UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 11, 2016

MOLINA HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)

 
 	 	 	 	 	
Delaware	 	1-31719	 	13-4204626	
(State of
incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification Number)	
200 Oceangate, Suite 100,
Long Beach, California 90802
(Address of principal executive offices)
Registrant’s telephone number, including area code: (562) 435-3666

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 	¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
 	¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
 	¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
 	¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 7.01. Regulation FD Disclosure.
On Monday, January 11, 2016, at 9:30 a.m. Pacific time, the Company’s management gave a presentation followed by a question and answer session at the 34 th  Annual J.P. Morgan Healthcare Conference in San Francisco, California. During the presentation, the Company presented and webcast certain slides, and addressed such issues as revenue and membership growth and opportunities for further expansion.
A copy of the Company’s complete slide presentation is included as Exhibit 99.1 to this report. An audio and slide replay of the Company’s presentation will also be available for 30 days from the date of the presentation on the Company’s website.
The information in this Form 8-K current report and the exhibits attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
 
 	(d)	Exhibits:	

Exhibit
No.	  	Description	
 	 	
99.1	  	Slide presentation in connection with the Company’s presentation at the 34th Annual J.P. Morgan Healthcare Conference on January 11, 2016.	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	 	 	 	MOLINA HEALTHCARE, INC.	
 	 	 	 	
Date: January 11, 2016	 	 	 	By:	 	/s/ Jeff D. Barlow	
 	 	 	 	Jeff D. Barlow	
 	 	 	 	Chief Legal Officer and Secretary	

EXHIBIT INDEX

Exhibit
No.	  	Description	
 	 	
99.1	  	Slide presentation in connection with the Company’s presentation at the 34th Annual J.P. Morgan Healthcare Conference on January 11, 2016.	

Exhibit 99.1

 
34th Annual JP Morgan Healthcare Conference
J. Mario Molina, MD
President & Chief Executive Officer
January 11-15, 2016 / San Francisco, California

 	

Cautionary Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:This slide presentation and our accompanying oral remarks contain “forward -looking statements” regarding, without limitation: our growth and acquisition expectations and strategies; the projected growth of the Medicaid program; our Companies growth and acquisition strategy; our projected 2016 revenues from the in-market acquisitions we announced in 2015; the headwinds and tailwinds we anticipate in fiscal year 2016; and various other matters. All of our forward -looking statements are subject to numerous risks, uncertainties, and other factors that could cause our actual results to differ materially. Anyone viewing or listening to this presentation is urged to read the risk factors and cautionary statements found under Item 1A in our annual report on Form 10-K, as well as the risk factors and cautionary statements in our quarterly reports and in our other reports and filings with the Securities and Exchange Commission and available for viewing gov . on its website at sec. Except to the extent otherwise required by federal securities laws, we do not undertake to address or update forward -looking statements in future filings or communications regarding our business or operating results.
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© 2016 MOLINA HEALTHCARE, INC.

 	

Our mission
To provide quality health care to people receiving government assistance
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© 2016 MOLINA HEALTHCARE, INC.

 	

Our footprint today
Health plan footprint includes 4 of 5 largest Medicaid markets
USVI
Puerto Rico
Molina Health plans
Molina Medicaid Solutions
Pathways2
Primary Care Direct delivery
1. Total enrollment relates to estimated membership as of January, 2016.
2. Pathways was previously know as Providence Human Services and was acquired from The Providence Services Corporation in a transaction that closed on November 1, 2015.
© 2016 MOLINA HEALTHCARE, INC.
1
3.9M
Members
1% Duals
1% Medicare
10% Marketplace
9% ABD
13% Expansion
65% TANF & CHIP
Member Mix
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Our membership growth
Significant historical enrollment growth over the last 10 years1
4.0M
136k
3.9M
3.0M 53k 66k 21k
2.0M 135k
64k
1.0M 0.9M
0.0M
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Jan -16
1. Total enrollment as of December 31 for each year from 2005 “2014 plus January 2016 preliminary enrollment from Company estimates.
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Our revenue growth
Historical revenue has outpaced historical membership growth over the last 10 years1
16.0B 136k
14.3B
12.0B 53k 66k 21k
8.0B 135k
64k
4.0B
1.7B
0.0B
2
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015O
1. Total revenue as reported in the Company“s 10Ks as of December 31 for each year from 2005 “2014.
2. 2015 Outlook as provided by the Company in the June 2015 estimate.
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© 2016 MOLINA HEALTHCARE, INC.

