Annual Report and Analysis of 2012 Activity

Managed Care in North Carolina Annual Report and Analysis of 2012 Activity North Carolina Department of Insurance Wayne Goodwin, Insurance Commissioner

Table of Contents Managed Care in North Carolina... 1 Annual Report and Analysis of 2012 Activity... 1 Table of Contents... 2 I. Glossary of Managed Care Terms in this Report... 3 II. Introduction... 5 III. 2012 HMO Activity... 7 A. Enrollment, Market Share and Member Turnover... 15 B. HMO Premium Revenues and Medical Expenses... 18 C. HMO Inpatient/Outpatient Encounter Data... 20 D. HMO Utilization Review and Appeals... 22 E. HMO Grievances... 25 G. HMO Provider Network Summary... 28 IV. 2012 PPO Plan Activity... 32 A. PPO Plan Enrollment and Member Turnover... 36 B. Utilization Review and Appeals... 38 C. Grievances... 42

I. Glossary of Managed Care Terms in this Report Appeal - A written request for a plan to reverse its utilization review decision to deny coverage of a requested service. Commercial-insured - Refers to those groups and individuals that pay premiums to an insurer, with the insurer accepting financial risk for the cost of covered healthcare services rendered over the course of the contract period. Commercial insured excludes membership covered under self-funded employer plans, Federal plans, Medicare and Medicaid. Exam - An examination by the Market Regulation Division of a company s market practices. External Review - An independent medical review of certain decisions made by health insurers. Grievance - A written complaint (other than an appeal) from a member about an insurer s decisions, policies or actions related to the availability, delivery or quality of healthcare services, claims payment or handling, reimbursement for services or the contractual relationship between a member and the plan. HMO (Health Maintenance Organization) - A health plan that provides or arranges for the delivery of healthcare services to members through a designated provider network, for a fixed, pre-paid monthly premium. Medical Loss Ratio - Ratio of medical expenses to premium revenue. For example, a Medical Loss Ratio of.93 indicates that for every dollar received as premium revenue, $0.93 is spent on medical expenses. Member - A person covered under a managed care plan. Member Months - Membership is counted each month. The monthly totals are then added together, to produce the total number of member months for the calendar year. NCQA Accreditation - See Section II, Data Sources. Noncertification - A formal decision, made through a plan s Utilization Review process, to deny coverage for a requested service. PMPM - Per Member Per Month POS/HMO (Point-of-Service HMO Plan) - A type of HMO plan that allows members to receive care for some services from any provider they choose, with the member bearing a higher out-of-pocket cost, such as a higher copayment. PPO (Preferred Provider Organization) Benefit Plan - A health plan that offers members lower out-of-pocket costs when they receive care from providers in the plan s network. For a higher outof-pocket cost, PPO plan members can receive care from out-of-network providers at any for all covered services. Pre-authorization - A plan s advance approval to obtain specified healthcare services. 3

Provider - A doctor, hospital or other health care professional or facility. Provider Network - The doctors, hospitals and other health care professionals and facilities under contract with a health plan. These are called in-network or participating providers. Primary Care Provider (PCP) - Doctors who provide general health care services. PCPs usually include family practitioners, general practitioners, pediatricians and internists. Some HMOs require members to obtain authorization from their PCP to obtain specialty care. Utilization Review (UR) - The process by which a managed care plan assesses whether requested health care services are medically necessary and appropriate. The review is somes conducted prior to the services being rendered, so that the plan can approve or disapprove coverage in advance ( prospective review or preauthorization ). The review can also occur during the course of treatment ( concurrent review ) or after treatment is completed ( retrospective review ). 4

II. Introduction About the North Carolina Department of Insurance The North Carolina Department of Insurance is responsible for the protection of North Carolina citizens through the oversight and regulation of insurance companies and agents doing business in the state. In exercising its regulatory responsibilities, the Department seeks to ensure a marketplace in which consumers can readily purchase insurance from financially sound and responsive companies, at fair prices, for their lives, health and property. In addition to regulating the insurance industry, the Department also enforces safety codes and standards and administers a variety of programs aimed at loss prevention and safety education and awareness throughout the state. These activities are carried out by the Divisions of Engineering and Codes, Fire and Rescue, Manufactured Building, Prevention Programs and Grants and Special Services. Contact the Department to learn more about these safety and education activities. The Commissioner of Insurance, who is elected to the position every four years, heads the Department. Data Sources Unless otherwise noted, data presented in this report reflect plans commercial-insured business only. Commercial-insured refers to those groups and individuals that pay premiums to an insurer, with the insurer accepting financial risk for the cost of covered healthcare services rendered over the course of the contract period. Commercial-insured excludes membership covered under selffunded employer plans, Federal plans, Medicare and Medicaid. Annual Managed Care Data Filing: By May 1 of each year, all North Carolina licensed HMOs and PPO plans are required (under NCGS 58-3-191) to submit an annual managed care data filing to the Department s Market Regulation Division. The May 2013 filing, covering the 2012 calendar year, is the source for data in this report on county specific commercial-insured enrollment, utilization review activity, appeals, grievances and provider networks. Annual Financial Statement: North Carolina law requires licensed HMOs to submit annual financial statements to the Department s Financial Evaluation Division by March 1 of each year. The March 2013 statement, covering the 2012 calendar year, is the source for data in this report on statewide commercial-insured enrollment, premium revenues, medical expenses, inpatient days and outpatient encounters. Although licensed insurers offering PPO benefit plans file annual financial statements, financial data specific to their PPO lines of business are not reported separately. Therefore, the types of financial data listed above for HMOs are not available for PPO benefit plans. Department of Insurance Records: The Department s own records are the source of data on consumer complaints HMO service areas and appeals that have been taken to External Review. Within this Report, the term complaints refers to written complaints sent by consumers and providers to the Department of Insurance, not appeals and grievances sent directly to HMOs and PPO plans. The Department licenses HMOs for specific service areas (North Carolina counties), but indemnity insurance companies which offer PPO benefit plans are licensed to do business on a statewide basis. Therefore, service areas are not reported for PPO benefit plans. The National Committee for Quality Assurance (NCQA): The NCQA evaluates and reports on the quality of HMOs across the nation. HMO participation in the NCQA accreditation program is 5

voluntary. Accreditation Outcomes reported in the one-page HMO summaries were obtained from NCQA s website (http://hprc.ncqa.org/index.asp) and were current as of 3/31/13. Excellent was the highest outcome a plan could receive; meaning the plan meets or exceeds NCQA s requirements for consumer protection and quality improvement. Other possible ratings are (from highest to lowest) Commendable, Accredited and Provisional. Other Managed Care Information Available from the Department of Insurance Publications The following publications are available on the North Carolina Department of Insurance website, www.ncdoi.com. Guide to Appeals and Grievances - Contains information about the insurance consumer s rights. Guide to Health Insurance - Contains general information about managed care and traditional indemnity insurance. Guide to External Review - Contains information on requesting an External Review of a plan s final decision to deny a service. Other Managed Care Data The following information is available on the North Carolina Department of Insurance website, www.ncdoi.com. HMO Information: Approved service area by HMO. Enrollment by county, by HMO (as of 12/31 of previous calendar year). Providers by county, by HMO (as of 12/31 of previous calendar year). Operational/performance data reported by HMOs annually, under authority of NCGS 58-3-191. PPO Carrier Information: List of PPO benefit plans. Enrollment by county, by PPO benefit plan. Operational/performance data reported by PPOs annually, under authority of NCGS 58-3-191. 6

