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BOARD OF GOVERNORS MEETING

November 3, 2016 ● 2:00 PM L.A. Care Health Plan 1055 W. 7th Street, Los Angeles, CA 90017

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Mission Statement

L.A. Care’s mission is to provide access to quality health care for Los Angeles County's vulnerable and low-income communities and residents and to support the safety net required to achieve that purpose.

Overview

Committed to the promotion of accessible, affordable and high quality health care, L.A. Care Health Plan (Local Initiative Health Authority of Los Angeles County) is an independent local public agency created by the State of California to provide health coverage to low-income Los Angeles County residents. Serving nearly two million members in six product lines, L.A. Care is the nation’s largest publicly operated health plan.

L.A. Care Health Plan is governed by 13 board members representing specific stakeholder groups, including consumer members, physicians, federally qualified health centers, children’s health care providers, local hospitals and the Los Angeles County Department of Health Services.

L.A. Care advances individual and community health through a variety of targeted activities including a Community Health Investment Fund that has awarded more than $132 million throughout the years to support the health care safety net and expand health coverage. The patient-centered health plan has a robust system of consumer advisory groups, including 11 Regional Community Advisory Committees (governed by an Executive Community Advisory Committee), four Coordinated Care Initiative Consumer Councils, 35 health promoters and four Family Resource Centers that offer free health education and exercise classes to the community, and has made significant investments in Health Information Technology for the benefit of the more than 10,000 doctors and other health care professionals who serve L.A. Care members.

Programs

Medi-Cal – In addition to offering a direct Medi-Cal line of business, L.A. Care works with three subcontracted health plans to provide coverage to Medi-Cal members. These partners are Anthem Blue Cross, Care 1st Health Plan, and Kaiser Permanente. Medi-Cal beneficiaries represent a vast majority of L.A. Care members.

L.A. Care Covered™ – As a state selected Qualified Health Plan, L.A. Care provides the opportunity for all members of a family to receive health coverage under one health plan in the Covered California state exchange.

L.A. Care Covered Direct™ – L.A. Care’s first private health plan for all members of a family.

L.A. Care Cal MediConnect Plan– L.A. Care Cal MediConnect Plan provides coordinated care for Los Angeles

County seniors and people with disabilities who are eligible for Medicare and Medi-Cal.

L.A. Care Healthy Kids (0-5) – Sponsored by First 5 LA, Healthy Kids (0-5) provides comprehensive health care coverage for children who do not qualify for Medi-Cal or Covered California.

PASC-SEIU Homecare Workers Health Care Plan – L.A. Care provides health coverage to Los Angeles County’s In-Home Supportive Services (IHSS) workers, who enable our most vulnerable community members to remain safely in their homes by providing services such as meal preparation and personal care services.

About L.A. Care Health Plan

Updated 9/13/2016

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10/31/2016 7:57 AM

AGENDA BOARD OF GOVERNORS MEETING Thursday, November 3, 2016, 2:00 PM L.A. Care Health Plan, 1055 W. 7th Street, 10th Floor, Los Angeles, CA 90017

Welcome

Mark Gamble, Chair

1. Approve today’s Agenda

Chair

2. Public Comment

Chair

3. Approve September 1, 2016 meeting minutes

Chair

4. Approve Consent Agenda Items · Ratify CEO’s execution of Contract with Covered California, the California Health

Benefit Exchange (EXE 100A) · 2017 Board & Committee Meeting Schedule (EXE 101) · Third Quarter CY 2016 Investment Report (FIN 100) · Oracle Maintenance & Support Contract Amendment (FIN 101) · Oracle Unlimited License Agreement Contract Amendment (FIN 102) · SunGard Contract Amendment (FIN 103) · PCM-G Contract Amendment (FIN 104)

· Authorization to Contract with Vendor still to be determined for Call Center Enhancement (FIN 105)

· Policy AFS 008 (Annual Investment) (FIN 106) · Policy AFS 004 (Travel and Other Expenses) and 027 (Non-Travel and Other

Expenses) (FIN 107) · Policy AFS 025 (Tangible Net Equity & Board-Designated Reserves Funds) (FIN 108) · RCAC Membership (ECA 100)

Chair

5. Chairperson’s Report

Chair

6. Chief Executive Officer Report · Strategic Vision Progress Report 4th Quarter FY 2015-16

John Baackes Chief Executive Officer

7. Chief Medical Officer Report

Gertrude S. Carter, MD Chief Medical Officer

Motions for Consideration

8. · Contract with RR Donnelly (Moore Wallace) (BOG 100) · Contract with Michael S. Kenny & Co. to provide consulting services for the Los

Angeles County Department of Health Services (BOG 101) · 2016-17 Community Health Investment Fund (CHIF) priorities (BOG 102)

John Baackes

Advisory Committee Reports

9. Executive Community Advisory Committee

Hilda Perez/Layla Gonzalez-Delgado Consumer member and Advocate member

Standing Committee Reports

Executive Committee

Chair

10. Government Affairs Update

Cherie Compartore Senior Director, Government Affairs

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Board of Governors Meeting Agenda November 3, 2016 Page 2 of 2

10/31/2016 7:57 AM

Finance & Budget Committee

Michael Rembis

11. Financial Update Marie Montgomery Chief Financial Officer

12. Monthly Investment Transactions Report Marie Montgomery

13. Information Technology Motions · Cognizant Infosys Staff Augmentation (FIN 109) · New Encounter Systems Project (FIN 110)

John Baackes Tom Schwaninger

ADJOURN TO CLOSED SESSION (Estimated time: 40 minutes)

Chair

14. CONTRACT RATES Pursuant to Welfare and Institutions Code Section 14087.38(m) · Plan Partner Rates · Provider Rates · DHCS Rates

15. REPORT INVOLVING TRADE SECRET Pursuant to Welfare and Institutions Code Section 14087.38(n) Discussion Concerning New Product Lines Estimated date of public disclosure: November 2018

16. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant Section 54956.9(d)(2) of Ralph M. Brown Act: (3)

17. CONFERENCE WITH LABOR NEGOTIATOR Pursuant to Section 54957 of the Ralph M. Brown Act Agency Negotiator: John Baackes Unrepresented Employees: L.A. Care Employees

RECONVENE IN OPEN SESSION

Chair

Adjournment

The next meeting will be on Thursday, December 1, 2016 at 2 pm At L.A. Care Health Plan, 10th Floor, 1055 W. 7th Street, Los Angeles, CA 90017

Please keep public comments to three minutes or less.

The order of items appearing on the agenda may change during the meeting. If a teleconference location is listed at the top of this agenda, the public can participate in the meeting at that location.

Teleconference arrangements listed at the top of this Agenda may change prior to the meeting. L.A. Care may make the teleconference number available to the public. If you wish to listen to the meeting by telephone, you can confirm details with L.A. Care Board Services staff prior to the meeting by calling (213) 694-1250, extension 4183 or 4184.

THE PUBLIC MAY ADDRESS THE BOARD OF GOVERNORS ON ALL MATTERS LISTED ON THE AGENDA BY FILLING OUT A “REQUEST TO ADDRESS” FORM AND SUBMITTING THE FORM TO L.A. CARE STAFF PRESENT AT THE MEETING BEFORE THE AGENDA ITEM IS ANNOUNCED. YOUR NAME WILL BE CALLED WHEN THE ITEM YOU ARE

ADDRESSING IS DISCUSSED. THE PUBLIC MAY ALSO ADDRESS THE BOARD ON L.A. CARE MATTERS DURING PUBLIC COMMENT. AN AUDIO RECORDING OF THE MEETING IS MADE TO ASSIST IN WRITING THE MINUTES AND IS RETAINED FOR 30 DAYS.

NOTE: THE BOARD OF GOVERNORS CURRENTLY MEETS ON THE FIRST THURSDAY OF MOST MONTHS AT 2:00 P.M. POSTED AGENDA and PRINTED MEETING MATERIALS ARE AVAILABLE FOR INSPECTION AT Board Services, 1055 W. 7th Street – 10th Floor, Los Angeles, California 90017.

Any documents distributed to a majority of the Board Members regarding any agenda item for an open session after the agenda has been posted will be available for public inspection at Board Services, L.A. Care Health Plan, 1055 W. 7th Street, 10th Floor, Los Angeles, CA 90017, during regular business hours, 8:00 a.m. to 5:00 p.m., Monday –

Friday.

Meetings are accessible to people with disabilities. Individuals who may require any accommodations (alternative formats – i.e., large print, audio, translation of meeting materials, interpretation, etc.) to participate in this meeting and wish to request an alternative format for the agenda, meeting notice, and meeting packet may contact L.A. Care’s Board Services Department at (213) 694-1250. Notification at least one week before the

meeting will enable us to make reasonable arrangements to ensure accessibility to the meetings and to the related materials.

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New Board Members Al Ballesteros Al Ballesteros is the President & Chief Executive Officer of JWCH Institute, Inc. a Los Angeles based non-profit, Federally Qualified Community Health Center. Al Ballesteros is also a Commissioner and past Co-Chair of the Los Angeles County Commission on HIV, appointed by the LA County Board of Supervisors. Other current community work includes: Member of the Board of Directors, International Gay and Lesbian Human Rights Commission; Member of the Board of Directors, Community Clinic Association of Los Angeles County; Founder and Publisher of Adelante Magazine, a Latino Gay and Lesbian Monthly Publication produced and distributed in California. Layla Delgado The following statement was included in the member election materials in July: I have worked for the Personal Assistance Services Council (PASC) for 13 years helping seniors and persons with a disability of low-income of varying degrees throughout the years. Currently, my main focus is to recruit more homecare providers so as to ensure the growth of the registry. I am also part of an Issue Solving Team that troubleshoots and submits claims to the In-Home Supportive Services offices in order to assist both consumers and homecare workers with their payroll issues. Working at Personal Assistance Services Council (PASC), I have become familiar with L.A. Care, as it is the HMO for qualified homecare workers of the IHSS program. PASC, in conjunction with SEIU, worked diligently in establishing healthcare coverage with the important concept that a healthy homecare provider is essential to the quality of care our IHSS recipients receive. Healthy homecare workers = happy consumers. Throughout the years, I have come to learn various aspects of the In-Home Supportive Services program and have become familiar with the creation and implementation of the Coordinated Care Initiative (CCI) that California has implemented. The CCI program is one of the many products that L.A. Care provides. L.A. Care provides services to a growing and diverse population that include some of Los Angeles' most vulnerable residents. Every human being should be able to have access to quality health care regardless of their income level. L.A. Care is a big part of that picture. L.A. Care receives funding through the State of California and must comply with various regulations. My hope is to be able to make sure that the healthcare needs of L.A. care members would not be compromised due to state limitations while still adhering to budget constraints. Stephanie Booth, MD Dr. Stephanie Booth is an American Board of Pediatrics certified pediatrician who currently works as a locum tenens physician, covering for other pediatricians when they are away from their offices. She is involved with professional organizations including the American Academy of Pediatrics and the California Medical Association. She is a member of the Board of Directors of the Los Angeles County Medical Association (LACMA). She serves as the President of District #3; the Chair of the Women Physicians’ Action Committee and participates as an active member of other LACMA committees.

