Annual Quality Assessment Performance Improvement Program Evaluation

Annual Quality Assessment Performance Improvement Program Evaluation 2012

Quality Improvement Annual Evaluation for 2012 Table of Contents INTRODUCTION...4 PROGRAM OVERVIEW...4 QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM...4 QI Program Structure...4 Committee Evaluations...5 Quality Improvement Work Plan...6 Organizational Report / Changes in Organization in Evaluation Year...8 Scope of the QAPI Program...8 COMPLIANCE...9 Compliance Program Description...9 QUALITY AND UTILIZATION ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM EFFECTIVENESS...9 POPULATION CHARACTERISTICS... 11 QUALITY PERFORMANCE MEASURES AND OUTCOMES... 13 QUALITY IMPROVEMENT ACTIVITIES... 13 Performance Improvement Projects (PIPs)... 13 HEDIS Indicators... 20 National Committee for Quality Assurance (NCQA) Accreditation... 22 Patient Safety... 23 Practitioner Office Site Quality... 25 MEMBER SERVICES... 26 Call Statistics... 26 ACCESS AND AVAILABILITY... 26 Network Adequacy... 26 24 Hour Access/Availability... 28 After-... 28 MEMBER SATISFACTION... 28 PROVIDER SATISFACTION SURVEY... 32 MEDICAL MANAGEMENT... 32 Complex Case Management... 32 Disease Management Programs... 33 Continuity and Coordination of Care... 34 UM PROGRAM INTRODUCTION... 36 UM PROGRAM OVERVIEW... 36 UTILIZATION IMPROVEMENT PROGRAM... 36 UM PROGRAM INTEGRATION... 37 UM COMMITTEE (UMC)... 37 UM COMMITTEE SCOPE... 38 UM COMMITTEE MEMBERS... 38 MEETING FREQUENCY AND DOCUMENTATION OF PROCEEDINGS... 39 SCOPE OF THE UM PROGRAM... 39 UTILIZATION MANAGEMENT MEASURES AND OUTCOMES... 39 2

Medical Necessity Criteria... 39 TIMELINESS OF DECISION MAKING... 41 NEW TECHNOLOGY ASSESSMENT... 42 INTER-RATER RELIABILITY... 43 CREDENTIALING AND RECREDENTIALING... 43 MEMBER RIGHTS AND RESPONSIBILITIES... 45 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 COMPLIANCE AND CONFIDENTIAL INFORMATION... 45 CLINICAL PRACTICE GUIDELINES AND PREVENTIVE HEALTH GUIDELINES... 46 DELEGATION OVERSIGHT... 50 REVIEW AND APPROVAL... 53 Approval... 53 3

Quality Improvement Program Evaluation - 2012 Introduction The objective of the 2012 annual Quality Improvement (QI) Program Evaluation is to provide a systematic analysis of Magnolia Health Plan's (Magnolia) performance and to define meaningful and relevant quality improvement activities for 2013 for approximately 77,000 Medicaid members in Mississippi. The Magnolia Board of Directors (BOD), President/ Chief Executive Officer (CEO), Vice President of Medical Management (VPMM), Vice President Operations (VPO), Chief Medical Director (CMD) and the senior management team provide oversight of the health plan's quality, utilization, and operational QI functions. The annual QI Program Description, QI Program Evaluation and QI Work Plan are reviewed and approved by the Quality Improvement Committee (QIC) prior to the BOD final review and approval. These entities serve as the foundation for making recommendations based upon identified opportunities for improvement, implementing interventions, and ensuring follow-up for effectiveness of adopted recommendations. During 2012, Magnolia continued to reinforce its approach to quality improvement by actively involving the entire organization with the responsibility of improving the quality of care and services delivered to its members and providers. The Ql Department, while still performing core functions such as quality of care investigations, appeals and grievances, National Committee for Quality Assurance (NCQA), and Healthcare Effectiveness and Data Information Set (HEDIS ) oversight also coordinated and monitored progress on Ql activities performed in other departments and integrated data and outcomes through the committee structure of the Plan. Throughout 2012, Magnolia's Ql Department remained focused and committed to this structure for organization-wide quality improvement. This approach has led to improved performance during the reporting year. The program utilizes a systematic approach to quality using reliable and valid methods of monitoring, analysis, evaluation and improvement in the delivery of health care provided to all members, including those with special care needs. This systematic approach to quality improvement provides a continuous cycle for assessing the quality of care and service among Magnolia initiatives including preventive health, acute and chronic care, over and underutilization, continuity and coordination of care, patient safety and network services. Program Overview Quality Assessment and Performance Improvement Program QI Program Structure The Magnolia BOD has the authority and accountability for the quality of services provided to members and oversight of the development, implementation and evaluation of the Ql Program. The BOD delegates the daily oversight and operating authority of the Quality Improvement Program to the Quality Improvement Committee (QIC). Magnolia executive management staff, clinical staff and network providers, including but not limited to primary care, specialty and nurse practitioners health care providers are involved in the implementation, monitoring and directing of all aspects of the quality improvement program through the QIC, which is directly accountable to the BOD. 4

All quality activities from all service and clinical sub-committees are reviewed by the QIC. Network physicians participate on several committees including the QIC. There is adequate internal staff, corporate staff and data systems to support the Ql Program. Committee Evaluations Quality Improvement Committee (QIC) The QIC is Magnolia s senior level committee, accountable directly to the BOD. This committee promotes a system wide approach to QI. The QIC met four (4) times in 2012, meeting the frequency expectation with all voting members meeting the attendance requirement. Performance Improvement Team (PIT) The PIT is an internal, cross-functional QI team that facilitates the integration of a culture of QI throughout the organization. The PIT met eleven (11) times in 2012, meeting the goal of required meetings. Attendance of voting members met the requirement. Credentialing Committee (CC) The CC is a standing subcommittee of the QIC. It is responsible for oversight and operating authority of the Credentialing Program. The CC met nine (9) times in 2012 which met the meeting requirements. Attendance of voting members met the requirement. Pharmacy and Therapeutics Committee (P&T) The P&T committee is a subcommittee of the QIC and is responsible for oversight and operating authority of the Pharmacy Program. The P&T Committee met four (4) times in 2012, meeting the quarterly requirement. Attendance met the requirement. Utilization Management Committee (UMC) The UMC is a standing subcommittee of the QIC and has oversight and operating authority of utilization management activities. The UMC met three (3) times in 2012. This did not meet the frequency expectation of four (4) required meetings. The November 13, 2012, UM Committee meeting was cancelled due to not having a quorum. The UM meeting was rescheduled for November 29. However, the last QIC meeting of the year was November 27. Since there were no new reports for the UM meeting on November 29, the meeting was cancelled. HEDIS Steering Committee (HSC) The HEDIS Steering Committee was organized to reflect the progress of each department as it pertains to HEDIS measures. The HSC met seven (7) times in 2012, meeting the frequency expectation with all voting members meeting the attendance requirement. Compliance Committee The Compliance Committee met three (3) times in 2012, with the 3 rd and 4 th meetings being combined. These meetings met the frequency expectation with all voting members meeting the attendance requirement. Grievances and Appeals Committee (GAC) The GAC is responsible for maintaining compliance with contractual, federal and state, and accrediting body requirements as it relates to the processing of complaints, grievances and appeals. The GAC met three (3) times in 2012. The meetings started in April with the last 5

meeting in October. These meetings met the frequency expectation with all voting members meeting the attendance requirement. Community Advisory Council (CAC) The CAC is a subcommittee of the PIT. This committee is responsible for providing feedback from a community perspective to Magnolia. The CAC met once in 2012. Member Advisory Committee (MAC) The MAC is an advisory subcommittee of the PIT with a goal of soliciting the members perspective on quality of care and services offered by Magnolia. The MAC did not meet due to the transition of leadership throughout 2012. Committee Structure Assessment: The committee structure was acceptable, but it was found that some of the scheduled quality meetings were unnecessary, and therefore combined. The charters were re-written to accommodate fewer meetings while allowing some flexibility. Some committees could benefit from a wider variety of specialists; therefore a goal for 2013 will be to expand our provider panel representation. Barriers: Physician committee representation lacks variety of specialists Poor physician attendance Recommended 2013 Interventions: Restructure charter to allow more flexibility with scheduling Provide diversity of physicians specialties on committees including Nurse Practitioners Increased physician compensation for meeting attendance Decreased the number of required meetings from four (4) to three (3) Quality Improvement Work Plan The 2012 QI Work Plan defines the activities, the person(s) responsible for the activity, the date of expected task completion and the monitoring techniques that will be used to ensure completion within the established timeframe. The QI Work Plan is presented to the QIC on an annual basis for approval, through the annual evaluation process and at regular intervals throughout the year. QI Program Integration The QI Program Evaluation, QI Program Description, and the QI Work Plan are integrated. The year-end QI Program Evaluation identifies barriers, opportunities for improvement, results and recommended interventions. The QI Evaluation is then used to make modifications to the coming year's QI Program Description and to create the key metrics of the Ql Work Plan. The Ql Program is integrated throughout Magnolia through its committees. The QIC and the subcommittees are comprised of members from multiple departments to enhance communication throughout the Plan. In order to integrate feedback from stakeholders into the Ql Program, participating network physicians are members of the QIC, the Credentialing Committee (CC), the Pharmacy and Therapeutic (P&T) and the ad-hoc Peer Review Committee (PRC). 6

Board of Directors Quality Improvement Committee (QIC) Magnolia Heath Plan Last updated November 30, 2011 Board of Directors (BOD) Compliance Committee Compliance Committee Credentials Committee Performance Improvement Team (PIT) Health Care Advisory Council (Corporate w/ Plan Representation) Quality Improvement Committee (QIC) Pharmacy & Therapeutics (P&T) Member Advisory (MAC) Credentials Committee (CC) Utilization Management Committee (UMC) Pharmacy and Therapeutics Committee (P&T) HEDIS Steering Committee Utilization Management (UM) Performance Improvement Team (PIT) Committee Peer (Ads Hoc) Community Advisory (CAC) Standing Specialty Advisory Committees Ad - Hoc Peer Review (PRC) AD HOC Hospital Advisory (HAC) Member Advisory Committee (MAC) Community Advisory Committee (CAC) Hospital Advisory Committee (HAC) Provider Advisory Committee (PAC) Provider Advisory (PAC) The Magnolia QI program enables the Plan to positively impact the delivery of patient care in all areas of the health care delivery system through collaboration and input from all departments. Member Services, Contracting, Credentialing, Quality Improvement, Provider Relations, Utilization Management (UM) and Case Management (CM) collaborate effectively to determine the most efficient mechanisms to address key issues. Some examples include: Member Communication - Member Services/QI/UM/Marketing Practitioner Education regarding HEDIS Program - Provider Relations/QI Member Satisfaction - Member Services/QI Grievance Investigation - Member Services/QI/Provider Relations/Pharmacy Timely Appointment Access Evaluation - Provider Relations/QI Community Linkage Activities - Member Services/QI/Provider Relations/Marketing Delegation Oversight Activities Network Development/Contracting/Corporate/QI/UM 7