III. 2012 HMO Activity Licensed Full-Service HMOs in North Carolina The number of licensed full-service HMOs in North Carolina peaked at 24 in 1997, and has decreased to 6 as of 12/31/12. Licensed Full-Service HMOs: 12/31/12 Figure 1 Company Name Aetna Health Care, Inc. (PA) Blue Cross Blue Shield of North Carolina CIGNA HealthCare of North Carolina, Inc. Coventry Health Care of the Carolinas, Inc. FirstCarolinaCare, Inc. UnitedHealthCare of North Carolina, Inc. Source: North Carolina Department of Insurance Short Name Used in Report Aetna Health BCBSNC CIGNA Coventry FirstCarolinaCare UnitedHealth Number of Licensed Full-Service HMOs: 1992-2012 30 Figure 2 25 20 23 24 23 15 10 5 10 10 15 18 18 17 14 11 9 9 7 7 7 7 7 6 6 6 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: North Carolina Department of Insurance 7

Licensed Single-Service HMOs in North Carolina Single-Service HMOs are licensed to sell HMO products related to a single-service product line such as dental or vision. However, most of these plans act as intermediaries offering their products through full-service HMOs rather than selling directly to individuals or groups. Licensed Single-Service HMOs in North Carolina: 12/31/12 Figure 3 Company Name President Address City State Aetna Dental Inc. CIGNA Dental Health of North Carolina, Inc. Joel Hodge Matthew Manders Source: North Carolina Department of Insurance 2012 Annual Managed Care Data Filings 980 Jolly Road, U11S 1571 Sawgrass Corporate Pkwy, Suite 140 Zip Code Blue Bell PA 19422 Sunrise FL 33323 Phone (800) 872-3862 (800) 343-5845 Enrollment as of 12/31/12 27,947 22,308 8

Aetna Health Care, Inc. (a Pennsylvania Corporation) President: Patrick Young Website: www.aetna.com Address: 980 Jolly Road, Blue Bell, PA 19422 Licensure in NC: 01/28/2010 Phone: (800) 872-3862 NCQA Accred. Status: Commendable Member Toll Free: (800) 872-3862 Profit Status: For Profit Most Recent Exam: 11/10/2004 Enrollment at 12/31/12 Enrollment Summary Type Members Commercial - Insured 16,020 Medicaid 0 Medicare 68 Total 16,088 Commercial - Insured Enrollment by Premium Category Type Members Group 16,015 Individual 5 Member Months Commercial Insured 195,221 Financial Results for 2012 Item Plan Median* Net Worth ** $360,216,786 $62,678,779 Pre-Tax Profit (Loss) ** $216,715,283 $52,429,573 Premiums Earned $69,300,340 $59,443,728 Incurred for Health Care Services $59,318,437 $50,646,180 Medical Loss Ratio 0.86 0.79 Premium PM/PM $354.98 $378.28 Member Encounter Data Item Rate per 10,000 member months Median* Inpatient Days 143 154 Outpatient/Ambulatory 210,862 151,049 Grievances, Appeals and Complaints Item Rate per 10,000 member months Median* 1st Level UR Appeals 0.9 1.1 1st Level UR Grievances 2.1 1.9 Member Turnover Item Percent Median* Membership Change 12/31/11-12/31/12-2.9% -1.9% Primary Care Provider Turnover Item Providers Median* Resigning 35 138 Terminated by Plan 154 28 Added 1,267 497 Total as of 12/31/12 5,235 4,799 * Median for North Carolina HMOs ** HMO Financial data not limited to commercial-insured business; also includes Medicare, Medicaid and/or ASO business (if applicable) 9

Blue Cross & Blue Shield of North Carolina President: James Wilson Website: www.bcbsnc.com Address: 5901 Chapel Hill Rd., Durham, NC 27707 Licensure in NC: 09/02/1981 Phone: (919) 489-7431 NCQA Accred. Status: Member Toll Free: (800) 446-8053 Profit Status: Not For Profit Most Recent Exam: 02/12/2010 Enrollment at 12/31/12 Enrollment Summary Type Members Commercial - Insured 1,967 Medicaid 0 Medicare 0 Total 1,967 Commercial - Insured Enrollment by Premium Category Type Members Group 1,967 Individual 0 Member Months Commercial Insured 27,426 Financial Results for 2012 Item Plan Median* Net Worth ** $2,081,004,349 $62,678,779 Pre-Tax Profit (Loss) ** $116,739,181 $52,429,573 Premiums Earned $12,618,537 $59,443,728 Incurred for Health Care Services $9,884,000 $50,646,180 Medical Loss Ratio 0.78 0.79 Premium PMPM $460.09 $378.28 Member Encounter Data Item Rate per 10,000 member months Median* Inpatient Days 194 154 Outpatient/Ambulatory 12,179 151,049 Grievances, Appeals and Complaints Item Rate per 10,000 member months Median* 1st Level UR Appeals 0.7 1.1 1st Level UR Grievances 1.1 1.9 Member Turnover Item Percent Median* Membership Change 12/31/11-12/31/12-31.1% -1.9% Primary Care Provider Turnover Item Providers Median* Resigning 167 138 Terminated by Plan 19 28 Added 264 497 Total as of 12/31/12 4,207 4,799 * Median for North Carolina HMOs ** HMO Financial data not limited to commercial-insured business; also includes Medicare, Medicaid and/or ASO business (if applicable) 10

CIGNA HealthCare of North Carolina, Inc. President: Charles Pitts Website: www.cigna.com Address: 701 Corporate Center Dr., Raleigh, NC 27607 Licensure in NC: 04/18/1986 Phone: (704) 556-5800 NCQA Accred. Status: Excellent Member Toll Free: (860) 726-6050 Profit Status: For Profit Most Recent Exam: 03/29/2009 Enrollment at 12/31/12 Enrollment Summary Type Members Commercial - Insured 5,765 Medicaid 0 Medicare 0 Total 5,765 Commercial - Insured Enrollment by Premium Category Type Members Group 5,760 Individual 5 Member Months Commercial Insured 71,590 Financial Results for 2012 Item Plan Median* Net Worth ** $8,684,535 $62,678,779 Pre-Tax Profit (Loss) ** $1,923,016 $52,429,573 Premiums Earned $29,202,705 $59,443,728 Incurred for Health Care Services $23,008,241 $50,646,180 Medical Loss Ratio 0.79 0.79 Premium PMPM $407.92 $378.28 Member Encounter Data Item Rate per 10,000 member months Median* Inpatient Days 159 154 Outpatient/Ambulatory 39,039 151,049 Grievances, Appeals and Complaints Item Rate per 10,000 member months Median* 1st Level UR Appeals 2.8 1.1 1st Level UR Grievances 7.4 1.9 Member Turnover Item Percent Median* Membership Change 12/31/11-12/31/12-10.0% -1.9% Primary Care Provider Turnover Item Providers Median* Resigning 109 138 Terminated by Plan 83 28 Added 7,984 497 Total as of 12/31/12 13,226 4,799 * Median for North Carolina HMOs ** HMO Financial data not limited to commercialinsured business; also includes Medicare, Medicaid and/or ASO business (if applicable) 11

