unless a higher level is clearly supported by documentation, and for the facility fee and diagnostic services such as laboratory and radiology.
|
C.
|
For all other non-contracting providers, reimbursement by Provider for properly documented claims for services rendered by a non-contracting provider pursuant to this provision shall be the lower of the following rates applicable at the time the services were rendered by the non-contracting provider:
|
1)
|
The usual charges made to the general public by the non-contracting provider.
|
2)
|
The maximum Fee-For-Service rates for similar services under the Medi-Cal program.
|
D.
|
Provider shall not refuse to cover reimbursement for Emergency Services rendered by a non-contracting provider based on the emergency room provider, hospital, or fiscal agent not notifying the Member's Primary Care Physician or Provider of the Member's screening and treatment within 10 calendar days of presentation for emergency. Provider shall not limit what constitutes an emergency medical condition solely on the basis of lists of diagnoses or symptoms.
|
E.
|
In accordance with California Code of Regulations, Title 28, Section 1300.71.4, Provider shall approve or disapprove a request for post-stabilization inpatient services made by a non-contracting provider on behalf of a Member within 30 minutes of the request. If Provider fails to approve or disapprove authorization within the required timeframe, the authorization will be deemed approve. Provider is financially responsible for post-stabilization service payment as provided by subprovision C above.
|
F.
|
Disputed Emergency Services claims may be submitted to DHCS, Office of Administrative Hearings and Appeals, 1029 J Street, Suite 200, Sacramento, California 95814 for resolution under the provisions of Welfare and Institutions Code Section 14454 and California Code of Regulations, Title 22, Section
|
1.
|
Downstream Compliance
. Provider agrees to require all of its downstream, related entity(s), and transferees that provide any services benefiting Health Plan’s Medicare enrollees to agree in writing to all of the terms provided herein.
|
2.
|
Right to Audit
. HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, contracts, records, including medical records and documentation that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under Health Plan’s contract with CMS, or as the Secretary may deem necessary to enforce Health Plan’s contract with CMS. Provider agrees to make available, for the purposes specified in this paragraph, its premises, physical facilities and equipment, records relating to its Medicare enrollees, and any additional relevant information that CMS may require. HHS, the Comptroller General, or their designee's right to inspect, evaluate, and audit extends through ten (10) years from the end of the final contract period or completion of audit, whichever is later. (42 CFR 422.504(e)(2), 422.504(e)(3), 422.504(e)(4) and 422.504(i)(2)(ii)).
|
3.
|
Confidentiality
. Provider shall comply with the confidentiality and enrollee record accuracy requirements set forth in 42 CFR 422.118. (42 CFR 422.504(a)(13)).
|
4.
|
Hold Harmless/Cost Sharing.
Provider agrees it may not under any circumstances, including nonpayment of moneys due the providers by the Health Plan, insolvency of the Health Plan, or breach of this Agreement, bill, charge, collect a deposit, seek compensation, remuneration, or reimbursement from, or have any recourse against the
|
5.
|
Delegation
. Health Plan may only delegate activities or functions to a first tier, downstream, or related entity, in a manner that is consistent with the provisions set forth in
Attachment H-1
. Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement shall be consistent and comply with the Health Plan’s contract with CMS. (42 CFR 422.504(i)(3)(iii) and 422.504(i)(4)).
|
6.
|
Prompt Payment
. Health Plan and Provider agree that Health Plan shall pay all clean claims for services that are covered by Medicare within sixty (60) days of the date such claim is delivered by Provider to Health Plan and Health Plan determines such claim is complete/clean. Any claims for services that are covered by Medicare that are not submitted to Health Plan within six (6) months of providing the services that are subject of the claim shall not be eligible for payment, and Provider hereby waives any right to payment therefor. Health Plan reserves the right to deny any claims that are not in accordance with the Medicare Claims Processing Manual and Medicare rules for billing. (42 CFR 422.520(b)).
|
7.
|
Reporting.
Provider agrees to provide relevant data to support Health Plan in complying with the requirements set forth in 42 CFR 422.516 and 42 CFR 422.310. (42 CFR 504(a)(8)).
|
8.
|
Accountability
. Health Plan may only delegate activities or functions to a first tier, downstream, or related entity, in a manner that is consistent with the provisions set forth in
Attachment H-1
. (42 CFR 422.504(i)(3)(ii)).
|
9.
|
Compliance with Medicare Laws and Regulations
. Provider shall comply with all applicable Medicare laws, regulations, and CMS instructions. (42 CFR 422.504(i)(4)(v)).
|
10.
|
Benefit Continuation.
Provider agrees to provide for continuation of enrollee health care benefits (i) for all Members, for the duration of the period for which CMS has made payments to Molina for Medicare services; and (ii) for Members who are hospitalized on the date Molina's contract with CMS terminates, or, in the event of an insolvency, through discharge. (42 CFR 422.504(g)(2)(i), 422.504(g)(2)(ii) and 422.504(g)(3).
|
1.
|
Downstream Compliance.