Organizational Report / Changes in Organization in Evaluation Year There were several changes in the Magnolia Health Plan senior leadership team in 2012. The following positions opened and were filled: Chief Medical Director, Vice President of Medical Management, Chief Operating Officer and Vice President of Finance. In 2012, Magnolia also had a substantial membership increase due to the expansion of the population categories. The population categories include: Pregnant Women and Infants, Family/Children (TANF), Children, and Foster Care Children (Adoption Assistance). The membership increase is noted below: CY 2011 CY2012 End of Year Membership 31, 698 77, 204 Scope of the QAPI Program Magnolia systematically monitors and evaluates the QI Program throughout the year by analyzing and reporting key indicators of clinical and non-clinical outcomes. These indicators include but are not limited to: Healthcare Effectiveness Data and Information Set (HEDIS) results Telephone service statistics for members and providers Accessibility and availability of network practitioners and providers UM, CM, and Disease Management (DM) service metrics and outcomes Clinical Practice Guideline adherence Member and provider satisfaction survey results Cultural competency and healthcare disparities data Complaints, grievances, and appeals data Denial turn-around times Patient safety metrics Continuity and coordination of care measures Performance Improvement Projects Monitoring of practitioner office site quality Practitioner credentialing Delegation oversight Performance Measures 8

Compliance Compliance Program Description Magnolia Health Plan s departments perform required quality of service, clinical performance, and utilization studies throughout the year based on contractual requirements, requirements of the state, federal, regulatory agencies and those of applicable accrediting entities such as NCQA. All functional areas utilize standards/guidelines from these sources and those promulgated by national and state medical societies or associations, the Centers for Disease Control and Prevention (CDC) and/or the federal government. The Compliance Department maintains a schedule of relevant Ql reporting requirements for all applicable state and federal regulations and submits reports in accordance with all requirements. Magnolia also provides timely ad hoc reports to the State as requested. Magnolia adheres to all relevant policies of the Office of the Inspector General (both federal and state). Magnolia refers to the False Claims Act (31 U.S.C. 3729-33) as well as relying upon Federal and State definitions of fraud and abuse to investigate and report possible acts. Magnolia s Compliance and Ethics Program Description is intended to assist the organization in developing effective internal controls that ensure adherence to federal and state legislation, and program requirements of federal, state law, and program regulations which are applicable to private health maintenance organizations and their contractors. It is also designed to prevent fraud, waste and abuse throughout the organization while furthering Magnolia s fundamental mission; to provide access to high quality care to its members. The adoption and implementation of this Program demonstrates Magnolia s strong commitment to compliance with all applicable laws, regulations, accreditation standards and contractual obligations as stated in the contract between the Mississippi Division of Medicaid (DOM) and Magnolia. Magnolia s Compliance and Ethics Program is designed to create a culture of compliance within the health plan that promotes the prevention, detection and resolution of instances of conduct inconsistent with federal and state law, state and private payer health care program requirements, and internal (Centene Corporation s and Magnolia s) business and ethics policies. It is intended to promote ethical behavior among Magnolia staff in their daily interactions with members, providers, regulators, co-workers, and vendors. Finally, it establishes the foundation for compliant and ethical business practices that are part of the fabric of routine operations. Quality and Utilization Assessment and Performance Improvement Program Effectiveness During 2012, the Ql Program continued its collaboration with all organizational departments to facilitate continuous improvement in performance by empowering all stakeholders through education, communication, and evaluation. Magnolia has continued to improve the quality of care and services provided to the membership through continuous assessment of patterns and trends and identification of barriers to desired outcomes. Magnolia ensures participation of our network physicians throughout all of our assigned state regions (North, Central and South) in the program through committee participation i.e., the Quality Improvement Committee, Credentialing Committee, and Pharmacy and Therapeutic 9

Committee. This physician involvement ensures influencing network-wide safe clinical practices. The following illustrates the strengths and accomplishments in 2012, as well as identified opportunities for improvement in 2013: Strengths and Accomplishments: Timely submission of reports to Division of Medicaid (DOM) Completed initial document submission to External Quality Review organization for audit to Carolina s Center for Medical Excellence (CCME) Started cohort study to encourage the use of a medical home and reduce emergency room utilization All Plan Policies and Procedures were reviewed and updated as needed ConnectionsPlus Phones were provided to at-risk members who do not have access to telephones to contact physicians, case managers, pharmacy, and emergency services (911) Expansion of Medicaid Program Health Insurance Portability and Accountability Act ( HIPAA) Audits were conducted by Compliance four times during 2012 on all Magnolia employees Completed 100% employees licensure verification for licensed employees Member Services Call Center stats for the Average Speed of Answer and Abandonment Rate exceeded all benchmarks for 2012 Magnolia Provider Manual was updated in 2012 and is available to providers on the physician Web Portal Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) Program coordinates care for members that need wellness visits or are behind in their immunizations Opportunities for Improvement: Staff educational opportunity to all aspects of the complaint, grievance, and appeal processes Meet expected benchmarks for denial turn-around times Strengthen data reporting capabilities Implement strategies to improve HEDIS and Performance Measure rates and maintain statistically significant improvements in rate HEDIS measurement improvement: 10

- Childhood Measures: Immunizations, Pharyngitis, Upper Respiratory Infection, Well Child Visits Weight assessment & counseling for nutrition and physical activity - Prenatal and Postpartum Care - Diabetes: HgbA1c testing, eye exams, nephropathy, LDL-C screening - Cholesterol Management - Anti-depressant medical follow-up - Woman s Healthcare: breast cancer screening, cervical cancer screening, chlamydia screening - Controlling high blood pressure - Adult Body Mass Index (BMI) - Avoidance of antibiotic treatment in adults with acute bronchitis - Pharmacotherapy Management of Chronic Obstructive Pulmonary Disease (COPD) Exacerbation - Appropriated use of medication for asthma - Use of spirometry testing in the assessment and diagnosis of COPD - Use of imaging studies for low back pain Population Characteristics Magnolia s membership characteristics for 2012: month end November, the membership was 30,485; effective December 1, 2012, the membership increased by 158% bringing the end of year 2012 enrollment to 77,204. The eligible categories are as follows: 2012 Magnolia Health Plan Membership Profile January 1 - November 31 Categories SSI Working Disabled Breast and Cervical Cancer Disabled Child Living at Home DHS Foster Children December 1 - December 31 Additional Categories Pregnant Women and Infants Family/Children (TANF) Children DHS Foster Care Children (Adoption Assistance) As of December 2012, the eligible membership population was categorized as described: 11

Member Report Risk Population Description Distinct Unique Member Count Breast Cervical Cancer 102 Children Age 0-6 and 133% Poverty Level 924 Children under age 19 and under 100% Poverty Level 8,083 DHS Foster Care Adoption Assistance 1,117 Disabled Child at Home 112 Family/Children (TANF) 22,528 Category of Eligibility (COE) **MISSING** 192 Pregnant Women and Infants 6,782 SSI Blind/QMB Dual-2320 534 SSI via SDX 36,675 Working Disabled 155 Total 77,204 As of December 2012, the membership characteristics of age and sex were identified below: Medicaid Cohort Females Males Totals 0-11 mos 5048 5227 10275 1-5 yrs 6-13yrs 14-20 yrs 21-44 yrs 45+ yrs 805 1037 1842 1881 3684 5565 3911 3149 7060 27759 6457 34216 11445 6801 18246 TOTALS 50849 26355 77204 12

Quality Performance Measures and Outcomes Quality Improvement Activities Performance Improvement Projects (PIPs) Magnolia is contractually required to perform four (4) Focus Studies annually on the topics prevalent and significant to the population served. Magnolia identified the need to select an additional Focus Study specific to hypertension due to the impact of hypertension affecting the Magnolia membership population. The five (5) Performance Improvements Projects for Magnolia are: Asthma Diabetes Obesity Heart Failure Hypertension The baseline reports were submitted to the Division of Medicaid in April 2012. The baseline measurement period is from 1/1/2011 12/31/2011. Asthma Indicator: The percentage of members ages 5-64 that were identified as having persistent asthma and were appropriately prescribed medication. Goal: Increase Magnolia s 2012 HEDIS rates for the Asthma Care performance measure to meet or exceed the NCQA 75th percentile. Time Period Measurement Covers 1/1/2011 12/31/2011 Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Baseline 571 692 82.5% 84.9% (25th Percentile) Region 4 2012 National Benchmark Statistical Test Significance and p value Data Not Available The baseline calculations for the PIP are inconsistent with the HEDIS data due to the lack of requirement for membership continuous enrollment. As Magnolia is located in a market new to managed care, in this area the benchmark was not met. 13

The data measures have length-of-enrollment (or "continuous enrollment") requirements that identify those individuals that have treatment information that can be included in calculations of measures assessing the performance of Managed Care Organizations (MCOs). To be included in the calculation of rates for HEDIS measures involving services or treatments delivered in set time frames (e.g., preventive services, screenings, well-care visits), managed care plan members must be enrolled for a minimum of 12 months, with no more than one break of 45 days. Because HEDIS measures are based in part on the premise that MCOs are accountable for providing defined services to enrolled members; the minimum period of enrollment is designed to give MCOs a reasonable opportunity to fulfill that responsibility prior to measurement. The HEDIS asthma measurement requires two (2) years continuous enrollment in the measure. The asthma data for calendar year 2011 was run with the continuous enrollment requirement excluded. The continuous enrollment exclusion was used to run data for the total number of asthmatics in Mississippi. The data are processed centrally at corporate headquarters. Programming code, based on HEDIS Technical Specifications, is developed to produce algorithms that calculate the ratios. The programming code is updated annually based on the applicable HEDIS Technical Specifications. Magnolia continues to work with the contracted Disease Management (DM) vendor, Nurtur, to ensure appropriate management of members diagnosed with asthma. Magnolia will continue to identify barriers and implement appropriate interventions to positively impact compliance with this guideline. Goal: Reduce healthcare utilization related to asthma Improve functional status through reduced symptom severity and frequency Asthma Program Guidelines: The DM program, delivered through scheduled outbound coaching calls, mailed materials and unlimited inbound calls, includes: Disease specific education Education Materials Review of the self-management plan developed in collaboration with the participant's physician Medication education and compliance management Goal setting to minimize modifiable risk factors Assessment of changes in symptom severity Assessment of the participants understanding of disease self-management Re-evaluation of participant's metered dose inhaler and spacer technique Review of participant's goals and planning with education and problem solving as necessary Encouragement of flu and pneumonia vaccines 14