Coventry Health Care of the Carolinas, Inc. President: Tracy H. Baker Address: 2801 Slater Rd.; Suite 200, Morrisville NC 27560 Phone: (919) 337-1907 Member Toll Free: (866) 935-7284 Most Recent Exam: 01/16/2004 Website: www.chccarolinas.coventryhealthcare.com Licensure in NC:10/26/1995 NCQA Accred. Status: Profit Status: For Profit Enrollment at 12/31/12 Enrollment Summary Type Members Commercial - Insured 65,537 Medicaid 0 Medicare 0 Total 65,537 Commercial - Insured Enrollment by Premium Category Type Members Group 45,260 Individual 20,277 Member Months Commercial Insured 801,014 Financial Results for 2012 Item Plan Median* Net Worth ** $39,315,381 $62,678,779 Pre-Tax Profit (Loss) ** $15,506,570 $52,429,573 Premiums Earned $233,492,169 $59,443,728 Incurred for Health Care Services $179,103,034 $50,646,180 Medical Loss Ratio 0.77 0.79 Premium PMPM $291.50 $378.28 Member Encounter Data Item Rate per 10,000 member months Median* Inpatient Days 152 154 Outpatient/Ambulatory 337,658 151,049 Grievances, Appeals and Complaints Item Rate per 10,000 member months Median* 1st Level UR Appeals 1.2 1.1 1st Level UR Grievances 1.7 1.9 Member Turnover Item Percent Median* Membership Change 12/31/11-12/31/12 2.2% -1.9% Primary Care Provider Turnover Item Providers Median* Resigning 317 138 Terminated by Plan 14 28 Added 607 497 Total as of 12/31/12 5,334 4,799 * Median for North Carolina HMOs ** HMO Financial data not limited to commercialinsured business; also includes Medicare, Medicaid and/or ASO business (if applicable) WellPath Select, Inc. changed to Coventry Health Care of the Carolinas, Inc. effective 07/02/2012. 12

FirstCarolinaCare, Inc. President: Kenneth J. Lewis Website: www.firstcarolinacare.com Address: 42 Memorial Drive, Pinehurst, NC 28374 Licensure in NC: 04/30/2007 Phone: (910) 715-8100 NCQA Accred. Status: Member Toll Free: (800) 574-8556 Profit Status: Not For Profit Most Recent Exam: 06/23/2006 Enrollment at 12/31/12 Enrollment Summary Type Members Commercial - Insured 11,076 Medicaid 0 Medicare 0 Total 11,076 Commercial - Insured Enrollment by Premium Category Type Members Group 11,076 Individual 0 Member Months Commercial Insured 128,337 Financial Results for 2012 Item Plan Median* Net Worth ** $13,608,803 $62,678,779 Pre-Tax Profit (Loss) ** ($81,063) $52,429,573 Premiums Earned $49,587,116 $59,443,728 Incurred for Health Care Services $41,973,922 $50,646,180 Medical Loss Ratio 0.85 0.79 Premium PMPM $386.38 $378.28 Member Encounter Data Item Rate per 10,000 member months Median* Inpatient Days 155 154 Outpatient/Ambulatory 128,799 151,049 Grievances, Appeals and Complaints Item Rate per 10,000 member months Median* 1st Level UR Appeals 0.5 1.1 1st Level UR Grievances 0.4 1.9 Member Turnover Item Percent Median* Membership Change 12/31/11-12/31/12-0.8% -1.9% Primary Care Provider Turnover Item Providers Median* Resigning 29 138 Terminated by Plan 0 28 Added 20 497 Total as of 12/31/12 280 4,799 * Median for North Carolina HMOs ** HMO Financial data not limited to commercialinsured business; also includes Medicare, Medicaid and/or ASO business (if applicable) Financial data used on this page and others reflect Company s HMO membership and 5,747 PPO plan members. 13

UnitedHealthCare of North Carolina, Inc. President: Garland Scott, III Website: www.unitedhealthcare.com Address: 3803 N. Elm St., Greensboro, NC 27455 Licensure in NC: 05/21/1985 Phone: (860) 720-9147 NCQA Accred. Status: Member Toll Free: (800) 318-7689 Profit Status: For Profit Most Recent Exam: 02/18/2011 Enrollment at 12/31/12 Enrollment Summary Type Members Commercial - Insured 21,036 Medicaid 0 Medicare 90,403 Total 111,439 Commercial - Insured Enrollment by Premium Category Type Members Group 21,019 Individual 17 Member Months Commercial Insured 229,739 Financial Results for 2012 Item Plan Median* Net Worth ** $86,042,177 $62,678,779 Pre-Tax Profit (Loss) ** $89,352,575 $52,429,573 Premiums Earned $85,042,545 $59,443,728 Incurred for Health Care Services $64,517,801 $50,646,180 Medical Loss Ratio 0.76 0.79 Premium PMPM $370.17 $378.28 Member Encounter Data Item Rate per 10,000 member months Median* Inpatient Days 151 154 Outpatient/Ambulatory 173,298 151,049 Grievances, Appeals and Complaints Item Rate per 10,000 member months Median* 1st Level UR Appeals 1.8 1.1 1st Level UR Grievances 3.0 1.9 Member Turnover Item Percent Median* Membership Change 12/31/11-12/31/12 33.3% -1.9% Primary Care Provider Turnover Item Providers Median* Resigning 267 138 Terminated by Plan 36 28 Added 386 497 Total as of 12/31/12 4,362 4,799 * Median for North Carolina HMOs ** HMO Financial data not limited to commercialinsured business; also includes Medicare, Medicaid and/or ASO business (if applicable) 14

Comparative Charts and Tables A. Enrollment, Market Share and Member Turnover HMOs are required to report enrollment figures to the Department of Insurance. Figures 4-11 illustrate HMO enrollment trends in North Carolina. Statewide HMO Enrollment: 12/31/02-12/31/12 Figure 4 1,000,000 900,000 889,820 800,000 700,000 658,243 600,000 500,000 558,824 448,770 400,000 300,000 200,000 100,000 367,291 282,657 184,033 126,284 100,750 115,992 121,401 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Annual Financial Statement (2002-2012) Statewide Market Share, by HMO: 12/31/12 Figure 5 UnitedHealth 17% FirstCarolinaCare 9% Aetna Health 13% BCBSNC 2% CIGNA 5% Source: 2012 Annual Financial Statements Coventry 54% 15

Statewide Market Share, by HMO: 12/31/12 HMO Market Share in Triangle MSA: 12/31/12 Figure 6 Figure 7 HMO Enrollment Percent of Covered Lives HMO Enrollment Percent of Covered Lives Aetna Health 16,020 13% Aetna Health 1,933 10.0% BCBSNC 1,967 2% BCBSNC 401 2.1% CIGNA 5,765 5% CIGNA 1,591 8.3% Coventry 65,537 54% Coventry 11,613 60.3% FirstCarolinaCare 11,076 9% FirstCarolinaCare 106 0.6% UnitedHealth 21,036 17% UnitedHealth 3,617 18.8% TOTAL 121,401 100% TOTAL 19,261 100% HMO Market Share in Triad MSA: 12/31/12 HMO Market Share in Charlotte MSA: 12/31/12 Figure 8 Figure 9 HMO Enrollment Percent of Covered Lives HMO Enrollment Percent of Covered Lives Aetna Health 2,275 12.2% Aetna Health 8,500 21.4% BCBSNC 399 2.1% BCBSNC 349 0.9% CIGNA 3,251 17.4% CIGNA 267 0.7% Coventry 7,384 39.5% Coventry 26,414 66.5% FirstCarolinaCare 54 0.3% FirstCarolinaCare 18 0.0% UnitedHealth 5,339 28.5% UnitedHealth 4,180 10.5% TOTAL 18,702 100% TOTAL 39,728 100% HMO Market Share in Other MSA: 12/31/12 HMO Market Share in non-metro MSA: 12/31/12 Figure 10 Figure 11 HMO Enrollment Percent of Covered Lives HMO Enrollment Percent of Covered Lives Aetna Health 447 3.9% Aetna Health 1,367 6.7% BCBSNC 443 3.8% BCBSNC 345 1.7% CIGNA 267 2.3% CIGNA 376 1.8% Coventry 7,754 67.3% Coventry 9,920 48.5% FirstCarolinaCare 31 0.3% FirstCarolinaCare 5,068 24.8% UnitedHealth 2,582 22.4% UnitedHealth 3,369 16.5% TOTAL 11,524 100% TOTAL 20,445 100% Source for figures 6-11: 2012 Annual Managed Care Data Filings 16