Provider agrees to require all of its downstream, related entity(s), and transferees that provide any services benefiting Health Plan’s Medicare enrollees to agree in writing to all of the terms provided herein.
|
2.
|
Medicare Compliance
. Provider shall comply with all applicable Medicare laws, regulations, and CMS instructions. (42 CFR 422.504(i)(4)(v)).
|
3.
|
Confidentiality
. Provider shall comply with the confidentiality and enrollee record accuracy requirements set forth in 42 CFR 422.118. (42 CFR 422.504(a)(13)).
|
4.
|
Right to Audit
. HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, contracts, records, including medical records and documentation that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under the contract, or as the Secretary may deem necessary to enforce Health Plan’s contract with CMS. Provider agrees to make available, for the purposes specified in this paragraph, its premises, physical facilities and equipment, records relating to its Medicare enrollees, and any additional relevant information that CMS may require. HHS, the Comptroller General, or their designee's right to inspect, evaluate, and audit extends through ten (10) years from the end of the final contract period or completion of audit, whichever is later. (42 CFR 422.504(e)(2), 422.504(e)(3), 422.504(e)(4) and 422.504(i)(2)(ii)).
|
5.
|
Responsibilities and Reporting Arrangements.
The Agreement specifies the delegated activities and reporting responsibilities. To the extent applicable, Provider shall support Health Plan in complying with the reporting requirements set forth in 42 CFR 422.516 and 42 CFR 310 by providing relevant data . (42 CFR 504(a)(8)).
|
6.
|
Revocation of Delegated Activities
. In the event CMS or Health Plan determines, in its sole discretion, that Provider has not performed the delegated activities or functions satisfactorily, the delegated activities shall be revoked upon not less than five (5) days prior written notice. (42 CFR 422.504(i)(4)(ii)).
|
7.
|
Accountability
Notwithstanding any relationship(s) Health Plan may have with first tier, downstream, and related entities, Health Plan maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its contract with CMS. Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement shall be consistent and comply with the Health Plan’s contract with CMS. (42 CFR 422.504(i)(1) and 422.504(i)(3)(iii)).
|
8.
|
Credentialing.
If Provider is delegated credentialing activities, Provider's credentialing process will be reviewed and approved by Health Plan, and such credentialing process will be audited by Health Plan on an ongoing basis; further, Provider agrees that its credentialing process will comply with all applicable NCQA standards. Health Plan retains the right to approve, suspend, or terminate any credentialing delegation arrangement. (422.504(i)(4) and 422.504(i)(5)).
|
9.
|
Monitoring.
Notwithstanding any relationship(s) Health Plan may have with first tier, downstream, and related entities, Health Plan maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its contract with CMS. Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement shall be consistent and comply with the Health Plan’s contractual obligations. Health Plan shall monitor the performance of first tier, downstream, and related entities. (42 CFR 422.504(i)(1) and 422.504(i)(4)).
|
10.
|
Further Requirements.
Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement shall be consistent and comply with Health Plan’s contractual obligations. If Health Plan delegates selection of the providers, contractors, or subcontractor to another organization, Health Plan retains the right to approve, suspend, or terminate any such arrangement. (42 CFR 422.504(i)(3)(iii), 42 CFR 422.504(i)(4) and 42 CFR 422.504(i)(5)).
|
Name of Individual/Entity
|
Employer Identification Number
|
Social Security Number
|
Faustino Bernadett, MD
|
|
|
Robert Lugliani, MD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No one is listed because there are no individuals or entities with a five (5%) percent or more interest
|
|
No one is listed because the plan is under government ownership.
|
|
No one is listed because the provider of services is a non-profit, public benefit corporation for which there are no outside controlling interests.
|
1.
|
DEFINITIONS
|
2.
|
GENERAL PROVISIONS
|
3.
|
SCOPE OF USE AND DISCLOSURE
|
a.
|
for Business Associate’s proper management and administrative services;
|
b.
|
to carry out the legal responsibilities of Business Associate; and
|
c.
|
to provide data aggregation services relating to the health care operations of Molina Healthcare if required under the Agreement.
|
4.
|
OBLIGATIONS OF BUSINESS ASSOCIATE.
|
a.
|
a brief description of what happened, including the date of the Breach and the date of the discovery of the Breach;
|
b.
|
a description of the types of Unsecured PHI that were involved in the Breach;
|
c.
|
a brief description of what the Business Associate is doing to investigate the Breach, to mitigate harm to individuals, and to protect against any further Breaches.
|
a.
