June 2017

MedStar Family Choice Highlights

District of Columbia Managed Care Program
 MedStar Family Choice District of Columbia Medicaid
Summary
Maintaining MedStar Family Choice (MFC) as a Medicaid provider is in the best interests of the
District and its most vulnerable residents who depend on Medicaid for their healthcare.
MFC has been a partner to the District in the managed care program since 2012, has financial and
quality metrics that compare favorably with the other two incumbents, and has relevant experience in
the District that far exceeds the proposed new entrant.

Under DHCFs proposal, nearly 60,000 District residents will face needless disruption of the high-
quality healthcare they have been receiving over the past four years. Tens of thousands will have to
change their insurance coverage and many could lose access to their doctors.

MFCs highest priority has always been to deliver an integrated patient care experience using the full
resources of MedStar Health and our community partners; we are accountable to our enrollees and the
District of Columbia government, not to shareholders outside the District.

Our quality and patient satisfaction is reflected in our enrollments, which have grown by 70% over the
past 5 years.

2
 MedStar Family Choice District of Columbia Medicaid
History of Service
MedStar Family Choice (MFC) entered the Healthy Families and Alliance programs in late 2012 at a time when DHCF was facing issues
with two of its then-current MCOs, United and Chartered.

Through June 2013, MFC was building its base in the Districts Medicaid market, growing its membership, and providing its 10,000
members with high-quality care and an excellent patient experience. In July 2013, MFC acquired nearly 25,000 members from Uniteds
MCO as it exited the program.

MFC spent the next 12 months addressing the health needs of its new members, many of whom had previously lacked adequate access to
high quality care and an outstanding customer experience. During this time, MFC experienced its highest patient utilization statistics as it
dealt with the pent-up health needs of its members.

Following this 12 month period, MFCs utilization statistics and financial metrics began their drastic improvement, which is continuing
through the current reporting period. This is consistent with MFCs experience in getting new members into MFCs system of care and
addressing these members health needs.

Surprisingly, MFC was not recommended by DHCF to participate in the next five year Medicaid contract despite demonstrating financial
and quality metrics that compare favorably with the other two incumbents and far surpassing the proposed new entrant in relevant
experience in the District.

If the DHCF decision holds, MFCs nearly 60,000 District-resident members (more than 23,000 in Wards 7 and 8 alone) will face not only
inconvenience, but disruption to the high quality healthcare they have been receiving. Tens of thousands will be required to change their
insurance coverage and many could lose access to their physicians. This would be particularly disruptive to their care, causing uncertainty
and stress.

3
 MedStar Family Choice District of Columbia Medicaid
Uniquely Qualified to Serve the District
MedStar Family Choice (MFC) is the only locally-owned
and controlled MCO. MFC has the Largest Medicaid Network
MFC is not only an insurer, it also provides care to its MedStar Other
members. MFC is owned by MedStar Health, the largest
healthcare provider for District residents. MedStars Owned or Contracted
hospitals and physicians provide health care to more Provider Type Employed Providers Total
than 35% of the District population.
Primary care 190 527 717
MFC has the largest provider network in the District,
ensuring the most needy residents access to quality care, Specialist 917 1,265 2,182
including top-rated hospitals in the Washington metro
area. Hospital 3 6 9
Each year, MedStar also treats hundreds of patients from Totals 1,110 1,798 2,908
the other two MCO plans. Special procedures ensure we
can quickly gain approvals and provide treatment.

MFCs provider network far exceeds the requirements set Almost two-thirds of the MedStar network
by the District for the MCOs. are community-based providers.

4
 MedStar Family Choice District of Columbia Medicaid
MFC Has Become the MCO of Choice in DC
The Districts Medicaid and Healthcare
Alliance beneficiaries have voted with their 21 % MARKET SHARE 29 %
feet: 58,300
54,300
MFC enrollment has grown by 70 percent during the 48,200
past five years. 44,900

MFCs market share has grown from 21% to 29%

Alliance
during the same period. 34,200
Healthy Families
MFC is voluntarily selected by one out of three
members, compared to one out of four for AmeriHealth
and one out of eight for Trusted.