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DRAFT

Board of Governors Meeting Minutes #257 – September 1, 2016 The California Endowment, 1000 N. Alameda Street, Los Angeles, CA 90012

Members Management/Staff Mark Gamble, Chair John Baackes, Chief Executive Officer Louise McCarthy, Vice Chair Phinney Ahn, Chief of Staff Michael Rembis, Treasurer Henry Charoen, Executive Director, Medi-Cal Plan Partners Alexander Li, MD, Secretary Maribel Ferrer, Executive Director, Medicaid Coverage Expansion & TANF Hector De La Torre Linda Greenfeld, Executive Director for Commercial Products Jann Hamilton Lee Augustavia Haydel, General Counsel Thomas Horowitz, DO Dino Kasdagly, Chief Operating Officer Ozzie Lopez, MPA* Marie Montgomery, Chief Financial Officer Hilda Perez Noah Paley, Chief of Enterprise Integration G. Michael Roybal, MD, MPH Bruce Pollack, Executive Director, Medi-Cal, SPD & CCI Honorable Hilda Solis * Garrison Rios, Executive Director. Cal MediConnect Sheryl Spiller Kimberly Uyeda, MD, MPH *Absent **Via teleconference

AGENDA ITEM/PRESENTER

MOTIONS / MAJOR DISCUSSIONS

ACTION TAKEN

WELCOME

Mark Gamble

Mark Gamble, Chair, called the meeting to order at 8:55 a.m.

He welcomed attendees to the meeting. He announced that the public may address the Board on any matter at the Public Comment section of the meeting or on specific agenda items before or during the Board’s discussion of those items. The public is welcome to sign the guest book at the entrance but should not feel compelled to do so. He welcomed members of the advisory committees and announced that members will be introduced later in the meeting.

He announced that the Board is glad to have people speak at the meeting. There are no Board members calling in to the meeting so there is no teleconference. He announced that there is one Public Comment section at the beginning of the meeting; there will not be one at the end of the meeting.

APPROVAL OF MEETING AGENDA

The meeting agenda was approved as submitted.

Approved unanimously. 8 AYES (De La Torre, Gamble,

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Board of Governors Meeting September 1, 2016, Page 2 of 27 DRAFT DRAFT



ACTION TAKEN

Mark Gamble

Hamilton Lee, Horowitz, Rembis, Roybal, Spiller, and Uyeda).

PUBLIC COMMENT

There was no public comment at this section of the meeting, please see page 8.

Framing the Issues and Introduction of Speakers John Baackes

John Baackes, Chief Executive Officer, informed Board members that two guest speakers will address the meeting, which will be followed by a roundtable discussion about the future of health care, particularly in the aftermath of the implementation of the Affordable Care Act. In the afternoon, the Board will have a business meeting, followed by an update on the strategic vision announced at the retreat in 2015.

(Members Perez and McCarthy joined the meeting.)

Mr. Baackes introduced Diana Dooley, the Secretary of California Health and Human Services since 2011. She has held other positions which demonstrate her commitment to the community L.A. Care serves. Ms. Dooley attended an L.A. Care board meeting several years ago, and agreed to attend today following a meeting where Mr. Baackes discussed L.A. Care’s initiatives and the provider improvement project.

Guest Speaker – Where Do We Go From Here? Diana Dooley

Ms. Dooley noted that she receives many invitations and it is difficult for her to take time away from her work. She came to this meeting to learn from Board members. She reviewed the recent significant changes in health care and her observations on opportunities. She asked the Board to contribute thoughts on how to cement the progress that has been achieved and ideas on further work to be done on health coverage in California.

(Member Li joined the meeting.)

The foundation for the Affordable Care Act (ACA) in California had been set when she took office in 2011. Governor Schwarzenegger contributed to the initial steps taken to ensure success during the initial work to implement the ACA. Unfortunately, the state budget deficit meant that early planning was conditioned on the availability of funding to complete the implementation. There was a diverse group of people committed to work together and to make hard decisions about how the health benefit exchange would operate in California. In some regions of the nation, the health benefit exchanges have seen an exodus of health plans, which takes away some of the choices for enrollees. California’s program, California Covered, has not seen that type of decline, because of robust competition among the health plans. The establishment of rate regions, requirements that plans meet qualifications to participate, and

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ACTION TAKEN

required standard benefits that aligned with the private health insurance market, have ensured a healthy competitive environment for health plans in Covered California and a good fit in the overall health plan markets throughout the state. A commitment was made to invest heavily in marketing to ensure a good mix of risk levels in the enrollment pool. California Covered has a structure that will survive. Open enrollment in 2016 will indicate the significance of consumer choice. California’s program has seen an average 13% increase in premiums. Two health plans in Covered California were highest, with the other plans grouped much lower. Analysis has shown that the market is working and adjustments are being made as consumers select a health plan for 2017.

The quality of health care offered is important to Covered California. Increased transparency in the market has exposed consumers to quality and cost aspects of health care, and consumers are selecting a plan that has a share of cost and benefit coverage that matches their need. Physicians have informed her that they know very little about the cost of care. More transparency is needed.

California is looking at ways to change the financing incentives to create efficiencies and control cost. She would like to use the power of government to set the policy framework and stay out of the way of the market. She mentioned that L.A. Care’s work with providers is an example of transparency in quality. She noted that health plans and providers will be in conflict over cost of care. She suggested that health plans will need to be an agent for the consumer for cost, and plans need to work with providers to gain the highest possible quality and best cost. She thinks the structure of the ACA makes plans compete on quality and cost.

There are dramatic changes in the market in Northern California, with mergers among hospitals and medical groups. There are higher health care costs in Northern California because there are fewer providers.

She offered that she would like to know what L.A. Care will need to continue the improvement in health coverage programs in Los Angeles County. She praised the work of L.A. County and L.A. Care in assuring that beneficiaries receive the care they need from providers in the public safety net. She hopes that Medi-Cal, Covered California and employer-sponsored insurance will one day be operating without barriers. She discussed the difficulties in getting to that ideal because of the diverse pilot programs operating in California which dictate the structure of public and private health coverage in individual counties. There are pilot programs that are very irrational. She recommended that over the next 5-10 years California will look at transparent, rationalized and streamlined care models. She noted that public private partnerships are important; the public and private safety net providers work very well together. She hopes to

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ACTION TAKEN

keep progress going on health coverage in California. At one time California had 22% uninsured and now has only 9%.

Mr. Baackes thanked Secretary Dooley.

Guest Speaker – Health 3.0 and the California Safety Net Peter Long, PhD

Mr. Baackes welcomed and introduced Peter Long, PhD, the Chief Executive Officer of Blue Shield Foundation.

Dr. Long will build on Ms. Dooley’s remarks and comment on the future. He presented information about Blue Shield Foundation’s current programs to make California healthy and safe (a copy of his presentation is available by contacting Board Services). He reviewed the history and current state of the health delivery system transformation in the United States. Dr. Long presented information that the health delivery in the United States since 1900 has evolved from caring for the sick to a coordinated health care system. Dr. Long proposes that the next step in the evolution will be the development of integrated health and human services in the community. He suggested it is important for health plans to support work that will accelerate solutions with a goal of helping the most vulnerable Californians receive the services they need to be healthy and safe. Dr. Long commended L.A. Care for its work in supporting programs in Los Angeles County that have made progress toward achieving that goal. He cited recent studies in Arkansas and Kentucky that show low-income adults who are able to get health care have positive medical and financial outcomes, and the expansion of Medi-Cal will bring positive results in California. He outlined ideas for continued improvements for California and for Los Angeles County. He described ideas for integration of social services, including health care, and the framework for achieving additional progress, including financial approaches. He commended Secretary Dooley for developing Medi-Cal 2020, the last federal 1115 waiver. Medi-Cal 2020 includes components that help move toward new financing of integrated programs and establishes a foundation to support the transition to value based purchasing of health care services. His program ended with a challenge on implementing community integrated systems in Los Angeles County, despite some systemic barriers to health system innovation.

Moderated Discussion with Secretary Dooley and Dr. Long

Jonathan Freedman moderated a discussion among Board Members, staff and the two guest speakers. Mr. Freedman noted that a number of issues were raised around what next steps need to be implemented to continue to improve health care delivery in Los Angeles County. He asked if the progress was moving too fast or not fast enough?

Secretary Dooley proposed that there is no control over the speed of progress. Organizations concerned with health system improvement must take advantage of the existing opportunities

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ACTION TAKEN

and energy. She noted that there is a perception that Medi-Cal payment is the lowest in the U.S. and California is the worst Medicaid payor. California has a very low per beneficiary cost, an indicator that the system is very efficient. She suggested that private insurance would do well to learn from Medi-Cal. Medi-Cal overall patient satisfaction is high (80-85%) and there are extremely capable professionals that provide care in difficult circumstances. It is important to understand how the safety net system provides high quality and efficient care and dramatically changes people’s lives. She does not agree with people who say that the care delivered in the safety net is not good. There is very good care being delivered by highly trained, skilled professionals in the safety net. People in more expensive plans are dissatisfied with their level of care. Changes do need to be made, but not only in the safety net. She indicated that more resources can be added to Medicaid, but those would not be applied across the board. Instead, the added resources would be used to reward behavior that moves California toward the health care delivery of the future. She suggested that financial incentives must be properly aligned to achieve more efficiency.