Newsletter Recommendations for 2013: Continue to redefine the work process for enrollment of members into case management and disease management Continue to mail educational materials to members and provide follow-up to make sure the material is understood Continue to monitor asthmatics and medications use through pharmacy reporting Continue to monitor emergency room visits by members diagnosed with asthma Diabetes Indicator: The percentage of member 18-75 years of age with diabetes (Type 1 and Type 2) who had evidence of an HbA1c testing, LDL-C Screening, Retinal Eye Exam and Nephropathy Screening during 2012. Goal: Increase Magnolia s 2012 HEDIS Rates for all diabetes measures to meet or exceed the NCQA 75 th percentile. HbA1c Time Period Measurement Covers Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Statistical Test Significance and p value 1/1/2011 12/31/2011 Baseline 2538 3422 74.1% 75% (25 th Percentile) Region 4 2012 National Benchmark NA LDL-C Time Period Measurement Covers Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Statistical Test Significance and p value 15

1/1/2011 12/31/2011 Baseline 2243 3422 65.5% 71.3% (25th Percentile) Region 4 2012 National Benchmark NA Nephropathy Time Period Measurement Covers Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Statistical Test Significance and p value 1/1/2011 12/31/2011 Baseline 2688 3422 78.5% 78.9% (75th Percentile) Region 4 2012 National Benchmark NA Magnolia will continue to monitor compliance against the Diabetes practice guideline as compliance has not been achieved on the three measures. Magnolia will continue to work with the contracted Disease Management vendor, Nurtur, to ensure appropriate management of members diagnosed with diabetes. Magnolia will continue to identify barriers and implement appropriate interventions to positively impact compliance with this guideline. Current interventions include member and provider outreach and education. Goal: Reduce diabetic complications Optimize hemoglobin A1c, lipid and blood pressure control Improve weight control, increase exercise and discontinue tobacco use The program, delivered through scheduled outbound coaching sessions, mailed materials, and unlimited inbound calls, includes: Goal setting to minimize modifiable risk factors Medication education & compliance/management Promoting and tracking regular physician visits Self- blood glucose monitoring Recognizing signs of low and high blood glucose levels Nutrition counseling for carbohydrate counting and weight management 16

Recommended annual screening for diabetic complications Blood pressure and cholesterol management Optimizing physical activity levels to meet recommended guidelines Coping strategies for stress management Encouragement of annual flu vaccine Recommendations for 2013: Continue to redefine the work process for enrollment of members into case management and disease management Continue to mail educational material to member and provide follow-up to make sure the material is understood Continue to monitor emergency room (ER) visits by members who have diabetes Obesity Indicator: Child The percentage of member 3-17 years of age whose BMI, counseling for nutrition, and counseling for physical activity was documented during 2012 Indicator: Adult The percentage of member 18-74 years of age whose BMI was documented during 2012. Goal: Increase Magnolia s 2012 HEDIS rates to meet or exceed the NCQA 75 th percentile. Child BMI, Counseling for Nutrition and Physical Activity Time Period Measurement Covers Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Statistical Test Significance and p value 1/1/2011 12/31/2011 Baseline 9 49 18% 21.9% (75th Percentile) Region 4 2012 National Benchmark NA Adult BMI Time Period Measurement Covers Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Statistical Test Significance and p value 17

1/1/2011 12/31/2011 Baseline 107 418 26% 29.6% (50th Percentile) Region 4 2012 National Benchmark NA In 2012, Magnolia conducted two pilot Focus Studies with assistance of a Federally Qualified Health Center (FQHC) on adult BMI and child weight and counseling of nutrition and physical activity. A pilot study was conducted at one of the largest contracted FQHC s in the Jackson, MS area, using information collected through a random sampling of medical record chart review. The measurement was evidence of documented BMI in the member s medical record. This study was very limited due to the lack of HEDIS data available. The data source for both the weight measures can be collected using administrative data, but for the first year study the hybrid method, which includes medical record review, was used for collecting the data needed for the report. The rationale behind collecting the data by hybrid methodology was that Magnolia Health Plan had only been in existence for one year. The adult BMI data is pulled on a cycle of the measurement year and the year prior to the measurement year. In 2013, Magnolia will complete full hybrid medical record review (MRR) for HEDIS. Magnolia contracts with Record Flow for MRR and abstraction. At least annually, Magnolia will assess medical records. A sample of records from the HEDIS review will be evaluated against standards the MRR documentation requirements. Recommendations for 2013: Continue to redefine the work process for enrollment of members into case management and disease management Continue to mail educational materials to members and provide follow-up to assure the materials are understood. Hypertension Indicator: The percentage of member 18-85 years of age who had a documented blood pressure during 2012. Goal: Increase Magnolia s 2012 HEDIS rates for hypertension to meet or exceed the NCQA 75th percentile. 18

Hypertension Time Period Measurement Covers 1/1/2011 12/31/2011 Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Baseline 24 136 18% 41% (10th Percentile) Region 4 2012 National Benchmark Statistical Test Significance and p value NA In 2012, Magnolia conducted another Focus Study with assistance of an FQHC. A pilot study was conducted at one of the largest contracted FQHC s in the Jackson area, using information collected through a random sampling of medical record chart review. The measurement was evidence of documented blood pressure in the member s medical record. This study was very limited due to the lack of HEDIS data. The study conducted used the 2012 HEDIS Technical Specifications. The data source for hypertension can be collected using administrative data, but for the first year study the hybrid method, which includes MRR, was used for collecting the data needed for the report. The rationale behind collecting the data by hybrid methodology was that Magnolia had only been in existence for one year. The hypertension data is pulled on a cycle of the measurement year and the year prior to the measurement year. In 2013, Magnolia will complete full hybrid MRR for HEDIS. Magnolia contracts with Record Flow for MRR and abstraction. At least annually, Magnolia will assess medical records. A sample of records from the HEDIS review will be evaluated against standards the Medical Record Review documentation requirements. The goal of Nurtur's Hypertension Program is to reduce the risk of heart attack and/or stroke by controlling blood pressure and/or cholesterol. The program, delivered through scheduled outbound coaching sessions, mailed materials, and unlimited inbound calls, includes: Disease-specific education Goal setting to minimize modifiable risk-factors Medication education and compliance management Nutritional counseling for weight control, blood pressure and cholesterol management Optimizing physical activity levels to meet recommended guidelines 2013 Planning: Continue to redefine the work process for enrollment of members into case management and disease management Continue to mail educational materials to members and provide follow-up to assure the materials are understood. 19

Heart Failure Indicator: The percentage of members having Heart Failure (HF) and were prescribed the appropriate medication during 2012. Goal: Increase Magnolia s 2012 HEDIS rates for HF to meet or exceed the NCQA 75th percentile. Time Period Measurement Covers 1/1/2011 12/31/2011 Baseline Project Indicator Measurement Numerator Denominator Rate or Results Industry Benchmark Statistical Test Significance and p value Baseline 1737 2480 70.04% TBD NA The goals of Nurtur's Heart Disease Programs are as follows: Reduce heart disease-related hospitalizations and emergency room visits Improve exercise tolerance and reduce fluid retention (Heart Failure only) Optimize lipid and blood pressure control Improve weight control, increase exercise and discontinue tobacco use Control co-morbidities (ex. diabetes) The re-measurement for all five (5) PIPs will be completed in June 2013, and reported in July 2013. HEDIS Indicators Healthcare Effectiveness Data and Information Set (HEDIS) Objective: HEDIS is a collection of performance measures developed and maintained by NCQA. Participation in the program enables organizations to collect and submit verified data in a standardized format. In 2013, Magnolia will submit HEDIS data in accordance with the performance measure specifications and design and implement key interventions to increase the Plan's HEDIS rates reported each calendar year. Submit the HEDIS reporting documentation to Centene Corporate Ongoing monitoring of HEDIS rates in the Quality Spectrum Insight (QSI) system Contracted vendor will perform HEDIS medical record audits HEDIS data verification and submission process audited by certified audit firm Metrics: HEDIS Specifications Results: 20

Measure Sub Measure 2011 2012 2012 NCQA 75 th Quality Compass Benchmark Adult BMI (ABA) 0.00% 4.86% 70.60% Antidepressant Medication Management (AMM) Acute Phase 64.29% 47.85% 52.74% Continuation 35.71% 32.41% 37.31% Phase Appropriate Testing for Children With Pharyngitis (CWP) 51.87% 50.97% 76.37% Appropriate Treatment for Children With Upper Respiratory Infection (URI) Avoidance of Antibiotic Treatment in Adults With Acute Bronchitis (AAB) 45.79% 45.19% 89.96% Invert 52.38% 72.61% 26.67% Breast Cancer Screening (BCS) 0.00% 41.46% 56.58% Cervical Cancer Screening (CCS) 34.63% 45.85% 73.24% Childhood Immunization Status (Combination 2) (CIS) 0.00% 82.69% 84.18% Chlamydia Screening in Women (CHL) 51.57% 46.13% 63.89% Cholesterol Management for Patients With Cardiovascular Disease (LDL- Screening) (CMC) 0.00% 63.10% 85.12% Comprehensive Diabetes Care-Screening (CDC) Eye Examination 44.08% 43.77% 61.75% HbA1c Testing 72.95% 69.04% 87.01% LDL-C Screening 63.94% 59.49% 80.88% Nephropathy Monitoring 77.00% 74.22% 83.03% Controlling High Blood Pressure (CBP) 0.00% 0.00% 63.65% Follow-Up for Children Prescribed ADHD Medication (ADD) Initiation 0.00% 26.22% 44.46% Timeliness of Prenatal and Postpartum Care (PPC) Use of Appropriate Medications for People With Asthma (5-50 year olds) (ASM) Maintenance 0.00% 27.91% 56.10% Prenatal 70.12% 61.65% 90.39% Care Postpartum Care 29.88% 28.64% 71.05% 0.00% 81.03% 88.19% Use of Imaging Studies for Low Back Pain (LBP) Invert 22.64% 26.5% 79.38% Well Child Visits by 15 Months of Life (6+ visits) (WCV15) 0.00% 0.00% 70.70% Weight Assessment and Counseling for Nutritional and Physical BMI 0.15% 0.47% 66.67% Activity (WCC) Nutritional Counseling 0.35% 1.48% 67.15% Use of Spirometry Testing in the Assessment and Diagnosis of COPD (SPR) Pharmacotherapy Management of COPD (PCE) Physical Counseling 0.05% 0.64% 56.20% 0.00% 0.00% 38.38% Systemic 36.76% 40.00% 72.76% Corticosteroid Bronchodilators 69.78% 76.00% 85.71% 21