|
To the individual or Molina Healthcare to the extent necessary to permit Molina Healthcare to respond to an individual’s request for access to their PHI for inspection and copying in accordance with 45 CFR § 164.524, to the extent the PHI is maintained in a Designated Record Set;
|
b.
|
To the individual or Molina Healthcare to the extent necessary to permit Molina Healthcare to make an accounting of disclosures of PHI about the individual, in accordance with 45 CFR § 164.528. At a minimum, Business Associate shall provide Health Plan with the following information: (i) the date of the disclosure, (ii) the name of the entity or person who received the PHI, and if known, the address of such entity or person, (iii) a brief
|
5.
|
INDEMNIFICATION
|
6.
|
TERMINATION OF AGREEMENT
|
1.
|
Section 5.11
Attachments (
or equivalent section of the Agreement) is amended to add the following to the list of Attachments which are part of the Agreement:
|
2.
|
Attachment M-Capitated Financial Alignment Demonstration Program Requirements, attached hereto, is hereby added to the Agreement.
|
4.
|
Health Plan and Provider acknowledge that Attachment H, Medicare Program Requirements Healthcare Services, and Attachment H-1, Medicare Program Requirements-Delegated Services, are applicable only to Health Plan's Medicare Advantage (Molina Medicare Options) and Medicare Advantage Special Needs Plan (Molina Medicare Options Plus) programs, and nothing in this Amendment or Agreement shall be construed to apply such requirements to the Medicare-Medicaid Program, otherwise known as the Capitated Financial Alignment Demonstration.
|
5.
|
Health Plan and Provider acknowledge that the Capitated Financial Alignment product is part of the Medicare-Medicaid Program and is not a sub-product under the Medicare or Medicaid Products.
In
the event that the Capitated Financial Alignment Demonstration was categorized as a sub-productunder the Medicare or Medicaid Program in the Agreement or previous Amendments, they will now be treated as a separate product under the Capitated Financial Alignment Demonstration Program.
|
6.
|
Compliance with Applicable Law, section 2.9 (or equivalent section of the Agreement), is modified to add the following subsection, which reads:
|
7.
|
Pursuant to Section 5.6, Amendment, or equivalent section of the Agreement, Health Plan may amend this Agreement to maintain compliance with any state or federal law, policy, directive or government sponsored program by providing forty-five (45) business days' notice, unless a shorter time is necessary for compliance.
|
10.
|
No Other Modifications. Except as provided herein, the terms and conditions of the Agreement shall remain the same, in full force and effect.
|
1.
|
Downstream Compliance. Provider agrees to require all of its first tier, downstream, and related entity(ies) that provide any services benefiting Health Plan's Medicare-Medicaid Program Members to agree in writing to all of the terms provided herein.
|
2.
|
Right to Audit. HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any pertinent information, including books, contracts, computer or other electronic systems, including medical records. Provider agrees to make available, for the purposes specified in this paragraph, its premises, physical facilities and equipment, records relating to its Medicare-Medicaid Program Members, and any additional relevant information that CMS may require. HHS, the Comptroller General, or their designee's right to inspect, evaluate, and audit extends through ten ( 10) years from the end of the final contract period between Health Plan and CMS or completion of audit, whichever is later.
|
6.
|
Delegation. Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement will be consistent and comply with the Health Plan's contract with CMS and DHCS.
|
7.
|
Prompt Payment. Health Plan and Provider agree that Health Plan will pay all Clean Claims for Covered Services, which are determined by Health Plan to be payable, within sixty (60) days of the date
|
8.
|
Reporting. Provider agrees to provide relevant data to support Health Plan in complying with the requirements set forth in 42 CFR 422.516 and 42 CFR 422.310.
|
9.
|
Compliance with Medicare Laws and Regulations. Provider will comply with all federal and state laws, regulations, and CMS instructions.
|
a.
|
Communicated with or advocated on behalf of one or more of his or her prospective, current or former patients regarding the provisions, terms or requirements of the Health Plan's health benefit plans as they relate to the needs of such provider's patients; or
|
b.
|
Communicated with one or more of his or her prospective, current, or former patients with respect to the method by which such provider is compensated by the Health Plan for services provided to the patient.
|
1.
|
Downstream Compliance. Provider agrees to require all of its first tier, downstream, and related entity(s) that provide any services benefiting Health Plan's Medicare-Medicaid Program Members to agree in writing to all of the terms provided herein.
|
5.
|
Responsibilities and Reporting Arrangements. The Agreement specifies the delegated activities and reporting responsibilities, if any. To the extent applicable, Provider will support Health Plan in complying with the reporting requirements set forth in 42 CFR 422.516 and 42 CFR 310 by providing relevant data
.
|
6.
|
Revocation of Delegated Activities. In the event CMS, DHCS or Health Plan determines, in its sole discretion, that Provider has not performed the delegated activities or functions satisfactorily, the delegated activities will be revoked.
