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Partnership HealthPlan of California Finance Committee Meeting Agenda

April 17, 2019 | 8:00 a.m. to 9:30 a.m.

Held at PHC’s Southeast Regional Office at 4665 Business Center Drive, Fairfield, CA 94534 (Board Room – 3rd Floor)

Video Conference Location PHC’s Southwest Regional Office at 495 Tesconi Circle, Santa Rosa, CA 95401,

PHC’s Northwest Regional Office at 1036 5th Street, Eureka, CA 95501, PHC’s Northeast Regional Office at 2525 Airpark, Redding, CA 96001

Finance Committee Members: Dave Jones, Chair, Dick Fogg, Randall Hempling, Karen Larsen, Viola Lujan, Kathryn Powell, Nancy Starck, Joseph D’Angina (non-voting member), and Letty Garza (non-voting member)

I. Agenda Items Lead Page # Time1. Agenda Dave Jones, Chair 1 8:00

2. Finance Committee Minutes – March 20, 2019 - Decision Dave Jones, Chair 2

3. Commissioner CommentsAt this time, committee members may provide comments and announcements.

Commissioners --

4. Public CommentsAt this time, members of the public may address the committee on any non-agendaitem of interest to the public that is within the subject matter jurisdiction of thecommittee. There will also be an opportunity to address the committee on ascheduled agenda item during the committee's consideration of that item.Speakers will be limited to three (3) minutes.

Public --

II. New Business1. CEO’s Health Plan Update – Information Liz Gibboney 8 2. Progress Report – New Building Expenditures - Information Patti McFarland -- 3. Wellness & Recovery Update – Information Liz Gibboney --

4. PHC Bylaw Revision – DecisionThis resolution approves minor changes to PHC’s Bylaws for clarity. This reviewwill be in lieu of taking the bylaws to the Governance Committee.

Liz Gibboney 9

5. Budget Assumptions for FY 2019-2020 – DecisionThis resolution approves the budget assumptions for all lines of business.

Patti McFarland 39

6. Approve February 2019 Metrics and Financials – Decision Patti McFarland 46

IV. Adjournment 9:30

Government Code §54957.5 requires that public records related to items on the open session agenda for a regular finance meeting be made available for public inspection. Records distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all members, or a majority of the members of the committee. The Finance Committee has designated the Administrative Assistant to the CFO as the contact for Partnership HealthPlan of California located at 4665 Business Center Drive, Fairfield, CA 94534, for the purpose of making those public records available for inspection. The Finance Committee Meeting Agenda and supporting documentation is available for review from 8:00 AM to 5:00 PM, Monday through Friday at all PHC regional offices (see locations above). It can also be found online at www.partnershiphp.org.

PHC meeting rooms are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation (including auxiliary aids or services) to participate in this meeting, or who have a disability and wish to request an alternative format for the agenda, meeting notice, agenda packet or other writings that may be distributed at the meeting, should contact the Administrative Assistant to the CFO at least two (2) working days before the meeting at (707) 863-4207 or by email at [email protected]. Notification in advance of the meeting will enable the Administrative Assistant to make reasonable arrangements to ensure accessibility to this meeting and to materials related to it.

This agenda contains a brief description of each item to be considered. Except as provided by law, no action shall be taken on any item not appearing on the agenda.

Finance Committee Packet, 041719: of 64

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PARTNERSHIP HEALTHPLAN OF CALIFORNIA MEETING MINUTES

Committee: Finance Committee Date/Time: March 20, 2019 / 8:00 – 9:30 AM Members Present: Dave Jones –Chairperson, Randall Hempling, Richard Fogg, Viola Lujan, Kathryn Powell, Nancy Starck* Members Absent: Karen Larsen Staff Present: Liz Gibboney, Patti McFarland, Amy Turnipseed, Sonja Bjork, Margaret Kisliuk, Mary Kerlin, Kirt Kemp, Meredith Wurden, Wendell Coats, Jeff Ingram, Staff Absent: Jennifer Chancellor, Wendi West, Marisa Dominguez, Diane Walton Guests: Joseph D’Angina (Woodland Hospital), Letty Garza* (Trinity County at the Redding Office) Others Present: Olevia E. O’Donovan, Executive Assistant

* Attendance via Video Conference

DECISION AGENDA ITEMS DISCUSSION / CONCLUSIONS RECOMMENDATIONS / ACTION TARGET DATE DATE

RESOLVED

Approval of February 20, 2019, Meeting Minutes

At 8:02 am, Mr. Dave Jones, Chairperson, confirmed a quorum, stated there are no changes to the agenda. February 20, 2019, minutes presented for approval.

Action: Ms. Kathryn Powell motioned to approve and Mr. Randall Hempling seconded.

All voted yes, and approval was unanimous.

AGENDA CHANGES AND DELETIONS

None

NEW BUSINESS

CEO’s Health Plan Update

Presenter: Liz Gibboney, CEO

Ms. Liz Gibboney provided various PHC and Federal/State level updates.

New HHS Secretary: The governor’s office announced the new HHS Secretary, Dr. Mark Ghaly, from Southern California. He is from the county-world, public health perspective and managed care.

Another announcement is from the State auditors that released a report on pediatric services (EPSDT) that created quite a bit of stir in Sacramento due to the recommendations to the legislation. This includes low reimbursement rates for child services and unrealistic enrollment rates. Also recommended greater oversight by the Department, and implement statewide pay-for-performance (PPF), and greater requirements on all HEDIS measures.

Action: Information only

Finance Committee Packet, 041719: Page 2 of 64

In response, Ms. Gibboney stated that they would be issuing sanctions. PHC is currently under a corrective action plan (CAP) related to HEDIS measures in the Northern Region. Ms. Gibboney went on to explain that most plans would be under a CAP with the newly proposed benchmark of a national 50th percentile.

This new administration is more focused on healthcare, as compared to the previous State administration. There will be greater scrutiny from DHCS including revisiting QIP, moving reimbursement from capitation to fee-for-service, and more closely monitoring encounter data submissions.

Per Ms. Gibboney, there would likely be other committees like Quality Advisory Committee (QAC), but the fiscal parameters would come through Finance Committee. She explained it’s a bit early for implementation.

Ms. Patti McFarland stated that the new administration has a love/hate relationship in regards to capitation. They like to focus on quality and oversight, and also want to save money at the same time. PHC is doing well on the encounter data, except for the rural northern region, and it will take a while to move the dial as the region is new to managed care.

Ms. Gibboney stated that the State is looking to have greater strings attached to the Prop 56 program, and developing value-based purchasing measures with additional measures attached.

Ms. Gibboney explained the Governor’s executive order proposing the removal of the pharmacy benefit from managed care. Health Centers are lobbying due to the potential loss of hundreds of millions in revenue, which has yet to be addressed. PHC is working with sister plans to advocate for the continued administering of the program, but there is a tough fight ahead.

In response, Ms. Gibboney said that Assemblyman Wood is aware and will be meeting with him soon.

In Lieu of Services: Ms. Gibboney stated that PHC is working on getting paid for services that are not part of a Medi-Cal covered benefit. These services, like respite care, are good alternatives to discharge members from high cost hospital stays. There is both commercial and public interest in the idea. PHC will

Ms. Powell asked what is the penalty to the healthplans?

Ms. Nancy Stark asked which PHC Committee would be reviewing a move to fee-for-service?

Mr. Hempling made a comment that it seemed like moving backwards, with the fee-for-service, and would reduce the reimbursement.

Ms. Starck asked if our local state representatives are aware.


continue to work with sister plans and use it’s lobbyist to gain traction.

Board Strategic Planning Retreat: There was great feedback from the last retreat and PHC is planning for the next one. More info to come.

NCQA Accreditation & HEDIS: NCQA/HEDIS is on track for survey, HEDIS is taking on new pressure with the aforementioned. More discussions to come.

In response, Ms. Gibboney said that we are part of LHPC, where we do a lot of collaborative work together, advocacy, and sharing of concerns. We also met with Jennifer Kent (former Executive Director of DHCS).

Ms. Gibboney replied that we do have lobbyists.

Mr. Richard Fogg asked what is PHC doing with other associations.

Mr. Fogg also asked if we have our own lobbyist.

Progress Report – New Building Expenditures

Presenter: Patti McFarland, CFO

New Building: Ms. McFarland mentioned that the general contractor, after being cleared by his doctors due to health issues, is onsite doing the tour of the new building. Soundproofing panels are being installed on the first floor. There are some door closure issues that creates negative pressure. Overall things are going well at the new building.


Mr. Jones asked if there were any questions.

No questions.

Wellness & Recovery Program Update

Presenter: Margaret Kisliuk

Wellness & Recovery Program: PHC met with the State on March 8th, and had signed off on the fiscal model based on Humboldt County, and the Plan will work on the rest of the counties for the remainder of the fiscal year.

The State also agreed that the Counties will delegate to PHC. DHCS has a hefty agreement with each County and then each County will further delegate to PHC. More to come as the details become available.

There has been trainings on substance abuse that also covered the types of drugs being used, mental health and addiction. Another training coming soon is on integration



care, that according to Dr. Jeff DeVido (Behavioral Health Clinical Director), has long standing issues, like how to treat eating disorders with disproportionate treatments, or autism benefits which continue to be a challenge. We are also looking for other guidelines for other treatments, like alcoholism.

There is a lot going on, on top of how to serve the new programs as mandated by the State.

Mr. Jones asked if there were any questions.

No questions.

Long-Term Care (LTC) Reimbursement Changes

Presenter: Liz Gibboney

This request approved changing several aspects of how PHC reimburses LTC facilities:

Ms. Gibboney explained this request rescinds the “hold harmless” rate change policy and moves the standard 2% rate increase into the existing 2% QIP fund, creating a new target of 4%.

Ms. McFarland stated that PHC will still budget the 4% and use the QIP; however, PHC will not see the expense until August 2020. Ms. Gibboney clarified that the QIP is for the free standing facilities and not for hospital related facilities.

In response, Ms. McFarland stated that about 15-20 facilities will be impacted. We want them to earn the increases as part of the QIP. PHC does not have the luxury to continue with current LTC reimbursement system. PHC is currently engaged in contract negotiations.

Decision: Mr. Fogg moved to approve, and Mr. Hempling seconded the motion.

All voted yes, to approve.

Mr. Hempling asked how many facilities will be impacted.

Intergovernmental Transfer Program (IGT) Plan/Provider Agreement Modification

Presenter: Liz Gibboney

This request approves modifying PHC’s I.G.T. Plan and Provider Agreement

Ms. Gibboney started that, historically, PHC would come to the commission for approval on I.G.T. changes. This request is to allow PHC to charge the participating entities 10% in administration fees. In looking at other healthplans, the rate varied widely to as much as 30%. This new modification will provide more revenue that can be used to cover some other healthcare programs. This resolution would also delegate signing authority to the CEO on future agreements as long as there is no material impact to the organization.

Ms. McFarland stated that PHC currently has about 40 IGTs in comparison to other healthplans that may have only about 10.

Decision: Mr. Fogg moved to approve, seconded by Ms. Powell.

All voted in favor, but Ms. Starck abstained.

Mr. Hempling requested that the commission be notified on how much PHC is charging.


Approve January 2019 Metrics and Financials

Presenter: Patti McFarland, CFO

Ms. McFarland stated that PHC has been renewing the contracts with hospitals, with the effective dates being later than the budget anticipated, with expenses expect to taper-off around May. MedImpact, if negotiated, will be potentially save roughly $1 million a quarter.

For the month ending January 31, 2019, PHC reported a deficit of $7.0 million, bringing the year-to-date deficit to $52.8 million.

Revenue January’s State Capitation Revenue of $228.0 million increased by $4.4 million in comparison to the prior month. The additional revenue is associated with the WCM/CCS program which went live January 1, 2019. The new revenue is partially offset by a BHT true-up tied to a sub-capitation arrangement, which is offset in the healthcare expenses.

Healthcare Costs Total Healthcare Costs are lower than budget by $12.3 million for the month. For the year-to-date, Total Healthcare Costs remain above budget by $26.6 million.

Administrative Costs Total administrative costs are under budget by $2.2 million for the month and $14.3 million year-to-date. This is primarily due to the method in which the budget is recorded. The positive variance in Employee Costs continues to be from open positions, which are expected to be filled later in the year. The positive variance in Occupancy Costs are from lower depreciation costs, as budgeted capital items have yet to be purchased

Membership Membership decreased by 1,209 members during the month. Medi-Cal Rate Regions 1 and 2 had net decreases of 565 members and 644 members, respectively.

Decision: Mr. Jones asked if there were any question.

No additional questions.

Mr. Hempling move to approve the January 2019 financials. Seconded by Mr. Fogg.

All voted in favor to approve the financials.

CLOSED SESSION

Closed Session Pursuant to Government Code § 54956.87, Contract Negotiations (Information)

Decision: No action taken.


Minutes Prepared and Submitted by: Olevia E. O’Donovan Minutes Reviewed and Submitted by: Dell Coats and Jeff Ingram

Chairman Signature of Approval_______________________ Date__________________

Adjournment Meeting adjourned at approximately 9:24 am.