Barriers: Practitioner lack of knowledge for HEDIS measures Practitioner lack of knowledge of clinical practice and preventive health guidelines Member lack of knowledge of preventive guidelines reflected in HEDIS measures Ineffective member outreach efforts due to inaccurate and/or unavailable member contact information Recommended 2013 Interventions: Continue the HEDIS Steering Committee comprised of senior management to review results, conduct barrier analysis and create an action plan for interventions that address opportunities identified Analyze the effectiveness of the 2012 incentive programs and consider developing an ongoing incentive program Continue member education initiatives to receive necessary services Continue targeted interventions to practitioners and members identifying those in need of specific services Continue to identify issues with monitor and improve upon data capture & reporting opportunities Continue to work with provider network to ensure that practitioners are educated on metrics and specific coding requirements Expand the supplemental database to capture 2012 services on an ongoing basis Continue to meet applicable HEDIS technical specifications throughout 2013 National Committee for Quality Assurance (NCQA) Accreditation Objective: Ensure Magnolia s compliance with the 2012 NCQA accreditation standards for New Health Plans Continue to identify leaders/ owners for all standard categories Compile required documents and information for review Metrics: NCQA readiness is periodically assessed by the Centene Senior Director of Accreditation and Quality and Corporate s external consultant who is an NCQA surveyor. 22

Results: Identified and educated responsible parties from each department. Conducted continuous file audits for the file types audited by NCQA. Barriers: Maintaining awareness of NCQA Standards among all Magnolia departments. Recommended 2013 Interventions: Maintain compliance with all NCQA Standards Implement interventions to improve HEDIS and CAHPS scores Continue ongoing periodic file audits of denials, appeals, grievances and credentialing Magnolia maintained compliance with NCQA Standards for Health Plan accreditation (transitioned from New Health Plan to Health Plan). Patient Safety Magnolia Health Plan encompasses member grievances from the Grievance & Appeals Coordinator (GAC) and the Member Services Department regarding clinical care. Potential quality of care (QOC) and service issues are classified according to a defined risk severity level that is outlined in the table below. Data included in the assessment of patient safety is collected from the GAC and Member Services Departments on a monthly basis; trends are identified and reported to the quality committees for additional recommendations. Track and trending of these occurrences additionally identifies provider issues that are related to potential quality performance. These occurrences are referred to Provider Relations as needed. Information was compiled on a quarterly basis and reported through the QIC. In addition, the Pharmacy Department conducts review of prescriptions from multiple providers which may lead to Lock-in Program, where by the member is restricted to one pharmacy and one provider for care. Severity Level Definition Level 0 Level I Level II Level III Level IV Investigation indicates acceptable Quality of Care has been rendered. Investigation indicates that a particular case was without significant potential for serious adverse effects, but could become a problem if a pattern developed. Investigation indicates that a particular case demonstrated a moderate potential for serious adverse effects. Investigation indicates that a particular case has demonstrated a significant potential for serious adverse effects. Investigation indicates that a particular case demonstrated a serious, significant adverse outcome. 23

Objective: Communication/ education for members and providers. Monitoring of grievance potential quality of care events Monitor adverse events through the internal clinical documentation systems Metrics: Safety information in the provider and member newsletters Trend potential quality of care grievances and adverse events, implement follow-up actions as required Pharmacy staff monitors Drug Utilization Review (DUR) for narcotics in pregnant woman, general membership and have a lock-in program for fraud and substance abuse Results: Safety information was included in the providers and members newsletters as planned Pharmacy reports are received monthly and quarterly. The data pulled is impacted by Magnolia s benefit design. The pharmacy benefit does not allow more than two (2) narcotics/opioids a day as well as two prescriptions a month. Magnolia approved and implemented a Pharmacy Lock-In Policy that will detect and prevent abuse of the pharmacy benefit by restricting members to one specific pharmacy for a defined period of time. The majority of the lock-in members are Suboxone users; not fraud and abuse of narcotics users. Magnolia received and investigated a total of ten (10) QOC grievances and implemented follow-up actions as appropriate. The ten (10) QOC grievances represented <1% of all grievances and were on severity levels were either Severity 0 or Severity 1. 0.58% 99.42% Total Grievances QOC Grievances 30% 70% Severity 0 Severity I Severity II Severity III Severity IV Barriers: 24

Staff knowledge of potential QOC incidents potentially leads to under-identification and reporting Provider knowledge of contract with Magnolia when requesting medical records Recommended 2013 Interventions: Continue to include safety information in the providers and members newsletters in 2013 Fully automate grievance QOC and adverse event reporting Staff education, workshops and webinars defining QOC and examples of incidents Practitioner Office Site Quality Magnolia monitors member grievances about practitioner offices on an ongoing basis. Grievances are defined as any expression of dissatisfaction by a Magnolia member. The Member Services Department receives and documents member grievances, including grievances related to office site quality. Magnolia Provider Relations Department conducts site visits to the practitioner s office to investigate member grievances related to physical accessibility, physical appearance, and adequacy of exam room and waiting room space when established thresholds have been met. The Quality Improvement Department is responsible for the tracking and trending of member grievances, including monitoring for practitioner sites which require a site visit. The Quality Improvement Department will alert the Provider Relations Department who then conducts a site visit, utilizing the site visit review tool, within 30 days of identification. The site visit evaluation score will dictate next actions; Magnolia will determine whether corrective action is required, and develop an action plan based on the survey results score if necessary. If Magnolia receives another grievance about the same aspect of performance for the office during the three (3) months after completing the site visit, Magnolia will follow up on the subsequent grievance and determine whether the practitioner s previous office site visit met Magnolia s standards and thresholds. If the subsequent grievance is about a different aspect of performance, another site visit will be completed, but focusing only on the specific performance standard relevant to the subsequent grievance. This report summarizes the monitoring results for the periods from January 1, 2012 to December 31, 2012. The following categories of member grievances are included in this report: Physical accessibility- including grievances related to handicap accessibility, access to parking, location of offices, etc. Physical appearance- including grievances related to cleanliness, safety, etc. Adequacy of waiting and/or examining room space- including grievances related to the appropriate size and seating for waiting rooms, ability to physically maneuver comfortably, etc. Magnolia did not receive any grievances about practitioner office sites, regarding physical accessibility, physical appearance, or the adequacy of waiting and/or examining room space, during this reporting period. 25

Member Services Call Statistics During the 2012 year, Magnolia successfully and consistently met all established benchmarks. Although both the provider and member service calls significantly increased during the fourth (4 th ) quarter due to the program expansion resulting in additional membership, appropriate numbers of new hires were added to the Call Center staff to accommodate membership needs. Total Call Summary (Members & Providers) 1st Qtr. (Jan, Feb, Mar) 2nd Qtr. (Apr, May, Jun) 3rd Qtr. (Jul, Aug, Sep) 4th Qtr. (Oct, Nov, Dec) YTD 2012 # of Inbound Calls 29,226 25,610 14,784 42,283 54,836 # of Outbound Calls 14,388 12,803 8,097 19,052 27,191 # of Abandoned Calls 641 426 118 583 1,067 Abandoned Rate 2.19% 1.66% 0.80% 1.38% 3.86% Average Speed of Answer 0.19 0.82 0.80 0.07 0.30 Service Level 81.02% 87.37% 85.95% 88.12% 85.61% Access and Availability Network Adequacy Objective: Magnolia Health Plan will ensure an adequate network of providers to meet the needs of the members via GeoAccess reports, established industry ratios, comparison of language capabilities and analysis of grievances related to availability of practitioners. GeoAccess evaluation of the distribution of providers in various groups against Magnolia standards: Primary Care Providers Identified high volume specialists Metrics: The practitioner network is monitored to meet the following state mandated standards: Primary Care Physicians Obstetrics/ Gynecology URBAN 95 % of urban members have at least 2 FP/GP within 30 miles. 2 PCP per 2500 members 90 % of urban members have access within 30 minutes or 30 miles. 1 per 5000 members RURAL 95 % of rural members have at least 2 FP/GP within 60 miles. 2 PCP per 2500 members 90 % of rural members have access within 60 minutes or 60 miles. 1 per 5000 members 26

Cardiology 90 % of urban members have access within 30 minutes or 30 miles. 1 per 5000 members 90 % of rural members have access within 60 minutes or 60 miles. 1 per 5000 members URBAN General Surgery 90 % of urban members have access within 30 minutes or 30 miles. 1 per 5000 members Orthopedic Surgery 90 % of urban members have access within 30 minutes or 30 miles. 1 per 5000 members Gastroenterology 90 % of urban members have access within 30 minutes or 30 miles. 1 per 5000 members RURAL 90 % of rural members have access within 60 minutes or 60 miles. 1 per 5000 members 90 % of rural members have access within 60 minutes or 60 miles. 1 per 5000 members 90 % of rural members have access within 60 minutes or 60 miles. 1 per 5000 members The top five (5) specialty types by claims volume for 2012 were: Obstetrics/Gynecology Cardiology General Surgery Orthopedic Surgery Gastroenterology Practitioner availability is also assessed and monitored via ratios of practitioners to members. The Performance Improvement Team established standards for the ratio of PCPs to members as 1:2,500 and the ratio of high volume specialty providers as 1:5,000. Ratios: Magnolia Health Plan met or exceeded the practitioner to member ratio standards for both primary care and specialty care practitioners. Barriers: While the GeoAccess mapping indicates that all metrics were satisfied, there have still been issues with providers being set up in the system in a timely manner resulting in a need for prior authorizations for credentialed providers. For example, when a participating provider begins to work for a different practice, they do not require credentialing again but will still require prior authorization at the new location until it is established in Magnolia s business systems. Recommended 2013 Interventions: Continue timely and accurate quarterly reports to the state Continue contracting efforts in areas where additional practitioners/providers can be identified who are not yet contracted with Magnolia Continue to meet applicable NCQA Standards throughout 2012 27

24 Hour Access/Availability After-hours Survey Results: Upon the initial assessment it was determined the after-hours survey results show that there is room for improvement in the guidance that members receive after hours when attempting to contact their provider offices. Patients often receive a message directing them to the Emergency Room. However, in a state that has a dire physician shortage this is not uncommon. Magnolia will work with its network providers to encourage members to use resources such as NurseWise to obtain needed health advice. During 2012, the leadership in this department was in transition. The survey may have been completed, but was not able to be retrieved from other s computers. However, for 2013 the survey will be completed. Member Satisfaction Magnolia evaluates member satisfaction with its services and identifies potential areas of improvement. The assessment of member satisfaction includes monitoring of Consumer Assessment of Healthcare Providers and Systems (CAHPS ) survey data and members' grievances and appeals. The overall objective of the CAHPS survey is to capture accurate and complete information about consumer-reported experiences with health care. The objectives are to measure how well health plans are meeting their members' expectations and goals; to determine which areas of service have the greatest effect on members' overall satisfaction; and to identify areas of opportunity for improvement to increase the quality of care provided. Both the Adult and Child CAHPS surveys are fielded and results are analyzed. The results are divided into Health Plan Domain, Health Care Domain, and Effectiveness of Care measures. Both composite scores (for groups of related questions) and individual question responses can be analyzed to assist in identifying the most meaningful opportunities for improvement for the Plan. CAHPS results are analyzed by the Member Satisfaction Task Force and recommendations for interventions are forwarded to the QIC. The Member Satisfaction Task Force is an internal ad-hoc subcommittee of the Performance Improvement Committee who reviewed the key driver analysis along with the overall results of the survey and organization goals to identify the following three questions to focus on for improvement: Ease of getting appointment with a specialist Obtaining needed care right away Getting information/help from customer service Rating of Health Plan Magnolia s goals for improvement are include the Key Drivers identified in the 2012 survey, as well as those Medicaid Child Survey (MCS) questions being monitored for annual Performance Improvement Projects submitted to the Mississippi Division of Medicaid: Members set standards for performance whether consciously or subconsciously. Standards are usually set higher for health plan services that are deemed important to each member. These important services are noted as the Key Drivers of Satisfaction. 28