Member turnover refers to the number of members who joined or left a health plan in 2012. Since most people receive their health insurance through an employer group plan, the decision to change health plans is usually made by the employer and not by the individual member. Therefore, member turnover does not necessarily reflect member dissatisfaction with a health plan. Turnover can also occur when people move or change jobs, when they find a plan with better benefits or lower cost, or for a variety of other reasons. Figure 12 shows the number of HMO members enrolled in each plan in 2012. The last column shows the percentage of change (up or down) from 2011 to 2012. Figure 12 HMO # Added in 2012 # That Left in 2012 Total on 12/31/12 % Change: 12/31/11 to 12/31/12 Aetna Health 7,934 8,396 15,639-2.9% BCBSNC 250 1,137 1,967-31.1% CIGNA 722 1,360 5,765-10.0% Coventry 14,503 13,083 65,537 2.2% FirstCarolinaCare 149 194 5,332-0.8% UnitedHealth 13,890 8,796 20,413 33.3% Source: 2012 Annual Managed Care Data Filings 17

B. HMO Premium Revenues and Medical Expenses All North Carolina HMOs are required to submit an annual financial report (the Annual Statement ) to the Department s Financial Evaluation Division. Based on a template developed by the National Association of Insurance Commissioners (NAIC), the Annual Statement gives plans across the country a standardized financial reporting format, and greatly facilitates the evaluation of an HMO s solvency and financial condition. Note: The one-page profiles that are contained in Section III of this Report contain additional financial statistics for each HMO. Statewide HMO Medical Expenses and Premium Revenues: 2003-2012 Figure 13 Medical Expenses PMPM Premium Revenue PMPM $350 $309 $320 $316 $325 $320 $330 $300 $250 $200 $182 $229 $197 $253 $216 $272 $231 $291 $243 $253 $253 $251 $246 $260 $150 $100 $50 $0 Source: Annual Financial Statements (2003-2012) 18

Medical Loss Ratio, by HMO: 2007-2012 Figure 14 2007 2008 2009 2010 2011 2012 1.20 0.90 0.60 0.79 0.79 0.77 0.86 0.78 0.79 0.85 0.77 0.81 0.84 0.87 0.78 0.75 0.85 0.76 0.68 0.77 0.81 0.79 0.83 0.92 0.74 0.84 0.69 0.30 0.00 0.80 0.80 0.92 0.78 0.81 0.80 0.87 0.74 0.79 0.78 0.90 0.86 0.77 0.78 0.76 0.73 0.79 0.82 0.88 0.84 0.80 0.72 0.83 0.77 Source: Annual Financial Statements (2007-2012) 19

C. HMO Inpatient/Outpatient Encounter Data The amount of health care services used by an HMO s members can be affected by numerous factors, many of which are beyond the HMO s control (e.g., covered members ages, gender, socioeconomic levels, community practice standards, etc.). Inpatient Days Per 10,000 Member Months, by HMO: 2012 Figure 15 NC HMO Average (weighted) 152 NC HMO Median 154 Aetna Health 143 BCBSNC 194 CIGNA 159 Coventry 152 FirstCarolinaCare 155 UnitedHealth 151 0 50 100 150 200 250 Source: 2012 Annual Financial Statements When comparing utilization statistics for several plans, therefore, it is important to consider several possible explanations for whatever differences you might see. For example, if HMO A has a higher inpatient utilization rate than HMO B, then HMO A might be relatively ineffective at managing chronic conditions. Another possibility, however, is that HMO A has a relatively high proportion of adult female members, leading to a higher incidence of maternity stays. It is important to remember that the quantity of health care services provided does not necessarily reflect the quality of an HMO s delivery system. Note: Additional utilization statistics can be found on the one-page HMO profiles located in Section III. 20

Outpatient Encounters per 10,000 Member Months, by HMO: 2012 Figure 16 NC HMO Average (weighted) 6,205 NC HMO Median 6,498 Aetna Health BCBSNC 4,441 10,801 CIGNA 5,453 Coventry 4,215 FirstCarolinaCare 10,036 UnitedHealth 7,543 0 2,000 4,000 6,000 8,000 10,000 12,000 Source: 2012 Annual Financial Statements 21

D. HMO Utilization Review and Appeals Managed care plans evaluate requests for health care services through a process known as utilization review. Under NCGS 58-50-61(a)(17), utilization review (UR) is defined as a set of formal techniques designed to monitor the use of or evaluate the clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedures, providers, or facilities. UR can occur before services are rendered (prospective review), while services are ongoing (concurrent review) or after services have been delivered (retrospective review). UR usually involves direct communication between the health plan and the member s provider of care. North Carolina law requires a health plan s UR decisions to be based on sound medical information, and to be made within specified frames. When a health plan determines that a requested service does not meet the plan s requirements for medical necessity, appropriateness, effectiveness, health care setting or level of care, the plan must issue a noncertification notice to the member and provider. A physician licensed in North Carolina must review all noncertification decisions. North Carolina law also requires a noncertification notice to include: why the service was denied; instructions for filing an appeal of the plan s decision; and instructions for requesting a copy of the plan s utilization review criteria. A more detailed description of member appeal rights can be found in Guide to Appeals and Grievances. See page 6 of this Report for information on how to obtain that guide and other publications. 22

Comparison of the percentage of utilization reviews that resulted in noncertifications is one way to compare health plans of different sizes. The table below shows utilization reviews and noncertification percentages for licensed HMOs in North Carolina. Percentage of Utilization Reviews Resulting in Noncertification, by HMO: 2012 Figure 17 HMO # of Reviews Performed % of Reviews Resulting in Noncertification NC HMO Average (weighted) 6,338 12.2% NC HMO Median 3,779 12.1% Aetna Health 5,186 14.1% BCBSNC 573 15.0% CIGNA 7,626 18.9% Coventry 20,363 10.1% FirstCarolinaCare 2,371 6.7% UnitedHealth 1,906 8.1% Source: 2012 Annual Managed Care Data Filings Using data from the table, Figure 18 shows the percentage of each plan s utilization reviews that resulted in a noncertification. Figure 18 Percentage of Utilization Reviews Resulting in Noncertification, by HMO: 2012 NC HMO Average (weighted) 12.2% NC HMO Median 12.1% Aetna Health 14.1% BCBSNC 15.0% CIGNA Coventry 10.1% 18.9% FirstCarolinaCare 6.7% UnitedHealth 8.1% 0.0% 5.0% 10.0% 15.0% 20.0% Source: 2012 Annual Managed Care Data Filings 23