Finance Committee

Report from the Chief Executive Officer

April, 2019

DHCS & Legislative Issues

“Future of MediCal” & State Waivers

Pediatric Services/EPSDT Audit

Federal Issues

Housing Efforts

General

Coalition for Compassionate Care of California Award

Employee Engagement Survey

25th Anniversary Community Event

NCQA Accreditation & HEDIS


CONSENT AGENDA REQUEST for

PARTNERSHIP HEALTHPLAN OF CALIFORNIA

Board / Finance Committee (when applicable) Agenda Item Number: Meeting Date: April 17, 2019 3.7 Board Meeting Date: April 24, 2019

Resolution Sponsor: Liz Gibboney, CEO, Partnership HealthPlan of CA

Recommendation by: PHC Staff

Topic Description: PHC bylaws provide internal rules for running the HealthPlan. The current bylaws have not been reviewed since April 27, 2016, and we wanted to make some minor changes to bring it up-to-date.

The Finance Committee’s review will be in lieu of taking it to the Governance Committee since this is the only item for consideration.

Reason for Resolution: To allow the Board the opportunity to review and approve the recommended changes to PHC’s bylaws.

Financial Impact: There is no financial impact to the HealthPlan.

Requested Action of the Board: Based on the recommendation of the PHC staff, the Board is asked to approve the recommended changes to PHC’s bylaws.


CONSENT AGENDA REQUEST for



Resolution Number: 19-

IN THE MATTER OF: TO APPROVE MINOR CHANGES TO PHC’S BYLAWS

Recital: Whereas,

A. The Board has ultimate responsibility for approving changes to the bylaws.

Now, Therefore, It Is Hereby Resolved As Follows:

1. To approve the recommended changes to PHC’s bylaws.

PASSED, APPROVED, AND ADOPTED by the Partnership HealthPlan of California this 24th day of April 2019 by motion of Commissioner, seconded by Commissioner, and by the following votes:

AYES: Commissioners:

NOES:

ABSTAINED: Commissioners:

ABSENT: Commissioners:

EXCUSED: Commissioners:

Nancy Starck, Vice Chair

Date ATTEST:

BY: Cynthia McCamey, Clerk


BYLAWS OF

PARTNERSHIP HEALTHPLAN of CALIFORNIA

Revision Date: March 05, 2019 Deleted: April

Deleted: 27

Deleted: 2016


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ARTICLE 1 - AUTHORITY AND PURPOSE .................................................................1 Section 1.1 Authority and Purpose .....................................................................1

ARTICLE 2 – COMMISSIONERS ...................................................................................2 Section 2.1 Number ..............................................................................................2 Section 2.2 Appointment and Qualifications .....................................................2 Section 2.3 At-Large Consumer Appointments ................................................3 Section 2.4 Non-Voting Members .......................................................................4 Section 2.5 Term of Office ...................................................................................4 Section 2.6 Resignation ........................................................................................5 Section 2.7 Removal .............................................................................................5 Section 2.8 Vacancies ...........................................................................................5 Section 2.9 Reimbursement of Expenses ............................................................6 Section 2.10 Action by the Board………………………………………………6

ARTICLE 3 – OFFICERS ..................................................................................................6 Section 3.1 Designation ........................................................................................6 Section 3.2 Election ..............................................................................................8 Section 3.3 Resignation ........................................................................................9 Section 3.4 Vacancies ...........................................................................................9

ARTICLE 4 – MEETINGS .................................................................................................10 Section 4.1 Regular and Special Meetings .........................................................10 Section 4.2 Open and Public ...............................................................................10 Section 4.3 Notice .................................................................................................10 Section 4.4 Attendance and Participation ..........................................................12 Section 4.5 Quorum .............................................................................................12 Section 4.6 Meeting Agendas ..............................................................................12 Section 4.7 Conduct of Business .........................................................................13 Section 4.8 Resolutions ........................................................................................13 Section 4.9 Voting.................................................................................................14 Section 4.10 Disqualification from Voting ...........................................................14 Section 4.11 Minutes ..............................................................................................14 Section 4.12 Closed Sessions..................................................................................14 Section 4.13 Public Records ..................................................................................15 Section 4.14 Adjournment .....................................................................................15

ARTICLE 5 – COMMITTEES OF THE COMMISSION ..............................................16 Section 5.1 Appointment .....................................................................................16 Section 5.2 Authority ...........................................................................................16 Section 5.3 Meetings.............................................................................................16 Section 5.4 Notice .................................................................................................17 Section 5.5 Minutes ..............................................................................................17 Section 5.6 Open and Public ...............................................................................17

Deleted: Non-Voting Members

Deleted: Term of Office

Deleted: Resignation

Deleted: Removal

Deleted: 4

Deleted: Vacancies

Deleted: Reimbursement of Expenses

Deleted: Action by the Board

Deleted: 5

Deleted: 8

Deleted: 4

Deleted: 5

Deleted: 7

Deleted: 7

Deleted: 7

Deleted: 7

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Deleted: 8


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ARTICLE 6 – ADVISORY GROUPS ...............................................................................18 Section 6.1 Composition ......................................................................................18 Section 6.2 Authority ...........................................................................................18 Section 6.3 Officers ..............................................................................................18 Section 6.4 Conduct of Proceedings ………………………………………18

ARTICLE 7 – MANAGEMENT COMMITTEES AND GROUPS ................................19 Section 7.1 Appointment .....................................................................................19

ARTICLE 8 – EXECUTION OF DOCUMENTS.............................................................20 Section 8.1 Contracts and Instruments ..............................................................20 Section 8.2 Checks, Drafts, Evidences of Indebtedness ....................................20

ARTICLE 9 – CONFLICTS OF INTEREST POLICY ...................................................21 Section 9.1 Adoption ............................................................................................21 Section 9.2 Definition ...........................................................................................21

ARTICLE 10 – MISCELLANEOUS PROCEDURES, PRACTICES AND POLICIES, INSURANCE, BONDS ..........................................23

Section 10.1 Purchasing, Hiring, Personnel, Etc. .............................................23 Section 10.2 Enforcement ....................................................................................23 Section 10.3 Insurance .........................................................................................23 Section 10.4 Bonds ...............................................................................................24

ARTICLE 11 – AMENDMENT OF BYLAWS ................................................................25

-

Deleted: 9

Deleted: 9

Deleted: 9

Deleted: Conduct of Proceedings

Deleted: 9

Deleted: 20

Deleted: 20

Deleted: 21

Deleted: 21

Deleted: 21

Deleted: 2

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Deleted: 6


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ARTICLE 1.

AUTHORITY AND PURPOSE

Section 1.1 Authority and Purpose. These Bylaws are adopted by the

Partnership HealthPlan of California (herein after referred to as the

“Commission”), to establish rules for its proceedings. The Commission is a local

public agency and political subdivision of the State of California, created by Solano

County Ordinance No. 1720, Napa County Ordinance No. 1384, Yolo County

Ordinance No. 1432, and Sonoma County Ordinance No. 6099, Marin County

Ordinance No. 3597, and Mendocino County Ordinance No. 4310, Del Norte County

Ordinance No. 2013-004, Humboldt County Ordinance No. 2501, Lake County

Ordinance No. 3014, Lassen County Ordinance No. 2013-003, Modoc County

Ordinance No. 350, Shasta County Ordinance No. 2013-004, Siskiyou County

Ordinance No. 15-14, and Trinity County Ordinance No. 1329 pursuant to the

authority for such creation conferred by California Welfare and Institutions Code

Section 14087.54.

The purpose of the Commission is to negotiate exclusive contracts with the

California Department of Health Care Services and to arrange for the provision of

health care services to qualifying individuals, as well as other purposes set forth in

the enabling ordinances established by the respective counties.


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ARTICLE 2.

COMMISSIONERS

Section 2.1 Number. Commission representation shall be calculated

using the following equation: 0-25,000 Medi-Cal PHC members = 1 seat; 25,000-

40,000 =2 seats; 40,000 – 55,000 = 3 seats; 55,000 + = 4 seats.

Section 2.2 County Selected Appointments and Qualifications. Each

member of the Commission shall be appointed by a majority vote of the Board

according to the ordinance adopted by each County Board, and shall be subject to

the following qualifications:

Section 2.2.1 Each member of the Commission shall be committed to

a health care system which seeks to improve access to quality health

care for all persons, regardless of their economic circumstances.

Members of the Commission shall have an abiding commitment to,

and interest in, a quality publicly assisted health care delivery system.

Section 2.2.2 Each member of the Commission shall be a legal

resident of the County whose Board of Supervisors made the

appointment.

Section 2.2.3 Each County shall have its own member selection

criteria.


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Section 2.2.4 If a Commissioner no longer qualifies for his/her

prescribed position on the Commission, the position shall be vacant

until a replacement is selected per the County’s selection criteria

stated in Section 2.2.3.

Section 2.3 At-Large Consumer Appointments and Qualifications. Two

members of the Commission shall be nominated by a Selection Committee based on

applications submitted, and then recommended by PHC, since PHC is unable to

delegate the selection of at-large consumer representatives to each of the County

Board of Supervisors of its 14 county region. One representative will be from the

Northern Region and one from the Southern Region, and they will rotate from

region to region within the larger region.

Section 2.3.1. The Selection Committee consists of:

The Chief Executive Officer (CEO) (or a designee)

One PHC staff member from Member Services

One consumer representative (not applying for the position)

One Board member

Section 2.3.2. Selections of these Board members will occur in the

summer and the two-year term will be from August of the year

appointed. Over a four-year period, there will be a consumer from

each of the four regions.

Deleted: Nominated

Deleted: or Regional Executive Director


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Section 2.3.3 Criteria to be selected as Consumer Representative shall

include:

A current PHC member; or a family member of a current

PHC member

Reside in a region that is due to be represented

Submits a complete application

Participation in the regional PHC CAC meetings is preferred,

but not required

Commits to attending scheduled Board meetings during the

year and providing a consumer update at Board meetings

Section 2.4 Non-Voting Members. In addition to the voting members

of the Commission, the Board may also appoint ex-officio non-voting members to

the Commission. Ex-officio members may include persons or representatives of

organizations that provide health care services to clients of the Commission or

recipients of health care services administered by the Commission, or any person

having information or experience which may be helpful to the Commission.

Section 2.5 Term of Office. The terms of office for each of the

members of the Commission shall be four (4) years, with the exception of the At-

Large Consumer member who shall serve a two (2) year term from August of the

year appointed. Nothing herein shall prohibit a person from serving more than one

(1) term. Each member of the Commission shall remain in office, at the conclusion

Deleted: the 6

Commented [MB1]: In order to be consistent with Section 4.1 which states “shall hold at least four (4) regular meetings.” Recommend removal of the “6” board meetings and simply input “scheduled Board meetings”

Deleted: PHC

Deleted: each


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of that member’s term, until a successor member has been selected and installed in

office.

Section 2.6 Resignation. Any Commissioner may resign effective on

giving written notice to the Clerk of the Commission, unless the notice specifies a

later time for his or her resignation to become effective. Upon receipt of such

notice, the Clerk of the Commission shall notify the Chairperson of the Board of

Supervisors of the County appointing the Commissioner. The Clerk of the

Commission shall enter such notice in the proceedings of the Commission. The

acceptance of a resignation shall not be necessary to make it effective.

Section 2.7 Removal. Any Commissioner may be removed from office

by the Board, which appointed him or her, at any time either “for” or “without”

cause by a majority vote of the Board.

Section 2.8 Vacancies. An office shall become vacant if a member of the

Commission is removed, resigns, discontinues to function in the area from which

such member was appointed (as provided in Section 2.2 above) or has two (2)

unexcused absences during a six-month period. Any vacancy of the Commission,

however created, shall be filled for the unexpired term according to each County’s

selection criteria. Each vacancy shall be filled by an individual having the

qualifications of his or her predecessor in accordance with Section 2.2.

Section 2.9 Reimbursement of Expenses. Commissioners may be

compensated for their services and/or reimbursed for out-of-pocket expenses, as

specifically authorized by resolution of the Commission.

Deleted: .

Commented [MB2]: How is Commissioner “removed?” by vote of the Board? Recommend simply adding “…by majority vote of the Board.” Unless removal should require a supermajority?

Deleted: fails to attend three (3) consecutive meetings of the Commission


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Section 2.10 Action by the Board. Notwithstanding the foregoing, the

qualifications, term and other conditions of Commission membership shall be as

determined from time to time by action of the Board.

ARTICLE 3.

OFFICERS

Section 3.1 Designation. The Officers of this Commission shall be:

Section 3.1.1 A Chairperson, who shall be a Commissioner and who

shall preside at all meetings of the Commission.

Section 3.1.2 A Vice-Chairperson who shall be a Commissioner and

who in the Chairperson’s absence or inability to act shall preside at

the meetings of the Commission. If both the Chairperson and Vice-

Chairperson are absent or unable to act, the Commissioners present

shall by resolution select one of the Commissioners present to act as

chairperson pro-tempore, who, while so acting, shall have all the

authority of the Chairperson.