The analysis of key drivers allows the health plan to drive actions based on plan strengths (summary rates at or above 75th percentile), opportunities (summary rates below 50th percentile) and areas to monitor (summary rates between 50th and 75th percentile). The grievance and appeal data are categorized as follows: Transportation Access to Services/Providers Provider Care and Treatment Customer Service Payment and Reimbursement Issues Administrative Issues Benefit Denial or Limitation Metrics: CAHPS results by composite score and individual questions and by Adult and Child results. Grievances and appeals are monitored by volume and type. Results are reviewed by the QIC. Results: Adult and Child Consumer Assessment Healthcare Providers & Systems (CAHPS ) survey were conducted February through May, 2012. Member Grievance data is reported to the QIC quarterly while Medical Necessity Appeals are reported to QIC every other month. The Member Satisfaction Study Indicators from the Adult CAHPS results in the Performance Improvement Project were reviewed for statistically significant improvements in 2012 as shown below. Rating of Health Plan results are also outlined. Composite I Attribute 2011 SRS* 2012 SRS* Percentage Change Current Benchmark** Significance Ease of getting appointment with a specialist (Q23 ) Getting care, tests, or treatments necessary (Q27) Getting information/help from customer service (Q31) Treated with Courtesy and respect by customer service staff (Q32) Rating of Health Plan (Q35) 71.2% 66.9% (4.3%) 79.5% Not Significant 75.9% 69.1% (6.8%) 83.6% Not Significant 74.3% 74.1% (0.2%) 78.2% Not Significant 87.4% 90.7% 3.3% 90.3% Not Significant 73.3% 73.3% No Change 78.2% Not Significant 29

The Member Satisfaction Study Indicators from the Child CAHPS results in the Performance Improvement Project were reviewed for statistically significant improvements in 2012 as shown below. Rating of Health Plan results are also outlined. Composite I Attribute 2011 SRS* 2012 SRS* Percentage Change Ease of getting appointment with a specialist (Q44) Current Significance Benchmark** Gen CCC Gen CCC Gen CCC 69.3% 68.9% 75.8% 74.3% 6.5% 5.4% 75.4% Not Significant Getting care, tests, or treatments necessary (Q48) 66.7% 64.8% 76.0% 69.1% 9.3% 4.3% 82.5% Significant decrease Getting information/help from customer service (Q50) Treated with Courtesy and respect by customer service staff (Q51) 67.1% 61.2% 68.9% 60.5% 1.8% (0.7%) 73.7% Not Significant 86.4% 84.5% 86.1% 84.2% (0.3%) (0.3%) 87.0% Not Significant Rating of Health Plan (Q54) 61.8% 63.2% 72.9% 67.6% 11.1% 4.4% 81.4% Significant decrease *Summary Rate Score **Current Benchmark 2011 NCQA Quality Compass 75 th Percentile Organizational-wide training was conducted in 2012 to ensure Magnolia staff is appropriately capable of identifying, capturing and reporting grievances and knowledgeable of the appeals process. As a result, there was a significant increase in the number of grievances and appeals reported in 2012 compared to 2011. The highest volume of grievances reported for 2012 was in the category of Access to Services/Providers, as identified below. The highest volume of appeals was in the Benefit Denial or Limitation category. Throughout the 2012 calendar year, the timeframes to acknowledge and resolve grievances and appeals were met at 100%. 2012 Grievances by Type 1% 28% 34% Transportation Access to Services/Providers 3% Provider Care and Treatment Payment and Reimbursement Issues 16% 16% 2% CCO Administrative Issues Benefit Denial or Limitation 30

Grievances by Type 2011-2012 600 500 400 300 200 100 0 2011 2012 Appeals by Type 2012 Transportation Access to Services/Providers Provider Care and Treatment CCO Customer Service Payment and Reimbursement Issues CCO Administrative Issues Benefit Denial or Limitation 100% 31

Appeals by Type 2011-2012 600 500 400 300 200 100 0 2011 2012 Provider Satisfaction Survey The Provider Relations department is in the process of performing a 90 Day Provider Satisfaction Survey. The target audience for the survey is new providers within the first 90 days of their contract with Magnolia. This is a paper survey that is designed to assess provider satisfaction with the credentialing process, the web portal, and ease of obtaining member information. The outcome of the survey will allow Magnolia to assess the provider s knowledge of the Plan, supplement training, educate providers on operational matters, correct misunderstandings, obtain prompt feedback on problems and identify needed followup activities. The survey is short and designed to identify potential concerns that can be quickly resolved. The analysis will be completed by the end of June. Providers that participate in the survey will be entered in a drawing. Medical Management Complex Case Management Magnolia provides case management services to members receiving Breast and Cervical Cancer. Children Age 0-6, Children under age 19, DHS Foster Care Adoption Assistance, Disabled Child at home, Medicaid Temporary Assistance to Needing Families (TANF), Aged, Blind and Disabled (SSI), Pregnancy Women and Infant, and working disabled. Complex Case Management includes members identified from the high risk population for Adults, Pediatrics and Obstetrics. Objective: Magnolia Health Plan coordinates services for members with chronic conditions and assists them to access needed resources. This activity is administered by the Medical Management Department. The Case Management Program includes the following components: 32

Data to identify the population Resources for members to be considered for program Systems to support participation and follow-up Procedures for communication, education and self-management processes by members Optimum health promotion Magnolia Health Plan Case Management Program is conducted in compliance with NCQA Health Plan Standard QI7. The Case Management (CM) Program Evaluation is currently in preparation for comprehensive analysis by the Utilization Management Committee (UMC). The CM Program Evaluation findings and recommendations from the UMC will then be reported to the QIC. Result: Achieved 100% compliance with all related NCQA Health Plan Standards. Recommended 2013 Interventions: Continue to submit case management reports to the UMC Forward the CM Program Evaluation to the UMC and report findings to the QIC Continue to meet applicable NCQA Standards throughout 2013 Disease Management Programs Objective: Magnolia actively assists members and practitioners in the management of chronic conditions through the Disease Management Program. Magnolia targets a minimum of two (2) chronic conditions to address. In CY 2012, the Disease Management Program included: asthma, coronary artery disease, chronic obstructive pulmonary disease, diabetes, heart failure, hypertension, tobacco cessation and weight management. Magnolia integrates data from various resources to identify members that qualify for participation in its DM Programs. Examples of data and referral sources are: claims, CM referrals, pharmacy, and medical review. The following Disease Management Programs are managed internally by Magnolia: Sickle Cell Disease Organ Transplantation Hemophilia The Disease Management Programs are managed externally by Nurtur, an NCQA accredited disease management vendor. Results: The Disease Management Programs are conducted in compliance with NCQA Health Plan Standard Ql 8. The Disease Management Program Evaluation is reviewed for 33

comprehensive analysis by the Utilization Management Committee (UMC). The DM Program Evaluation findings and recommendations from the UMC are reported to the QIC. Recommended 2013 Interventions: Continue DM to the UMC Forward the DM Program Evaluation to the UMC with reporting of findings to the QIC Continue to meet applicable NCQA Standards throughout 2013 Continuity and Coordination of Care Objective: Magnolia monitors the data surrounding continuity of care and services across its delivery network and takes necessary action to implement improvements when necessary. Magnolia collects and analyzes data to insures coordination of care and services Magnolia notifies members affected by any changes in their practitioner's status and terminations of PCP providers (Internists, Family Practitioners, and Pediatricians) Magnolia demonstrates that in defined situations members have continuous access to practitioners with terminated contracts Magnolia demonstrates efforts to assist members transitioning their care. Metrics: Continuity and Coordination of Medical Care is monitored through: The total number of emergency room (ER) visits that resulted in a follow up outpatient visit with a physician within thirty (30) days Sickle Cell Disease members were outreached for medical home, coordination of care, ER diversion and stabilization of the disease process Magnolia notifies affected members at least thirty (30) calendar days prior to the termination of a PCP practitioner or practice group and helps them select a new primary care physician Magnolia allows continuation of treatment for the lesser of the current period of active treatment or up to ninety (90) calendar days for members undergoing active treatment for a chronic or acute condition if their practitioner terminates or through the postpartum period for pregnant members in their second or third trimester of pregnancy Magnolia assists with member transition of care when necessary Results: 34

Baseline (1/1/2012-6/30/12) Re-Measurement (7/1/2012-12/31/12) Total number of ER visits (Denominator) 64352 72994 Total number of ER visits that resulted in an outpatient 32695 46368 follow-up visit with any practitioner within 30 days Rate 50.8% 63.5% Performance Goal Increase by 5 percentage points Increase by 5 percentage points Sickle Cell Disease Members-ER Utilization 4570 3954 Performance Goal Decrease by 10 % Goal Met-Actual 13% Reduction Barriers: Inappropriate Utilization of Emergency Room: Member knowledge of appropriate use of the ER and Urgent Care settings Member awareness of and commitment to the Medical Home concept Member lack of knowledge of auto-assignment if/when they are auto-assigned a PCP Lack of communication to Magnolia when member uses ER Lack of member awareness and/or utilization of the 24 hour Nurse Wise Line Magnolia experienced a 50,000 member increase which also affected the ER utilization statistics during the re-measurement period. The expansion has contributed to an additional increase in the ER diversion efforts and education Sickle Cell members require a dedicated team to manage their needs and assisting them to SCD clinics for care, offering medication education for SCD crisis as SCD Crisis prevention or early treatment greatly reduces ER utilization SCD members/diagnosis resulted in the top reason for emergency room visits early in 2012. Magnolia efforts have impacted this causing a significant decrease of SCD ER utilization to the sixth (6 th ) reason for ER utilization. Recommended 2013 Interventions: ER Utilization: Provide member education about appropriate ER use and availability of Urgent Care Centers Provide member education about the importance of establishing a relationship with their PCP Member and Provider education pertaining to the state s auto-assignment process 35