|
7.
|
Accountability. Notwithstanding any relationship(s) Health Plan may have with first tier, downstream, and related entities, Health Plan maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its contract with CMS. Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement will be consistent and comply with the Health Plan's contract with CMS.
|
8.
|
Credentialing. If Provider is delegated credentialing activities, Provider's credentialing process will be reviewed and approved by Health Plan, and such credentialing process will be audited by Health Plan on an ongoing basis; further, Provider agrees that its credentialing process will comply with all applicable NCQA standards. Health Plan retains the right to approve, suspend, or terminate any credentialing delegation arrangement.
|
9.
|
Monitoring. Notwithstanding any relationship(s) Health Plan may have with first tier, downstream, and related entities, Health Plan maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its contract with CMS. Any services or other activity performed by a first tier, downstream, or related entity in accordance with a contract or written agreement will be consistent and comply with the Health Plan's contractual obligations. Health Plan will monitor the performance of first tier, downstream, and related entities.
|
A.
|
Whereas
, Health Plan and Provider have previously entered into Group/IPA Provider Services Agreement, as may have been amended from time to time (“Agreement”); and
|
B.
|
Whereas,
Health Plan desires to amend the Agreement in regards to Provider’s compensation for the Capitated Financial Alignment Demonstration product.
|
1.
|
Attachment B, Definitions, is amended to add the following definition:
|
2.
|
Attachment K-2 - CFAD Matrix of Financial Responsibility is hereby added to the Agreement and attached hereto.
|
3.
|
Attachment D-1 - Compensation Schedule for CFAD Members, is hereby added to the Agreement and attached hereto.
|
4.
|
All references in the Agreement which treat the CFAD product as a Medicare product are null and void. The CFAD product is its own separate and distinct product.
|
5.
|
Any reference to additional payments for incentive programs or the preventive care compensation programs shall not be applicable to the CFAD product. If the CFAD product will be eligible for additional compensation, a separate amendment will be issued at a future date.
|
6.
|
Attachment H, Medicare Program Provisions, shall also apply to the Capitated Financial Alignment Demonstration Product for all Medicare services provided under the Capitated Financial Alignment Demonstration Product.
|
7.
|
Use of Defined Terms
. Unless otherwise defined in this Amendment, capitalized terms utilized in this Amendment will have the same meaning(s) ascribed to such terms in the Agreement.
|
8.
|
No Other Modifications.
Except as provided herein, the terms and conditions of the Agreement shall remain the same, in full force and effect.
|
9.
|
Counterparts.
This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
|
By:
|
/s/ F. Bernadett
|
By:
|
/s/ Michelle Espinoza
|
|
|
|
Michelle Espinoza
|
Its:
|
President
|
Its:
|
Vice President, Provider Network Management
|
Date:
|
6/13/2014
|
Date:
|
7/3/14
|
LIST OF BENEFITS/SERVICES
---------------------------------------------------------
¹
These services are provided by or coordinated through the Provider. The Health Plan is not financially responsible for these services.
²
These services are provided by or coordinated through the Health Plan. The Provider is not financially responsible for these services.
³
Should the Provider choose to provide or coordinate these Covered Services, the Provider or any other rendering provider will be reimbursed by the Health Plan on a Fee-For-Service basis. Claims for these services should be billed directly to the Health Plan.
|
Pacific Healthcare IPA Associates, Inc.
1
|
MOLINA
2
|
OTHER COVERED SERVICES
3
|
Abortion
Facility Component
Office/Outpatient Setting Component
Professional Component
|
|
|
X
X
X
|
Acupuncture
|
Not a Covered Service
|
||
Allergy Testing (including serum)
|
X
|
|
|
Alpha-fetoprotein Test
|
|
|
X
|
Ambulance, Air or Ground (Emergency Services)
In Area
Out-of-Area
|
|
X
X
|
|
Amniocentesis
Facility Component
Professional Component
|
X
X
|
|
|
Anesthetics, Administration of
Inpatient
Outpatient
|
X
X
|
|
|
Blood and Blood Products
|
|
X
|
|
Blood Donations
|
|
X
|
|
Blood Donations, Autologous (when Medically Necessary)
|
|
X
|
|
Cancer Drugs (including infusion) and Administration of the Drug in the following settings:
Inpatient Facility Component
Inpatient Professional Component
Cancer Drugs administered in Physician’s Office
Outpatient Facility Component
Outpatient Professional Component
Oral taken By Patient
|
X
X
X
X
|
X
X
|
|
Caregiver Relief: Assist with Member bathing, feeding, dressing and other needs
|
|
X
|
|
Chemical Dependency (Acute Inpatient Overdose Treatment)
Inpatient Facility
Inpatient Professional Component
|
|
X
X
|
|
Chemical Dependency - Detoxification & Rehabilitation (Outpatient Treatment)
Outpatient Professional Component
Outpatient Facility Component
|
|
X
X
|
|
Chiropractic Care
|
X
|
|
|
LIST OF BENEFITS/SERVICES
---------------------------------------------------------
¹
These services are provided by or coordinated through the Provider. The Health Plan is not financially responsible for these services.