Section 3.1.3 The CEO who shall be an employee of the Commission

shall have the necessary authority and responsibility to conduct the

Commission’s activities, subject to the oversight and authority of the

Commission and Chairperson. The CEO shall be responsible to carry

Deleted: An Executive Director

Deleted: . The Executive Director

Deleted: Executive Director


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out the formal and informal policies, procedures and practices of the

Commission. The CEO shall act as the duly authorized representative

of the Commission in all matters in which the Commission has not

formally designated some other person so to act. All personnel shall

serve at the pleasure of the CEO, subject to any contract of

employment between the Commission and any such employee and the

personnel policies adopted by the Commission.

Section 3.1.4 A Clerk, who shall attend the meetings of the

Commission and prepare and keep the minutes of the Commission;

shall attest to the Chairperson’s, Vice-Chairperson’s, CEO’s, or other

authorized signatory’s signature on documents executed on behalf of

the Commission; shall give, or cause to be given, notice of all meetings

of the commission and committees of the Commission as required by

law; shall keep the seal of the Commission, if one be adopted, in safe

custody; and shall have such other duties as may be prescribed by

resolution of the Commission or these Bylaws. The Clerk shall be an

employee of the Commission and not a Commissioner. If the

Commission selects an individual to so serve, an Assistant Clerk will

perform the duties of the Clerk in the Clerk’s absence. The Assistant

Clerk shall not be a member of the Commission.

Section 3.1.5 Subordinate Officers. The Commission may appoint, or

may empower the CEO to appoint, such other officers as the business

of the Commission may require, each of whom shall hold office for


Deleted: The Executive DirectorCEO shall designate a Finance Director of the Commission who shall be an employee of the Commission and may appoint and engage individuals to fill such other executive, administrative, and management positions for the Commission as the Commission shall authorize by resolution.

Commented [MB5]: This passage implies that there is a Board level Finance position who is also an employee that may have authority separate and distinct from that stemming from the CEO. Since there is no such position, recommend removal of the passage.


Deleted: Executive Director’s

Deleted: executive Director


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such period, have such authority, and perform such duties as are

provided in these bylaws or as the Commission may from time to time

determine.

Section 3.2 Election. The commission shall elect officers for a two (2)

year term, at the first meeting in February every two years. For the first election of

the Commission, officers shall serve a term which begins on the day of the election

and ends at the first meeting in February of the second calendar year.

Section 3.2.1 Regional Rotation. Officers shall rotate by region and follow the order listed below:

Region 1: Southwest (Lake, Mendocino, Marin & Sonoma)

Region 2: Northeast (Shasta, Trinity, Modoc, Siskiyou, Lassen)

Region 3: Northwest (Del Norte & Humboldt)

Region 4: Southeast (Solano, Napa, Yolo)

Section 3.2.2 Regional Nominations of Officers. Commissioners

from each of the counties represented in a region will meet together as

a “nominating committee” and select an officer to represent their

region. That nominee will be taken to the full Board as a

recommendation for consideration and adoption at any regular or

special meeting of the Commission.

Section 3.3 Resignation. Any officer may resign effective on giving

written notice to the Clerk, unless the notice specifies a later time for his or her

resignation to become effective. Upon receipt of such notice, the Clerk shall notify

the Chairperson thereof and shall enter the notice in the proceedings of the


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Commission. The acceptance of a resignation shall not be necessary to make it

effective.

Section 3.4 Vacancies. A vacancy in any office for any cause shall be

filled with a Commissioner representing the same region the officer leaving is from

and follow the same selection process as Section 3.2.2.


10

ARTICLE 4.

MEETINGS

Section 4.1 Regular and Special Meetings. The date, time, and place of

regular meetings of the Commission shall be established by resolution of the

Commission. The Commission shall hold at least four (4) regular meetings each

calendar year. Special meetings may be held at any time and place at the call of the

Chairperson or a majority of the authorized number of Commissioners.

Section 4.2 Open and Public. All meetings shall be open and public,

and the Commission shall comply with the provisions of the Ralph M. Brown Act.

Any one shall be permitted to attend meetings of the Commission, except for closed

sessions, as permitted by applicable law.

Section 4.3 Notice. At least seventy-two (72) hours prior to each

regular meeting, an agenda shall be sent by electronic or regular mail to each

member of the Commission, and to any person who has filed a written request for

the notice with the Commission, and shall be posted at least seventy-two (72) hours

prior to the regular meeting at a location that is freely accessible to the public. The

agenda shall contain a brief general description of each item of business to be

transacted or discussed at the meeting. No action or discussion shall be undertaken

on any item not appearing on the posted agenda, except that members of the

Commission may briefly respond to statements made or questions posed by persons

exercising their public testimony rights or to ask a question for clarification, refer


11

the matter to staff or to other resources for factual information, or request staff to

report back at a subsequent meeting concerning any matter.

Written notice of each special meeting shall be delivered personally or by

electronic mail to each Commissioner and posted on the PHC Website. Such notice

shall be received at least twenty-four (24) hours before the time of such meeting as

specified in the notice. The notice shall specify the time and place of the special

meeting and the agenda for the meeting. Written notice may be dispensed with as to

any Commissioner who at or prior to the time the meeting convenes files with the

Clerk a written waiver of notice. Such waiver may be given by electronic

correspondence. Such written notice may also be dispensed with as to any

Commissioner who is actually present at the meeting at the time it convenes. Notice

shall be required pursuant to this section regardless of whether any action is taken

at the special meeting. At least twenty-four (24) hours before a special meeting, the

CEO shall cause the agenda for the meeting to be posted with the call and notice of

the meeting at the main entrance of the Commission’s executive offices, or, as

determined by duly adopted resolution of the Commission, any other location that is

freely accessible to members of the public. No business not set forth in the posted

agenda shall be considered by the Commission at such special meeting. Notice of

special meetings may be dispensed with only to the extent permitted by applicable

law.

Deleted: call

Deleted: and



12

Section 4.4 Attendance and Participation. Commissioners must attend

the regular meetings of the Commission and of committees to which they are

appointed and shall contribute their time and special abilities as may be required

for the benefit of the Commission. If a Commissioner is unable to attend a meeting,

he or she shall so inform the Clerk giving the reason therefore and the Clerk shall in

turn inform the Chairperson who shall rule in his or her discretion whether the

absence shall be excused. Failure to attend a meeting without first notifying the

Clerk of an inability to attend the meeting shall, except in cases of emergency or

extreme hardship, be treated as an unexcused absence. Two (2) unexcused absences

during a six-month period shall be grounds for the adoption of a resolution

requesting the Board to remove the Commissioner.

Section 4.5 Quorum. No act of the Commission shall be valid unless

half of the total number of Commissioners are present.

Section 4.6 Meeting Agendas. The CEO of the Commission shall cause

to be prepared an agenda for every meeting of the Commission setting forth a brief

general description of each item of business to be transacted or discussed at the

meeting and the time and location of the meeting. Each agenda for a regular

meeting shall provide an opportunity for members of the public to address the

Commission directly on items of interest to the public that are within the subject

matter jurisdiction of the Commission. At least seventy-two (72) hours before a

regular meeting, the CEO shall cause the agenda for the meeting to be posted at the

main entrance of the Commission’s executive offices, or, as determined by duly

Deleted: who are not disqualified from voting due to a conflict of interest

Commented [MB7]: This passage states what constitutes a quorum – majority of the members. Disqualification from Voting is dealt with in Section 4.10. If this Section is left as is, it leads to uncertainty if a quorum can be declared at the beginning of any Board meeting as the roll call would have to be taken and then subtracting roll by projecting possible conflicts of interest of potentially disqualified Board members. Some conflicts of interests are unknowable until a topic is fully elucidated. Therefore, to remove this uncertainty, it is recommended to remove this verbiage.

Commented [MB8]: For consistency and flexibility I would recommend “CEO of the Commission shall cause to be prepared”

Deleted: Executive Director o

Commented [MB10]: Same rationale as previous comment



13

adopted resolution of the Commission, any other location that is freely accessible to

members of the public. No action shall be taken at a regular meeting on any item

not appearing on the posted agenda unless: (a) the Commission determines by a

majority vote that an urgent situation exists under California Government Section

54956.5; (b) the Commission determines by a two-thirds (2/3) vote of the

Commissioners, or, if less than two-thirds (2/3) of the Commissioners are present,

by a unanimous vote of those Commissioners present, that the need to take the

action arose subsequent to the posting of the agenda; or (c) the item was included in

the posted agenda for a meeting of the Commission occurring not more than five (5)

calendar days prior to the meeting at which the item is to be continued .

Section 4.7 Conduct of Business. The items on the agenda shall be

considered in order unless the Chairperson shall announce a change in the order of

consideration.

Section 4.7.1 Unless an agenda item identifies a particular source for a

report, the CEO, the Commissioners, the Commission staff, and consultants shall

report first on the item. The item shall then be open to public comment upon

recognition of the speaker by the Chairperson.

Section 4.8 Resolutions. All official acts of the Commission shall be taken

and authorized by resolution, adopted on motion, duly made, seconded, and adopted

by vote of the Commissioners.

Deleted: emergency



14

Section 4.9 Voting. All resolutions of the Commission shall be

deemed adopted by a majority vote of the Commission and in accordance with

Sections 4.5, 4.6 and 4.10 of these Bylaws.

Section 4.10 Disqualification from Voting. A Commissioner shall be

disqualified from voting on any resolution relating to a transaction in which he or

she has a financial interest, as required by law and the Conflict of Interest Policy of

the Commission. Except as required by law and the Conflicts of Interest Policy of

the Commission, no Commissioner shall be disqualified from serving as a

Commissioner or taking part in any proceedings of the Commission because of any

financial interest of a Commissioner.

Section 4.11 Minutes. The Clerk shall prepare the minutes of each

meeting of the Commission. The minutes shall be an accurate summary of the

Commission’s consideration of each item on the agenda and an accurate record of

each action of the Commission. At a subsequent meeting, the Clerk shall submit the

minutes to the Commission for approval by a majority vote of Commissioners in

attendance at the meeting covered by the minutes. When approved, the minutes

shall be signed by the Clerk and kept with the proceedings of the Commission.

Section 4.12 Closed Sessions. The Commission shall meet in closed

session only as permitted by applicable law. The Commission shall report the

actions taken at a closed session to the public as required by applicable law. A

closed session minute book shall be established and maintained for minutes of all

closed sessions which shall reflect only the topics of discussion and decisions made at

Deleted: affirmative

Deleted: ing

Deleted: to

Deleted: Section


15

the session. The closed session minute book shall be kept confidential and not be a

public record and shall be available only to the Commissioners, the CEO, and the

Commission’s legal counsel, except as otherwise required by applicable law.

Section 4.13 Public Records. All documents and records of the

Commission, not exempt from disclosure by applicable law, shall be public records

under the California Public Records Act (California Government Code Section 6250

et seq.)

Section 4.14 Adjournment. The Commission may adjourn any

meeting to a time and place specified in the resolution of adjournment,

notwithstanding less than a quorum may be present and voting. If no members of

the Commission are present at a regular or adjourned regular meeting, the Clerk

may declare the meeting adjourned to a stated time and place and shall cause

written notice to be given in the same manner as provided in Section 4.3 of these

Bylaws for special meetings, unless such notice is waived as provided for special

meetings. A copy of the order or notice of adjournment shall be posted as required

by applicable law.



16

ARTICLE 5.

COMMITTEES OF THE COMMISSION

Section 5.1 Appointment. The Commission may create standing and

ad hoc committees and appoint members to those committees. At a minimum, there

shall be two (2) committees established, the first a Physician’s committee and the

second a Consumer’s committee. Commissioners may serve on committees and

subcommittees, but no Committee or subcommittee may be composed of a number

of Commissioners constituting a quorum of voting Commissioners. The

Commission may designate one (1) or more Commissioners as alternate members of

any committee or subcommittee to stand in for any absent member at any meeting

of the committee or subcommittee.

Section 5.2 Authority. All committees and subcommittees shall be

advisory only with the exception of the Finance Committee which is authorized

to act for the Board on matters of urgency and/or during the months the Board

does not meet. Items approved by the Finance Committee are to be ratified by

the full board at a subsequent full board meeting.

Section 5.3 Meetings. Regular meetings of committees and

subcommittees shall be held at such times and places as are determined by the

Commission. Special meetings may be held at any time and place as may be

designated by the Chairperson, the CEO or a majority of the members of the Deleted: executive Director


17

committee or subcommittee. A majority of members of the committee or

subcommittee, shall constitute a quorum for the transaction of business.

Section 5.4 Notice. All subcommittees shall comply with the notice

and agenda requirements otherwise applicable to the Commission in these bylaws,

except for subcommittees composed solely of less than a quorum of the members of

the Commission which are not standing subcommittees of the Commission with

either a continuing subject matter jurisdiction or a meeting schedule fixed by

resolution or other formal action of the Commission.

Section 5.5 Minutes. The Clerk or the designee shall prepare minutes

of each meeting of every committee and subcommittee. The minutes shall be an

accurate summary of the committee’s or subcommittee’s consideration of the

matters before it and an accurate record of each action of the committee or

subcommittee. At a subsequent meeting, the Clerk or the designee shall submit the

minutes to the committee or subcommittee for approval by a majority vote of

members in attendance at the meeting covered by the minutes.