Partnering hospitals with the Case Management team to divert members to a PCP and/or Urgent Care Centers for treatment of non-emergent medical conditions Program has demonstrated effectiveness and will be maintained, continually evaluated and necessary adjustments implemented when determined Identify additional opportunities (metrics) to assess and monitor continuity and coordination of medical care Continue to meet NCQA standards in notifying affected members at least thirty (30 ) calendar days prior to the termination of a PCP Continue to meet NCQA standards in allowing continuation of treatment for members meeting circumstances described above Continue working with NurseWise Vendor for appropriate triage of members to Urgent Care Clinics and extended hour PCP clinics for non-emergent care Continue to meet NCQA standards in assisting with members' transition of care when needed Continue to collaborate with Medical Management to take action to improve the continuity of care and services as stated in the Objectives UM Program Introduction The Utilization Management (UM) Program Description defines the structures and processes within the Medical Management Department, including assignment of responsibility to appropriate individuals, in order to promote fair, impartial and consistent utilization decisions and coordination of care for Magnolia Health Plan members. UM Program Overview Utilization Improvement Program The goals of the UM Program are to optimize a member's health status, sense of well-being, productivity, and access to quality health care, while at the same time actively managing cost trends. The UM Program aims to provide services that are a covered benefit, medically necessary, appropriate to the patient's condition, rendered in the appropriate setting and meet professionally recognized standards of care. The UM Program seeks to advocate the appropriate utilization of resources, using the following program components: 24-hr nurse triage, authorization/precertification, second opinion, ambulatory review, and retrospective for medical health care services, case management, disease management when applicable, maternity management, preventive care management and discharge planning activities. Additional program components implemented to achieve the program s goals include tracking utilization of services to guard against over- and under-utilization of services and interactive 36

relationships with practitioners to promote appropriate practice standards. The Primary Care Physician (PCP) is responsible for assuring appropriate utilization of services along the continuum of care. UM Program Integration The UM Program, Pharmacy and Therapeutics (P&T) Program, Quality Improvement (QI), Credentialing, and the Waste, Abuse and Fraud Program are closely linked in function and process. The UM process utilizes quality indicators as a part of the review process and provides the results to the QI Department. As Case Managers perform the functions of Utilization Management, quality indicators, prescribed by Magnolia as part of the patient safety plan, are identified. The required information is documented on the appropriate form and forwarded to the QI Department for review and resolution. As a result, the utilization of services is inter-related with the quality and outcome of the services. Any adverse information that is gathered through interaction between the utilization management staff and the practitioner or facility staff is also vital to the re-credentialing process. Such information may relate, for example, to specific case management decisions, discharge planning, precertification of non-covered benefits, etc. The information is forwarded to the QI Department in the format prescribed for review and resolution as needed. The Medical Director determines if the information warrants additional review by the Plan Credentialing Committee. If not, the information is filed in the practitioner s folder and is reviewed at the time of the practitioner s re-credentialing. UM policies and processes serve as integral components in preventing, detecting and responding to Waste, Abuse and Fraud among practitioners and members. The Medical Management Department works closely with the Compliance Officer and Centene s Special Investigations Unit to resolve any potential issues that may be identified. In addition, Magnolia coordinates Utilization/Case Management activities with local community practitioners for activities that include, but are not limited to: Early childhood intervention State protective and regulatory services Women, Infant and Children Services (WIC) EPSDT Health Check Services provided by local public health departments Department of Family Service UM Committee (UMC) Daily oversight and operating authority of Utilization Management activities is delegated to the UMC, which reports to Magnolia s QIC and ultimately to the BOD. The UMC is responsible for the review and appropriate approval of medical necessity criteria and protocols and Utilization Management policies and procedures. The UMC coordinates annual review and revision of the UM Program, Work Plan and Annual UM Program Evaluation incorporated into the Quality Assessment and Performance Improvement Program (QAPI). These documents are presented to the QIC for approval. The UMC monitors and analyzes relevant data to detect and correct patterns of potential or actual inappropriate under or over utilization, which may impact health care services, coordination of care and appropriate use of services and resources as well as member 37

and practitioner satisfaction with the UM process. Analysis of the above tracking and monitoring processes, as well as status of corrective action plans, as applicable, are reported to the QIC. In addition, the UMC also provides ongoing evaluation of the appropriateness and effectiveness of practitioner quality incentive payments and assists in modifying and designing an appropriate quality incentive program. This includes evaluating the performance of practitioner contracts and the impact of the contracts on participating physicians to ensure the contracting strategy is achieving its goal of providing sufficient incentives to ensure the provision of high quality, cost effective care. UM Committee Scope Oversees the UM activities of Magnolia in regard to compliance with contractual requirements, federal and Mississippi State statutes and regulations, and requirements of accrediting bodies such as the National Committee for Quality Assurance (NCQA) Development and annual review/approval of the UM Program Description, guidelines, policies and procedures Reviews practitioner-specific UM reports to identify trends and/or utilization patterns and makes recommendations to the QIC for further review Reviews reports specific to facility and/or geographic areas for trends and/or patterns Examines appropriateness-of-care reports to identify trends and/or patterns of underor over-utilization; refer identified practitioners to the QIC for performance improvement and/or corrective action Examines results of annual member and practitioner satisfaction surveys to determine overall satisfaction with the UM Program and identify areas for performance improvement Provides a feedback mechanism to the QIC for communicating findings, recommendations, and a plan for implementing corrective actions related to UM issues Identifies those opportunities whereby the UM data can be utilized in the development of quality improvement activities and submitted to the QIC for recommendations Reports findings of UM studies and activities to the QIC Liaisons with the QIC for ongoing review of quality indicators UM Committee Members Magnolia actively involves participating network practitioners in utilization review activities as available and to the extent that there is not a conflict of interest. Magnolia s UM Program Description and policies define when such a conflict may exist and describe the remedy when such a conflict occurs. Participation in Magnolia s UMC is one of the primary ways in which network practitioners participate in utilization review activities. Magnolia s UMC is comprised of the following members: 38

Network physicians (in the areas of Family Practice/Internal Medicine, OB- GYN, Pediatrics, Specialty and Behavioral Health practitioners, as applicable) Medical Director VPMM Executive leadership and UM/QI staff, as appropriate also attend but are nonvoting members of the committee. The UMC is co-chaired by the Medical Director and a network physician. All non-plan members of the UMC are voting members. A minimum of one voting member must be present for a quorum. The UMC Chairman will be the determining vote in the case of a tie vote. Meeting Frequency and Documentation of Proceedings The UMC meets at least four (4) times per year and the CMD maintains detailed records of all UMC meeting minutes, UM activities, case management program statistics and recommendations for UM improvement activities made by the UMC. The UMC submits to the QIC all meeting minutes and written reports regarding all UM studies and activities. Scope of the UM Program The scope of the UM Program is comprehensive and applies to all eligible members across all product types, age categories and range of diagnoses. The UM Program incorporates all care settings including preventive care, emergency care, primary care, specialty care, acute care, short-term care, long term care and ancillary care services. The UM Program is evaluated at least annually and modifications made as necessary. The CMD and VPMM will evaluate the impact of the UM Program by using: Member complaint, grievance and appeal data The results of Member Satisfaction Surveys Practitioner complaint and practitioner satisfaction surveys Relevant UM data Practitioner profiles The evaluation covers all aspects of the UM Program. Problems and/or concerns are identified and recommendations for removing barriers to improvement are provided. The evaluation and recommendations are submitted to the UMC for review, action and follow-up. The final document is then submitted to the QIC and BOD for approval. Utilization Management Measures and Outcomes Medical Necessity Criteria The goal in utilization management is to help guide best practice medicine in the most efficient and economical manner while addressing patient-specific needs. To that end, the clinical decision criteria utilized aligns the interests of the Plan, the practitioner, and the member. The UM criteria are nationally recognized, evidence-based standards of care and include input from recognized medical experts. UM criteria and the policies for application are reviewed at least annually and updated as appropriate. Utilization review criteria are utilized as an objective screening guide and are not intended to be a substitute for 39

physician judgment. Utilization review decisions are made in accordance with currently accepted medical or health care practices, while taking into consideration the individual member needs and complications at the time of the request in addition to the local delivery system available for care. The Medical Director reviews all potential medical necessity denials for medical appropriateness and is the only one with authority to implement an adverse determination, which results in reduction, suspension, denial, or termination of services. In general, Magnolia uses McKesson s InterQual guidelines to determine medical necessity and appropriateness of physical health care. InterQual is a recognized leader in development of clinical decision support tools, and is used by 3000 organizations and agencies to assist in managing health care for more than 100 million people. InterQual is developed by generalist and specialist physicians representing a national panel from academic as well as community based practice, both within and outside the managed care industry. InterQual provides a clear, consistent, evidence-based platform for care decisions that promote appropriate use of services, enhance quality, and improve health outcomes. Plan will use InterQual s Level of Care and Care Planning Criteria for Pediatric Acute, Adult Acute, Imaging, Home Care, Durable Medical Equipment and Procedures to determine medical necessity and appropriateness of care. At any time, treating practitioners may request UM criteria pertinent to a specific authorization request by contacting Magnolia s Medical Management Department or may discuss the UM decision with the Medical Director. Each contracted practitioner will receive a Provider Manual, a quick reference guide, and a comprehensive orientation that contains critical information about how and when to interact with the Medical Management Department. Covered services are those medically necessary health care services provided to members as outlined in Magnolia s contract with the State of Mississippi. Medical necessity means that the covered services prescribed are based on generally accepted medical practices in light of conditions at the time of treatment. Medically Necessary services are those that are: Appropriate and consistent with the diagnosis of the treating practitioner and the omission of which could adversely affect the member s medical condition; Compatible with the standards of acceptable medical practice in the community; Provided in a safe, appropriate and cost-effective setting given the nature of the diagnosis and the severity of the symptoms; Not provided solely for the convenience of the member, the physician, or the facility providing the care; Not primarily custodial care unless custodial care is a covered service or benefit under the member's evidence of coverage; and There must be no other effective and more conservative or substantially less costly treatment, service and setting available. 40