²
These services are provided by or coordinated through the Health Plan. The Provider is not financially responsible for these services.
³
Should the Provider choose to provide or coordinate these Covered Services, the Provider or any other rendering provider will be reimbursed by the Health Plan on a Fee-For-Service basis. Claims for these services should be billed directly to the Health Plan.
|
Pacific Healthcare IPA Associates, Inc.
1
|
MOLINA
2
|
OTHER COVERED SERVICES
3
|
Clinical Trials
Inpatient Professional Component
Inpatient Facility Component
Outpatient Professional Component
Outpatient Facility Component
|
|
X
X
X
X
|
|
Custodial Care (In a Skilled Nursing Facility)
|
X
|
||
Dental Services (Routine)
|
|
X
|
|
Dental Services (including treatment of TMJ, when Medically Necessary related to accidental injury or trauma to sound natural teeth and for dental work necessary to construct non-dental structures)
Professional Component
Anesthesia (only when medically indicated)
Facility Component
|
X
X
|
X
|
|
Diabetic Supplies (includes glucose monitors, test strips, lancets, screening tests)
|
|
X
|
|
Dialysis (inclusive of injectables)
Inpatient Facility Component
Outpatient Facility Component
Professional Component
Out-of-Area Routine
|
X
X
X
|
X
|
|
Disease Management
|
|
X
|
|
Drugs/Medications
Inpatient
Outpatient
Prescriptions (Oral Medications)
Injectable Medications
Administered by Home Health Provider
Depo Provera, Lupron, Growth Hormones (administered by Physician’s Office)
Administered in the Physician’s Office - (excluding Depo Provera, Lupron, Growth Hormones)
Infusion Therapy (i.e. TPN. For cancer related drugs or infusion, refer to Cancer Drugs and Administration of Cancer Drugs section in Matrix)
Self Administered
Self Administered Insulin
Vaccinations
|
X
|
X
X
X
X
X
X
X
X
X
|
|
Durable Medical Equipment (DME)
Inpatient
Outpatient Dispensing
|
X
|
X
|
|
LIST OF BENEFITS/SERVICES
---------------------------------------------------------
¹
These services are provided by or coordinated through the Provider. The Health Plan is not financially responsible for these services.
²
These services are provided by or coordinated through the Health Plan. The Provider is not financially responsible for these services.
³
Should the Provider choose to provide or coordinate these Covered Services, the Provider or any other rendering provider will be reimbursed by the Health Plan on a Fee-For-Service basis. Claims for these services should be billed directly to the Health Plan.
|
Pacific Healthcare IPA Associates, Inc.
1
|
MOLINA
2
|
OTHER COVERED SERVICES
3
|
Emergency Room Visits, In-Area
Facility Component
Professional Component (Anesthesiology, ER Physicians, Pathology, Radiology)
Professional Component Other than above
|
X
|
X
X
|
|
Emergency Room Visits, Out-of-Area
Facility Component
Professional Component (Anesthesiology, ER Physicians, Pathology, Radiology)
Professional Component Other than above
|
X
X
X
|
||
Emergency Medical Response - In home emergency response unit allowing Member to communicate with a central monitoring station in an Emergency.
|
|
X
|
|
Endoscopic Studies
Professional
Outpatient Facility Component
|
X
X
|
|
|
Family Planning Services
Inpatient Facility Component
Inpatient Professional Component
Outpatient Facility
Outpatient Professional Component
|
|
X
|
X
X
X
|
Fetal Monitoring
Inpatient Facility Component
Outpatient Facility and Professional Component
|
|
X
|
X
|
Genetic Testing (when Medically Necessary
Outpatient Facility Component
Outpatient Professional Component
|
X
X
|
|
|
Health Education
|
X
|
|
|
Hearing Aid
Hearing Aid Replacement Batteries
|
|
X
X
|
|
Hearing Screening
Routine Hearing Exam
Diagnostic Hearing Exams
|
X
|
X
|
|
Home Health Care (Including home hospice, MSW, OT, PT, RT, SN, injections, IV infusion, supplies and injected substances, etc.)
|
|
X
|
|
Hospice Care
Inpatient Facility
Professional Component
|
|
X
X
|
|
Hospitalization In-Area
Facility Component
Professional Component
|
X
|
X
|
|
LIST OF BENEFITS/SERVICES
---------------------------------------------------------
¹
These services are provided by or coordinated through the Provider. The Health Plan is not financially responsible for these services.
