Changing Nature of Managed Care Organization-Provider Relationships WAMSS Conference April 28, 2017 Andrew Nelson, Vice President, Provider Network Management Molina Healthcare of Washington

Company History Founded in 1980 by Dr. C. David Molina with a single clinic Provide quality healthcare to those most in need and least able to afford it Serves more than 775,000 members in Washington State Serves more than 4.2M Medicaid, Medicare, Duals and Marketplace members 16 states and two territories Molina Medical Group Clinics in states Hospital Providers 101 PCPs 5,470 Specialists 12,780

HCA’s “Value-Based Purchasing” goals In 2021, at least 90% of state-financed health care payments and 50% of commercial health care payments are linked to quality and value through Alternative Payment Mechanisms (APM) (Categories 2c-4b) Washington’s annual health care cost growth will be below the national health expenditure trend. 2021 90% state-financed 50% commercial Tools to accelerate VBP and health care transformation: 2014 Legislation directing HCA to implement VBP strategies State Innovation Model (SIM) Round 2 grant, 2015-2019 DSRIP Medicaid Transformation Demonstration Project, 2017-2021

What is “Paying for Value?” What is “Value”? What is “Paying for Value?” Patient experience HEDIS Avoidable emergency room visits or readmissions Medical cost ratio Per member per month

Provider relationships focus on value Emerging focus on specific populations Share, not shed, risk with providers who manage populations with complex needs, AH Blind Disabled and Medicare (DSNP) Evolution from volume to value-based relationships Focus on long-term relationships, not just ‘contracts’ Path-to-Value Gain-sharing and risk-sharing on population –based outcomes performance. We have capitation arrangements with some integrated delivery systems Not all providers are ready Meet providers where they are at and start there Increasing transparency into Provider Performance Quality outcomes, cost, member satisfaction Member self-direction & choice of provider and health plan Aggregation of groups combine forces to create scale

Molina’s Value-Based Care “Path to Value” Approach Shared Savings and Quality Savings shared relative to a medical pmpm or medical cost ratio target Savings tied to achievement of 4-6 HEDIS targets Shared Risk and Quality Greater shared savings potential in exchange for shared downside risk Global Risk and Quality Provider takes global risk as percent of premium A portion of premium is tied to achievement of 4-6 HEDIS targets Delegated functions such as UM, CM and claims

Challenges and opportunities in achieving a successful Value-Based Care relationship

An Aligned Culture of Quality Know and Engage the Patient Sharing Information & Resources Promote Best Practice Leverage Technology Managed Care Organization Share lists of non-engaged members Shared outreach Provider Patient outreach and engagement Provide appointment access Managed Care Organization Timely access to actionable data Missing HEDIS services HEDIS reporting Align to provider workflow Case Management Provider Share EMR Access Member Satisfaction Managed Care Organization Align Prior authorizations and Utilization Management functions to reduce barriers and promote consistent quality of care Provider Clinical pathways Managed Care Organization Molina Virtual Care 24 /7 access Shared documentation CM referrals My Molina – PHR Care Team Integration PreManage (EDIE) Provider ClinicalData Repository

VBC HEDIS Provider Performance Reporting

VBC HEDIS Provider Performance Reporting

EMR Chart Retrieval Analysis: HEDIS 2016 The rainbow colored column represents “compliance rate” by methodology “Full” remote access benefits both providers and MCOs

VBC Medical Cost Provider Performance Reporting Key Data Categories Member Months Premium Capitation Amounts Care Coordination Costs Inpatient Hospital Outpatient Hospital Professional Services Rx Incurred But Not Reported Claims Medical Cost Ratio

Future of Strong MCO-Provider Relationships Open communication on common goals - Quadruple Aim Quality focused approach Establishing trust and credibility Focus on the relationship not just the contract

Contact information Andrew Nelson Molina Healthcare of Washington Andrew.nelson@molinahealthcare.com

Questions?