Medical necessity determinations are made by appropriate professionals and include decisions about covered medical benefits defined by Magnolia via the State. There are two (2) levels of UM medical necessity review available for all authorization requests: Level I review is conducted on covered medical benefits by a Case Manager who has been appropriately trained in the principles, procedures, and standards of utilization and medical necessity review. A Level I review is conducted utilizing McKesson s InterQual criteria or applicable medical policy while taking into consideration the individual member needs and complications at the time of the request in addition to the local delivery system available for care. At no time shall a Level I review result in a reduction, denial, or termination of service. Adverse determinations can only be made by the Medical Director, during a Level II review. Level II review is conducted on a case-by-case basis by an appropriately licensed practitioner or other health care professional as appropriate. For instance, if the request is for behavioral health medication, a qualified behavioral health practitioner will be consulted during the review. If the request is for dental services, a qualified dental practitioner will conduct the Level II review. Automatic referral for Level II review includes requests for services or procedures that require benefit determination, services that do not have existing medical necessity criteria, or are potentially experimental or new in practice. A Level II review is also indicated when the request does not meet the existing medical necessity criteria. All Level II reviews shall be conducted with consideration given to continuity of care, individual member needs at the time of the request and the local delivery system available for care. An appropriately licensed board-certified consultant may be used in making a medical necessity determination. Timeliness of Decision Making Preauthorization requires that the provider or practitioner make a formal medical necessity determination request to Magnolia prior to the service being rendered. Upon receipt, the prior authorization request is screened for eligibility and benefit coverage and assessed for medical necessity and appropriateness of the health services proposed, including the setting in which the proposed care will take place. Prior Authorization (PA) is required for those procedures/services for which the quality of care or financial impact can be favorably influenced by medical necessity or appropriateness review such all out-of-network services and certain outpatient services, ancillary services and biopharmaceuticals as described on the PA List. UM decisions are made in a timely manner to accommodate the clinical urgency of the situation and to minimize any disruption in the provision of health care. Established timelines are in place for practitioners to notify the plan of a service request and for the plan to make UM decisions and subsequent notifications to the member and practitioner. For all pre-scheduled services requiring prior authorization, the practitioner should notify the plan within five (5) days prior to the requested service date. Prior authorization is not required for emergent care services. Determinations for standard, non-urgent, preservice prior authorization requests will be made within two (2) working days of receipt of the necessary information and receipt of the request not to exceed fourteen (14) calendar days of the receipt of the request for service. A determination for urgent preservice care (expedited prior authorization) will be issued within two (2) working days of 41

receipt of the necessary information not to exceed 72 hours of the receipt of the request for service. Medical necessity of post service decisions (retrospective review) and subsequent member/practitioner notification will occur no later than thirty (30) days from receipt of request. If the request is approved, the Case Manager or designee notifies the requesting provider of the decision by telephone, fax, or email within one (1) business day after the decision is made, not to exceed the original 72-hour determination period or subsequent extension. When notifying by telephone, the Case Manager will document the date and time of the notification in the authorization system, as well as who was notified of the decision. If the determination results in a denial, reduction or termination of an urgent pre-service request, the Medical Director or designee will notify the provider orally within one (1) business day of the determination not to exceed the original 72-hour determination period or subsequent extension A written or electronic notice of the decision, including reason, right to a peer-to-peer discussion, right to appeal and the appeal process to the treating physician, facility, and member is sent within one (1) business day of the determination, not to exceed the original 72-hour determination period or subsequent extension. Effective December 1, 2012, the State increased the number of eligibility categories for members which in-turn significantly increased the number of prior authorization requests processed. Collaborative efforts implemented by the Magnolia staff to educate members and providers lead to a successful expansion of the current contract. 2012 Turn-Around Times (TAT) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total # of Auths 1223 1138 1197 1121 1166 1063 910 1067 836 1065 964 2570 Turn-Around Time 3.1 1.7 1.9 1.5 1.1 1.5 1.7 1.9 1.8 2 1.5 2.1 (TAT) Goal 2 2 2 2 2 2 2 2 2 2 2 2 Goal Met No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No New Technology Assessment In instances of determining benefit coverage and medical necessity of new and emerging technologies and the new application of existing technologies or application of technologies for which no InterQual Criteria exists, the Medical Director shall first consult Centene s available Medical Policy Statements. The Centene Clinical Policy Committee, with representation from Magnolia and Centene Health Plans, develops these statements. The Corporate Clinical Policy Committee (CPC) is responsible for evaluating new technologies or new applications of existing technologies for inclusion in the benefit plan. The CPC shall develop, disseminate and annually update medical policies related to: medical procedures, behavioral health procedures, pharmaceuticals and devices. The CPC or assigned designee shall review appropriate information to make the coverage decision including published scientific evidence, applicable government regulatory body information, CMS s National Coverage Decisions database/manual and input from relevant specialists 42

and professionals who have expertise in the technology. Practitioners are notified in writing through the provider newsletters and the practitioner web portal of new technology determinations made by Magnolia. As with standard UM criteria, the treating practitioner may, at any time, request the medical policy criteria pertinent to a specific authorization by contacting the Medical Management Department or may discuss the UM decision with the Medical Director. Inter-Rater Reliability At least annually, the CMD and VPMM assess the consistency with which physicians and authorization nurses (Case Managers) apply UM criteria in decision-making. The assessment is performed as a periodic review by the VPMM or designee to compare how staff members manage the same case or some forum in which the staff members and physicians evaluate determinations, or they may perform periodic audits against criteria. Staff with a score of <80% are identified and must attend retraining and retake the test within thirty (30) days of retraining. At the conclusion of retesting, the aggregate scores are reviewed to identify any knowledge deficits that are applicable. If so, a corrective action plan is developed at the corporate level within thirty (30) days of identification and disseminated to the Plan trainers or designee when applicable. Deficits are the responsibility of the Plan VPMM and trainer or designee to address in the form of corrective action plans and retraining. Inability to pass retesting will be subject to further action. A department correction action plan will be created when there is a cumulative score of <80% for any one question. A corrective action plan may include precepting individuals or retraining the department. 2012 Average Inter-Rater Reliability (IRR) Scores Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average IRR Score 90% 90% 90% 93% 93% 93% 93% 93% 93% 93% 93% 93% Goal >80 >80 >80 >80 >80 >80 >80 >80 >80 >80 >80 >80 Goal Met Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Credentialing and Recredentialing Magnolia has procedures and practices in place to review, select, credential and re-credential licensed facilities, ancillary providers and individual practitioners who meet NCQA standards and who provide care and services to its members. Provider credentialing activities are performed on behalf of Magnolia by Credentialing/ Provider Data Management (PDM) Department of Centene Corporation, Magnolia s parent company, located in St. Louis, Missouri. Credentialing and re-credentialing activities are an integral part of the contracting process. PDM resources dedicated to credentialing and re-credentialing include a Credentialing Manager, a PDM Manager, a lead Credentialing Analyst and four (4) credentialing specialists. 43

There are four (4) delegated entities (LeBonheur Children s Hospital & LeBonheur Pediatric Physicians Medical Group; University of Mississippi Medical Center & University Physicians; The Hattiesburg Clinic; and Mississippi Physician Care Network). Each entity works collaboratively with PDM and Magnolia to make updates and changes to their practitioner or facility rosters on at least a monthly basis. For practical purposes, the term practitioner is used to define an individual (MD, DO, PA, NP, ST, OT, PT, and others), while the term provider is used to define an entity (hospital, ASC, IPA, PHO, imaging center, laboratory, and others). Metrics: Number of practitioners credentialed Number of practitioners recredentialed Practitioner credentialing turn-around time Number of practitioners decredentialed for administrative reasons Number of practitioners decredentialed for reportable peer review reasons Number of organizational providers credentialed Number of organizational providers recredentialed Organizational providers credentialing turn-around time Number of organizational providers decredentialed for administrative reasons Number of organizational providers decredentialed for reportable peer review reasons Number of entities with delegated credentialing monitored through the Credentialing Committee Credentialing Committee The Magnolia Credentialing Committee (CC) consists of the PDM Manager and Lead Credentialing Analyst, selected physicians licensed to practice medicine in the State of Mississippi and the following Magnolia associates: CMD, VPMM, and QI Vice President of Medical Management and two (2) QI Managers. The Committee meets monthly and minutes and related records are kept by the QI Department. Results: Count of Magnolia NPI 2012 YES NO TOTALS Approved Final 529 76 605 Closed File 2 2 Committee Adverse 9 9 Committee Clean 1 1 Denied 1 1 Not Contracted 3 3 Provider Term 3 3 Grand Total 548 76 624 44

Barriers: None Recommended Interventions: Continue credentialing activities following NCQA guidelines and Magnolia and Centene Policies and Procedures. Member Rights and Responsibilities Member s Rights and Responsibilities are given to the member on enrollment by the State and also upon enrollment with Magnolia in the Member Handbook. One of the rights is to privacy and this is closely guarded at Magnolia Health Plan. All member sensitive information is only accessible to authorized staff and is locked in secured cabinets or is placed in locked trash receptacles when documents are to be shredded. The Compliance Officer performs Health Insurance Portability and Accountability Act (HIPAA) rounds to assess access to protected health information. Health Insurance Portability and Accountability Act of 1996 Compliance and Confidential Information Objective: Magnolia Health Plan is required to establish policies and procedures which address privacy and confidentiality of member information. Specific policies detail Magnolia's safeguards, collection, use and disclosure of protected health information (PHI) and how PHI is shared with the members based upon HIPAA. In accordance with Magnolia s policy, the following tasks are undertaken to ensure the protection of member information: Quarterly Desk Audits Annual compliance training for all personnel New Hire Compliance and HIPAA Training Member complaints regarding management of health information are monitored All member information will be maintained in secure systems and hard copies will be kept in locked locations Metrics: All employee desk and work areas are audited to make sure that member PHI is secured, laptops are locked, and PHI is disposed of properly. Results: Audit Q1-2012 Audit Q2-2012 Audit Q3-2012 Audit Q4-2012 Total Desktop/Work Areas Audited 89 86 82 119 Percent (%) Passed/Compliant 89% 96% 88% 92% Employees that do not pass the quarterly desk audits are provided additional education and their immediate supervisor is made aware of the occurrence. The work area of these 45

employees will be re-audited the following quarter. If an employee does not pass in consecutive quarters, they are required to re-take HIPAA online training. The annual associate training will be conducted in Q1 2013 Magnolia Health Plan had no reportable HIPAA violations in 2012 No grievances were received in 2012 regarding privacy or HIPAA violations Member information is kept secure in accordance with Magnolia s Information Technology (IT) Security and Compliance policies Barriers: Associate lack of knowledge of company policies on HIPAA compliance Recommended 2013 Interventions: Continue mandatory staff training on HIPAA compliance upon hire and annually Continue Quarterly HIPAA audits and additional education to staff as needed Continue to meet applicable HIPAA Regulations and NCQA Standards regarding confidentiality throughout 2013 Clinical Practice Guidelines and Preventive Health Guidelines Magnolia is accountable to adopt and disseminate Clinical Practice Guidelines (CPGs) and Preventive Health Guidelines (PHG) relevant to its population. The guidelines must be evidenced- based and must relate to two (2) entities included in the Disease Management Program as described in NCQA standard Ql 9. In 2012, Magnolia completed the following: Distributed the guidelines to the appropriate provider groups via printed and /or web communication Measured performance against two (2) aspects of the CPGs selected for medical conditions Reviewed and updated adult and pediatric preventive guidelines Metrics: Magnolia maintains the following Clinical Practice and Preventive Health Guidelines: Diagnosis and Management of Asthma General Diabetes Care Obesity in Children, Adolescents, and Adults General Prenatal Care Treatment of School-aged Children with Attention Deficit/Hyperactivity Disorder (ADHD) Major Depressive Disorder Adult Preventive Health Guidelines Pediatric Preventive Health Guidelines 46