MFC provides more than 58,000 Healthy Families and

Alliance members with an outstanding patient
experience through easy access to its extensive
network of providers who deliver best-in-class, high-
quality care. Dec 2013 Dec 2014 Dec 2015 Dec 2016 May 2017

5
 MedStar Family Choice District of Columbia Medicaid
Controlling Costs by Reducing the Need for Hospital Care
The year over year growth in medical expenses for both adults and children in the Medicaid
program has moderated due mostly to cost control measures employed by MedStar.
- DHCF Managed Care End-of-Year Report (January 2016 December 2016)

Reducing the need for inpatient admissions by providing regular access to primary
care and chronic disease management cuts costs, while providing value to Inpatient Admissions per 1,000 Members
patients who spend less time away from work and their families.
129
MedStar Family Choice (MFC) inpatient admission rates have decreased 27%
from 2014 (our first year of significant membership growth) to 2016, as we have 114
addressed the pent-up health needs of our new members.
Trending inpatient admission rates forward through 2017 places MFC in line with
94
its competitors.
AmeriHealth
Competitors inpatient admission rates have increased as much as 12% over this 79 77
80 80
MedStar
76 76
same period. 71 71 Trusted

Based on our market share, MFC treats 2 times as many hepatitis patients and 64

performs 1.5 times the number of transplants as other MCOs.

MFC is the only MCO whose Risk Score increased in every rate cell from 2016-
17. This is evidence that MFCs patients are more complex than originally
assessed.* 2014 2015 2016 2017 Trended
*Findings of the most recent rating exercise by Mercer

6
 MedStar Family Choice District of Columbia Medicaid
Integrated Healthcare = Superior Patient Experience, Outcomes

MedStar Family Choice (MFC) members benefit from their health plan being part of
MedStar Health, a major integrated health system, to coordinate care and
achieve better clinical outcomes and higher patient satisfaction. Integration
facilitates sharing of patient information, care and data among physicians, hospitals
and others, to better coordinate a patients care.

MFC is the fastest growing MCO in the Districts Medicaid managed care program.

MFC was the first MCO during the current contract period to be fully accredited by
the National Committee of Quality Assurance (NCQA).

MFC is evaluated for member satisfaction using the Consumer Assessment of

Healthcare Providers and Systems (CAHPS). MFC ranked 1st or 2nd among the
Districts Medicaid MCOs on the CAHPS measures 84% of the time.

MFC received high marks from the respected Delmarva Foundation, a national not-
for-profit organization. Its most recent external quality review rated MFC first or
second for more than 71% of the measured items. Delmarva also found that MFC
had satisfactorily addressed 100% of Delmarvas recommendations from its
previous review, unlike the other two MCOs in the Districts program.

7
 MedStar Family Choice District of Columbia Medicaid
Strong Economic Performance
We spend more of our DHCF funds on medical care for our Combined Ratios by MCO
members, and less on administrative expenses, than do the 2016
other two MCOs.
Medical Loss Ratio (MLR) measures the percentage of DHCF funds that an
MCO spends providing medical care to its members.
MFC directs more DHCF funds to patient care, but cost-cutting has
enabled us to reduce our MLR from 90% in 2015 to 88% in 2016.
Administrative Loss Ratio (ALR) measures the percentage of DHCF funds
that an MCO spends on administrative costs (e.g., salaries, rent,
processing).
2015
The other MCOs choose to spend more on administrative
expenses, with ALRs between 8% and 10%, as opposed to MFCs
6%.
The Combined Ratio is the combination of the MLR and the ALR, which is
what DHCFs funds are designed to cover.
The Combined Ratio for MFC improved from 96% to 94% from 2015
to 2016, right in line with the other two insurers.

8
 MedStar Family Choice District of Columbia Medicaid
In Conclusion

We are prepared and ready to continue our superior clinical and administrative services to
the residents of the District of Columbia. We thank you for your time to review our
presentation. We invite you to contact us if we may provide any additional insights or
information as you consider this important decision.

David A. Finkel Leslie Lyles Smith

President & COO Executive Director
MedStar Health Plans MedStar Family Choice
(410) 933-3035 (202) 243-5408
David.A.Finkel@medstar.net Leslie.S.LylesSmith@medstar.net

June 26, 2017