²
These services are provided by or coordinated through the Health Plan. The Provider is not financially responsible for these services.
³
Should the Provider choose to provide or coordinate these Covered Services, the Provider or any other rendering provider will be reimbursed by the Health Plan on a Fee-For-Service basis. Claims for these services should be billed directly to the Health Plan.
|
Pacific Healthcare IPA Associates, Inc.
1
|
MOLINA
2
|
OTHER COVERED SERVICES
3
|
Hospitalization Out-of-Area
Facility Component
Professional Component
Professional Component (where Member is stable for transfer and group/provider refuses to transfer Member)
|
X
|
X
X
|
|
Implantable Lenses (following cataract surgery)
|
|
X
|
|
Incontinence Supplies
|
|
|
X
|
Infertility Services
|
Not a Covered Service
|
||
Investigational/Experimental Procedures (when a Medicare Covered Benefit)
Inpatient Professional
Outpatient Professional
Inpatient Facility
Outpatient Facility
|
|
X
X
X
X
|
|
Immunizations (Flu Vaccine, Hep B, Pneumonia Vaccine)
Professional Component
|
X
|
|
|
Laboratory Tests (except when related to ER Pathology)
Inpatient Facility Component
Outpatient Facility and Professional Component (including Pathology)
|
X
|
X
|
|
Medical/Surgical Supplies (including ostomy supplies)
Inpatient
Outpatient & Office
|
X
|
X
|
|
Mental Health
Inpatient Professional Component
Inpatient Facility Component
Outpatient Professional Component
Outpatient Facility Component
|
|
X
X
X
X
|
|
Nutrition/Diet Counseling
|
X
|
|
|
Nutritional Supplements/Enteral Feeding Therapy (when Medically Necessary)
|
|
X
|
|
Nurse Advice Line - Twenty-Four (24) hour unlimited telephone access to live registered nurse to answer medical questions.
|
|
X
|
|
Obstetrical Care
Inpatient Facility Component
Outpatient Diagnostic Services (including but not limited to fetal monitoring, ultrasound and observation)
Total OB Care (Professional Component)
|
X
X
|
X
|
|
Office Visit Supplies (i.e. Splints, Bandages, Casting, etc.)
|
X
|
|
|
Organ Transplant (when a Covered Benefit*)
Inpatient Facility Component
Inpatient Professional Component
*Investigational/Experimental Transplants are not covered.
|
|
X
X
|
|
LIST OF BENEFITS/SERVICES
---------------------------------------------------------
¹
These services are provided by or coordinated through the Provider. The Health Plan is not financially responsible for these services.
²
These services are provided by or coordinated through the Health Plan. The Provider is not financially responsible for these services.
³
Should the Provider choose to provide or coordinate these Covered Services, the Provider or any other rendering provider will be reimbursed by the Health Plan on a Fee-For-Service basis. Claims for these services should be billed directly to the Health Plan.
|
Pacific Healthcare IPA Associates, Inc.
1
|
MOLINA
2
|
OTHER COVERED SERVICES
3
|
Organ Transplant Work Up
Facility Component
Professional Component
|
X
|
X
|
|
Ostomy Supplies
Inpatient
Outpatient
|
X
|
X
|
|
Outpatient Diagnostic Services, including but not limited to:
Angiograms, Colonoscopy, Echocardiograms, EDG, EEG, EKG, EMG/NCV, Sleep Studies, Treadmill, Drug
|
X
|
|
|
Outpatient Surgery
Facility Component
Professional Component
|
X
|
X
|
|
Pathology Services (except when related to ER visit)
Inpatient Facility Component
Outpatient Facility Component
Professional Component
|
X
X
|
X
|
|
Physical Therapy , Occupational Therapy, Respiratory Therapy, Speech Therapy, Rehabilitation
Inpatient
Outpatient
|
X
|
X
|
|
Personal Patient Navigator
|
|
X
|
|
Preventive Care - Colorectal Services, TB Screening, Bone Density, Mammograms, Prostate Screening
In Office
Outpatient Professional
Outpatient Facility
|
X
X
X
|
|
|
Primary and Specialty Care Physician Services*
Inpatient
Outpatient
SNF
Office
Patient’s Home
*See Emergency Room for exceptions
|
X
X
X
X
|
X
|
|
Podiatry Services (includes two (2) routine visits per calendar year)
Medically Necessary podiatry/foot care
|
X
X
|
|
|
Pre-Admission Diagnostic Testing
Professional Component
Facility Component
|
X
X
|
|
|
Prosthetics/Orthotics
Inpatient and Surgically Implanted
Outpatient Dispensing
|
|
X
X
|
|
LIST OF BENEFITS/SERVICES
---------------------------------------------------------
¹
These services are provided by or coordinated through the Provider. The Health Plan is not financially responsible for these services.