Magnolia assessed compliance to guidelines in 2012 with the following metrics based on the current HEDIS technical specifications for the following measures: Clinical Practice Guideline Guidelines for the Diagnosis and Management of Asthma Guidelines for General Diabetes Care Guidelines for Management of Obesity in Children and Adolescents Guidelines for Management of Obesity in Adults Guidelines for Prenatal Care HEDIS Measure to Assess Compliance Use of Appropriate Medications for People with Asthma (ASM) Selected elements of Comprehensive Diabetes Care (CDC) such as HbA1c testing, eye exam {retinal), LDL screening and nephropathy monitoring performed Weight Assessment and Counseling for Nutrition and Physical Activity for Children/Adolescents (WCC) Weight Assessment of a documented BMI in the medical record (ABA) Timeliness of Prenatal Care visit during 1st trimester Postpartum Care visit between 21 and 56 days after delivery Diagnosis and Evaluation of the Child with Attention Follow-up Care for Children Prescribed ADHD Medication (ADD) Deficit/Hyperactivity Disorder (ADHD) including Initiation Phase and Continuation and Maintenance Phase Guideline for Treatment of Patients with Major Depressive Disorder Guidelines on the Preventive Services for Adults Guidelines on the Preventive Services for children and EPSDT Screening Guidelines on general recommendations of immunizations Guidelines on recommendations for blood lead screening of children Antidepressant Medication Management (AMM) Selected measures on prevention and screening Well Child Visits (W15) during first 15 months of life (six or more wellchild visits) Immunizations (CIS) in children Lead screening (LSC) for children with one or more capillary or venous lead blood test by their second birthday Results: Review and Approval of Guidelines: All Clinical Practice Guidelines (CPGs) and Preventive Health Guidelines (PHGs) were reviewed and/or updated on schedule during 2012. Guidelines are distributed to the practitioner network via website and practitioners are notified by fax blast and newsletter of the availability of Guidelines on the website. Compliance with Guidelines: Guideline Measure HEDIS 2012 (CY 2011) HEDIS 2013 (CY2012) Compliance Goal NCQA Quality Compass Benchmark 75th Percentile 47

Guidelines for the Diagnosis and Management of Asthma Use of Appropriate Medications for Persistent Asthma, Members 5-50 years old 0.00% 81.03% 75% Guidelines for General Diabetes Care Diabetic Members 18-75 years old who had HbA1c Testing Diabetic Members 18-75 years old who had a Retinal Eye Exam Diabetic Members 18-75 years old who had a LDL-C Screening 72.95% 69.04% 75% 44.08% 43.77% 75% 63.94% 59.49% 75% Guidelines for Management of Obesity in Children and Adolescents Diabetic Members 18-75 years old who had a nephropathy screening Member 3-17 years of age BMI Screening Members 3-17 years of age Counseling for Nutrition 77.00% 74.22% 75% 0.15% 0.47% 75% 0.35% 1.48% 75% Guidelines for Management of Obesity in Adults Members 3-17 years of age Counseling for Physical Activity Member 18-74 years old who had a BMI 0.05% 0.64% 75% 0.00% 4.86% 75% Guidelines for Timeliness of Prenatal Care 70.12% 61.65% 75% management of Prenatal Care Postpartum Care 29.88% 28.64% 75% Diagnosis and Evaluation of the Child with Attention Deficit/Hyperactivity Disorder (ADHD) Initiation Phase 0.00% 26.22% 75% Continuation and Maintenance Phase 0.00% 27.91% 75% Guideline for Treatment of Patients with Major Depressive Disorder Antidepressant Medication Management (AMM) Effective Acute Phase Treatment 64.29% 47.85% 75% Antidepressant Medication Management (AMM) - Effective Continuation Phase Treatment 35.71% 32.41% 75% Guideline on Preventive Service for Adults Breast Cancer Screening, women 40-69 years who had a mammogram 0.00% 41.46% 75% 48

Guideline on Preventive Service for Adults Cervical Cancer Screening, women 21-64 years who had a pap test 34.63% 45.85% 75% Guideline on Preventive Service for Adults Chlamydia Screening, women 16-24 years who are sexually active and had one test 51.57% 46.13% 75% Guideline on Preventive Service for Children Children turning 15 months old who have had six or more well-child visits 0.00% 0.00% 75% EPSDT Screening EPSDT Screenings 85% (DOM target) Guideline for Immunizations for Children Children 2 years of age who had 4-DTaP, 3-IPV, 1-MMR, 3-HiB, 3-HepB, 1-VZV 0.00% 82.69% 90% (DOM target) Guideline for Lead Screening in Children (LSC) Children 2 years old who had a venous or capillary lead blood test before 2 nd birthday 0.00% 0.00% 75% Barriers: No barriers were identified in the process for annual review, revision and approval of guidelines Practitioner inconsistency in application of the guidelines Recommended 2013 Interventions: Continue annual review of CPGs and PHGs, review and update as needed based on the policy and procedure requirements. Continue to notify practitioners about the guidelines via newsletter, fax blast and web site announcements Continue member and provider outreach and education-based initiatives regarding all guidelines Adopt CPGs in collaboration with the other Mississippi CMOs based upon national scientific resources and common compliance measurement Continue to meet applicable NCQA Standards throughout 2013 Distribution of Guidelines Magnolia maintains preventative care guidelines as a reference on the Magnolia web site and updates them annually or as the guidelines change. These guidelines include adult 49

preventive, immunizations; lead screening, pediatric preventive and perinatal care. These guidelines are available in hard copy upon request. Delegation Oversight Objective: Magnolia will maintain oversight functions performed by contracted entities. The following vendors performed services during 2012. CareCentrix-Durable Medical Equipment (DME), Home Health, Orthotics & Prosthetics Cenpatico-Behavioral Health (CBH) DentaQuest-Dental Services National Imaging Associates (NIA)-Radiology Services NurseWise-24 Hour Nurse Triage Nurtur-Disease Management OptiCare-Vision Services Univita-DME, Home Health, Home Infusion US Script-Pharmacy Services Magnolia evaluates each delegated entity's capacity to perform the proposed delegated activities prior to the executing of a delegation agreement. Magnolia retains accountability for any functions and services delegated, and as such will monitor the performance of the delegated entity through annual approval of the delegated programs (Credentialing, UM, QI, etc.), routine reporting of key performance metrics and annual or more frequent evaluation to determine whether the delegated activities are being carried out according to the contract, accreditation standards and program requirements. Magnolia retains the right to reclaim the responsibility for performance of delegated functions, at any time, if the delegate is not performing adequately. Vendor Claims Network UM Credentialing CM DM CareCentrix X X X X Cenpatico X X X X X DentaQuest X X X X NIA X NurseWise Nurtur OptiCare X X X X Univita X X X X US Script X X X X Metrics: Newly delegated entities are required to have a pre-delegation audit prior to contract implementation. All entities are subject to annual audits and submit regular reports of key functions to the Delegated Vendor Oversight Committee. X 50

Vendor Audit Dates CareCentrix 2/27-28/2012 Corrective Action Plan (CAP) Corporate CAP for Claims Payment Timeliness Current Score for Elements Claims Processing 86% Credentialing/Recredentialing 100%; Quality Improvement 100%; Utilization Management 94% Current Score for File Review Claims Processing 91% Credetialing/Recredentialing 91% ;Utilization Management 100% Cenpatico N/A N/A N/A N/A DentaQuest 6/4-5/2012 N/A Credentialing/Recredentialing 100%; Member Rights and Responsibiities100%; Utilization Management 100%; Quality Improvement 98%; Claims Processing 100% Credentialing 100%; Recredentialing 95%; Claims Processing 100%; Utilization Management Denials 98% ; Utilization Management Appeals 100% NIA 3/15-16/2012 NurseWise 6/27-28/2012 N/A Credentialing/Recredentialing 100%; Member Rights and Responsibilities 100%; Utilization Management 100%; Quality Improvement 98% N/A URAC Core Standards 100%; Call Center Standards 100% Credentialing 100%; Recredentialing 43%; Utilization Management Denials 85%; Utilization Management Appeals 100% Timely Start of Resolutions 97.8%; Concern Categorized 100%; Documentation 100%; Concern Resolved Timely 97.8%; Written Notification 100%; Assessments 100%; Symptoms 98%; Algorithm 96% Nurture 5/17/2012 N/A Evidence-Based Programs 100%; Patient Services 99%; Practitioner Services 100%; Care Coordination 100%; Clinical Quality 92% ;Program Operations 100% Time of Referral 94%; Assessment Completion 89.4%; Proper Outreach 86.4% OptiCare 08/15-16/2012 N/A Credentialing /Recredentialing 100%; Members Rights and Responsibilities 98%; Utilization Management 95%; Claims Processing 100% Univita 12/6/2012 N/A Claims Processing 100% ;Compliance 70%; Credentialing/Recredentialing 100%; Quality Improvement 100%; Utilization Management 100% US Script 3/29-30/2012 N/A Credentialing/Recredentialing 100%; Member Rights and Responsibilities 100%; Utilization Management 100%; Quality Improvement 100%; Performance Standards 100%; Claims Processing 100% Credentialing 100%; Recredentialing 100%; Claims Processing 100%; Complaints 100% ;Utilization Management Denials 60% Claims Processing 85%; Credentialing 100%; Recredentialing 100% Credentialing 100%; Recredentialing 95%; Claims Processing 100%; Utilization Denials 84% Results: All entities passed their annual audits. Results were reported through the Delegated Vendor 51

Oversight Committee (DVOC) to the QIC. Monthly and quarterly meetings were held with all delegated vendors. All vendors who failed to meet program requirements carried out Corrective Action Plans (CAPs) or Quality Improvement Plans (QIP). CareCentrix was placed on a CAP for Untimely Claim Payment during 2012 in addition to multiple other issues in which they did not perform within Magnolia's standards. CareCentrix was de-delegated effective 7/31/2012 and delegation was implemented with Univita on 8/1/2012. DentaQuest was recognized to have inconsistencies in their denial letters (only 83% compliant). Magnolia will follow up in six (6) months to review progression. NIA was placed on a six (6) month QIP as a result of a 43% compliance on recredentialing and a second QIP as a result of inadequate Notification of Denials at 85% compliance. Barriers: The CareCentrix CAP, which initiated in 2011, continued unresolved into 2012. Delegation was terminated effective 7/31/12 with replacement by Univita effective 8/1/12. Recommendations for 2013: Continue annual audits and reporting of CAPs through the Delegated Vendor Oversight Committee Continue to meet applicable NCQA Standards throughout 2013 Monitor NIA to ensure both QIP s are demonstrating meeting Magnolia standards. 52

Review and Approval Describe your approval process for the Annual Evaluation. Approval The Quality and Utilization Assessment and Performance Improvement Program Evaluation for 2012 has been reviewed and approved as follows: Submitted by Date QI Committee Approval Chair Date of Committee UM Committee Approval Chair Date of Committee Board Approval Chair Date 53