When a managed care plan denies coverage for a service based on utilization review, the member has the right to file an appeal asking the health plan to reconsider the denial (noncertification). A member may also file a second-level appeal of a denial if they are not satisfied with the outcome of the first appeal (if a managed care plan waives the second-level appeal process, then the member may take his/her case directly to External Review, as described in the next section). Due to the small number of second-level appeals filed by members during 2012, only first-level appeal data are presented in this Report. Figure 19 shows the number of first-level appeals of non-certifications and the percentage of firstlevel appeals resolved in members favor for each North Carolina HMO. Percentage of First-Level Appeals Resolved in Members' Favor, by HMO: 2012 Figure 19 HMO # of Noncertifications Appealed % of Appeals Resolved in Member's Favor NC HMO Average (weighted) 31 30.3% NC HMO Median 19 28.8% Aetna Health 17 29.4% BCBSNC 2 0.0% CIGNA 20 15.0% Coventry 99 28.3% FirstCarolinaCare 6 83.3% UnitedHealth 41 36.6% Source: 2012 Annual Managed Care Data Filings Using data from the table, Figure 20 shows the percentage of each HMO s first-level appeals resolved in the members favor. Percentage of First-Level Appeals Resolved in Members' Favor, by HMO: 2012 Figure 20 NC HMO Average (weighted) NC HMO Median Aetna Health 30.3% 28.8% 29.4% Source: 2012 Annual Managed Care Data Filings BCBSNC 0.0% CIGNA 15.0% Coventry FirstCarolinaCare 28.3% 83.3% UnitedHealth 36.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 24

E. HMO Grievances In addition to noncertification appeals (see page 24), members may also file complaints about most other policies, decisions or actions of the health plan or its providers. As defined in 58-50-61(a)(6), these complaints, called grievances, may be about claims handling, the quality or availability of providers, the requirements or services of the health plan or anything else that may have caused a member to be dissatisfied. The health plan must issue a written decision within 30 days of receiving a grievance, and the decision letter must inform the member that a second-level grievance review may be requested if the first-level decision is not satisfactory. Due to the small number of second-level grievances filed by members during 2012, only first-level grievance data are presented in this Report. Not all grievances result from unfair policies or incorrect decisions by HMOs. For example, a member s complaint might have resulted from his/her not following the HMO s procedures for obtaining services. Therefore, the number or rate of grievances received does not necessarily indicate the quality of an HMO or the satisfaction level of its members. A more detailed description of member grievance rights can be found in Guide to Appeals and Grievances. See page 6 of this Report for information on how to obtain that Guide and other publications. 25

The rate of grievances per 10,000 member months allows comparison between plans of different sizes. For example, a rate of 37 means that during 2012, a plan received 37 first-level grievances per 10,000 member months. Figure 21 shows the total number of first-level grievances received by each HMO and the rate of grievances received per 10,000 member months. First-Level Grievances per 10,000 Member Months, by HMO: 2012 Figure 21 HMO # of Grievances Received Grievances per 10,000 Member Months NC HMO Average (weighted) 51 2.1 NC HMO Median 47 1.9 Aetna Health 41 2.1 BCBSNC 3 1.1 CIGNA 53 7.4 Coventry 133 1.7 FirstCarolinaCare 5 0.4 UnitedHealth 70 3.0 Source: 2012 Annual Managed Care Data Filings Using data from the table, Figure 22 shows the rate of grievances received by HMOs, per 10,000 member months. First-Level Grievances per 10,000 Member Months, by HMO: 2012 Figure 22 NC HMO Average (weighted) NC HMO Median 1.9 2.1 Aetna Health 2.1 BCBSNC 1.1 CIGNA 7.4 Coventry 1.7 FirstCarolinaCare 0.4 UnitedHealth 3.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Source: 2012 Annual Managed Care Data Filings 26

First-Level Grievances, by Reason: 2012 Figure 23 Auth/ Referral/ Precert 4.9% Quality of Care/ Service 0.0% Other 9.5% Claims 28.9% Enrollment/ Eligibility 3.6% Benefits 41.3% Network / Access to Care 11.8% Source: 2012 Annual Managed Care Data Filings Percentage of First-Level Grievances Resolved in Members' Favor, by HMO: 2012 Figure 24 HMO Percent (X) NC HMO Average (weighted) 33.1% NC HMO Median 31.1% Aetna Health 24.4% BCBSNC 66.7% CIGNA 50.9% Coventry 27.8% FirstCarolinaCare 20.0% UnitedHealth 34.3% Source: 2012 Annual Managed Care Data Filings 27

Using data from the table, Figure 25 shows the percent of first-level grievances resolved in members favor by HMOs in 2012. Percentage of First-Level Grievances Resolved in Members' Favor, by HMO: 2012 Figure 25 NC HMO Average (weighted) 33.1% NC HMO Median 31.1% Aetna Health BCBSNC 24.4% 66.7% CIGNA 50.9% Coventry 27.8% FirstCarolinaCare 20.0% UnitedHealth 34.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Source: 2012 Annual Managed Care Data Filings G. HMO Provider Network Summary Since HMO members are required to obtain their health care services from in-network providers, and since HMO/POS members are given strong financial incentives to do so, it is essential that these provider networks include enough providers with sufficient locations and appointment availability to adequately serve covered members. HMOs are required to establish standards for provider appointment availability and geographic accessibility and to monitor their networks with respect to those standards. The table below shows the 2012 Geographic Accessibility standards established by each HMO in 2012, expressed as the number of providers within a specific driving distance (example: 2:10 indicates a standard of 2 providers within 10 miles of each covered member). 28

Geographic Provider Accessibility Standards, by HMO: 2012 Figure 26 HMO Area PCP Ped.'s OB/Gyn Aetna Health Aetna Health Aetna Health BCBSNC BCBSNC Urban Suburban Rural High Urbanization Low Urbanization 2:10 miles; 95% of the 2:15 miles; 90% of the 2:30 miles; 90% of the CIGNA Urban 1:10 miles CIGNA Suburban 1:15 miles CIGNA Rural 1:50 miles Coventry Coventry Coventry FirstCarolina Care, Inc. UnitedHealth Care UnitedHealth Care UnitedHealth Care Urban Suburban Rural 2:10 miles; 95% of the 2:15 miles; 90% of the 2:30 miles; 90% of the 2:10 miles; 95% of the 2:15 miles; 90% of the 2:30 miles; 90% of the 1:15 1:15 1:15 1:30 1:30 1:30 1:15; 90% of the 1:15; 90% of the 1:30; 90% of the 1:10 miles 1:15 miles Specialist MDs 2:10 miles; 95% of the 2:20 miles; 95% of the 2:45 miles; 90% of the 1:30 or 1:45 1:60 or 1:90 Non-MDs 2:10 miles; 95% of the 2:20 miles; 95% of the 2:45 miles; 90% of the Acute Facilities 2:10 miles; 95% of the 2:20 miles; 95% of the 2:45 miles; 90% of the Outpatient Facilities 2:10 miles; 95% of the 2:20 miles; 95% of the 2:45 miles; 90% of the MH/CD (Psychiatrist s) 1:10 miles; 90% of the 1:10 miles; 90% of the 1:40 miles; 90% of the MH/CD (non-md) 1:10 miles; 90% of the 1:10 miles; 90% of the 1:40 miles; 90% of the Acute Facilities (MH/CD) 1:25 miles; 90% of the 1:25 miles; 90% of the 1:45 miles; 90% of the 1:30 1:45 1:45 1:30 1:30 1:60 1:60 1:90 1:90 1:60 1:60 1:90 1:10 miles 2:15 miles 2:15 miles 1:25 miles 1:25 miles 2:10 2:10 1:25 1:15 miles 2:20 miles 2:20 miles 1:30 miles 1:30 miles 2:10 2:10 1:25 1:50 miles 1:50 miles 2:50 miles 2:50 miles 1:35 miles 1:35 miles 1:25 1:25 1:45 1:15; 1:15; 90% 1:30 or 1:30; 90% 90% of 1:45; 90% 1:45; 90% of of the 1:45; 90% of the the of the the of the 1:10 1:10 1:25 1:15; 1:15; 90% 1:30 or 1:30; 90% 90% of 1:45; 90% 1:45; 90% of of the 1:45; 90% of the the of the the of the 1:25 1:25 1:40 1:30; 90% of the 1:30; 90% of the 1:60 or 1:85; 90% of the 1:60; 90% of the 1:90; 90% of the 1:90; 90% of the 1:40 1:40 1:60 Rural 1:30 1:30 1:30 1:45 NA 1:75 1:75 1:45 1:45 1:75 Large Metro 1:5 1:5 1:15 Metro 1:10 1:10 1:30 Micro 1:20 1:20 1:60 1:10 or 1:15 1:20 or 1:30 1:35, 1:45 or 1:60 NA 1:10 1:5 or 1:10 NA 1:30 1:10 or 1:30 NA 1:60 1:60 UnitedHealth Care Rural 1:30 1:30 1:75 1:60 or 1:75 NA 1:60 1:60 1:45; 90% of the 1:45; 90% of the 1:60; 90% of the UnitedHealth Care Urban 1:10; 90% of the 1:10; 90% of the 1:15; 90% of the UnitedHealth Care Suburban 1:20; 90% of the 1:20; 90% of the 1:30; 90% of the Note: HMOs are not required to have separate standards for urban vs. suburban vs. rural areas NA = Not Applicable (company does not maintain a separate standard for this category) Source: 2012 Annual Managed Care Data Filings 29