²
These services are provided by or coordinated through the Health Plan. The Provider is not financially responsible for these services.
³
Should the Provider choose to provide or coordinate these Covered Services, the Provider or any other rendering provider will be reimbursed by the Health Plan on a Fee-For-Service basis. Claims for these services should be billed directly to the Health Plan.
|
Pacific Healthcare IPA Associates, Inc.
1
|
MOLINA
2
|
OTHER COVERED SERVICES
3
|
Radiation Therapy
Inpatient Facility Component
Outpatient Facility Component
Professional Component
|
X
X
|
X
|
|
Radiology Services
Inpatient Facility Component
Outpatient Facility Component
Professional Component
|
X
X
|
X
|
|
Reconstructive Surgery (Non-Cosmetic)
Facility Component
Professional Component
|
X
|
X
|
|
Routine Physical Examinations
|
X
|
|
|
Skilled Nursing Facility
Facility Component
Professional Component
|
|
X
X
|
|
Sterilization
|
|
|
X
|
Transportation - Ambulatory, Van, Wheelchair, Gurney
|
|
X
|
|
Urgent Care Services
|
X
|
|
|
Vision Care
Eye exams for the diagnosis and treatment for diseases and conditions of the eye.
One routine eye exam per calendar year.
Eyeglass frames and lenses or contact lenses every two (2) years.
Following cataract surgery, one pair of eye glasses or contact lenses.
|
X
|
X
X
X
|
|
(1)
|
Non-Capitated Services Payment Rate for Capitated Financial Alignment Demonstration Members.
Provider will receive an amount equivalent to the Medicare Fee-For-Service Program allowable payment rates (adjusted for place of service or geography) set forth by CMS in effect on the date(s) of service, and any portion, if any, that the Medicaid agency or Medicaid managed care plan would have been responsible for paying if the Member was enrolled in the Medicare Fee-For-Service Program. The Medicare Fee-For-Service Program allowable payment rate deducts any cost sharing amounts, including but not limited to co-payments, deductibles, co-insurance, or amounts paid or to be paid by other liable third parties that would have been deducted if the Member were enrolled in the Medicare Fee-For-Service Program.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(Dollars in Millions)
|
||||||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes, continuing operations
|
$
|
322
|
|
|
$
|
135
|
|
|
$
|
81
|
|
|
$
|
23
|
|
|
$
|
120
|
|
Add fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, including amortization of debt discount and expense
|
66
|
|
|
57
|
|
|
52
|
|
|
17
|
|
|
16
|
|
|||||
Estimated interest portion of rental expense
|
8
|
|
|
5
|
|
|
4
|
|
|
3
|
|
|
2
|
|
|||||
Total fixed charges
|
74
|
|
|
62
|
|
|
56
|
|
|
20
|
|
|
18
|
|
|||||
Total earnings available for fixed charges
|
$
|
396
|
|
|
$
|
197
|
|
|
$
|
137
|
|
|
$
|
43
|
|
|
$
|
138
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges from above:
|
$
|
74
|
|
|
$
|
62
|
|
|
$
|
56
|
|
|
$
|
20
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
5.4
|
|
|
3.2
|
|
|
2.4
|
|
|
2.2
|
|
|
7.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total rent expense
|
$
|
44
|
|
|
$
|
32
|
|
|
$
|
25
|
|
|
$
|
20
|
|
|
$
|
23
|
|
Interest factor
|
18
|
%
|
|
16
|
%
|
|
16
|
%
|
|
14
|
%
|
|
11
|
%
|
|||||
Interest component of rental expense
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
2
|
|
Name
|
Jurisdiction of Incorporation
|
Molina Healthcare Data Center, Inc.
|
New Mexico
|
Molina Healthcare of Arizona, Inc.*
|
Arizona
|
Molina Healthcare of California
|
California
|
Molina Healthcare of California Partner Plan, Inc.
|
California
|
Molina Healthcare of Florida, Inc.
|
Florida
|
Molina Healthcare of Georgia, Inc.*
|
Georgia
|
Molina Healthcare of Illinois, Inc.
|
Illinois
|
Molina Healthcare of Iowa, Inc. *
|
Iowa
|
Molina Healthcare of Maryland, Inc.*
|
Maryland
|
Molina Healthcare of Michigan, Inc.
|
Michigan
|
Molina Healthcare of Mississippi, Inc.*
|
Mississippi
|
Molina Healthcare of New Mexico, Inc.
|
New Mexico
|
Molina Healthcare of New York, Inc.*
|
New York
|
Molina Healthcare of North Carolina, Inc.*
|
North Carolina
|
Molina Healthcare of Ohio, Inc.