 	

Medicaid growth
Growth in the Medicaid program accelerated between 2013-2015 due to the Affordable
Care Act, steady organic growth is expected to continue over the next five years. Year to Date Enrollment
Growth
136k
85M
Medicaid/CHIP Growth Projections 1
81.5M 82.2M December 31, 2014
80.8M
53k 79.8M 2.6M 80M
77.9M 66k members
21k
76.3M
135k
75M
72.1M 64k
January 2016
70M 3.9M
members
65M
2013 2014 2015 2016 2017 2018 2019 2020
1. CMS, Office of the Actuary, National Health Expenditure Projections 2014 -2024, Table 17 Health Insurance Enrollment and Enrollment Growth Rates https://www. cms.gov/Research -Statistics -Data-and-Systems/Statistics -Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected. htm.l
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Medicaid spending on managed care vs. fee for service
$500 Medicaid Benefit Spending
2010-2014 $468B
$283 Expenditures on Medicaid Long Term Services and Supports $286 (LTSS) represent ~50% of Medicaid Fee For Service spend.
$400
$295 $282 $284 6%
3%
People with Other / $300
Serious Multiple Mental Populations Medicaid Fee For Service Illness $200
$184 30% $145 61%
$100 $125 People with $111 Older People & $98 Developmental People with Disabilities Physical Disabilities
Medicaid Managed Care
Source: Truven Health Analytics. “Medicaid Expenditures for Long-Term Services and Supports in FFY 2012; $0 published April 28, 2014.
2010 2011 2012 2013 2014
Sources:
1. 2011 “2014 March Medicaid and CHIP Program Statistics MACStats
2. MACStats: Medicaid and CHIP Data Book, December 2015
Total spend includes FFS plus managed care and premium assistance only and excludes Medicare premiums and coinsurance and collections. 8
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Increasing complexity drives higher spend
Complex members continue to transition into managed care
$$$$$
Long Term Care
Dual Eligible $$$$
Seniors & Persons $$$ with Disabilities
Medicaid
Expansion $$
Temporary
Assistance to $ Needy Families
Number of potential enrollees
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© 2016 MOLINA HEALTHCARE, INC.

 	

How will we continue to grow?
Organic growth in existing markets and RFPs
In-market acquisitions
Marketplace
Transition of members and benefits from FFS to managed care Capability -based provider acquisitions
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Executing on our strategy: RFPs
§ Successful re-procurement
Region 1
§ Won all 9 regions bid on
1
§ Expands current geographic footprint by 18 counties
§ HealthPlus and HAP Midwest acquisitions add an additional 170K
Regions 2 -10 members
§ New Medicaid contract became effective January 1, 2016
§ Successful re-procurement for one region
§ Combines physical health and behavioral health services into one contract§ CUP acquisition adds an additional 55K members§ New Medicaid contract will become effective April 1, 2016
1. Molina did not bid on Region 1 in Michigan
© 2016 MOLINA HEALTHCARE, INC.
Michigan
§ Awarded contracts will serve more than 1.7M
beneficiaries across the
state
Washington
“ Molina is one of two awardees in the region
that will serve more than 120,000 beneficiaries
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Acquisition strategy
How do the pieces fit together?
New Managed Care State Existing Managed Care State Provider / Capability
Rationale
Diversification “ revenue, risk, contracts Fortify competitive position Enhance provider alignment
Administrative cost leverage “long term Administrative leverage “short term Medical cost improvement “ medium term
Criteria
Increased member care oversite / Competitive provider environment Competitive provider environment management
Sizeable Medicaid population Attractive price Complementary to Molina care model
Difficult /expensive / timely to develop Favorable regulatory environment Favorable regulatory environment internally
Valuable talent
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© 2016 MOLINA HEALTHCARE, INC.

 	

Executing on our growth strategy: acquisitions
9 acquisitions announced in 2015
May August October
In-market acquisitions:
§ generally asset purchases§ provide greater scale§ entry to new service areas§ accretive
Michigan Florida Illinois status: closed status: closed status: closed
Washington
Status: closed Florida status: closed * Michigan Status: closed 23 states + DC
Status: closed Illinois status: closed
2015 Illinois status: pending
July September November
* Capability based provider acquisition
In-market acquisitions expected to add approximately $1.4 billion in total revenue in 2016
Note:
Estimated revenue based on annualized Company estimates. Please refer to the Company“s cautionary statement. 13 © 2016 MOLINA HEALTHCARE, INC.