Mr. Freedman summarized Secretary Dooley’s comments as the pace of progress is not entirely controlled, we need to identify the points of value and how to accelerate within that context, particularly more so in the area where Medi-Cal covers patients in non-traditional safety net providers.

Dr. Long proposed focusing on fewer opportunities to address issues in bigger projects to achieve great gains. He also suggested that it is important that the measures of success are clearly established.

Board Member De La Torre noted that the Board believes that L.A. Care can do the right thing. He asked why the UC Medical system is not a Medi-Cal provider. Secretary Dooley responded that the UC medical system is independent from state government and are strongly encouraged to have contracts with Medi-Cal plans.

Board Member McCarthy commented that better cost containment will have to rely on better data capture. Information about the social determinants of health is important, and providers can use the information to improve care delivery. Dr. Long agreed with the importance of data, which can help inform the best ways to provide care efficiently. Work is being done to get the best measurements. Secretary Dooley added that treatment outcomes are important to inform the community, particularly with the more difficult discussions of end of life treatment and how much care is enough. An understanding of the social determinants of health must encompass the community demographics. The state sets goals according to what can benefit the least among us. Public conversations about difficult aspects of care must happen.

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ACTION TAKEN

Board Member Rembis stated that providers are leaving the Medi-Cal system because the reimbursement is insufficient. He also proposed that not enough is being done to address financial shortfalls for Behavioral Health treatment in the safety net.

Board Member Horowitz asked that ineffective state policies be addressed. He also noted that there are fewer specialty providers to support safety net primary care providers.

Board Member De La Torre informed the Board that recent study results indicated that 54% of millennials (aged 18-35 years) reported they have a medical condition. The three conditions reported were depression, anxiety, and obesity.

Mr. Freedman noted there was an expansion in benefits and coverage in Medi-Cal. He asked if there might be better financial and programmatic alignment of behavioral health coverage.

Secretary Dooley reported that it is very difficult to change the financing in Medicaid. The financing of behavioral health has more pressure on it than the medical services delivery. As a result, the infrastructure of behavioral health care delivery must be rebuilt in order to build capacity to provide additional services.

Mr. Freedman asked Secretary Dooley if further alignment of eligibility systems would occur to simplify enrollment. She described the difficulties in implementing the California Healthcare Enrollment, Eligibility and Retention System (CALHEERS) across the diverse market of state and county systems and the complications in continuing to manage CALHEERS. Progress is being made, but there are additional challenges to address. There has been tremendous cooperation from county staff.

Mr. Baackes commented that the pilot program to enroll dually eligible beneficiaries in Medi-Cal has integrated services and helps the health plan better serve the beneficiary. He noted that usually when new ideas are proposed they are layered on existing programs. He asked that the integration of new ideas be implemented so that programs are simplified. Secretary Dooley noted that this is a priority and it is very difficult to implement. Mr. Baackes noted that L.A. Care does work with other social service programs to help its members. He asked if there could be one care manager that oversees the full array of social service programs for beneficiaries. Secretary Dooley noted that there are segmented programs that were started to address specific needs. The difficulty of gauging an individual’s eligibility and prioritize services among an array of programs is in the complexity of the assessment that would be needed.

Board Member Li asked Secretary Dooley’s thoughts on how consumers can be engaged in their care and how health plans and providers can make it easier for consumers to be more engaged. Secretary Dooley responded that the state is working on ease of enrollment and renewal. The

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ACTION TAKEN

enrollment notices are very complicated and hard to understand for consumers. While consumer engagement is very important, it is also important to ensure that beneficiaries are enrolled in the right programs. Dr. Li noted that continuity of care is very important. Secretary Dooley emphasized that the complexity of Medi-Cal makes alignment difficult and the state is working on solutions. Dr. Long responded that seamless and frictionless access to care is part of the next step in health care. Secretary Dooley noted that there is some difficulty in integrating the policies of Medi-Cal and Medicare. Mr. Baackes proposed that the duals program could integrate benefits of Medicaid and Medicare if the Medicaid program was “clawed back”. Secretary Dooley responded that the Medicare program would want reimbursement from each Medicaid program, and states would be reluctant to send funds to Medicare. She supports the simplification of programs and she will bring the messages from this meeting back to Sacramento for further consideration.

Board Member Perez noted the common desires for efficiency and expanded services among beneficiaries and those who manage the programs. She has heard many presenters say the services are okay. In the community, providers will not take Medi-Cal patients. She asked Secretary Dooley to describe her perspective on community engagement, how she expects beneficiaries to be involved in a system that they do not fully believe in because of the difficulty they have it accessing services. Secretary Dooley described her experience in community engagement. Engaging with people who are beneficiaries is a personal priority of hers. She described the stakeholder engagement opportunities with the department. She has reached out beyond the immediate Sacramento area with opportunities for listening to meetings and bus tours. Secretary Dooley noted that it is not possible to reach each individual personally. She expressed her appreciation for Ms. Perez’ representation of her community. Dr. Long noted that priorities should be set by the community members, and candid feedback from the community is important.

Board Member McCarthy noted that as long as there are people without health care coverage local safety net programs are necessary. She commented that the state programs seem to have more “work arounds” than programs, which makes integration complicated or impossible. The policies, programs and people each have a role in breaking down the barriers. There are also barriers at the local program level. Until the barriers are eliminated, the integration we are seeking will not be possible.

Mr. Freedman summarized the discussion of the next steps in health care which involves integration of services beyond providing health care.

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ACTION TAKEN

· The state’s new federal waiver includes programs which help move closer to that integration goal.

· Integration can be achieved with: o Financial alignment to services o Simplification of programs o Strategic incentives for improving performance o Consumer engagement not just for provider choice, but engaging consumers in their

own health o Understanding of population health characteristics o Including all provider systems in government programs

Board Member Spiller commented that she appreciated the Secretary’s comments about CALHEERS and recognizing the barriers that counties have faced. L.A. County has 3.2 million people enrolled in Medi-Cal. Challenges remain with renewal of eligibility, with members disenrolled because they did not complete the necessary paperwork. She is hoping to see a significant improvement in enrollment with the “Happy Path” which allows automatic enrollment for beneficiaries whose eligibility aligns on the federal hub. She expressed a need for further simplification in processing renewals to reduce the workload for county staff.

Board Member Uyeda commented that the opportunity for whole person care will benefit the youth beneficiaries. The school district is looking forward to pilot programs that focus on the young adolescent age group and the systems that surround that population. Secretary Dooley mentioned her commitment to assistance and health care for children. Health and Human Services covers a broad area beyond health care. Dr. Long added that there is work underway to understand trauma that happens to children throughout California.

Mr. Gamble thanked Dr. Long and Secretary Dooley for the discussion. He noted that the Board will be focused on working with organizations around the table and throughout the state to make progress in all the areas discussed this morning to further advance California health care.

PUBLIC COMMENT

Hillary Marides, CCI Council 2 Member, commented that since December of last year she has been addressing the issue of examination tables that can be accessible for the disabled. She learned that there is no requirement for disabled accessible examination tables and the issue would be tabled. She wanted to ask the Secretary, as a woman, how she expects disabled women to have proper gynecological examinations if they cannot be on an examination table? She noted that five of her female friends have died from cancer because they could not get on

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ACTION TAKEN

the examination table. Mr. Baackes informed the meeting participants that L.A. Care is looking into the issue among its providers.

Elizabeth Cooper, RCAC 2 and CCI Council Area 2 Member, is a long time member of L.A. Care. It is important that the Secretary of Health and Human Services hear from consumers. She thanked Ms. Spiller for the services of the Department of Public and Social Services. She would like to see a conference for the consumers, and particularly for the special needs beneficiaries. She thanked the Board members. She noted that Mr. Baackes is always available to the members. Mr. Baackes commented the Regional Consumer Advisory Committees do have annual meetings and he will suggest that staff consider the suggestion to include a discussion that is consumer focused.

ADJOURN TO CLOSED SESSION Mark Gamble

Augustavia J. Haydel, Esq., General Counsel, announced the following items to be discussed in closed session. The Board adjourned to closed session at 11:52 a.m.

CONFERENCE WITH REAL PROPERTY NEGOTIATORS Property: 1200 West 7th Street, Los Angeles Agency Negotiator: John Baackes Negotiating Parties: Rising Realty Partners, HRRP Garland, LLC. Under Negotiation: Price and Terms of Payment Property: 1055 W. 7th St., Los Angeles Agency Negotiator: John Baackes Negotiating Parties: Jamison Services, Inc. Under Negotiation: Price and Terms of Payment

CONTRACT RATES Pursuant to Welfare and Institutions Code Section 14087.38(m) · Plan Partner Rates · Provider Rates · DHCS Rates · Medi-Cal Managed Care Supplemental Payment


Mark Gamble

The Board reconvened in open session at 12:35 p.m. There was no report on action taken during the closed session.

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ACTION TAKEN

ACCEPTANCE OF MEETING MINUTES

Mark Gamble

The minutes of the July 7, 2016 meeting were approved as submitted. Approved unanimously. 11 AYES

APPROVAL OF CONSENT AGENDA

Mark Gamble

PUBLIC COMMENT: Elizabeth Cooper, RCAC 2 and CCI Area 2 member, commented that she appreciates Ozzie Lopez’ leadership and wishes him the best in the future. She asked the Board to note that Mr. Lopez deserves recognition.

Chair Gamble asked for any public comment on the Consent Agenda. There was no public comment on the Consent Agenda.

Members Hamilton Lee, Horowitz and McCarthy may have financial interests in Plan Participating Providers or other programs and as such should consider refraining from discussion and voting for Motion BOG 100.0916.

Motion BOG 100.0916* To authorize staff to execute a contract with SafetyNet Connect Inc., to provide software and technical support for the eConsult/ eManagement program for an amount not to exceed $700,000 for the period of October 1, 2016 through September 30, 2017.

Motion BOG 101.0916* To authorize staff to execute three separate new 36 month leases through Canon Solutions, Inc., to replace high volume copy equipment and scanners, Therefore document Management Software and a DR-X10 scanner with Kofax Optical Character Recognition software, in an amount not to exceed $793,044.