Physician turnover refers to the number of physicians who joined or left an HMO provider network during 2012. Physician turnover occurs when participation contracts between physicians and plans are terminated. Contract termination can be initiated by physicians or by plans. Some reasons a physician might resign from a plan include: Dissatisfaction with the amount or method of payment. Disagreement with the plan s medical guidelines. Decisions to participate with only certain health plans or with no managed care plans. Dissatisfaction with the plan s administrative requirements. Retired or moved from the plan s service area. Some reasons a health plan may terminate a physician include: Member complaints about the physician or physician staff. Concerns about the quality of care provided by the physician. Physician failure to follow the plan s administrative requirements. Plan decided to limit the number of physicians in the network. Figure 27 shows the percentage of turnover from December 31, 2011, to December 31, 2012, for four categories of physicians in each HMO s network: Primary Care Physicians (PCP), Obstetrician- Gynecologists (OB/GYN), Pediatricians and Specialists. Within each physician category, the table indicates the number that left the plan s network involuntarily (terminated by the plan), the number that left voluntarily (resigned from the network), the number that joined the plan s network and the percent change in network size from December 31, 2011 to December 31, 2012. Physician turnover is reported in this Report for HMOs only. 30

Physician Turnover, by HMO: 2012 Figure 27 PCP HMO # Terminated by Plan in 2012 # Resigned in 2012 # Added in 2012 % Change: 12/31/11 to 12/31/12 Aetna Health 154 35 1,267 25.9% BCBSNC 19 167 264 1.3% CIGNA 83 109 7,984 143.4% Coventry 14 317 607 22.1% FirstCarolinaCare 0 29 20-24.9% UnitedHealth 36 267 386 1.9% OB/GYN HMO # Terminated by Plan in 2012 # Resigned in 2012 # Added in 2012 % Change: 12/31/11 to 12/31/12 Aetna Health 38 7 200 18.9% BCBSNC 9 50 82 2.1% CIGNA 25 25 1,140 104.5% Coventry 2 59 130 23.4% FirstCarolinaCare 0 9 1-32.1% UnitedHealth 4 68 75 0.3% Pediatricians HMO # Terminated by Plan in 2012 # Resigned in 2012 # Added in 2012 % Change: 12/31/11 to 12/31/12 Aetna Health 36 7 241 16.8% BCBSNC 1 57 86 2.3% CIGNA 20 47 1783 120.9% Coventry 2 65 144 21.4% FirstCarolinaCare 0 17 1-30.3% UnitedHealth 6 81 115 2.2% Specialists HMO # Terminated by Plan in 2012 # Resigned in 2012 # Added in 2012 % Change: 12/31/11 to 12/31/12 Aetna Health 344 78 2,197 24.2% BCBSNC 43 534 1,250 5.7% CIGNA 220 98 16,401 127.4% Coventry 11 443 991 20.4% FirstCarolinaCare 0 100 28-11.4% UnitedHealth 0 785 1,038 2.9% Source: 2012 Annual Managed Care Data Filings 31

IV. 2012 PPO Plan Activity PPO benefit plans are products offered by licensed indemnity carriers. Figure 28 shows the licensed indemnity carriers that reported offering full-service PPO Benefit Plans in North Carolina, as of 12/31/12. Licensed Insurers Reporting Membership Full-Service PPO Benefit Plans in North Carolina As of 12/31/12 Figure 28 Name of PPO Plan Carrier Aetna Life Insurance Company American Heritage Life American Medical Security Life Insurance Company American National Life of Texas BlueCross & BlueShield of North Carolina Celtic Insurance Company Connecticut General Life Coventry Health and Life Federated Mutual FirstCarolinaCare, Inc. Golden Rule Insurance Company Humana Insurance Company Independence American John Alden Life Madison National Life, Inc. Mega Life and Health Mid-West National Life of Tennessee Monumental Life Address City State Zip Phone 151 Farmington Avenue Hartford CT 06156 1776 American Heritage Life Drive Jacksonville FL 32224 P. O. Box 19032 Green Bay WI 32 54307-9032 One Moody Plaza Galveston TX 77550 P.O. Box 2291 Durham NC 27702 233 S. Wacker Drive, Suite #700 Two Liberty Place, 1601 Chestnut St. TL14A 6705 Rockledge Drive, Suite 900 Chicago IL (800)446-8053 (800)477-7870 60606-6393 Philadelphia PA 19192 Bethesda MD 20817 121 East Park Square Owatonna MN 55060 42 Memorial Drive Pinehurst NC 28374 7440 Woodland Drive Indianapolis IN 46278 500 W. Main Street Louisville KY 40202 485 Madison Avenue, 14th Fl 501 West Michigan, P.O. Box 3050 New York NY 10022 Milwaukee WI 53201 P.O. Box 5008 Madison WI 53705 9151 Boulevard 26 9151 Boulevard 26 4333 Edgewood Road NE North Richland Hills North Richland Hills TX 76180 TX 76180 Cedar Rapids IA 52499 (860)273-0123 (904)992-1776 (800)232-5432 (800)899-6806 (215)761-1000 (800)743-8421 (800)241-4945 (910) 715-8112 (618)943-8000 (800)664-4140 (212)355-4141 (800)327-7771 (800)356-9601 (800) 725-7887 (800)527-5504 (410) 576-4590 Enrollm ent as of 12/31/1 2 Perce nt of Total 25,274 2.2% 24,454 2.1% 637 0.1% 160 0.0% 885,529 75.6% 3,084 0.3% 28,900 2.5% 12,541 1.1% 2,631 0.2% 5,719 0.5% 11,003 0.9% 4,692 0.4% 152 0.0% 1,766 0.2% 144 0.0% 1,051 0.1% 253 0.0% 618 0.1%