 	

Diagnoses of behavioral and mental health conditions are increasing
Mental and substance use disorders are expected to surpass all physical diseases as a major cause of worldwide disability by 2020
68% 49%
68% of adults with 49% of Medicaid mental illness also enrollees with have at least 1 chronic disabilities have a physical illness . psychiatric illness.
Source: Annals of Internal Medicine: Crowley RA, Kirschner N, for the Health and Public Policy Committee of the American College of Physicians. The Integration of Care for Mental Health, Substance Abuse, and Other Behavioral Health Conditions into Primary Care: Executive Summary of an American College of Physicians Position Paper. Ann Intern Med. 2015;163:298 -299. doi:10.7326/M15 -0510.
© 2016 MOLINA HEALTHCARE, INC.
2X
Prevalence of mental illness among the Medicaid population is twice that of the general population
2X-3X
Treatment of chronic physical health issues for patients with behavioral health needs is 2 to 3 times more expensive than patients with physical health only needs.
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Introducing Pathways
A capability -based provider acquisition
Pathways provides a growing number behavioral health programs and social services to Medicaid beneficiaries throughout the nation.
Mental Other 1 Health Child 10% 44%
Autism &
Intellectual and Mental Developmental Health Adult Disabilities 26% 9%
Child Welfare 11%
1. Other includes Educational, Probational, and Substance Abuse
© 2016 MOLINA HEALTHCARE, INC.
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Medicaid and social services on the horizon
CMS has announced a 5-year, $157M program to test up to 44 separate pilot projects that will better link Medicare and Medicaid patients to social services.
CMS will focus on:
§ Housing Social service needs inhibit many lower income § Food insecurity individuals from getting better or maintaining § Utilities good health
§ Interpersonal safety, and§ Transportation
Social health issues become a more significant driver of health care costs as care complexity increases
Sources:
1. Kaiser Health News Feds Funding Effort To Tie Medical Services To Social Needs, Julie Rovner, January 5, 2016; http://khn. org/news/feds -funding -effort-to-tie-medical -services -to-social-needs
2. New England Journal of Medicine: Accountable Health Communities “ Addressing Social Needs through Medicare and Medicaid; Dawn E. Alley, Ph.D., Chisara N. Asomugha, M.D., Patrick H.
Conway, M.D., and Darshak M. Sanghavi, M.D.; January 5, 2016 DOI: 10.1056/NEJMp1512532; http://www. nejm.org/doi/full/10.1056/NEJMp1512532 16
© 2016 MOLINA HEALTHCARE, INC.

 	

Home and Community Based Services
Behavioral and mental health services are significant drivers of cost
Medicaid HCBS Expenditures
Prevocational services FY 20101 Day habilitation Education services Day treatment/partial hospitalization Other2 Adult day health 14%
Adult day services Group living, mental health services Community integration Round-the-clock services, unspecified Medical day care for children Group living, other Day Services Round-the-clock Shared living, other 15% In-home residential habilitation
In-home round-the-clock services, other Group living, residential habilitation Home-based habilitation 46% Home-Based Shared living, residential habilitation Home health aide In-home round-the-clock mental health services Personal care 18% Companion Homemaker Chores
Mental Health Case Management
3% 4%
Medicaid HCBS total spend in 2012: $69B
1. Mathematica Policy Research. “The HCBS Taxonomy: A New Language for Classifying Home-and Community -Based Services”, August 2013
2. Other includes expenses related to goods and services, interpreters, housing consultation, and claims where the procedure code could not be interpreted
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Continued organic growth in Medicare-Medicaid Plans (MMP)
Dual eligible markets
1. CMS enrollment data as of December, 2015
2. South Carolina is currently enrolling voluntary members only
© 2016 MOLINA HEALTHCARE, INC.
Enrollment
December December 2014 20151 California 11K 14K Illinois 5K 4K
USVI Michigan—9K Ohio 2K 10K
South Carolina 2—<1K
Puerto Rico Texas—14K
Total 18K 51K
MMP Markets
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Marketplace
15M
Penalty for not having coverage in 2016 is 2.5% of yearly household income or $695 per adult (half for those under 18)
[Graphic Appears Here]
§ Leverages existing Medicaid network§ Continuity for Medicaid members§ No platinum, limited gold
§ Low MCR not sustainable in the long term
USVI
Puerto Rico Molina 325K1
Marketplace 226K Enrollment
Marketplace operations
3Q2015 Jan 2016
93% of Molina marketplace members receive government subsidies
1. Company“s enrollment as of January 2016
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© 2016 MOLINA HEALTHCARE, INC.

 	

One of a kind
Flexible health services portfolio (health plans, direct delivery, MMIS) Focused on people receiving government assistance Scalable administrative infrastructure Consistent Medicaid national brand Seasoned management team Unique culture
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© 2016 MOLINA HEALTHCARE, INC.

 	

The year ahead
Tailwinds
Headwinds
§ Top line revenue/membership from § Premium rates existing managed care state acquisitions§ Pent-up demand new § Dual eligible experience in all 6 contracts/populations demonstration states§ Provider settlements and retroactive§ Marketplace growth state recoveries§ Marketplace MCR convergence
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© 2016 MOLINA HEALTHCARE, INC.

 	

Q&A
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