Motion BOG 102.0916* To authorize staff to amend contracts with Dickerson in the amount of $708,000 (not to exceed $2,807,249) and Healthcare Access in the amount of $372,000 (not to exceed $1,559,811) through September 30, 2017.

Motion BOG 103.0916* To authorize staff to amend the contract with Health eConnex in the amount of $585,000 (not to exceed total contract amount of $2,661,000) to provide optical character recognition (OCR) and electronic data interchange (EDI) services for paper claims documents from October 1, 2016 to June 30, 2017.

Motion BOG 104.0916* To recommend that the Board ratify the Chief Executive Officer’s execution of Amendment No. 20 to Contract 04-36069 between the California Department of Health

Approved unanimously. 11 AYES except for conflicts where noted, those members abstained from discussion and voting on Motion BOG 100.0916.

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ACTION TAKEN

Care Services and L.A. Care Health Plan, and to ratify any non-substantive changes to Amendment No. 20 which may be made or negotiated by the Chief Executive Officer and/or his designees.

CHAIR’S REPORT

Mark Gamble

Mr. Gamble acknowledged the services and recognized the skills and contributions of Ozzie Lopez, Jann Hamilton Lee, and Thomas Horowitz, DO, as members of the Board. Ms. Hamilton Lee thanked the Board and said it was a pleasure to work with all of them. Dr. Horowitz commented that being a member of the board was fascinating. Mr. Baackes thanked Ms. Lee and Dr. Horowitz for their service to L.A. Care.

Mr. Gamble announced that Hilda Perez was re-nominated by L.A. Care RCAC members as the consumer representative and Layla Gonzalez-Delgado was elected as the Consumer advocate representative.

The Community Clinic Association of Los Angeles County nominated Alvaro Ballesteros, CEO of JWCH Institute, to the Board of Governors. A fourth nominee is expected to be announced soon by the Los Angeles County Medical Association.

CHIEF EXECUTIVE OFFICER REPORT John Baackes

Mr. Baackes reported: · Thomas Mapp is L.A. Care’s new Chief Compliance Officer · Mr. Baackes attended the July 29 meeting of the advisory groups to elect their nominees for

the Board. It was a wonderful experience to see community action. The candidates addressed the members and a vote was held.

Mr. Gamble added that watching that process play out during the national election year was interesting and inspiring. He commended the candidates for their impressive presentations. He encouraged Board members to attend advisory committee events.

· Mr. Baackes informed the Board about corrections to two motions previously approved by the Board: o Motion FIN 107.0715 to provide grant funding for EHR included subcontracts with

five vendors. Subsequent to the Board’s approval and at the request of the California Department of Health Care Services, a sixth vendor was added – HCI Group. The total cost does not change and will not exceed $8 million. No vote is necessary to make this change.

o Motion FIN 103.0716 was approved to enter into a contract with FlexTech in the amount of $4.2 million. The motion mentioned a total contract amount of $12.7 million

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which was incorrect. The total contract amount is actually $14.2 million. This has no budgetary impact.

· Great improvements have been made in bringing current L.A. Care’s payments to providers. During the process a large backlog of open claims were paid. There were claims remaining in provider dispute resolution process. Those will be resolved by the end of September. The underlying issues delaying payment of those claims were more complicated than originally thought. Dino Kasdagly, Chief Operating Officer, is working with the providers in this process to resolve the outstanding claims. An exhaustive forensic examination of the delayed claims is underway. Mr. Kasdagly reported that the remittance advice and the encounter reporting processes have caused some of the problems with the claims, and a cross-functional team is working to fully analyze and correct the problems to prevent recurrence. It is anticipated that 90% will be completed within 60 days.

· L.A. Care’s Medi-Cal enrollment decreased by 32,000 members as of September 1. There was a net loss in July and a slight gain in August. Because of eligibility redeterminations in Los Angeles County, there is a large “churn” in Medi-Cal enrollment in Los Angeles County. 119,000 members were disenrolled, and 87,000 new members enrolled. L.A. Care’s total Medi-Cal enrollment is 1.9 million. There are 277,000 cases on hold for redetermination of eligibility for Medi-Cal. It is expected that enrollment will increase as the cases on hold are resolved. Mr. Baackes complimented Maribel Ferrer, Executive Director, Medicaid Coverage Expansion & TANF, for her work to help Medi-Cal members maintain their health coverage.

Medi-Cal enrollment for children under SB75 is 13,000; it is estimated that there may be up to 40,000 eligible for enrollment in Los Angeles County, and it is anticipated that about 2/3rds of them will enroll in L.A. Care.

Voluntary enrollment in L.A. Care’s coverage program for dually eligible increased by 480 members.

· On August 15, L.A. Care moved off the old legacy data system and is now using QNXT for all lines of business. The claims throughput is working much better, with 180,000 claims paid since August 3. The transition required tremendous effort by staff.

MOTIONS FOR CONSIDERATION

Community Clinics Association of Los Angeles County

Members Hamilton Lee and McCarthy may have financial interests in Plan Participating Providers or other programs and refrained from discussion and voting for Motion BOG 105.0916.

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ACTION TAKEN

Mr. Baackes summarized the motion to request approval of a contract to support health information technology programs for the Health Center Controlled Network. The vendors have not yet been selected for this program.

Motion BOG 105.0916 To authorize staff to execute a contract with Community Clinics Association of Los Angeles County (CCALAC) and subcontract with Object Health and e2o Health to provide consulting services to CCALAC in the amount of $2,325,000 from August 1, 2016 to July 31, 2019 to implement programs for the Health Center Controlled Network.

Approved unanimously. 11 AYES

Alchemy, Inc. Data Center Management

Mr. Baackes reported that L.A. Care will move its data center to a more secure location at the Garland Building. Lance MacLean, Director, Facilities Services, is working closely with information technology staff on this process to eliminate the existing vulnerabilities in the current environment where L.A. Care’s electronic equipment is located. Mr. Schwaninger reported that the cost of the move will be about $750,000 and is included in L.A. Care’s budget.

Motion BOG 106.0916 To authorize staff to execute a new five year lease with Alchemy Communications, Inc. for colocation data center space and services agreement in a total amount not to exceed $2,720,475.


Workforce Solutions Group, LLC

Mr. Baackes summarized L.A. Care’s move to reduce the number of temporary staff and to improve efficiency in managing temporary staff needs. The number of temporary staff has been reduced by over one-half from one year ago.

Motion BOG 107.0916 To authorize staff to amend a contract with Workforce Solutions Group, LLC (WSG) in the amount of $2,490,048 for temporary staff vendor management services for the period beginning June 1, 2016 through September 30, 2016, (total contact not to exceed $18,517,159).


ADVISORY COMMITTEE REPORTS Executive Community Advisory Committee Hilda Perez Ozzie Lopez

Chairperson Gamble congratulated Layla Gonzalez-Delgado, who was recently nominated by L.A. Care members as the Consumer Advocate Board Member.

PUBLIC COMMENT: Elizabeth Cooper congratulated participants in the election process and the winners of the election. She hopes they take the role seriously and in their mannerisms and communication to always remember those who voted for them and those who didn’t. She asked them to be courteous and respectful to each member. She congratulated those who won

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the election and all who were present. She noted it is always important to remember your role and be courteous to the members.

Hilda Perez reported that ECAC met on July 13. She acknowledged the advisory committee members attending today’s meeting:

RCAC Name 1 Amanda Calzada 2 Elizabeth Cooper 3 Daniel Kwong 4 Herceys Donis 5 Mariel Herrera 6 Mary Romero 7 Maria Galvan 8 Ana Romo 9 Ravy Morrath 10 Janner Gavidia 11 Reyna Hernandez CCI Councils Area 1 Demetria Saffore Area 2 Hillary Marides, Wilma Ballew Area 3 Robert Harvey Dixon Area 4 Nesima Istrefi

· ECAC Chairs shared their RCAC work plan events that will be taking place in their communities covering topics like: o Healthy Eating and Cooking o Nutrition and Diabetes

· The ECAC Ad-Hoc Committee for member recruitment met on June 13 and discussed how to improve the RCAC and CCI application to reduce the number of vacancies in the RCACs and CCI Councils and improve the membership process.

· The Election for Consumer Representatives took place on July 29. More than 160 advisory committee members attended.

· Ms. Perez noted that she is the nominee elected by the advisory committee members for the Consumer Member seat on the Board of Governors. She has had a lot of different experiences in her first term; she has been trained in different health topics. She is helping

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to get more members to join the advisory committees. The advisory committees are essential to the organization and bring issues to the Board. She has a passion for helping others.

· She welcomed Layla Gonzalez-Delgado, who was elected as the nominee for the Member Advocate seat on the Board of Governors.

Children’s Health Consultant Advisory Committee Kimberly Uyeda, MD

Dr. Uyeda reported on the meeting held on July 19, 2016 (minutes are available by contacting Board Services). · Gertrude S. Carter, MD, Chief Medical Officer, informed the committee that L.A. Care is

working on an aggressive plan to increase HEDIS quality scores. · Dr. Clayton Chau, Medical Director, organizes the Behavioral Health Services continuing

medical education conferences. The conferences have attracted new providers. L.A. Care received accreditation for six years to provide health education. Dr. Uyeda recently received an invitation to an L.A. Care conference on providing health care for lesbian, gay, bi-sexual, transgender and questioning members.

· Matthew Emons, Medical Director, Quality Improvement, provided on an update on the 2015 Clinician and Group CAHPS results to the committee. Currently most providers are in the low 70’s for the Access Composite Measure. L.A. Care’s goal is to be in the 90’s. To achieve the goal L.A. Care is: o Scheduling interviews with top performers in the Access Composite Measure. o Clinician and Group CAHPS has been incorporated into the provider score cards to

raise visibility. o Sharing best practices during Quality meetings with providers.

STANDING COMMITTEE REPORTS Executive Committee

Mark Gamble

The Executive Committee met on July 27, 2016. (Minutes are available by contacting Board Services). The Committee approved a motion to add an executive to the L.A. Care Health Plan Qualified and the Nonqualified Supplemental Defined Contribution Plans (authority to approve amendments to the retirement plans was previously delegated by the Board to the Executive Committee).

Government Affairs Update

Cherie Compartore, Director of Government Affairs, reported that an updated legislative matrix was provided for this meeting (copies of the document can be obtained by contacting Board Services).