Section 5.6 Open and Public. Meetings of committees and

subcommittees need not be open and public, except as may be required by law.


18

ARTICLE 6.

ADVISORY GROUPS

Section 6.1 Composition. The Commission may establish Advisory

Groups and committees of Advisory Groups composed of consumers,

representatives of consumers, and/or providers, in a number and with qualifications

as set forth in the resolution of the Commission establishing the Advisory Groups.

The Advisory Groups shall provide review and recommendations on policies and

procedures considered by the Commission and, to the extent deemed appropriate by

the Commission, shall participate in the Commission’s consideration of policies and

procedures prior to their adoption.

Section 6.2 Authority. Advisory groups shall be considered advisory by

nature.

Section 6.3 Officers. The Advisory Group each shall have a

Chairperson appointed by the Commission. The Clerk of the Commission or a

designee shall serve as the secretary of each of the Advisory Groups.

Section 6.4 Conduct of Proceedings. The provisions of Article IV of

these bylaws pertaining to regular and special meetings of the Commission shall

apply equally to such meetings of the Advisory Groups, all references therein to the

“Commission,” “Commissioners” and “Clerk” being deemed to mean the “Advisory

Groups,” the “members of the Advisory Groups” and the “secretary of the Advisory

Groups,” respectively.

Deleted: 3

Deleted: supply


19

ARTICLE 7.

MANAGEMENT COMMITTEES AND GROUPS

Section 7.1 Appointment. The CEO may, from time to time as

he/she deems necessary, create ad hoc or standing committees or work groups and

appoint members thereto in order to facilitate the internal operations of the

organization. Membership may include employees, community members,

providers, consultants, commissioners, or others, depending on the nature of the

business of the group.



20

ARTICLE 8.

EXECUTION OF DOCUMENTS

Section 8.1 Contracts and Instruments. The Commission may

authorize any officer or officers, agent or agents, employee or employees to enter

into any contract or execute any instrument in the name of and on behalf of the

Commission, and this authority may be general or confined to specific instances;

and, unless so authorized or ratified by the Commission, no officer, agent or

employee shall have any power or authority to bind the Commission by any contract

or engagement or to render it liable for any purpose or for any amount. In the

absence of any such authorization by the Commission, the CEO is hereby

authorized to enter into any contract or execute any instrument in the name of and

on behalf of the Commission. The Clerk shall have the authority to attest to the

signatures of those individuals authorized to enter into contracts or execute

instruments in the name of and on behalf of the Commission and to certify the

incumbency of those signatories.

Section 8.2 Checks, Drafts, Evidences of Indebtedness. All checks,

drafts or other orders of payment of money, notes or other evidences issued in the

name of or on behalf of the Commission or payable to the order of the Commission,

shall be signed or endorsed by such person or persons and in such manner as, from

time to time, shall be determined by resolution of the Commission.



21

ARTICLE 9.

CONFLICTS OF INTEREST POLICY

Section 9.1 Adoption. The Commission shall by resolution adopt and, from

time to time may amend, a Conflicts of Interest Policy for the Commission as

required by applicable law.

Section 9.2 Definition. A member of the Commission shall not be deemed to

be financially interested in a contract entered into by the Commission (within the

meaning of Government Code Section 1090 et seq.) if all the following apply:

1) The Board appointed the member to represent the interests of

physicians, health care practitioners, hospitals, pharmacies, or

other health care organizations.

2) The contract authorized the Commissioner or the organization the

Commissioner represents to provide services to Medi-Cal

beneficiaries under the Commission’s program.

3) The contract contains substantially the same terms and conditions

as contracts entered into with other individuals or organizations

that the Commissioner was appointed to represent.

4) The Commissioner does not influence or attempt to influence the

Commission or other Commissioners to enter into a contract in

which the Commissioner is interested.


22

5) The member discloses the interest to the Commission and abstains

from voting on the contract.

6) The Commission notes the Commissioner’s disclosure and

abstention in its official records and authorizes the contract in

good faith by a vote of the majority of the commission without

counting the vote of the interested member.


23

ARTICLE 10.

MISCELLANEOUS PROCEDURES, PRACTICES AND

POLICIES, INSURANCE, BONDS

Section 10.1 Purchasing, Hiring, Personnel, Etc. The Commission

shall by resolution adopt and, from time to time may amend procedures, practices

and policies for purchasing and acquiring the use of equipment and supplies,

acquiring, constructing and leasing real property and improvements, hiring

employees, managing its personnel and for all other matters, in the determination of

the Commission, as are necessary and appropriate for the proper conduct of the

Commission’s activities and affairs and the furtherance of its authorized purposes.

Section 10.2 Enforcement. Subject to the ultimate authority of the

Commission, the CEO shall be responsible to implement all procedures, practices

and policies adopted by the Commission.

Section 10.3 Insurance. The Commission shall procure property,

casualty, indemnity and workers’ compensation insurance, including without

limitation directors’ and officers’ liability and professional liability coverage, in

such amounts and with such carriers as the Commission shall from time to time

determine shall be prudent in the conduct of its activities; provided, the Commission

may in its discretion provide self insurance or participate in consortia or similar

associations to obtain coverage in lieu of commercial coverage.



24

Section 10.4 Bonds. The Commission shall require all of its members,

officers, employees and agents to be covered by fidelity bonds as required by law

and as the Commission shall determine shall be prudent in the conduct of its

activities.


25

ARTICLE 11.

AMENDMENT OF BYLAWS

These Bylaws may be amended only by resolution of the Commission at any

meeting of the Commission. Notice of such proposed amendment shall be given in

the manner prescribed in Section 4.3 for notices of special meetings of the

Commission.

Deleted: name


REGULAR AGENDA REQUEST for



Resolution Sponsor: Liz Gibboney, CEO, Partnership HealthPlan of CA

Recommendation by: PHC Staff

Topic Description: The PHC budget process is usually a three-step process: budget assumptions comes to Finance Committee and Board in April, a preliminary Health Care budget at Finance Committee in May, with the final budget (health care, administrative, and operations) coming to the Finance Committee and Board in June.

Reason for Resolution: The purpose of this resolution is to provide the attached budget assumptions to the Board for FY 2019-2020 and to direct staff to prepare a full operational budget.

Financial Impact: The financial impact is significant.

Requested Action of the Board: Based on the recommendation of PHC staff, the Board is asked to approve budget assumptions for FY 2019-2020.


REGULAR AGENDA REQUEST for



Resolution Number: 19-

IN THE MATTER OF: APPROVING BUDGET ASSUMPTIONS FOR FY 2019-2020

Recital: Whereas,

A. The Board has responsibility for establishing budget policy and specific budget approval.

B. In prior meetings, PHC staff, the Finance Committee, and Board provided direction and input.

Now, Therefore, It Is Hereby Resolved As Follows:

1. To approve budget assumptions for FY 2019-2020.

PASSED, APPROVED, AND ADOPTED by the Partnership HealthPlan of California this 24th day of April 2019 by motion of Commissioner, seconded by Commissioner, and by the following votes:

AYES: Commissioners:

NOES:

ABSTAINED: Commissioners:

ABSENT: Commissioners:

EXCUSED: Commissioners:

Nancy Starck, Vice Chair

Date

ATTEST:

BY: Cynthia McCamey, Clerk


1

Partnership HealthPlan of California

2019‐20 Budget Assumptions

April 2019

Introduction

Each year, starting in January, PHC begins building the annual health plan budget for Board review and

approval in June. As part of this process, PHC presents to the Finance Committee and the Board key

components of the budget development for review and approval. Specifically, in April, draft Budget

Assumptions are presented to the Finance Committee and Board, followed by the draft budget in May. In

June, the final budget—including previously reviewed component parts and a fully developed

Administrative Budget—are presented to the Board for final review and approval. This document outlines

the Plan’s draft budget assumptions that inform PHC’s revenue and cost projections as impacted by

estimated changes in enrollment, health care costs, administrative costs, as well as disposition of

incentive arrangements and reserves.

Outlook for 2019‐20

As the Plan prepares for the upcoming 2019‐20 fiscal year, PHC continues to implement major initiatives

while being faced with some uncertainties at the State and Federal levels that could impact plan

operations. PHC is closely monitoring these activities and will update our budget accordingly.

PHC expects base program revenues to continue to be leaner than in prior years. With a strong economy

and low unemployment, the Medi‐Cal program is experiencing State‐wide reductions in enrollment. PHC

is eagerly awaiting premium rates from the Department of Health Care Services (DHCS) — to be provided

in late April or early May—to thoroughly support revenue projections. Meanwhile, PHC continues to

implement major elements of new federal Medicaid managed care rules, new benefits required by the

State which includes expanded non‐medical transportation, Whole Child Model program, and also

continue to pursue NCQA accreditation.

Enrollment

The Plan continues to experience membership losses, consistent with statewide trends, due to a number

of factors, including a generally strong economy. PHC anticipates a continued reduction in overall

membership. PHC continues to hear anecdotally of individuals who may have undocumented family

members avoiding government agencies that may be impacting membership as a result of federal

immigration related actions. PHC is generally using average monthly membership trends over the past six

to fifteen months to inform enrollment projections for 2019‐20. The Plan ended FY 2017‐18 with 562,998

members, which has further dropped to 553,164 as of January 2019. This is a decrease of 1.75%, with a

larger portion of the losses coming in more recent months. The membership decreases have been largely


2

felt within MCE, Child, and Adult aid categories, in that order. Based on these trends, PHC is considering a

targeted membership loss from June 2019 to June 2020 of roughly 1.3% ‐ 2.6%. Actual retro eligibility

development for months January 2019 ‐ April 2019 will ultimately inform the Plan’s target.

PHC will continue to monitor membership over the next couple of months before fully finalizing

enrollment projections for the budget.

Revenue

Draft base rates from DHCS are expected in late April or early May 2019, which will be incorporated in the

final budget. Major anticipated revenue impacts are noted below:

Medi‐Cal Rates: As mentioned above, PHC has not yet received the draft rates for FY 2019‐20.

The initial draft of the budget assumes a total revenue increase of 3.2%. This assumes DHCS will

hold the MCE rates flat and does not account for the risk of a rate cut consistent with the prior

year. Between 2017‐18 and 2018‐19, DHCS reduced the MCE rate by roughly $77 million.

Whole Child Model: Effective January 1, 2019, PHC became responsible for the CCS

administrative functions to provide comprehensive treatment of the whole child and care

coordination for CCS‐eligible and non‐CCS‐eligible conditions. PHC has received draft rates from

the State to support this program and they appear reasonable at this time. However, PHC

continues to work with the State regarding program implementation details and related

potential revenue impacts.

Interest Income: During the March 2019 Federal Open Market Committee (FOMC) policy

meeting, Fed Chair Jerome Powell stated policymakers will let data inform the next steps on

monetary policy. They decided to take a ‘wait and see’ approach and did not raise the federal

funds target rate which range is currently at 2.25% to 2.50%. Market analysts are predicting one

to no increases for the remainder of 2019 while for 2020 there is discussion of a possible rate

decrease. While there is not a direct correlation between the federal funds rate and the interest

rate earned on deposits or investments held, the overall yield tends to follow a similar direction.

The Plan will assume an annual rate of return of 1.0%, comparable to current computed yields.

PHC will revise the rate accordingly based on any future actions taken from the Fed’s.

Rental Income: Currently, PHC leases space to 11 tenants in Fairfield and one tenant in Redding.

Tenants are currently being sought for previously leased vacant space while the buildout and use

of the third floor in the newest building will be completed based on company needs. Rental

income will be estimated based on existing and anticipated lease agreements. For anticipated

leases, rental income will be projected using lease rates that are approximately 90% of current

market rates. Building maintenance costs associated with the leased space will be included in

administrative costs.


3

Healthcare Costs

Healthcare cost projections for fiscal year 2019‐20 will be based on the Plan’s historical claims experience

for all counties. PHC cost experience from January 2017 through October 2018 will serve as the base data

for budget development. Completion factors will be incorporated where appropriate to account for

incurred but not yet reported claims. PHC is closely monitoring healthcare costs in the context of

continued decreasing membership and adjusting our budget methodology accordingly to better track how

changes in membership relate to these costs.

The base period costs will be adjusted for:

Changes in provider contracting, either through new payment amendments or ongoing and/or

anticipated negotiations.

Reasonable assumptions regarding underlying utilization trends based on internal analysis and a

review of DHCS trends used in developing Plan capitation rates.

Effects of changes in current case management, utilization management, and specific disease

management programs from year to year, or newly developed or planned programs. Specific

programs such as Complex Case Management are monitored on an annual basis to ensure a

continuous positive return on investment.

Expense impacts related to operational improvements or efficiency gains, inclusive of

configuration changes impacting historical trends.

Other material anticipated benefit, price, and enrollment related changes.