|
Ohio
|
Molina Healthcare of Oklahoma, Inc.*
|
Oklahoma
|
Molina Healthcare of Pennsylvania, Inc.*
|
Pennsylvania
|
Molina Healthcare of Puerto Rico, Inc.
|
Puerto Rico/Nevada
|
Molina Healthcare of South Carolina, LLC
|
South Carolina
|
Molina Healthcare of Texas, Inc.
|
Texas
|
Molina Healthcare of Texas Insurance Company^
|
Texas
|
Molina Healthcare of Utah, Inc.
|
Utah
|
Molina Healthcare of Virginia, Inc.
|
Virginia
|
Molina Healthcare of Washington, Inc.
|
Washington
|
Molina Healthcare of Wisconsin, Inc.
|
Wisconsin
|
Molina Health Plan Management, Inc.*
|
New York
|
Molina Hospital Management, Inc.
|
California
|
Molina Information Systems, LLC, dba Molina Medicaid Solutions
|
California
|
Molina Youth Academy
|
California
|
Molina Medical Management, Inc.
|
California
|
Easy Care MSO, LLC~
|
California
|
Molina Pathways, LLC
|
Delaware
|
Molina Pathways of Ohio, LLC+*
|
Ohio
|
Molina Pathways of Texas, Inc.+
|
Texas
|
Molina Personal Care of Texas, Inc.+ *
|
Texas
|
Molina Personal Care of South Carolina, Inc.+*
|
South Carolina
|
Synergy Partners, L.L.C.+
|
Michigan
|
Pathways Health and Community Support LLC+
|
Delaware
|
AmericanWork, Inc.-
|
Delaware
|
A to Z In-Home Tutoring LLC-
|
Nevada
|
Children's Behavioral Health, Inc.-
|
Pennsylvania
|
Choices Group, Inc.-
|
Delaware
|
College Community Services-
|
California
|
Dockside Services, Inc.-
|
Indiana
|
Family Builders, Inc.- *
|
Arizona
|
Family Preservation Services, Inc.-
|
Virginia
|
Family Preservation Services of Florida, Inc.-
|
Florida
|
Family Preservation Services of North Carolina, Inc.-
|
North Carolina
|
Family Preservation Services of Washington D.C., Inc.-
|
District of Columbia
|
Family Preservation Services of West Virginia, Inc.-
|
West Virginia
|
Maple Star Nevada, Inc.-
|
Nevada
|
Maple Star Oregon, Inc.-
|
Oregon
|
Pathways Community Corrections, Inc.-
|
Delaware
|
Camelot Care Centers, Inc.>
|
Illinois
|
Pathways Community Services LLC-
|
Delaware
|
Pathways Community Services LLC-
|
Pennsylvania
|
Pathways of Massachusetts LLC-
|
Delaware
|
Pathways of Washington, Inc.-
|
Washington
|
Pathways Health and Community Support of Florida, Inc.-
|
Florida
|
Pathways of Arizona, Inc.-
|
Arizona
|
Pathways of Idaho LLC-
|
Delaware
|
Pathways of Alabama, Inc.-
|
Alabama
|
Pathways of Delaware, Inc.-
|
Delaware
|
Pathways of Maine, Inc.-
|
Maine
|
Pathways of Oklahoma, Inc.-
|
Oklahoma
|
Pathways Community Support of Texas, Inc.-
|
Texas
|
The RedCo Group, Inc.-
|
Pennsylvania
|
Raystown Developmental Services, Inc./
|
Pennsylvania
|
Transitional Family Services, Inc.-
|
Georgia
|
W.D. Management, LLC-
|
Missouri
|
*
|
Non-operational entity
|
^
|
Wholly owned subsidiary of Molina Healthcare of Texas, Inc.
|
+
|
Wholly owned subsidiary of Molina Pathways, LLC
|
~
|
Partially owned subsidiary of Molina Medical Management, Inc.
|
-
|
Wholly owned subsidiary of Pathways Health and Community Support LLC
|
/
|
Wholly owned subsidiary of The RedCo Group, Inc.
|
>
|
Wholly owned subsidiary of Pathways Community Corrections, Inc.
|
|
|
|
Dated: February 26, 2016
|
|
/s/ Joseph M. Molina
|
|
|
Joseph M. Molina
|
|
|
Chairman of the Board,
|
|
|
Chief Executive Officer and President
|
|
|
|
Dated: February 26, 2016
|
|
/s/ John C. Molina
|
|
|
John C. Molina, J.D.
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
Dated: February 26, 2016
|
|
/s/ Joseph M. Molina
|
|
|
Joseph M. Molina, M.D.
|
|
|
Chairman of the Board,
|
|
|
Chief Executive Officer and President
|
|
|
|
Dated: February 26, 2016
|
|
/s/ John C. Molina
|
|
|
John C. Molina, J.D.
|
|
|
Chief Financial Officer and Treasurer
|