On August 19, L.A. Care held a second briefing for state and federal legislative staff members which was very well-attended. An attorney from the Western Center on Law and Poverty presented information about changes in legislation on the Medi-Cal estate recovery process that

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will occur in January 2017. There was a presentation on L.A. Care’s Family Resource Centers and advisory groups. There were many questions.

The deadline for bills to be passed out of the State Legislature was August 31, 2016. A list of bills that L.A. Care has been following will be provided to Board Members.

PUBLIC COMMENT: Elizabeth Cooper commented on the three initiatives that L.A. Care will support on the November ballot. When she was Chairperson of RCAC 2, they hosted a presentation on the hospital associations. She supports Proposition 52 because she has used a hospital. She supports the county and hospitals that serve Medi-Cal and uninsured. She supported an initiative to keep the hospitals from bleeding. She thinks it is very vital. She does communicate with her representatives and she is proud to say that this initiative should pass.

She thinks the tobacco tax is very important for health care and L.A. Care is about health care. Those two initiatives should be supported because prevention is very important. She thanked providers and said that consumers need to talk to their legislators and support the providers.

Board Member McCarthy commented that SB 1335 was pulled by the author because the Governor threatened to veto it. It will have a chilling impact on Los Angeles County if legislation like this is not passed. And it will be brought back. She appreciated the co-sponsorship of the Los Angeles County Board of Supervisors on this bill, along with CCALAC and the state association. Essentially, if integrated care is required for Medi-Cal, at this time Community Health Centers are not being permitted to provide behavioral health services, including drug Medi-Cal and specialty mental health services at the same sites where primary care is provided. If the community health centers do provide this care at primary care sites, it is considered part of their regular services and they will have to return funds to the state.

Statewide Initiative Support Positions

Mr. Baackes noted that it is permissible for L.A. Care to take a position on a ballot measure as long as the Board considers the proposals in an open and public meeting where all perspectives may be shared. The ballot measure should be within the scope of L.A. Care’s mission, purpose and business. In taking a position, L.A. Care may adopt a motion or a resolution at an open and public meeting in support or against a ballot measure, but cannot support efforts funded with public resources that involve urging the public to vote one way or another in upcoming elections. L.A. Care will not use public resources to encourage or influence which way the voters should vote or take any actions in support of or in opposition to a measure.

There are 17 statewide ballot measures appearing before California voters on November 8, 2016. Three of the measures, if passed, would benefit the Medi-Cal program and are in alignment with L.A. Care’s mission and purpose.

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· Proposition 52, Medi-Cal Hospital Reimbursement Initiative · Proposition 55, Children’s Education and Health Care Protection Act · Proposition 56, Healthcare, Research and Prevention Tobacco Tax

Specifically, Propositions 52, 55 and 56 meet the following principles contained in L.A. Care’s 2016 State and Federal Policy Agenda which was approved in 2015: · Support use of health plan fees, provider fees, and intergovernmental transfers that

maximize California’s share of Federal Medicaid funding · Support proposals that would result in increased reimbursement · Support proposals that strengthen and stabilize financing of the Medi-Cal program

Mr. Rembis noted that it is important to support all three initiatives in supporting appropriate funding for Medi-Cal programs.

Motion BOG 108.0916 To authorize L.A. Care to take a Support position on Statewide Ballot Measure - Proposition 52, Medi-Cal Hospital Reimbursement Initiative.

Motion BOG 109.0916 To authorize L.A. Care to take a Support position on Statewide Ballot Measure - Proposition 55, The California Children’s Education and Health Protection Act of 2016.

Motion BOG 110.0916 To authorize L.A. Care to take a Support position on Statewide Ballot Measure - Proposition 56, The California Healthcare, Research and Prevention Tobacco Tax.

Motions BOG 108, 109 and 110 were simultaneously approved unanimously. 11 AYES

Finance & Budget Committee

Michael Rembis reported that the Committee met on July 27 (meeting minutes are available from Board Services). The Committee approved motions that do not require Board approval: · Authorization for capital leasehold improvement budget not to exceed $400,032 for

Inglewood Family Resource Center. · Authorization to execute a contract with OptumInsight Inc. to provide professional services

to review L.A. Care’s Cal MediConnect Risk Adjustment Program. · Authorization to procure necessary equipment and services to support to support a

Multiprotocol Label Switching connection to Ansafone with the following vendors: TCP Gurus, Inc., Level 3 Communications, Inc., Verizon.

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ACTION TAKEN

Motion Approved under Consent Agenda

Motion FIN 100.0916 To accept the Quarterly Investment Report for the 2nd quarter ending June 30, 2016, as submitted.

Approved unanimously on the Consent Agenda. 11 AYES

Financial Update Marie Montgomery

Marie Montgomery, Chief Financial Officer, referred to the financial report included in the meeting materials and provided a summary of fiscal year financial performance for the period ending June 30, 2016. (A copy of the report and his presentation can be obtained by contacting Board Services.) Highlights include: · A net surplus of $12.2 million for the month and $70 million year-to-date; comparable to

prior months. · Anticipate reaching the goal of $100 million by the end of the fiscal year. · Member enrollment is favorable, there was a delay in start of eligibility redeterminations. · Retroactive adjustments to the rates have improved net operating margin although operating

margin is behind plan. · L.A. Care continues to control administrative expenses. · Behind projected spending on grants. · Non-operating revenue is favorable to budget. · Operating margin for business lines are performing consistently with prior months. · Medical costs are higher than budgeted for the Coordinated Care Initiative (CCI) and

Seniors and People with Disabilities (SPD) programs, at over 100%, consistent with prior months.

· Key financial ratios are the same as past months. · Cash to claims ratio is low because of the timing of payments from State of California. June

is the end of California’s fiscal year so the payment was sent in July. · A dip in the level of tangible net equity reflects a higher required TNE caused by sharp

increases in revenues.

Monthly Investment Transaction Report

Marie Montgomery

Ms. Montgomery referred to the June 2016 Investment Transaction Report included in the meeting materials. (A copy of the report can be obtained by contacting Board Services). Overall market value of $2.1 billion in June. Due to the timing of payments, the July month end value was $2.5 billion.

FY 2016-17 Capital and Operating Budget

Ms. Montgomery reported the financial performance projected for fiscal year 2016-17. · Increase in membership by 13.4 %. · Increased revenue for fiscal year. · Improved operating margin by $70 million for the next fiscal year.

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· Significant enrollment growth projected will require commensurate increases in administrative spending.

· Administrative ratio will be 4.4%.

Member Rembis asked for information on the category with the largest increase. Ms. Montgomery responded that the biggest increase will be for the community investment fund.

· Opportunities for efficiencies include o CSPplus implementation will bring efficiency gains o Improvement in claims payment accuracy o Converting eligible members to CalMediConnect to increase revenue in order to meet

the actual cost of care · Risks include

o Unknown total impact of eligibility redetermination o Rate uncertainty

· Impact of internal initiatives planned across all lines of business o Consolidate vendors o Risk arrangements will be reviewed to optimize each business segment o Identify members with disabilities and enroll them in appropriate programs

· Membership projections o Expect to go below 2 million members but regain enrollment by fiscal year end and

continue growth in 2017

Mr. Baackes reported that he had been concerned about continued growth but state forecasts Medi-Cal enrollment above 14 million for next year. If L.A. Care receives proportionate enrollment, the growth in enrollment will continue. In response to a question about the reasons for continued growth, Mr. Baackes indicated that in Los Angeles County, there are a significant number of people who are eligible for programs but have not enrolled. Enrollment will increase as advocates and community health workers continue outreach programs. Member Spiller noted that young men of color that have not enrolled and that group is a target population for outreach programs.

Ms. Montgomery noted that the CalMediConnect (CMC) program is projected to enroll 3500 new members in 2017.

Ms. Montgomery described the projections for revenue rates: · Medi-Cal expansion rates will decrease · The rate increase for SPDs will help address high medical costs

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· There will be changes in rates for some TANF aid categories · Important that CMC rates are correct for each aid category

Mr. Baackes explained that the blending of the rates is problematic because the proportion of aid categories is not correctly addressed. There is movement among aid categories which is detrimental to health plans because the blended rate does not account for the actual cost of care. L.A. Care continues its long term lobbying effort to address the insufficient rates. Ms. Montgomery added that state officials have agreed that the rate proportions are not correct but have not offered a plan to address the problem. · Covered California program has wide variability in premium cost projections among the

health plans · L.A. Care anticipates attracting more members during open enrollment because of its

premium rate position

Mr. Baackes reported that in the first year of L.A. Care Covered, 75% of enrollment was in bronze rate tier, with the rest in silver tier. The bronze tier attracted young people, with low utilization of benefits. L.A. Care was required to return some premium revenue to the state-wide risk adjustment pool. L.A. Care now has the second lowest premium in nearly every region, and current enrollment is 60% in bronze and 40% in silver. It is expected that the risk pool contributions will be lower.

Ms. Montgomery described additional budget projections: · Shared risk liability is expected to be $20 million · Provider incentives expenditure will be about $55 million · Investment income is projected at $8 million · Community program expenditures are increased to $19.4 million; $4 million will go toward

the Los Angeles County Whole Person Initiative

Ms. Montgomery then reviewed the breakdown of revenues and expenses by categories of membership and community programs. Costs are expected to be higher than revenue for the CMC (-11.8%), SPD (-5.2%) and commercial (-0.8%) lines of business, with improvements in medical cost ratios. The Plan Partner and TANF/MCE segments are expected to produce excess revenue over expenses.

Ms. Montgomery summarized projected expenditures totaling $65 million for projects proposed during the next fiscal year. The projects cover IT, customer service tools, workflow and other improvements in technology to better serve the customers, more reliable processes for encounter submissions.

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Board Members may have financial interests in Plan Participating Providers or other programs and as such the vote will be for the entire budget except for the topic noted.

Members Hamilton Lee, Horowitz, Li, Lopez, McCarthy, Roybal and Uyeda. · Community Health Investment Fund · HITEC-LA/TCPI · eManagement · Sponsorships/In-Kind and Ad Hoc Grants

Members Hamilton Lee, Lopez and McCarthy · Health Center Controlled Network Grant

Members Hamilton Lee, Lopez and McCarthy · CTAP · Community Clinic Program/(SCOPE) Plan

Member Perez · Health Promoters/Promotoras Program

Motion FIN 101.0916 To authorize and approve the proposed Operating and Capital Budget for FY 2016-17, as submitted.