National Foundation Life National Union Fire of Pittsburg, PA. NC Health Insurance Risk Pool Standard Life & Accident Insurance Company Standard Security Life of New York Time Insurance Company Trustmark Insurance Company (Mutual) Trustmark Life United HealthCare 801 Cherry St., Unit 33 Fort Worth TX 76102 175 Water Street, 18th Floor 3739 National Drive, Suite 228 One Moody Plaza, 8th Floor 485 Madison Avenue, 14th Fl 501 West Michigan St., P.O. Box 3050 New York NY 10038 Raleigh NC 27612 Galveston TX 77550 New York NY 10022 Milwaukee WI 53201 400 Field Drive Lake Forest IL 400 Field Drive Lake Forest IL (800)800-1212 (800)366-6663 (800)366-6663 (860)720-9147 60045-2581 60045-2581 185 Asylum Street Hartford CT 06103 (800)221-9039 (212) 770-7000 (919) 783-5766 (800)899-6806 (212)355-4141 2,323 0.2% 140,649 12.0% 10,781 0.9% 26 0.0% 94 0.0% 6,820 0.6% 5 0.0% 1,351 0.1% 257 0.0% Source: North Carolina Department of Insurance 2012 Annual Managed Care Data Filings Due to differences in the laws and reporting requirements that apply to HMOs vs. indemnity carriers, some of the data presented in the HMO section of this Report are not available for PPO benefit plans. For example, an insurance company files an annual financial statement to report its overall financial condition, but this statement does not contain data focused solely on the company s PPO product. Conversely, both HMOs and PPO carriers are subject to the annual managed care data reporting requirements set forth in NCGS 58-3-191 (covering utilization review activity, grievances, provider networks, and other operational data). 33

Licensed Insurers Offering Single-Service PPO Benefit Plans in North Carolina As of 12/31/12 Figure 29 Name of PPO Plan Carrier Type Address City State Zip Phone Enrollment as of 12/31/12 Aetna Life Insurance Company Dental 151 Farmington Avenue Hartford CT 06156 (860)273-0123 25,721 Aetna Life Insurance Company Vision 151 Farmington Avenue Hartford CT 06156 (860)273-0123 1,400 American General Life Dental P. O. Box 1591 Houston TX 77251 (800)231-3655 2,447 American General Life Vision P. O. Box 1591 Houston TX 77251 (800)231-3655 1,516 Ameritas Life Insurance Corp. Dental P. O. Box 81889 Lincoln NE 68501 (800)745-6665 279,146 Ameritas Life Insurance Corp. Vision P. O. Box 81889 Lincoln NE 68501 (800)745-6665 75,806 Citizens Security Life Vision P.O. Box 436149 Louisville KY 40253 (800)843-7752 485 Combined Insurance Company of America Vision 436 Walnut Street, P.O. Box 1000 Philadelphia PA 19106 (800)225-4500 56,936 CompBenefits Insurance Company Vision P.O. Box 740036 Louisville KY 40202 (800)633-1262 4,239 Connecticut General Life Dental Two Liberty Place, 1601 Chestnut St. TL14A Philadelphia PA 19192 (215)761-1000 427,816 Coventry Health and Life Dental 6705 Rockledge Drive, Ste. 900 Bethesda MD 20817 (800)743-8421 2,758 Dearborn National Life Dental 1020 31st Street Downers Grove IL 60515 (800)633-3696 16,412 Delta Dental Insurance Company Dental 100 First Street MS15L San Francisco CA 94105 (415)972-8300 61,503 Fidelity Security Life Vision 3130 Broadway Kansas City MO 64111 (800)648-8624 232,813 Golden Rule Insurance Company Dental 7440 Woodland Drive Indianapolis IN 46278 (618)943-8000 4,501 Guardian Life Insurance Company of America Dental 7 Hanover Square New York NY 10004 (610)807-7299 98,870 HM Life Vision P. O. Box 535061 Pittsburgh PA 15253-3099 (800)328-5433 14,508 Humana Vision 500 W. Main Street Louisville KY 40202 (800)664-4140 2,920 HumanaDental Insurance Company Vision P.O. Box 740036 Louisville KY 40202 (800)558-4444 3,889 Metropolitan Life Insurance Company Dental 18210 Crane Nest Drive, 3rd Floor Tampa FL 33647 (888)645-4408 231,972 Mid-West National Life of Tennessee Vision 9151 Boulevard 26 North Richland Hills TX 76180 (800)527-5504 2,475 National Guardian Life Dental 2 E. Gilman St., P. O. Box 1191 Madison WI 53701 (800)548-2962 9,049 34

National Guardian Life Vision 2 E. Gilman St., P. O. Box 1191 Madison WI 53701 (800)548-2962 322,336 National Union Fire of Pittsburg, PA. Vision 175 Water Street, 18th Floor New York NY 10038 (212)770-7000 4,397 Principal Life Insurance Company Dental 711 High Street Des Moines IA 50392 (800)554-3398 41,115 Reliance Standard Life Dental 2001 Market Street Suite 1500 Philadelphia PA 19103-7000 (800)351-7500 34,748 Reliance Standard Life Vision 2001 Market Street Suite 1500 Philadelphia PA 19103-7000 (800)351-7500 3,323 Renaissance Life & Health of America Dental P. O. Box 30381 Lansing MI 48909 (800)745-7509 175 Security Life Insurance Company of America Vision 10901 Red Circle Drive Minnetonka MN 55343 (800)328-4667 919 Standard Insurance Company Standard Insurance Company Dental P.O. Box 711 Portland OR 97207 Vision P.O. Box 711 Portland OR 97207 (800)348-3226 (800)348-3226 12,599 914 Sun Life and Health (U.S.) Dental One Sun Life Executive Park Wellesley Hills MA 02481 (800)451-2513 1,117 The Chesapeake Life Vision 9151 Boulevard 26 North Richland Hills TX 76180 (800)638-3182 1,876 The MEGA Life and Health Vision 9152 Boulevard 26 North Richland Hills TX 76180 (800)725-7887 1,283 Vision Service Plan Vision 3333 Quality Drive Rancho Cordova CA 95670 (800)852-7600 1,431,566 Source: North Carolina Department of Insurance 2012 Annual Managed Care Data Filings 35

Comparative Charts and Tables Statewide PPO Plan Enrollment: 12/31/00-12/31/12 A. PPO Plan Enrollment and Member Turnover Figure 30 1,400,000 1,200,000 1,000,000 800,000 1,138,306 1,170,914 1,016,589 944,544 1,119,240 1,087,737 1,081,552 896,513 989,393 600,000 849,376 400,000 743,761 814,935 200,000 756,356 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Annual Managed Care Data Filings (2000-2012). 36

PPO Plan Member Turnover: 2012 Figure 31 PPO Plan Carrier # Added in 2012 # That Left in 2012 Total on 12/31/12 % Change: 12/31/11 to 12/31/12 Aetna Life 0 0 25,274 0.0% American Heritage Life 15,879 14,682 24,454 5.1% American Medical Security Life 7 263 637-28.7% American National Life of Texas 3 93 160-36.0% BlueCross & BlueShield of North Carolina 251,118 215,085 885,529 4.2% Celtic 537 599 3,084-2.0% Connecticut General Life 11,429 11,921 28,900-1.7% Coventry Health and Life 4,746 11,788 12,541-36.0% Federated Mutual 943 842 2,631 4.0% FirstCarolinaCare, Inc. 1,580 328 5,719 28.0% Golden Rule 9,672 10,749 11,003-9.1% Humana 1,472 2,428 4,692-17.0% Independence American 45 14 152 25.6% John Alden Life 272 1,829 1,766-46.9% Madison National Life, Inc. 188 127 144 73.5% Mega Life and Health 0 402 1,051-27.7% Mid-West National Life of Tennessee 0 95 253-27.3% Monumental Life 618 0 618 NA National Foundation Life 968 886 2,323 3.7% National Union Fire of Pittsburg, PA. 30,060 0 140,649 27.2% NC Health Insurance Risk Pool 5,954 3,113 10,781 35.8% Standard Life & Accident 1 20 26-42.2% Standard Security Life of New York 82 203 94-56.3% Time 2,818 3,672 6,820-11.2% Trustmark (Mutual) 0 2 5-28.6% Trustmark Life 222 849 1,351-31.7% United HealthCare 161 233 257-21.9% NA = Not Applicable Source: 2012 Annual Managed Care Data Filings 37