Approved elements of the Strategic Use of Reserve (SUR). Major approved and anticipated

forthcoming SURs include:

o Housing

o Redirection of funds from discontinuation of Medicare copays and deductibles

o Drug Medi‐Cal program implementation

Incentive Arrangements

PHC anticipates maintaining the same overall levels of funding for all five major incentive programs

subject to final revenue projections when rates from DHCS are received. Notably, effective January 1,

2018, the Primary Care Provider Quality Improvement Program (QIP) was restructured away from a fixed

pool program to support better alignment with high level provider performance. The measurement

period was also changed from fiscal to calendar year to align with HEDIS. As a result, there is some

budgetary risk involved in estimating the exact overall payment level, which is dependent on the actual

performance of participating providers. Effective for dates of service beginning August 1, 2019, PHC will

conclude the 2% annual rate increase to all LTC facilities. The funding will be transferred to the LTC QIP,

thereby increasing the total incentive program to 4% for participating entities. This effort ties the

additional funding to better outcomes.


4

Administrative Costs

Staff: During the fiscal year 2018‐19 budget development, staffing changes resulted in a net

increase year over year to meet program changes related Whole Child Model, NCQA, and new

federal rule administrative requirements. For fiscal year 2019‐20 staffing changes will be

primarily related to plan program changes as well as infrastructure needs, including those related

to the implementation of the new core system. As with prior years, a vacancy rate will be

determined based on historical trends. Staffing changes are currently being reviewed and final

numbers are to be determined.

Benefits: PHC is currently researching employer benefit trends and will present the expected

percentage change for employee medical, dental and vision benefits during the May review. Any

benefit changes recommended and approved by the personnel committee will also be

incorporated into the budget. No new benefits are anticipated at this time.

Salaries: Based on the projected employment outlook by the Department of Labor and the FOMC

the unemployment rate is expected to remain low through calendar year 2019. Accordingly and

as with prior year, there are continued indications that there will be competition to recruit and

retain a talented workforce. According to the January 2019 Economic News Release from the

U.S. Bureau of Labor Statistics, the Bay Area employment cost index (ECI) for the 12 months

ending December 2018 is 3.8 percent. Given the ECI and in keeping with the market, PHC will

continue to assume an average four percent merit increase. PHC does not separately adjust

salaries for COLA and merit.

Capital: New capital purchase recommendations, primarily related to IT needs and general

building repairs and maintenance will be included on the final detailed Capital Expenditures

Budget list. Capital items previously approved and in progress or not yet purchased will be

carried forward as in the past. Depreciation will be calculated based on anticipated purchase

dates or completion dates for those items that are construction in progress along with existing

capital assets.

Reserves

Board designated reserves are calculated according to policy (60 days of operating expenses, $15 million

for infrastructure and an additional amount set aside for the Strategic use of Reserves (SUR)‐already

approved, but not yet incurred). In the past years, the Health Plan benefited from the increase in

revenues related to new MCE members. That benefit resulted in a higher fund balance and robust

reserves. PHC, through Board approval, created the SUR initiatives and was able to utilize a substantial

amount of reserves in a manner that increased member access, increased provider reimbursement and

improved overall operational efficiency. However, in fiscal year 2018‐19 with less than expected rate

increases from the State and higher than anticipated costs in health care, particularly pharmacy costs,


5

fiscal losses have diminished the excess reserves. The total fund balance, including the final SUR amount

and the projected Board designated amount for the year ending June 30, 2020 will be presented with the

final budget.


FINANCIAL HIGHLIGHTS Of The Partnership HealthPlan Of California For the Period Ending February 28, 2019

Financial Analysis for the Current Period

Total (Deficit) Surplus

For the month ending February 28, 2019, PHC reported a deficit of $11.9 million, bringing the year-to-date

deficit to $64.7 million. Significant variances are explained below.

Revenue

February’s State Capitation Revenue of $234.1 million increased by $6.1 million in comparison to the prior

month. The month-to-month increase is attributable to the BHT adjustment made in January ’19 and a

timing difference for Indian Health Services revenue in the current month.

Healthcare Costs

Total Healthcare Costs are higher than budget by $10.8 million for the month. For the year-to-date, Total

Healthcare Costs are above budget by $37.4 million. Notable variances are as follows:

Global Sub-capitation is unfavorable to budget $1.5 million for the month of February primarily due to an

adjustment related to prior year Hep C expenses and timing of current month BHT expenses.

Non-Capitated Physician Services is unfavorable to budget $1.5 million for the month and unfavorable $7.2

million year-to-date. The variances are primarily attributable to higher incurred expenses than anticipated.

Inpatient Hospital has an unfavorable year-to-date variance of roughly $12.7 million or 3.18%. Partnership

is actively engaged in contract negotiations with various network hospitals in addition to closely monitoring

expense development.

Pharmacy had a favorable to budget month of $413,229 due to timing of rebates, but remains unfavorable

year-to-date with a variance of $11.6 million, attributable to higher than anticipated utilization along with

increased costs related to the new MedImpact contract. As noted in the prior months, an audit of MedImpact

remains ongoing.

Capitated Ancillary Services has a year-to-date favorable variance of $1.2 million which is attributable to

favorable contract development related to vision services. Staff expects the favorability to continue

throughout the remaining fiscal year which will help offset the unfavorable fee-for-service, non-capitated,

ancillary expenses.

The Transportation expense within Other Medical remains over budget on both a month and year-to-date

basis. Partnership is engaged in contract negotiations with transportation vendors, actively working to reduce

future unfavorable variance development.

Administrative Costs

Total administrative costs are under budget by $1.2 million for the month and $15.5 million for the year-

to-date. The larger year-to-date variances are in Employee Costs, which are due to the open positions that

have been budgeted for but not yet filled. Several of the open positions are designated for the Whole Child

Model (WCM) program that became effective for the PHC January 1, 2019. As the program is in its early


FINANCIAL HIGHLIGHTS Of The Partnership HealthPlan Of California For the Period Ending February 28, 2019

stages of implementation, the determination of the timing of filling those open positions is being reviewed.

Occupancy Costs also contribute to the large year-to-date variance as several budgeted capital items have

yet to be purchased and may not be purchased by the time the fiscal year ends; this results in lower than

budgeted depreciation costs. Several of the projects are going through the contract process and it is likely

that their costs will be carried into the next budget year.

Balance Sheet

The Strategic Use of Reserve balance decreased slightly by $413,068 for the month with activity primarily

in Prenatal Care, Provider Recruitment, the Local Innovation Fund, and the Member Portal; this brings the

total SUR balance to $66.1 million. In order to not understate the balance for uncompleted SURs, the SUR

amounts that have exceeded their original budget have been excluded in calculating the ending balance. See

reconciliation of the unspent SUR to date on the Strategic Use of Reserves Update schedule.

General Statistics

Membership

Membership decreased by 891 members during the month. Medi-Cal Rate Regions 1 and 2 had net decreases

of 497 members and 394 members, respectively.

Utilization Metrics and High Dollar Case

For the fiscal year 2018/19 through February 28, 2019, 125 members reached the $250,000 threshold

with an average cost of $451,561. For fiscal year 2017/18, the number of members reached 458, and

the average cost per case was $417,629. For fiscal year 2016/17, 385 members reached the $250,000

threshold with an average claims cost of $417,608.

Current Ratio/Required Reserves (Excluding Capital Assets)

Current Ratio Including Required Reserves 1.99

Current Ratio Excluding Required Reserves: 1.24

Required Reserves: $473,865,632

Total Fund Balance: $594,121,845

Days of Cash on Hand

Including Required Reserves: 82.43

Excluding Required Reserves: 31.18


Partnership HealthPlan of CaliforniaStrategic Use of Reserves UpdateAs of February 28, 2019

Focus Area InitiativeAllocatedAmount

$ Spent To-Date

Balance at06/30/18

SURAdditions/

Adjustments

SURDeletions

(P&L)

SURDeletions

(B/S)

Re-AllocUnusedFunds

Balance at 02/28/19

Access 1% Reduction 7,800,000 7,800,000 - - - 0Billing Limit 8,400,000 8,400,000 - - - 0Hospital Outpatient Rate Increase (to 165%) 54,000,000 57,119,279 (7,050,570) 3,931,291 - (3,119,279)Long Term Care Provider Rate Increase (2%) 25,800,000 20,894,388 4,905,612 - - 4,905,612Medicare Copays and Deductibles 12,000,000 26,936,535 (14,077,385) - (859,150) (14,936,535)Provider Recruitment Program 8,562,270 4,054,380 5,015,875 92,130 (600,115) 4,507,890Others 25,255,060 22,499,230 3,263,985 59,398 (567,553) - 2,755,830

Access Total 141,817,330 147,703,812 (7,942,482) 4,082,818 (2,026,818) - (5,886,482)Care Coordination Analytics Support 750,000 750,000 - - - 0

CarePlus (Home Visit Program) 2,700,000 2,700,000 - - - 0Case Management System 2,500,000 2,780,411 (187,381) - (93,030) (280,411)IOPCM Grants (Marin CC, Shasta CHC) 900,000 900,000 - - - 0IOPCM Grants (Mendo, PHC, QVMC, La Clinica) 1,500,000 1,500,000 - - - 0Others 1,663,140 3,062,673 (1,381,868) - (17,665) (1,399,533)

Care Coordination Total 10,013,140 11,693,083 (1,569,249) - (110,695) (1,679,943)Community Partnership Discharge Grant 500,000 132,500 367,500 - - 367,500

Local Innovation Fund: SDOH (Round 2) 2,650,000 2,524,756 359,873 - (234,629) 125,244LOCAL INNOVATION FUNDS- Provider Access 1,600,000 1,424,213 175,787 - - 175,787SUR Funding Project for Housing & Sober Living 25,000,000 3,293,714 23,725,746 - (2,019,460) 21,706,286Others 775,310 592,481 349,001 - (166,172) 182,829

Community Partnership Total 30,525,310 7,967,664 24,977,907 - (2,420,261) 22,557,646New Benefits Cardiac Rehab Benefit (RM) 300,000 300,000 - - - 0

Coverage Of Chiropractors & Acupuncturists For Patients On A Narrow Basis (Rm) 300,000 300,000 - - - 0Palliative Care Benefit 1,800,000 1,800,000 - - - 0Optional Medi-Cal Benefits-Vision&Podiatry 18,000,000 5,891,054 (3,685,250) 15,794,196 - 12,108,946Others 413,000 447,430 (34,430) - - (34,430)

New Benefits Total 20,813,000 8,738,485 (3,719,680) 15,794,196 - 12,074,515Plan Infrastructure Analytics Department 1,500,000 1,500,000 - - - 0

Enterprise Data Warehouse 2,700,000 2,700,000 (691) 691 - 0New Building in Fairfield - 4605 Bus. Ctr. Dr. 53,006,400 37,569,197 26,015,600 (10,578,398) 15,437,203NR Buildings (Redding and Eureka) 3,112,511 3,112,511 - - - 0Technical Infrastructure For Hie And Clinical Data 2,000,000 1,876,898 238,837 - (115,735) 123,102Others 3,545,930 4,262,683 (320,953) - (395,800) (716,753)

Plan Infrastructure Total 65,864,841 51,021,290 25,932,794 691 (511,535) (10,578,398) 14,843,552Quality Clinic Consortia Quality Improvement 1,275,000 1,275,000 - - - 0

Expand Hospital P4P Programs 7,500,000 4,750,000 2,750,000 - - 2,750,000Improve Prenatal Care With Pay For Performance Program 1,000,000 201,675.00 1,000,000 - (201,675) 798,325PCP QI Planning 330,000 330,000 - - - 0Pharmacy QIP 3,200,000 3,200,000 - - - 0Others 410,000 272,240 155,752 - (17,992) 137,760

Quality Total 13,715,000 10,028,915 3,905,752 - (219,667) 3,686,085

Grand Total 282,748,621 237,153,248 41,585,042 19,877,705 (5,288,975) (10,578,398) - 45,595,373

Over Expenditures To-Date 26,738,528 20,486,941

Total Unspent SUR To-Date 68,323,570 66,082,314


Partnership HealthPlan of CaliforniaExecutive Dashboard: Medi‐Cal ‐ Rate Region 1 (Solano, Napa, Yolo & Marin Counties)

Key Measures of Financial Performance as of February 28, 2019

2018/19 2018/19 2017/18 2017/18

LOB: Medi‐Cal Budget Estimated FYTD Budget Actual

Average Enrollment 225,260 225,691 235,427 231,879

Cost Per Member Per Month:

Global Subcapitation $45.01 $45.84 $44.89 $44.26

Professional Cap $20.51 $21.67 $20.90 $21.43

Medical Services (FFS &Prop 56) $91.40 $99.77 $79.82 $91.22

IP Hospital ‐ Cap $44.21 $47.32 $42.92 $45.87

IP Hospital ‐ FFS $65.05 $68.20 $60.25 $60.77

Pharmacy $35.73 $39.57 $38.93 $37.31

Long Term Care $52.11 $53.11 $47.23 $47.04

Total $354.02 $375.48 $334.92 $347.91

Total Capitation Revenue PMPM $380.38 $389.09 $351.14 $354.17

Annual Bed Days/1000 323 306

Annual Admissions/1000 66 64

Avg Length of Stay (ALOS) 4.89 4.75

Avg Cost Per Bed Day $4,315 $4,132

ED Visits/1000 550 594

Physician Visits PMPY 2.78 3.14

Pharmacy Avg Cost Per Fill $78.06 $69.56

Pharmacy Pct. Generic Fills 89% 89%

Pharmacy Fills PMPY 7.71 8.16

FY 2017‐2018 Utilization measures as of 6/30/18. FY 2018‐2019 as of Q1.