Approved unanimously. 11 AYES, with members abstaining from voting on items for which there may be conflicts of interest, as noted.

Information Technology Motions

Tom Schwaninger summarized three motions for amendments to existing contracts. All three contracts are with vendors L.A. Care is currently working with, and are for staff augmentation for information technology projects and are adding funds to existing contracts.

Motion FIN 102.0916 To authorize staff to amend a contract with Cornerstone Data Strategies, Inc., for an amount of $1,800,000 (total contract not to exceed $15,453,820) for consulting and staffing services through March 31, 2017.

Motion FIN 103.0916 To authorize staff to amend a contract with Cognizant Technology Solutions in the amount of $1,800,000 (total amount not to exceed $6,300,000), through December 31, 2016 for staff augmentation expenditures.

Motion FIN 104.0916

Motions FIN 102, 103 and 104 were simultaneously approved unanimously. 11 AYES

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ACTION TAKEN

To authorize staff to amend a contract with Infosys for member conversion services, reporting, production support, environments management, and system testing in the amount of $4,000,000 (total contract not to exceed $16,392,818) through March 31, 2017.

Audit Committee Alexander K. Li, MD

Member Li, Chairperson of the Audit Committee, reported: · The Audit Committee met on July 22 to discuss the final audit work plan for the 2015-16

fiscal year. Minutes of the meeting are available by contacting Board Services. · The Board delegated authority to the Audit Committee for overseeing the work of our

external independent financial audit firm. · Key areas of focus are 1) Revenue Recognition, 2) Health Care Costs and Claims Reserves,

and 3) Pervasive risk related to management override of controls. · Some of the approach will focus on 1) risk based audit methodology addressing L.A. Care’s

unique circumstances and issues, 2) optimize the completion of procedures throughout the audit cycle, and 3) leveraging specialists and technology-powered solutions in audit delivery model. o Enterprise Risk Service Specialists will be used as necessary specifically to assess IT

controls, o Actuaries will assist with evaluation of L.A. Care’s claims reserves and o Capital Market Specialists will assist with evaluation of L.A. Care’s investment pricing.

Governance Committee Hector De La Torre

Member De La Torre, Chairperson of the Governance Committee, reported that the Committee met on August 12. · He was elected Chairperson of the Governance Committee. · At the end of October, the terms for several of current members will end. · The new Board members coming in may not know all of the Board members, and could be

uncomfortable electing officers. · The Governance Committee recommends that an election of officers is held at today’s

meeting, for a term to end in May, 2017. The next election of officers would take place at the April, 2017 meeting.

· The Governance Committee also discussed the nominations received and would like to recommend the following slate of officers:

Chair: Mark Gamble Vice Chair: Louise McCarthy Treasurer: Michael Rembis Secretary: Alex Li, MD

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· Since the timing of the officer elections falls on the first meeting for Board members every two years, the Governance Committee recommends consideration of a permanent change to the timing of officer elections in the future.

Elect 2017 Board Officers

Motion GOV 100.0916 To elect the following Board Officers for 2016, effective September 1, 2016, to serve until May 4, 2017. Chairperson Mark Gamble Vice Chairperson Louise McCarthy Treasurer Michael Rembis Secretary: Alexander K. Li, MD


STRATEGIC DISCUSSION Strategic Vision First Year Recap and Discussion

Mr. Baackes reviewed L.A. Care’s progress on the Strategic Vision that was introduced a year ago. He summarized the responses he received to two questions he asked one year ago: · What value does L.A. Care add to our members’ health care experience?

o Access to care o Quality focus from providers o Humane treatment o Member advocacy

· What value does L.A. Care add to our providers’ participation? o Timely, accurate information o Ease of administration o Responsible reimbursement o Informed members

Mr. Baackes added a third question for the second year of the strategic vision: · What value does L.A. Care add to our staff’s experience?

o Meaningful work o Healthy workplace o Wellness programs o Fair compensation o Professional development

Mr. Baackes found that the staff is highly motivated and mission driven. As a demonstration of that commitment, he asked Mr. Kasdagly to describe an event that happened about 10 days ago. Mr. Kasdagly informed the Board that about 47 mail crates with claims for payment from

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providers had accumulated. He sent an email to management staff asking for help in processing the mail, and the response was overwhelming. The accumulation of claims was successfully processed very quickly.

Mr. Baackes reviewed the four areas of focus for the strategic vision: 1. Clear lines of accountability that simplify processes and drive efficiency and excellence. 2. A network that aligns reimbursement with member risk and provider performance. 3. Tailored models of care for the specific needs of our member populations. 4. Recognized leader in improving health outcomes for low income and vulnerable

populations.

Staff developed an operating plan based on those four areas, and he reviewed the initiatives adopted a year ago to fulfill those objectives: · Core systems conversion · Talent assessment and competency development · Accountability for product line performance · Centralized data analytics · Data-driven decision making · Equitable distribution of risk among MCLA and Plan Partners · High-risk members aligned with appropriate providers · Dual risk contracting · High performance among providers · Direct contracts with providers · Tailored health management programs for special populations · L.A. Care brand with a clear value proposition · Support for safety net providers · Responsive, accountable community partner · Optimal growth of CMC and LACC · Innovative approaches to quality of care provided by the safety net

Mr. Baackes informed the Board that the staff has developed revised initiatives for the coming year to continue moving toward the four areas of focus in the strategic vision. Mr. Baackes reviewed five of the initiatives in depth.

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The core system conversion became a key project that affects all areas of the organization. Mr. Baackes reviewed the key steps in achieving the objectives of the initiative. The system was implemented on August 15.

Mr. Schwaninger thanked Mr. Baackes for his leadership in focusing staff on the core system project. The challenge and the opportunity has been a new way of doing business for L.A. Care that is more efficient, accurate and timely. The new core data system provides a strong foundation for continued improvement in business systems at L.A. Care. Mr. Baackes reported that the successful transition is a big achievement for L.A. Care.

Member Li asked if providers will see the effects of the new system. Mr. Kasdagly responded that providers will experience faster and more accurate payment of claims. In the short term there may be an increase in provider claims disputes because of the changes. L.A. Care is communicating with providers bi-weekly to explain the effects of the new system. L. A. Care is also working to move payment of claims to electronic processing instead of using paper.

Mr. Baackes summarized the reorganization of L.A. Care in a matrix structure to align business processes for accountability, eliminating duplicate functions, clarifying communication, add internal audit functions, enterprise risk assessment, and developing a single source for data management and analytics. The lines of business were organized based on product characteristics of risk, reimbursement methods and enrollment challenges.

Mr. Kasdagly introduced Acacia Reed, Senior Director and Deputy Chief Operations Officer, Managed Care Services, and Shahran Haider, Managing Director, Enterprise Data Strategy and Analytics, IT Operations & Infrastructure. He summarized activities to improve performance in operational areas, including internal audit, data integrity and customer service. A presentation will be made a future meeting about improvements in the Customer Solutions area.

Mr. Baackes reported on the progress of the Value Initiative for IPA Performance (VIIP). The program is being implemented to ensure L.A. Care’s continued success as regulators move toward value-based reimbursement methodology. L.A. Care staff has met with all the IPAs to discuss quality scores.

Dr. Katrina Miller, Medical Director, Informatics, presented information on development of a provider scorecard and a program that will help providers improve their performance, leading to better services for L.A. Care members and higher quality scores for L.A. Care. Mr. Baackes noted that providers were provided with the data for this year so they can work on performance to begin raising their rating in the next assessment period.

The next steps in the VIIP program are:

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· Refresh with 2015 data in September · Use 2015 data as base year for measuring progress · Share goal performance with IPAs · Meet with IPAs to discuss barriers, opportunities and best practice · Develop an action plan · IPA to implement the action plan · Monitor progress and adjust as needed · Evaluate the VIIP process and revise

The Board discussed a timeline for applying consequences to underperforming providers. The Board also discussed the future potential for setting a limit to the number of independent provider associations (IPA) with which a physician could be affiliated.

Mr. Baackes next reviewed the Community Access provider network in the Antelope Valley, where L.A. Care has contracted directly with providers, and plans for expansion of this model to other areas in Los Angeles County to fill in gaps in access to health services. He summarized expansion plans for the Family Resource Centers, which will improve L.A. Care’s presence and promote health improvement programs in the communities they serve. · New FRCs in Palmdale and Mariachi Plaza in eastern Los Angeles · Expansion of the Inglewood FRC to accommodate care management staff

Mr. Baackes then described planning for the new Whole Person Care program to integrate services for Medi-Cal beneficiaries authorized by California’s latest federal section 1115 waiver, Medi-Cal 2020. Whole Person Care will be implemented in July 2017, and has five target populations: · Homeless High-Risk (20,000-24,000 people) · Reentry High-Risk (10,000-12,000 people) · Mental Health High-Risk (2,000 people) · Substance Use Disorder High-Risk (2,000 people) · Medically High-Risk (2,000 people)

Mr. Baackes noted that in the next year, L.A. Care will continue to work toward the four areas of focus:

1. A highly-functioning health plan with clear lines of accountability, authority and communication, and with processes and people that drive efficiency and excellence

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2. A network that aligns reimbursement with member risk and provider performance in support of high-quality, cost-efficient, member-centric care

3. Tailored models of care for the specific needs of our member populations 4. Recognized leader in improving health outcomes for low income and vulnerable

populations in Los Angeles County

He will continue to update the operating plan and provide information to the Board. L.A. Care will work on the initiatives to reach goals, improve performance and close gaps in the coming year. He noted a commitment to broaden participation by all staff in problem solving and operating plan initiatives, and to expand outreach to stakeholders, providers and members.

Mr. Gamble thanked Mr. Baackes for his leadership, and thanked all L.A. Care staff for their accomplishments over the past year.

RE-ADJOURN TO CLOSED SESSION Mark Gamble

Ms. Haydel, announced the following items to be discussed in closed session. The Board adjourned to closed session at 3:01 p.m.