B. Utilization Review and Appeals Percentage of Utilization Reviews Resulting in Noncertifications, by PPO Carrier: 2012 Figure 32 PPO Plan Carrier # of Reviews Performed % of Reviews Resulting in Noncertification NC PPO Plan Average (weighted) 4,940 13.5% NC PPO Plan Median 42 7.2% Aetna Life 5,191 10.7% American Heritage Life 0 NA American Medical Security Life 23 8.7% American National Life of Texas 24 16.7% BlueCross & BlueShield of North Carolina 82,155 14.3% Celtic 328 8.5% Connecticut General Life 24,742 20.2% Coventry Health and Life 3,996 6.7% Federated Mutual 562 3.6% FirstCarolinaCare, Inc. 3,654 4.9% Golden Rule 125 11.2% Humana 25 4.0% Independence American 6 16.7% John Alden Life 98 2.0% Madison National Life, Inc. 4 0.0% Mega Life and Health 0 NA Mid-West National Life of Tennessee 0 NA Monumental Life 0 NA National Foundation Life 42 7.1% National Union Fire of Pittsburg, PA. 39 74.4% NC Health Insurance Risk Pool 5,498 1.2% Standard Life & Accident 21 19.0% Standard Security Life of New York 4 0.0% Time 280 3.2% Trustmark (Mutual) 0 NA Trustmark Life 355 7.3% United HealthCare 6,197 0.7% NA = Not Applicable (company reported zero utilization reviews during 2012) Source: 2012 Annual Managed Care Data Filings 38

Percentage of Utilization Reviews Resulting in Noncertifications, by PPO Carrier: 2012 Figure 33 NC PPO Plan Average (weighted) 13.5% NC PPO Plan Median 7.2% Aetna Life 10.7% American Heritage Life NA Blue Cross & Blue Shield of North Carolina 14.3% Connecticut General Life 20.2% Coventry Health and Life 6.7% Golden Rule National Union Fire of Pittsburg, PA. NC Health Insurance Risk Pool 1.2% 11.2% 74.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% NA = Not Applicable (company reported zero utilization reviews during 2012) Source: 2012 Annual Managed Care Data Filings 39

Percentage of First-Level Appeals Resolved in Members' Favor, by PPO Carrier: 2012 Figure 34 PPO Plan Carrier # of Noncertifications Appealed % of Appeals Resolved in Member's Favor NC PPO Plan Average (weighted) 52 36.7% NC PPO Plan Median 1 34.2% Aetna Life 45 37.8% American Heritage Life NA American Medical Security Life 0 American National Life of Texas 0 BlueCross & BlueShield of North Carolina 872 35.1% Celtic 0 Connecticut General Life 76 59.2% Coventry Health and Life 17 35.3% Federated Mutual 8 37.5% FirstCarolinaCare, Inc. 15 33.3% Golden Rule 2 0.0% Humana 78 26.9% Independence American 0 John Alden Life 1 0.0% Madison National Life, Inc. 0 Mega Life and Health NA Mid-West National Life of Tennessee NA Monumental Life NA National Foundation Life 0 National Union Fire of Pittsburg, PA. 10 80.0% NC Health Insurance Risk Pool 25 48.0% Standard Life & Accident 0 Standard Security Life of New York 0 Time 1 0.0% Trustmark (Mutual) NA Trustmark Life 1 0.0% United HealthCare 1 0.0% NA = Not Applicable (company reported zero appeals during 2012) Source: 2012 Annual Managed Care Data Filings 40

Percentage of First-Level Appeals Resolved in Members' Favor, by PPO Carrier: 2012 Figure 35 NC PPO Plan Average (weighted) NC PPO Plan Median Aetna Life 36.7% 34.2% 37.8% American Heritage Life NA Blue Cross & Blue Shield of North Carolina 35.1% Connecticut General Life 59.2% Coventry Health and Life 35.3% Golden Rule 0.0% National Union Fire of Pittsburg, PA. 80.0% NC Health Insurance Risk Pool 48.0% 0% 20% 40% 60% 80% 100% NA = Not Applicable (company reported zero appeals during 2012) Source: 2012 Annual Managed Care Data Filings 41

C. Grievances First-Level Grievances, by PPO Carrier: 2012 Figure 36 PPO Plan Carrier Enrollment as of 12/31/12 # of Grievances Received NC PPO Plan Average 43,367 56 NC PPO Plan Median 2,323 5 Aetna Life 25,274 87 American Heritage Life 24,454 0 American Medical Security Life 637 4 American National Life of Texas 160 5 BlueCross & BlueShield of North Carolina 885,529 777 Celtic 3,084 45 Connecticut General Life 28,900 104 Coventry Health and Life 12,541 41 Federated Mutual 2,631 3 FirstCarolinaCare, Inc. 5,719 5 Golden Rule 11,003 79 Humana 4,692 78 Independence American 152 8 John Alden Life 1,766 82 Madison National Life, Inc. 144 0 Mega Life and Health 1,051 7 Mid-West National Life of Tennessee 253 3 Monumental Life 618 0 National Foundation Life 2,323 0 National Union Fire of Pittsburg, PA. 140,649 12 NC Health Insurance Risk Pool 10,781 0 Standard Life & Accident 26 5 Standard Security Life of New York 94 0 Time 6,820 81 Trustmark (Mutual) 5 1 Trustmark Life 1,351 72 United HealthCare 257 1 Source: 2012 Annual Managed Care Data Filings 42

First-Level PPO Plan Grievances, by Reason: 2012 Figure 37 Other 22.5% Claims 12.1% Access to Care 6.9% Auth/ Referral/ Precert 11.9% Quality of Care/ Service 0.1% Benefits 42.1% Enrollmt./ Eligibility 4.3% Source: 2012 Annual Managed Care Data Filings 43

Percentage of 1st-Level Grievances Resolved in Members' Favor, by PPO Carrier: 2012 Figure 38 Name of PPO Plan Carrier Percent NC PPO Plan Average (weighted) 43.3% NC PPO Plan Median 37.7% Aetna Life 29.9% American Heritage Life NA American Medical Security Life 50.0% American National Life of Texas 40.0% BlueCross & BlueShield of North Carolina 37.7% Celtic 71.1% Connecticut General Life 64.4% Coventry Health and Life 24.4% Federated Mutual 33.3% FirstCarolinaCare, Inc. 40.0% Golden Rule 26.6% Humana 29.5% Independence American 0.0% John Alden Life 79.3% Madison National Life, Inc. NA Mega Life and Health 14.3% Mid-West National Life of Tennessee 0.0% Monumental Life NA National Foundation Life NA National Union Fire of Pittsburg, PA. 16.7% NC Health Insurance Risk Pool NA Standard Life & Accident 40.0% Standard Security Life of New York NA Time 65.4% Trustmark (Mutual) 100.0% Trustmark Life 63.9% United HealthCare 0.0% NA = Not Applicable (company reported zero grievances during 2012) Source: 2012 Annual Managed Care Data Filings 44

Percentage of 1st-Level Grievances Resolved in Members' Favor, by PPO Carrier: 2012 Figure 39 NC PPO Plan Average (weighted) NC PPO Plan Median Aetna Life 29.9% 43.3% 37.7% American Heritage Life NA Blue Cross & Blue Shield of North Carolina 37.7% Connecticut General Life 64.4% Coventry Health and Life Golden Rule National Union Fire of Pittsburg, PA. 16.7% 24.4% 26.6% NC Health Insurance Risk Pool NA 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: 2012 Annual Managed Care Data Filings 45