Global Subcapitation

12%

Professional Cap6%

Medical Services27%

IP Hospital ‐ Cap13%

IP Hospital ‐ FFS18%

Pharmacy10%

Long Term Care14%

Medi‐Cal Expenditures by Cost CategoryFY 2018/2019

Global Subcapitation Professional CapMedical Services IP Hospital ‐ CapIP Hospital ‐ FFS PharmacyLong Term Care

Professional Cap7%

Medical Services30%



Pharmacy12%

Long Term Care16%

Medi‐Cal Expenditures(excluding Kaiser)

by Cost CategoryFY 2018/2019

Professional Cap Medical Services

IP Hospital ‐ Cap IP Hospital ‐ FFS

Pharmacy Long Term Care


Partnership HealthPlan of CaliforniaExecutive Dashboard: Medi‐Cal ‐ Rate Region 2 (Sonoma, Mendocino & Rural 8 Counties)

Key Measures of Financial Performance as of February 28, 2019

2018/19 2018/19 2017/18 2017/18

LOB: Medi‐Cal Budget Estimated FYTD Budget Actual

Average Enrollment 324,740 330,295 337,993 337,109

Cost Per Member Per Month:

Global Subcapitation $13.91 $13.29 $12.59 $14.22

PCP & Spec/Ancillary Capitation $12.41 $12.09 $12.69 $12.99

Medical Services (FFS, AB915 & Prop 56) $119.65 $127.02 $97.65 $111.31

IP Hospital ‐ Cap $18.22 $18.34 $17.76 $18.14

IP Hospital ‐ FFS $98.68 $104.59 $82.55 $90.83

Pharmacy $41.06 $45.34 $45.49 $41.02

Long Term Care $48.50 $48.43 $48.96 $47.10

Total $352.45 $369.11 $317.70 $335.61

Total Capitation Revenue PMPM $375.85 $373.01 $343.33 $347.27

Annual Bed Days/1000 290 298

Annual Admissions/1000 64 63

Avg Length of Stay 4.53 4.72

Avg Cost Per Bed Day $4,493 $4,281

ED Visits/1000 638 671

Physician Visits PMPY 2.55 3.10

Pharmacy Avg Cost Per Fill $71.75 $65.32

Pharmacy Pct. Generic Fills 89% 90%

Pharmacy Fills PMPY 7.88 8.20

FY 2017‐2018 Utilization measures as of 6/30/18. FY 2018‐2019 as of Q1.

Global Subcapitation

4%

Professional Cap3%

Medical Services35%



Pharmacy12%

Long Term Care13%

Medi‐Cal Expenditures by Cost CategoryFY 2018/2019

Global Subcapitation Professional CapMedical Services IP Hospital ‐ CapIP Hospital ‐ FFS PharmacyLong Term Care

Professional Cap3%

Medical Services36%



Pharmacy13%

Long Term Care14%

Medi‐Cal Expenditures(excluding Kaiser)

by Cost CategoryFY 2018/2019

Professional Cap Medical Services

IP Hospital ‐ Cap IP Hospital ‐ FFS

Pharmacy Long Term Care


Please note that the actual enrollment reported here is based on data refreshed as of Mar 1, 2019 and may not tie to the financial statement.

Member Months by County:

County Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19Solano 110,163 109,595 109,373 109,120 108,667 108,468 108,360 108,153 108,190 107,712 107,370 106,841 106,722

Napa 28,442 28,301 28,266 28,301 28,328 28,257 27,955 27,748 27,625 27,389 27,387 27,291 27,170

Yolo 53,621 53,347 53,332 53,010 52,876 52,787 52,792 53,050 53,092 52,761 52,455 52,051 51,439

Sonoma 110,043 109,583 109,227 108,616 107,809 107,546 107,468 106,983 106,700 106,152 105,745 105,868 105,203

Marin 38,919 38,802 38,389 38,243 38,028 37,757 37,562 37,429 37,432 37,074 37,156 37,047 36,907

Mendocino 38,832 39,050 38,896 38,863 38,800 38,579 38,622 38,609 38,603 38,418 38,342 38,039 37,974

Lake 31,295 31,087 30,915 30,867 30,783 30,641 30,546 30,539 30,454 30,268 30,295 30,146 29,917

Del Norte 11,576 11,535 11,456 11,487 11,471 11,362 11,323 11,254 11,231 11,271 11,261 11,198 11,141

Humboldt 52,460 52,456 52,381 52,225 52,173 51,922 51,851 51,810 51,955 51,803 51,891 51,819 51,705

Lassen 7,438 7,419 7,378 7,357 7,334 7,324 7,324 7,289 7,356 7,200 7,121 6,902 6,898

Modoc 3,160 3,148 3,129 3,142 3,129 3,112 3,149 3,153 3,147 3,173 3,195 3,195 3,184

Shasta 59,546 59,619 59,639 59,827 59,735 59,589 59,288 59,366 59,613 59,743 59,418 59,014 58,742

Siskiyou 17,761 17,787 17,677 17,635 17,498 17,478 17,451 17,471 17,489 17,471 17,447 17,409 17,282

Trinity 4,391 4,403 4,348 4,340 4,356 4,305 4,312 4,271 4,298 4,250 4,271 4,266 4,233

All Counties Tota 567,647 566,132 564,406 563,033 560,987 559,127 558,003 557,125 557,185 554,685 553,354 551,086 548,517

Medi-Cal Region 1: Solano, Napa, Yolo & Marin; Medi-Cal Region 2: Sonoma, Mendocino & Rural 8 Counties

571,589 571,364

571,142 570,924

563,289

560,805

558,342

555,899

553,476

551,073

548,691

546,328 543,984

567,647 566,132

564,406 563,033

560,987 559,127 558,003

557,125

557,185

554,685 553,354

551,086

548,517

540,000

545,000

550,000

555,000

560,000

565,000

570,000

575,000

580,000

585,000

590,000

MAR ‐18 APR ‐18 MAY ‐18 J UN ‐18 J UL ‐18 AUG ‐18 S EP ‐18 OCT ‐18 NOV ‐18 DEC ‐18 J AN ‐19 F EB ‐19 MAR ‐19

PARTNERSHIP HEALTHPLAN OF CALIFORNIAACTUAL V. PROJECTED MEDI‐CAL ENROLLMENT

MARCH 2018 ‐ MARCH 2019

Projected (Budgeted) Actual


43,343 As of As of

FINANCIAL INDICATORS Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 YTD Feb-19 Feb-18

Total Enrollment 558,229 555,694 554,259 553,722 554,344 551,393 550,184 549,293 4,427,118 553,390 567,627

Total Revenue 223,622,396 224,627,038 223,011,248 221,839,053 238,320,688 225,145,110 229,293,826 234,635,800 1,820,495,158 227,561,895 208,089,593

Total Health Care Costs 215,098,111 213,849,684 210,084,055 209,799,985 223,764,851 211,650,497 216,013,007 226,612,352 1,726,872,543 215,859,068 200,340,446

Total Administrative Costs 7,937,564 8,576,255 7,892,305 8,992,573 8,487,438 9,080,268 9,079,667 8,720,456 68,766,528 8,595,816 8,006,795

Medi-Cal Hospital & Managed Care Taxes 11,196,958 11,196,958 11,196,958 11,196,958 11,196,958 11,196,958 11,196,958 11,196,958 89,575,664 11,196,958 10,654,816

Total Current Year Surplus (Deficit) (10,610,237) (8,995,859) (6,162,070) (8,150,463) (5,128,559) (6,782,613) (6,995,806) (11,893,966) (64,719,577) (8,089,947) (10,912,464)

State DHS Cap Payable 322,923,752 322,923,752 322,923,752 6,562,106 6,562,106 6,562,106 6,562,106 6,562,106 6,562,106 125,197,723 438,573,422

Total Claims Payable 238,728,946 242,503,297 266,069,388 251,011,405 298,803,635 294,871,571 309,072,419 331,116,229 331,116,229 279,022,111 224,599,526

Total Fund Balance 648,231,184 639,235,325 633,073,254 624,922,791 619,794,231 613,011,618 606,015,811 594,121,845 594,121,845 622,300,758 791,861,913

Capital Assets 84,135,058 85,929,106 88,073,284

Reserve Fund - Required Reserves 468,852,166 470,106,280 470,618,797 375,187,068 374,339,552 371,639,122 373,138,099 376,969,141 376,969,141 410,106,278 449,983,659

Reserve Fund - Capital Assets 89,834,151 93,533,892 97,192,597 97,351,505 96,896,491 96,896,491 91,618,261 65,350,024

Reserve Fund - Strategic Use of Reserves 66,188,548 63,204,100 73,804,101 72,586,265 71,540,381 68,267,962 67,627,949 66,082,314 66,082,314 68,521,132 84,802,272

Unrestricted Fund Balance 29,055,412 19,995,839 577,072 87,315,307 80,380,406 75,911,937 67,898,258 54,173,899 54,173,899 52,055,087 191,725,958

Fund Balance as % of Reserved Funds 104.69% 103.23% 100.09% 116.24% 114.90% 114.13% 112.62% 110.03% 110.03% 109.13% 131.95%

Current Ratio 1.13:1 1.11:1 1.09:1 1.38:1 1.31:1 1.30:1 1.29:1 1.24:1 1.24:1 1.21:1 1.34:1

Medical Loss Ratio w/o Tax 101.26% 100.20% 99.18% 99.60% 98.52% 98.93% 99.04% 101.42% 99.77% 99.77% 101.47%

Admin Ratio w/o Tax 3.74% 4.02% 3.73% 4.27% 3.74% 4.24% 4.16% 3.90% 3.97% 3.97% 4.06%

Profit Margin Ratio w/o Tax -4.99% -4.21% -2.91% -3.87% -2.26% -3.17% -3.21% -5.32% -3.74% -3.74% -5.53%

Average / Month

As of

FINANCIAL INDICATORS Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 YTD Jun-18

Total Enrollment 568,992 569,707 570,705 568,892 566,242 567,337 564,572 564,569 563,691 562,064 560,050 558,880 6,785,701 565,475

Total Revenue 205,914,930 202,463,215 208,643,443 204,685,309 203,524,443 213,293,828 215,921,622 210,269,951 208,960,442 218,229,085 209,685,637 181,661,507 2,483,253,411 206,937,784

Total Health Care Costs 196,109,514 197,452,364 194,021,729 204,535,642 196,831,981 207,039,251 205,275,246 201,457,842 211,879,099 220,366,668 200,913,052 203,354,948 2,439,237,336 203,269,778

Total Administrative Costs 7,493,740 8,045,192 7,555,930 7,729,491 7,898,850 7,913,758 9,650,978 7,766,423 8,209,919 7,858,023 8,643,207 8,987,188 97,752,699 8,146,058

Medi-Cal Hospital & Managed Care Taxes 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 10,654,816 127,857,792 10,654,816

Total Current Year Surplus (Deficit) (8,343,140) (13,689,157) (3,589,032) (18,234,640) (11,861,204) (12,313,996) (9,659,418) (9,609,130) (21,783,393) (20,650,422) (10,525,438) (41,335,445) (181,594,415) (15,132,868)

State DHS Cap Payable 538,743,271 443,571,500 524,648,407 488,902,411 439,666,040 389,323,402 341,860,755 341,871,594 341,886,198 341,814,082 340,900,506 322,923,752 322,923,752 404,675,993

Total Claims Payable 222,550,796 206,631,634 221,639,982 207,148,084 222,592,917 235,244,176 229,118,232 251,870,385 235,067,841 214,457,971 224,847,266 247,403,757 247,403,757 226,547,753

Total Fund Balance 832,092,696 818,403,539 814,814,507 796,579,867 784,718,663 772,404,666 762,745,249 753,136,118 731,352,725 710,702,304 700,176,866 658,841,421 658,841,421 761,330,718

Capital Assets 57,893,788 60,201,112 62,527,138 64,308,066 66,311,268 68,557,648 70,577,856 72,423,316 73,790,467 78,146,812 78,942,486 79,989,985 79,989,985 69,472,495

Reserved Funds - Strategic Use of Reserves 104,524,973 98,369,480 94,884,494 90,902,268 85,254,785 70,540,971 68,189,018 65,752,188 63,856,025 55,608,127 55,043,647 68,323,570 68,323,570 76,770,796

Reserved Funds - Required Reserves 450,075,961 449,170,817 448,257,893 449,389,049 448,949,490 450,340,836 451,528,188 452,157,040 454,400,725 457,737,337 459,214,840 459,441,304 459,441,304 452,555,290

Unrestricted Fund Balance 219,597,974 210,662,130 209,144,982 191,980,484 184,203,120 182,965,211 172,450,186 162,803,575 139,305,508 119,210,028 106,975,893 51,086,562 51,086,562 162,532,138