REPORT INVOLVING TRADE SECRET Pursuant to Welfare and Institutions Code Section 14087.38(n) Discussion Concerning New Product Lines Estimated date of public disclosure: September 2018


Mark Gamble

The Board reconvened in open session at 4:00 p.m. There was no report on action taken during the closed session.

ADJOURNMENT

The meeting was adjourned at 4:00 pm.

Respectfully submitted by: APPROVED BY: _______________________________________ Linda Merkens, Manager, Board Services Alexander Li, MD, Secretary Malou Balones, Committee Liaison Jennifer Carabali, Committee Liaison Date Signed _______________________________________

32

For information on the current month’s meetings, check calendar of events at www.lacare.org. Meetings may be cancelled or rescheduled at the last moment. To check on a particular meeting, please call (213) 694-1250 or send email to [email protected].

Prepared by mhbalones/printed on 10/31/16

Monday Tuesday Wednesday Thursday Friday 1 2 3

Board of Governors 2 pm

4

7

8

9 ECAC 10 am

(for approx. 3 hours)

10

11

14

15 CHCAC 8:30 am


RCAC 4 9:00 am

(for approx. 2-1/2 hours)

16 CCI Area 2

10:00 am (for approx. 2-1/2 hours)

Finance & Budget

1 pm (for approx. 1 hour)

Executive Committee 2 pm


17 RCAC 11


Compliance & Quality

2 pm (for approx. 2 hours)

RCAC 7 4:30 pm


18 RCAC 8 10:30 am


21 RCAC 9 9:00 am


22 CCI Area 1


23

24 25

28 29 30

Schedule of Meetings November 2016

33

For information on the current month’s meetings, check calendar of events at www.lacare.org. Meetings may be cancelled or rescheduled at the last moment. To check on a particular meeting,

please call (213) 694-1250 or send email to [email protected].

1055 W. 7th Street, 10th Floor, Los Angeles, CA 90017 Tel. (213) 694-1250 / Fax (213) 438-5728

MEETING DAY, TIME, & LOCATION

MEETING DATES MEMBERS

Board of Governors

General Meeting

1st Thursday 2:00 PM

(for approximately 3 hours) 1055 W. 7th Street,

10th Floor, Los Angeles, CA 90017

November 3 December 1

Mark Gamble, Chairperson Louise McCarthy, Vice Chairperson Michael Rembis, FACHE, Treasurer Alexander K. Li, MD, Secretary Alvaro Ballesteros, MBA Stephanie Booth, MD Hector De La Torre Layla Delgado Hilda Perez G. Michael Roybal, MD, MPH Honorable Hilda L. Solis Sheryl Spiller Kimberly Uyeda, MD, MPH Staff Contact: John Baackes, Chief Executive Officer x4102 Linda Merkens, Manager, Board Services, x4050

Board of Governors & Public Advisory Committees 2016 Meeting Schedule / Member Listing

34

BOARD OF GOVERNORS & PUBLIC ADVISORY COMMITTEES 2016 MEETING SCHEDULE / MEMBER LISTING



Board of Governors - Standing Committees

MEETING DAY, TIME,

& LOCATION

MEETING DATES

MEMBERS

Executive Committee

4th Wednesday of the month 2:00 PM

(for approximately 2 hours)

1055 W. 7th Street, 10th Floor, Los Angeles,

CA 90017

November 16 No meetings in

December

Mark Gamble, Chairperson Louise McCarthy Michael Rembis, FACHE Alexander K. Li, MD Hector De La Torre G. Michael Roybal, MD, MPH Staff Contact: Linda Merkens, Manager, Board Services, x4050


Committee

3rd Thursday every 2 months 2:00 PM

(for approximately 2 hours) 1055 W. 7th Street,


November 17 G. Michael Roybal, MD, MPH, Chairperson Alexander Li, MD Hilda Perez Kimberly Uyeda, MD

Staff Contact: Jennifer Carabali Committee Liaison, Board Services, x 4184

Finance & Budget

Committee

4th Wednesday of the month 1:00 PM

(for approximately 2 hours)


CA 90017

November 16 No meetings in

December

Michael A. Rembis, FACHE, Chairperson Mark Gamble Louise McCarthy Hilda Perez Staff Contact: Malou Balones Committee Liaison, Board Services/x 4183

Governance Committee

1055 W. 7th Street, 10th Floor

Los Angeles, CA 90017

MEETS AS NEEDED

Hector De La Torre, Chairperson Hilda Perez Sheryl Spiller Staff Contact: Malou Balones Committee Liaison, Board Services/x 4183

Service Agreement Committee

1055 W. 7th Street, 10th Floor


Hector De La Torre, Chairperson Louise McCarthy Hilda Perez Honorable Hilda L. Solis

35




MEETING DAY, TIME,

& LOCATION

MEETING DATES

MEMBERS

MEETS AS NEEDED

Sheryl Spiller Staff Contact Malou Balones Committee Liaison, Board Services/x 4183

Audit Committee 1055 W. 7th Street, 10th Floor


MEETS AS NEEDED

Alexander K. Li, MD, Chairperson Hector De La Torre Staff Contact Malou Balones Committee Liaison, Board Services, x 4183

36




MEETING DAY, TIME,

& LOCATION

MEETING DATES

MEMBERS

L.A. Care Community

Health

Meets Annually or as needed


CA 90017


L.A. Care Joint Powers Authority

Meets Quarterly or as needed


CA 90017


37




Public Advisory Committees MEETING DAY,

TIME, & LOCATION

MEETING DATES

STAFF CONTACT

Children’s Health Consultant Advisory

Committee General Meeting

3rd Tuesday of every other month

8:30 AM (for approximately 2 hours)

1055 W. 7th Street,


November 15 Lyndee Knox, PhD, Chairperson Staff Contact: Jennifer Carabali Committee Liaison, Board Services/x 4184

Executive Community

Advisory Committee

2nd Wednesday of the month


1055 W. 7th Street,


November 9 December 14

Elda Sevilla, Chairperson Staff Contact: Idalia Chitica, Community Outreach & Education, Ext. 4420

Technical Advisory Committee

4th Thursdays every other month


1055 W. 7th Street,


November 17

Placeholder meeting dates. This

Committee is under restructure.

Chairperson to be elected Staff Contact: Jennifer Carabali Committee Liaison, Board Services/x 4184

38




REGIONAL COMMUNITY ADVISORY COMMITTEES

REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Region 1 Antelope Valley

3rd Friday of every other month

10:00 AM (for approximately 2-1/2 hours) Chimbole Cultural Center 38350 N. Sierra Highway

Palmdale, CA 93550 (661) 267-5656

December 16 Adela Guadarrama, Chairperson Staff Contact: Courtney Nicholas Community Outreach & Education, Ext. 6583

Region 2 San Fernando

Valley

3rd Monday of every other month

10:00 AM (for approximately 2-1/2 hours)

Family Resource Center-Pacoima

10807 San Fernando Road Pacoima, CA 91331

(844) 858-9942

December 19

Ana Rodriguez, Chairperson Staff Contact: Courtney Nicholas Community Outreach & Education, Ext. 6583

Region 3 Alhambra,

Pasadena and Foothill



Rosemead Center 3936 N. Muscatel Avenue,

Room 3 Rosemead, CA 91770

(626) 569-2160

December 13*

*Will meet the 2nd Tuesday of the month

Cynthia Conteas-Wood, Chairperson Staff Contact: Kristina Chung Community Outreach & Education, Ext. 5139

Region 4 Hollywood-

Wilshire, Central L.A. and Glendale


9:00 AM (for approximately 2-1/2 hours) Hope Street Family Center 1600 Hope Street, Rm 305

Los Angeles, CA 90015 (213) 742-6385

November 15 Michael Shelton, Chairperson Staff Contact: Kristina Chung Community Outreach & Education, Ext. 5139

39




REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Region 5 Culver City, Venice,

Santa Monica, Malibu, Westchester

3rd Monday of every other month 2:00 PM

(for approximately 2-1/2 hours) Veterans Memorial Building

Garden Room 4117 Overland Avenue Culver City, CA 90230

(310) 253-6625

December 19

Maria Sanchez, Chairperson Staff Contact: Martin Vicente Community Outreach & Education, x 4423

Region 6 Compton,

Inglewood, Watts, Gardena,

Hawthorne

3rd Thursday of every other month

3:00 PM (for approximately 2-1/2 hours) Saint John’s Well Child &

Family Center 808 W. 58th Street

Los Angeles, CA 90037 (323) 541-1600

December 15

Andria McFerson, Chairperson Staff Contact: Frank Meza Community Outreach & Education, x 4239

Region 7 Huntington Park,

Bellflower, Norwalk, Cudahy


4:30 PM (for approximately 2-1/2 hours)

Old Timers Foundation Family Center

3355 E. Gage Avenue Huntington Park, CA 90255

(323) 582-6090

November 17 Fatima Vasquez, Chairperson Staff Contact: Frank Meza Community Outreach & Education, x 4239

Region 8 Carson, Torrance,

San Pedro, Wilmington

3rd Friday of every other month


Harbor View Place 326 King Ave.