Fund Balance as % of Reserved Funds 135.85% 134.66% 134.53% 131.75% 130.67% 131.04% 129.21% 127.58% 123.53% 120.15% 118.03% 108.41% 108.41% 127.14%

Current Ratio 1.36:1 1.39:1 1.34:1 1.34:1 1.34:1 1.33:1 1.33:1 1.30:1 1.27:1 1.25:1 1.20:1 1.17:1 1.17:1 1.30:1

Medical Loss Ratio w/o Tax 100.44% 102.94% 98.00% 105.41% 102.05% 102.17% 100.00% 100.92% 106.84% 106.16% 100.95% 118.92% 103.56% 103.56%

Admin Ratio w/o Tax 3.84% 4.19% 3.82% 3.98% 4.10% 3.91% 4.70% 3.89% 4.14% 3.79% 4.34% 5.26% 4.15% 4.15%

Profit Margin Ratio w/o Tax -4.27% -7.14% -1.81% -9.40% -6.15% -6.08% -4.71% -4.81% -10.98% -9.95% -5.29% -24.17% -7.71% -7.71%

Partnership HealthPlan of CaliforniaComparative Financial Indicators Monthly ReportFiscal Year 2018 - 2019 & Fiscal Year 2017 - 2018

Average / Month


$73.8 $78.1 $78.9 $80.0 $84.1 $85.9 $88.1 $89.8 $93.5 $97.2 $97.4 $96.9

$454.4 $457.7 $459.2 $459.4 $468.9 $470.1 $470.6

$375.2 $374.3 $371.6 $373.1 $377.0

$63.9 $55.6 $55.0 $68.3

$66.2 $63.2 $73.8

$72.6 $71.5 $68.3 $66.5 $66.1

$139.3$119.2

$107.0

$51.1$29.1

$20.0 $0.6 $87.3 $80.4$75.9 $69.0 $54.2

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2018 Jan 2019 Feb 2019

Partnership HealthPlan of CaliforniaFund Balance Comparison

(in Millions of Dollars)

Capital Assets Reserves - Capital Assets Required Reserves Strategic Use of Reserves Unrestricted Funds

For the Past 12 Months Ending February 28, 2019


CURRENT MONTH

PRIORMONTH INC / DEC MEMBERSHIP SUMMARY

CURRENT YTD AVG

PRIOR YTD AVG VARIANCE

222,404 222,901 (497) Medi-Cal Region 1 224,537 231,488 (6,951) 326,889 327,283 (394) Medi-Cal Region 2 328,853 336,139 (7,286) 549,293 550,184 (891) TOTAL 553,390 567,627 (14,237)

ACTUALMONTH

BUDGETMONTH

$ VARIANCE MONTH FINANCIAL SUMMARY

ACTUAL YTD

BUDGET YTD

$ VARIANCE YTD

234,635,800 234,500,436 135,364 Total Revenue 1,820,495,158 1,818,877,611 1,617,547 226,612,352 215,815,927 (10,796,425) Total Healthcare Costs 1,726,872,543 1,689,476,381 (37,396,162)

8,720,456 9,968,953 1,248,497 Total Administrative Costs 68,766,528 84,289,529 15,523,001 11,196,958 11,289,604 92,646 Medi-Cal Managed Care Tax 89,575,664 89,379,347 (196,317)

(11,893,966) (2,574,048) (9,319,918) Total Current Year Surplus (Deficit) (64,719,577) (44,267,646) (20,451,931)

101.42% 96.69%Medical Loss Ratio (HC Costs as a % of

Rev, excluding Managed Care Tax) 99.77% 97.69%

3.90% 4.47%Admin Ratio (Admin Costs as a % of Rev, excluding Managed Care Tax) 3.97% 4.87%

PARTNERSHIP HEALTHPLAN OF CALIFORNIAMembership and Financial Summary

For The Period Ending February 28, 2019

Page 1 of 1


February 2019 January 2019

A S S E T SCurrent Assets

Cash &Cash Equivalents 229,386,771 234,334,438

ReceivablesAccrued Interest 377,400 187,700State DHS - Cap Rec 376,697,661 346,503,671Funds Receivable - Prov Risk 4,657,891 4,657,891Miscellaneous Receivable 144,011 163,693

Total Receivables 381,876,963 351,512,955

Other Current AssetsPayroll Clearing (2,598) (779)Prepaid Expenses 5,399,005 5,956,951

Total Other Current Assets 5,396,407 5,956,172

Total Current Assets 616,660,141 591,803,565

Non-Current AssetsFixed Assets

Motor Vehicles 139,824 139,824Furniture & Fixtures 6,226,037 6,226,037Computer Equipment - HP 541,886 541,886Computer Equipment 8,674,105 8,647,967Computer Software 14,000,727 14,000,727Leasehold Improvements 962,374 962,374Land 6,767,292 6,767,292Building 56,641,522 56,641,522Building Improvements 24,373,255 24,196,029Accum Depr - Motor Vehicles (118,500) (117,084)Accum Depr - Furniture (5,469,478) (5,445,785)Accum Depr - Comp Equip - HP (541,886) (541,886)Accum Depr - Comp Equipment (6,203,604) (6,098,374)Accum Depr - Computer Sftware (11,771,795) (11,597,866)Accum Depr - Lsehld Improve (921,169) (919,098)Accum Depr - Building (4,405,131) (4,284,102)Accum Depr - Bldg Improvements (3,284,286) (3,140,622)Construction Work-In-Progress 11,285,318 11,372,663

Total Fixed Assets 96,896,491 97,351,504

Other Non-Current AssetsDeposits 61,442 24,271Board-Designated Reserves 376,669,141 372,838,099Knox-Keene Reserves 300,000 300,000Net Pension Asset 1,018,026 1,018,026Deferred Outflows Of Resources 1,077,039 1,077,039

Total Other Non-Current Assets 379,125,648 375,257,435

Total Non-Current Assets 476,022,139 472,608,939

Total Assets 1,092,682,280 1,064,412,504

PARTNERSHIP HEALTHPLAN OF CALIFORNIABalance Sheet

As Of February 28, 2019

Page 1 of 2


February 2019 January 2019

PARTNERSHIP HEALTHPLAN OF CALIFORNIABalance Sheet

As Of February 28, 2019

L I A B I L I T I E S & F U N D B A L A N C E Liabilities

Current LiabilitiesAccounts Payable 82,766,328 72,568,403Unearned Income 201,424 134,966Suspense Account 1,255,776 1,493,882Capitation Payable 3,979,897 1,965,177State DHS - Cap Payable 6,562,106 6,562,106Claims Payable 88,092,368 85,302,481Incurred But Not Reported-IBNR 243,023,862 223,769,938Quality Improvement Programs 72,219,914 66,140,979

Total Current Liabilities 498,101,675 457,937,932

Non-Current LiabilitiesDeferred Inflows Of Resources 458,760 458,760

Total Non-Current Liabilities 458,760 458,760

Total Liabilities 498,560,435 458,396,692

Fund BalanceUnrestricted Fund Balance 54,173,899 69,030,826

Reserved FundsReserve Fund-Board Designated 361,669,141 357,838,099Reserve Fund-Board Designated-Infrastructure 15,000,000 15,000,000Reserve Fund-Board Designated-Capital Assets 96,896,491 97,351,505Reserve Fund-Strategic Use Of Reserve 66,082,314 66,495,382Reserve For Restricted Fund-Knox-Keene 300,000 300,000

Total Reserved Funds 539,947,946 536,984,986

Total Fund Balance 594,121,845 606,015,812

Total Liabilites And Fund Balance 1,092,682,280 1,064,412,504

Page 2 of 2


Current Month Activity Year-To-Date Activity

CASH FLOWS FROM OPERATING ACTIVITIES:Cash Received From:Capitation from California Department of Health Care Service 203,877,516 1,335,599,327 Other Revenues 2,458 536,866Cash Payments to Providers for Medi-Cal Members

Capitation Payments (37,251,139) (331,185,038) Medical Claims Payments (157,122,497) (1,279,576,062)

Cash Payments to Vendors (3,324,487) (97,233,787) Cash Payments to Employees (6,792,595) (57,404,697) Net Cash (Used) Provided by Operating Activities (610,744) (429,263,391)

CASH FLOWS FROM CAPITAL FINANCING & RELATED ACTIVITIES:Purchases of Capital Assets (770,859) (22,114,145) Net Cash Used by Capital Financial & Related Activities (770,859) (22,114,145)

CASH FLOWS FROM INVESTING ACTIVITIES:Board-Designated Reserve Transfers (3,831,042) 82,472,163Interest and Dividends on Investments 264,979 3,525,580Net Cash (Used) Provided by Investing Activities (3,566,063) 85,997,743

NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS (4,947,667) (365,379,793)

CASH & CASH EQUIVALENTS, BEGINNING 234,334,438 594,766,564

CASH & CASH EQUIVALENTS, ENDING 229,386,771 229,386,771

RECONCILIATION OF OPERATING (LOSS) INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:

TOTAL OPERATING (LOSS) INCOME (12,348,645) (68,431,277) DEPRECIATION 571,033 4,552,798CHANGES IN ASSETS AND LIABILITIES:Other Receivables 19,682 (51,494) California Department of Health Services Receivable (30,193,990) (163,485,203) Other Assets 1,177,435 (902,915) Accounts Payable and Accrued Expenses 12,040,997 (307,860,069) Accrued Claims Payable 22,043,810 83,712,472Quality Improvement Programs 6,078,935 23,202,297Net Cash Provided (Used) by Operating Activities (610,744) (429,263,391)

PARTNERSHIP HEALTHPLAN OF CALIFORNIAStatement of Cash Flow

For The Period Ending February 28, 2019

Page 1 of 1


-

ACTUALMONTH

BUDGETMONTH

$ VARIANCE MONTH

ACTUAL MONTH PMPM

BUDGET MONTH PMPM

ACTUAL YTD

BUDGET YTD

$ VARIANCE

YTD

ACTUAL YTD

PMPM

BUDGET YTD

PMPM

549,293 549,293 - TOTAL MEMBERSHIP 4,427,118 4,427,118 -

REVENUE234,071,506 234,071,506 - 426.13 426.13 State Capitation Revenue 1,815,446,176 1,815,446,171 5 410.07 410.07

454,679 236,280 218,399 0.83 0.43 Interest Income 3,711,701 1,890,240 1,821,461 0.84 0.43 109,615 192,650 (83,035) 0.20 0.35 Other Revenue 1,337,281 1,541,200 (203,919) 0.30 0.35

234,635,800 234,500,436 135,364 427.16 426.91 TOTAL REVENUE 1,820,495,158 1,818,877,611 1,617,547 411.21 410.85

HEALTHCARE COSTS16,247,174 14,714,396 (1,532,778) 29.58 26.79 Global Subcapitation 115,776,173 116,924,552 1,148,379 26.15 26.41

2,138,593 2,148,710 10,117 3.89 3.91 Capitated Medical Groups 16,489,508 17,310,035 820,527 3.72 3.91

Physician Services5,350,284 5,308,997 (41,287) 9.74 9.67 PCP Capitation 43,336,978 42,930,471 (406,507) 9.79 9.70

382,082 379,889 (2,193) 0.70 0.69 Specialty Capitation 3,099,783 3,082,770 (17,013) 0.70 0.70 27,032,544 25,538,046 (1,494,498) 49.21 46.49 Non-Capitated Physician Services 208,997,477 201,775,200 (7,222,277) 47.21 45.58

32,764,910 31,226,932 (1,537,978) 59.65 56.85 Total Physician Services 255,434,238 247,788,441 (7,645,797) 57.70 55.98

Inpatient Hospital16,189,078 16,113,958 (75,120) 29.47 29.34 Hospital Capitation 131,200,771 130,398,094 (802,677) 29.64 29.45 55,690,319 51,095,678 (4,594,641) 101.39 93.02 Inpatient Hospital - FFS 398,979,493 386,293,463 (12,686,030) 90.12 87.26 3,010,313 1,253,664 (1,756,649) 5.48 2.28 Hospital Stoploss 11,785,960 10,029,312 (1,756,648) 2.66 2.27

74,889,710 68,463,300 (6,426,410) 136.34 124.64 Total Inpatient Hospital 541,966,224 526,720,869 (15,245,355) 122.42 118.98

27,533,924 27,118,333 (415,591) 50.13 49.37 Long Term Care 220,183,869 220,138,590 (45,279) 49.74 49.73

23,304,042 23,717,271 413,229 42.43 43.18 Pharmacy 188,543,866 176,957,403 (11,586,463) 42.59 39.97

Ancillary Services977,421 1,216,098 238,677 1.78 2.21 Ancillary Services - Capitated 8,593,525 9,747,705 1,154,180 1.94 2.20

36,794,901 35,834,898 (960,003) 66.99 65.24 Ancillary Services - Non-Capitated 287,666,590 281,217,482 (6,449,108) 64.98 63.52 37,772,322 37,050,996 (721,326) 68.77 67.45 Total Ancillary Services 296,260,115 290,965,187 (5,294,928) 66.92 65.72

Other Medical2,099,298 2,113,513 14,215 3.82 3.85 Quality Assurance 13,931,686 18,091,639 4,159,953 3.15 4.09

172,749 666,670 493,921 0.31 1.21 Healthcare Investment Funds 3,435,104 5,333,360 1,898,256 0.78 1.20 78,146 129,610 51,464 0.14 0.24 Advice Nurse 719,115 1,036,880 317,765 0.16 0.23 9,259 21,410 12,151 0.02 0.04 HIPP Payments 87,158 171,280 84,122 0.02 0.04

3,331,940 2,174,501 (1,157,439) 6.07 3.96 Transportation 23,370,423 17,363,083 (6,007,340) 5.28 3.92 5,691,392 5,105,704 (585,688) 10.36 9.30 Total Other Medical 41,543,486 41,996,242 452,756 9.39 9.48

6,270,285 6,270,285 - 11.42 11.42 Quality Improvement Programs 50,675,062 50,675,062 - 11.45 11.45

226,612,352 215,815,927 (10,796,425) 412.57 392.91 TOTAL HEALTHCARE COSTS 1,726,872,543 1,689,476,381 (37,396,162) 390.08 381.63

ADMINISTRATIVE COSTS5,775,080 6,133,483 358,403 10.51 11.17 Employee 46,742,510 53,605,771 6,863,261 10.56 12.11

38,453 78,034 39,581 0.07 0.14 Travel And Meals 365,758 624,272 258,514 0.08 0.14 821,542 1,501,297 679,755 1.50 2.73 Occupancy 6,635,055 12,010,376 5,375,321 1.50 2.71 351,729 467,128 115,399 0.64 0.85 Operational 2,208,999 3,737,022 1,528,023 0.50 0.84

1,210,011 1,364,311 154,300 2.20 2.48 Professional Services 8,461,603 10,914,488 2,452,885 1.91 2.47 523,641 424,700 (98,941) 0.95 0.77 Computer And Data 4,352,604 3,397,600 (955,004) 0.98 0.77

8,720,456 9,968,953 1,248,497 15.87 18.14 TOTAL ADMINISTRATIVE COSTS 68,766,528 84,289,529 15,523,001 15.53 19.04

11,196,958 11,289,604 92,646 20.38 20.55 Medi-Cal Managed Care Tax 89,575,664 89,379,347 (196,317) 20.23 20.19

(11,893,966) (2,574,048) (9,319,918) (21.66) (4.69) TOTAL CURRENT YEAR SURPLUS

(DEFICIT) (64,719,577) (44,267,646) (20,451,931) (14.63) (10.01)


For The Period Ending February 28, 2019Statement of Revenues and Expenses

**The Notes to the Financial Statement are an Integral Part of this Statement

Page 1 of 1


PARTNERSHIP HEALTHPLAN OF CALIFORNIA NOTES TO FINANCIAL STATEMENTS

February 28, 2019

Page 1 of 3

1. ORGANIZATION

The Partnership HealthPlan of California (PHC) was formed as a health insurance organization,and is legally a subdivision of the State of California, but is not part of any city, county or stategovernment system. PHC has quasi-independent political jurisdiction to contract with the Statefor managing Medi-Cal beneficiaries who reside in various Northern California Counties. PHC isa combined public and private effort engaged principally in providing a more cost-effectivemethod of health care. PHC began serving Medi-Cal eligible persons in Solano in May 1994. Thatwas followed by Napa in March of 1998, Yolo in March of 2001, Sonoma in October 2009, Marinand Mendocino in July 2011, and eight Northern Counties in September 2013. Beginning July2018 and in accordance with direction from the Department of Health Care Services (DHCS), PHChas consolidated its reporting from these fourteen counties into two regions; these are in alignmentwith the two DHCS rating regions.

As a public agency, the HealthPlan is exempt from state and federal income tax.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING POLICIES:The accounting and reporting policies of PHC conform to generally-accepted accountingprinciples and general practices within the healthcare industry.

PROPERTY AND EQUIPMENT:Effective July 2015, property and equipment totaling $10,000 or more are recorded at cost; thisincludes assets acquired through capital leases and improvements that significantly add to theproductive capacity or extend the useful life of the asset. Costs of maintenance and repairs areexpensed as incurred. Depreciation for financial reporting purposes is provided on a straight-linemethod over the estimated useful life of the asset. The costs of major remodeling andimprovements are capitalized as building or leasehold improvements. Leasehold improvementsare amortized using the straight-line method over the shorter of the remaining term of theapplicable lease or their estimated useful life. Building improvements are depreciated over theirestimated useful life. Buildings purchased are recorded at cost and are depreciated on the straight-line basis over their estimated useful lives.

INVESTMENTS:PHC investments can consist of U.S. Treasury Securities, Agency Notes, Repurchase Agreements,Shares of Beneficial Interest and Commercial Paper and are carried at fair value.

BOARD-DESIGNATED & KNOX KEENE RESERVES:In April 2004, PHC’s Board established a policy to set aside in a reserve account a designated



February 28, 2019

Page 2 of 3

amount that represents the Knox-Keene Tangible Net Equity (TNE) requirement. This policy was subsequently revised in May 2012 and beginning July 2012, the new methodology has been reflected on the balance sheet. Based on this policy and as of As of February 2019, PHC has Board-Designated and Knox-Keene Reserves of $473.6 million and $0.3 million respectively. To account for the Board approved Strategic Use Of Reserves (SUR) initiatives, $66.1 million has been set aside as a “Reserve Fund-Strategic Use of Reserve.” The amount represents the net amount remaining of all of the SUR projects that have been approved to date; this balance is periodically adjusted as projects are completed.

3. STATE CAPITATION REVENUE

Medi-Cal capitation revenue is based on the monthly capitation rates, as provided for in the State contract, and the actual number of Medi-Cal eligible members. Capitation revenues are paid by the State on a monthly basis in arrears based on estimated membership. Prior to January 2010, enrollment was subject to retrospective adjustments by the State upon completion of the 6th and 12th months following the month of service. Effective January 2010, the retrospective adjustments have been replaced with monthly reconciliations with the State. As such, capitation revenue includes an estimate for amounts receivable from or refundable to State for these retrospective adjustments. These estimates are continually monitored and adjusted, as necessary, as experience develops or new information becomes known.

Effective with the enrollment of the Adult Expansion Population per ACA in January 2014 the HealthPlan was subject to State requirements to meet a minimum 85% medical loss ratio (MLR) for this population. Specifically, the HealthPlan was required to expend at least 85% of the Medi-Cal capitation revenue received for this population on allowable medical expenses as defined by the State. In the event the HealthPlan expended less than the 85% requirement, the Health Plan would be required to return to the State the difference between the minimum threshold and the actual allowed medical expenses. This difference was recorded as a reduction to Medi-Cal capitation revenue and the related liability was recorded in State DHS – Cap Payable. As of February 2019, the remaining amount due to the State is $6.6 million.

Effective with California SB 78 and beginning July 2012, the health plans were required to pay a gross premium tax on Medi-Cal Revenue. The rate in effect from July 2012 to June 2013 would remain at 2.35% and beginning July 2013, the tax rate increased to 3.94% and expired in June 2016. Effective July 2016, SB X2-2 revised the MCO Tax, which is implemented by DHCS. The tax is calculated by DHCS and is based on projected membership. Projected tax for fiscal year 2018/19 is $134.4 million.

4. HEALTH CARE COST

PHC continues to develop completion factors to calculate estimated liability for claims incurred



February 28, 2019

Page 3 of 3

but not reported. These factors are reviewed and adjusted as more historical data become available. Budgeted capitation revenues and health care costs are adjusted each month to reflect changes in enrollee counts.

5. QUALITY IMPROVEMENT PROGRAM

PHC maintains quality incentive contracts with acute care hospitals and primary care physicians.As of February 2019, PHC has accrued a Quality Incentive Program payout for Fiscal Years2017/2018 and 2018/2019 of $23.7 million and $48.5 million respectively.

6. ESTIMATES

Due to the nature of the operations of the Partnership HealthPlan, it is necessary to estimateamounts for financial statement presentation. Substantial overstatement or understatement of theseestimates would have a significant impact on the statements. The items estimated through variousmethodologies are:- Value of Claims Incurred But Not Received- Quality Incentive Payouts- Earned Capitation Revenues- Total Number of Members- Retro Capitation Expense for Certain Providers

7. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, the HealthPlan is party to claims and legal actions by enrollees,providers, and others. After consulting with legal counsel, HealthPlan management is of theopinion any liability that may ultimately be incurred as a result of claims or legal actions will nothave a material effect on the financial position or results of the operations of the HealthPlan.

8. UNUSUAL OR INFREQUENT ITEMS REPORTED IN CURRENT MONTH’SFINANCIAL STATEMENTS

None noted.


Partnership HealthPlan of CaliforniaInvestment ScheduleFebruary 28, 2019

Name of Investment Investment Type Yield to Maturity

Trade Date Maturity Date

Call Date Face Value Market Value Credit Rating Agency

Credit Rating

FUNDS HELD FOR INVESTMENT:

Highmark Money Market Cash & Cash Equiv NA Various NA NA NA 1,503,936$ NA NRCertificate of Deposit for Knox Keene Cash & Cash Equiv 0.00015 9/12/2015 12/30/2018 NA NA 300,000$ NA NR

FUNDS HELD FOR OPERATIONS:

Merrill Lynch Insitutional Cash for Operations NA NA NA NA NA 67,435,466$ Merrill Lynch MMA - Checking Cash for Operations NA NA NA NA NA 633,448$ UBOC - General/MMA and Checking Cash for Operations NA NA NA NA NA 431,094,317$ Government Investment Pools (LAIF) Cash for Operations NA NA NA NA NA 65,000,000$ Government Investment Pools (County) Cash for Operations NA NA NA NA NA 38,930,441$ West America Payroll Cash for Operations NA NA NA NA NA 1,455,005$ Petty Cash Cash for Operations NA NA NA NA NA 3,300$

GRAND TOTAL: 606,355,912$

Required Reserves (Liquid)Board Designated Assets 376,669,141$ Knox Keene Reserves 300,000$ Total Required Reserves (Liquid) 376,969,141$

Cash on Hand / Cash Days Available:Including Requried Reserves 606,355,912$ Excluding Required Reserves 229,386,771$

Cash Days Available incl. Required Reserves 82.43

Cash Days Available excl. Required Reserves 31.18


Partnership HealthPlan of CaliforniaInvestment Yield Trends

11 10 9 8 7 6 5 4 3 2 1 1

FISCAL YEAR 18/19 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN YTD

Interest Income 372,994 530,984 384,540 500,869 404,948 415,805 646,883 454,679 3,711,702Cash & Investments at Historical Cost (1) 360,595,665 563,240,721 578,907,713 291,918,698 318,206,676 280,512,593 234,334,438 229,386,771 357,137,909

Computed Yield (2) 0.93% 1.38% 0.81% 1.38% 1.59% 1.67% 3.02% 2.35%Total Rate of Return (3) 1.24% 1.17% 1.03% 1.20% 1.25% 1.31% 1.49% 1.56%CA Pooled Money Investment Account (PMIA) (4) 1.94% 2.00% 2.06% 2.14% 2.21% 2.29% 2.36% 2.39%

FISCAL YEAR 17/18 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN YTD

Interest Income 332,589 222,615 211,359 368,385 224,017 223,248 479,060 297,446 305,917 484,364 339,943 375,978 3,864,921Cash & Investments at Historical Cost (1) 941,701,479 910,772,703 877,294,392 858,013,986 835,453,426 771,800,557 712,929,042 730,790,113 675,072,624 641,816,629 731,017,561 597,203,014

Computed Yield (2) 0.52% 0.29% 0.28% 0.51% 0.32% 0.33% 0.77% 0.49% 0.52% 0.88% 0.59% 0.68%Total Rate of Return (3) 0.42% 0.36% 0.34% 0.38% 0.37% 0.37% 0.42% 0.43% 0.44% 0.47% 0.48% 0.50%CA Pooled Money Investment Account (PMIA) (4) 1.05% 1.08% 1.11% 1.14% 1.17% 1.24% 1.35% 1.41% 1.52% 1.66% 1.76% 1.85%

NOTES:

(1) Investment balances include Restricted Cash and Board Designated Reserves YTD for Cash & Investments is average year-to-date

(2) Computed yield is calculated by annualizing the current month's interest divided by the current month's average balance.

(3) Total Rate of Return is computed based on year-to-date interest income annualized divided by an average of the fiscal year's portfolio's market value at month-end.

(4) LAIF limits the amount a single government entity can deposit into LAIF; currently that amount is set at $65 million.


0.010%0.110%0.210%0.310%0.410%0.510%0.610%0.710%0.810%0.910%1.010%1.110%1.210%1.310%1.410%1.510%1.610%1.710%1.810%1.910%2.010%2.110%2.210%2.310%2.410%2.510%2.610%2.710%2.810%2.910%3.010%3.110%3.210%

JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN

Per

cent

age

Yie

ld

Periods

Partnership HealthPlan of California Investment Yield Trends

FISCAL YEAR 18/19

PMIA 18/19

FISCAL YEAR 17/18

PMIA 17/18


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