Wilmington, CA 90744 (310) 241-6861

November 18

Maria Montes – Chairperson Staff Contact: Frank Meza Community Outreach & Education, x 4239

40




REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Region 9 Long Beach

3rd Monday of every other month


Miller Family Health Education Center

3820 Cherry Avenue Long Beach, CA 90807

(562) 570-7987

November 21

Christina Deh-Lee, Chairperson Staff Contact: Kristina Chung Community Outreach & Education, Ext. 5139

Region 10 East Los Angeles,

Whittier and Highland Park


1:00 PM (for approximately 2-1/2 hours) Monseñor Oscar Romero

Clinic 2032 Marengo Street

Los Angeles, CA 90033 (323) 780-6336

December 15 Leticia Navarro, Chairperson Staff Contact: Martin Vicente, Community Outreach & Education, Ext. 4423

Region 11 Pomona and El

Monte

3rd Thursday of every other Month


dA Center for the Arts 252 D South Main Street

Pomona, CA 91766 (909) 397-9716

November 17 Lluvia Salazar, Chairperson Staff Contact: Martin Vicente, Community Outreach & Education, Ext. 4423

41




COORDINATED CARE INITIATIVE (CCI) CONSUMER COUNCIL

REGION

MEETING DAY, TIME,

& LOCATION

MEETING

DATE

STAFF CONTACT

Area 1 Antelope Valley

4th Tuesday of every other month

10:00 AM (for approximately 2-1/2 hours) Antelope Valley Partners for

Health 44226 10th Street West Lancaster, CA 93534

(661) 267-5656

November 14

*Will meet the 3rd Tuesday of the month

Demetria Saffore, Chairperson Staff Contact: Mariah Walton Community Outreach & Education, Ext. 5956

Area 2 San Fernando

Valley

4th Wednesday of every other month


Family Resource Center-Pacoima

10807 San Fernando Road Pacoima, CA 91331

(877) 287-6290

November 15*

*Will meet the 3rd Wednesday of the

month

Wilma Ballew, Chairperson Staff Contact: Mariah Walton Community Outreach & Education, Ext. 5956

Area 3 South Los Angeles

4th Wednesday of every other month

10:00 AM (for approximately 2-1/2 hours) Inglewood Family Resource

Center 3111 W. Century Boulevard,

Suite 100 Inglewood, CA 90303

(310) 330-3130

December 21*

*Will meet the 3rd Wednesday of the

month

Brenda White, Chairperson Staff Contact: Susan Ma Community Outreach & Education, Ext. 4586

Area 4 Long Beach

4th Tuesday of every other month 1:00 PM

(for approximately 2-1/2 hours) Mark Twain Branch Library

1325 E. Anaheim Street Long Beach, CA 90813

(562) 570-1046

December 20*

*Will meet the 3rd Tuesday of the month

Neisma Istrefi, Chairperson Staff Contact: Susan Ma Community Outreach & Education, Ext. 4586

42

2017 Draft Board and Committee Meeting schedule Regular meeting schedule according to the dates and times below:

BoG: Board of Governors, meets at 2:00 for approximately 3 hours, and BoG meets all day in September for strategic discussion

C&Q: Compliance and Quality Committee, meets at 2:00 p.m. for approximately 2 hours Exec: Executive Committee meets at 2:00 p.m. for approximately 2 hours

F&B: Finance & Budget Committee meets at 1:00 p.m. for approximately 1 hour CHCAC: Children’s Health Consultant Advisory Committee meets at 8:30 a.m. for approximately 2 hours

ECAC: Executive Community Advisory Committee meets at 10:00 a.m. for approximately 2 hours Technical Advisory Committee is currently being restructured and there are no scheduled meetings

JPA and LACH: Joint Powers Authority and L.A. Care Community Health Plan meet as needed concurrently with a scheduled Board of Governors meeting

Meetings are generally held at 1055 West 7th Street, 10th Floor, Los Angeles, CA 90017

unless a different address is posted on the meeting agenda.

January 2017 No BoG meeting 1/11 - ECAC 1/17 – CHCAC 1/19 – C&Q TBD - Audit 1/25 –F&B, Exec TBD – TAC

February 2017 2/2 – BoG 2/8 - ECAC 2/22 –F&B, Exec

March 2017 3/2 BoG (place holder) 3/8 - ECAC 3/14 - CHCAC 3/16 - C&Q 3/22 – F&B, Exec TBD – TAC, GOV

April 2017 4/6 – BoG 4/12 - ECAC 4/26 – F&B, Exec

May 2017 5/4 – BoG 5/10 - ECAC 5/16 – CHCAC 5/18 – C&Q 5/24 – F&B, Exec TBD – TAC

June 2017 6/1 – BOG (offsite) 6/14 - ECAC 6/21 – F&B, Exec

July 2017 7/6 – BoG 7/12 - ECAC 7/18 - CHCAC 7/20 – C&Q 7/26 – F&B, Exec TBD – TAC

August 2017 No meetings

September 2017 9/7 – BoG (all day retreat) 9/13 - ECAC 9/19 - CHCAC 9/21 - C&Q 9/27 - F&B, Exec TBD – TAC, GOV

October 2017 10/5 BoG (place holder) 10/11 - ECAC 10/25 - F&B, Exec

November 2017 11/2 – BoG 11/8 - ECAC 11/14 - CHCAC 11/15 – F&B, Exec 11/16– C&Q TBD – TAC

December 2017 12/7 – BoG 12/13 – ECAC

43

Board of Governors

MOTION SUMMARY

Date: November 3, 2016 Motion No. EXE 100A.1116

Committee: Executive Chairperson: Mark Gamble

Issue: Ratification of the CEOs execution of a three year [2017-19] agreement with Covered California,

the California Health Benefit Exchange, for L.A. Care to participate in the Exchange as a Qualified Health Plan through our L.A. Care Covered individual coverage program.

New Contract Amendment Sole Source RFP/RFQ was conducted

Background: L.A. Care staff requests ratification of the CEO’s execution of a contract with Covered

California, the California Health Benefit Exchange (Exchange) for L.A. Care to participate in the Exchange as a Qualified Health Plan for the program years 2017 through 2019. L.A. Care has participated in the Exchange as a Qualified Health Plan (QHP) since 2014. This Agreement renews L.A. Care’s participation for three years.

Executive Committee approved the CEO’s use of his discretionary authority to enter into and execute the Agreement, and to take any necessary actions to execute any necessary documents relating to the Agreement at the September 28, 2016 meeting (Motion EXE 100.0916).

All Qualified Health Plans are held to the same contractual standards and must adhere to the requirements outlined in the Agreement. With the change from a one year to a three year Agreement and QHP recertification process, the timeframes for implementation of and adherence to the requirements range from one to three years. The main areas of focus and accountability in the Agreement are on quality improvement including “triple aim” metrics, network adequacy, monitoring disease management programs and vulnerable populations for adequate utilization, and pay for performance strategies for physician providers and hospitals. The deadline for providing an executed agreement was September 30, 2016. Following approval of this motion by the Executive Committee, staff will seek ratification at the November 3, 2016 Board meeting.

Member Impact: L.A. Care members will benefit from the continued availability of L.A. Care as a

QHP choice on the Exchange. Members who lose Medi-Cal eligibility can enroll through the Exchange and continue to receive care through the L.A. Care provider network.

Budget Impact: Sufficient funds are budgeted in the Commercial and Group Product Management

budget for this fiscal year. Participation Fees are paid to the Exchange on a per-member/per-month basis at 4% of premium.

Motion: To ratify the CEO’s execution of a contract with Covered California, the California Health Benefit Exchange, for L.A. Care to participate as a Qualified Health Plan for the program years 2017 through 2019.

44

Board of Governors

MOTION SUMMARY

Date: November 3, 2016 Motion No. EXE 101.1116

Committee: Executive

Chairperson: Mark Gamble

Issue: Approval of 2017 schedule of meetings for the Board of Governors and Committees.

Background: Seeking to improve efficiency, L.A. Care’s Board scheduled ten meetings in 2016, but two of those meetings were tentatively scheduled. Those two meetings ultimately were cancelled, allowing time that would have been spent in preparing and attending those Board meetings to be used for other critical needs. Feedback from the schedule has been positive. The schedule did not cause any material delay in a Board action. The chart below shows the frequency of meetings held since 2011.

Meetings held per calendar year

Meeting # Meetings 2016 2015 2014 2013 2012 2011

Board of Governors 8* 14 12 10 10 10

Executive 10* 10 12 8 10 11

Finance & Budget 10* 11 10 8 8 10


4* 6 5

5

5

7

*2016 meeting frequency is projected

The following is recommended:

Schedule eight Board meetings in 2017, with two additional meetings tentatively scheduled in March and October.

The Finance & Budget and Executive Committees would also meet ten times annually, although with major milestones achieved in the core data system project, we anticipate that meeting frequency of the Executive and Finance & Budget committees may be reduced in the future. In 2017, the proposed agenda for scheduled meetings will be reviewed to determine if a meeting could be cancelled.

The Compliance & Quality Committee would continue to schedule six meetings annually, and will hold the scheduled meeting based on the actual contents of the meeting agenda.

The Governance Committee, Services Agreement Committee and any other committees would meet as needed.

The proposed changes are consistent with L.A. Care’s enabling statute (California Welfare & Institutions Code Section 14087) which requires six board meetings per year, and the proposed meeting frequency is in line with other public health plans in California.

Member Impact: Public input is welcome at the Board and Committee meetings.

Budget Impact: None.

Motion: To approve the 2017 Board of Governors meeting schedule as submitted.

45

2017 Draft Board and Committee Meeting schedule Regular meeting schedule according to the dates and times below:

BoG: Board of Governors, meets at 2:00 for approximately 3 hours, and BoG meets all day in September for strategic discussion

C&Q: Compliance and Quality Committee, meets at 2:00 p.m. for approximately 2 hours Exec: Executive Committee meets at 2:00 p.m. for approximately 2 hours

F&B: Finance & Budget Committee meets at 1:00 p.m. for approximately 1 hour CHCAC: Children’s Health Consultant Advisory Committee meets at 8:30 a.m. for approximately 2 hours

ECAC: Executive Community Advisory Committee meets at 10:00 a.m. for approximately 2 hours Technical Advisory Committee is currently being restructured and there are no scheduled meetings

JPA and LACH: Joint Powers Authority and L.A. Care Community Health Plan meet as needed concurrently with a scheduled Board of Governors meeting

Meetings are generally held at 1055 West 7th Street, 10th Floor, Los Angeles, CA 90017

unless a different address is posted on the meeting agenda.

January 2017 No BoG meeting 1/11 - ECAC 1/17 – CHCAC 1/19 – C&Q TBD - Audit 1/25 –F&B, Exec TBD – TAC

February 2017 2/2 – BoG 2/8 - ECAC 2/22 –F&B, Exec

March 2017 3/2 BoG (place holder) 3/8 - ECAC 3/14 - CHCAC 3/16 - C&Q 3/22 – F&B, Exec TBD – TAC, GOV

April 2017 4/6 – BoG 4/12 - ECAC 4/26 – F&B, Exec

May 2017 5/4 – BoG 5/10 - ECAC 5/16 – CHCAC 5/18 – C&Q 5/24 – F&B, Exec TBD – TAC

June 2017 6/1 – BOG (offsite) 6/14 - ECAC 6/21 – F&B, Exec

July 2017 7/6 – BoG 7/12 - ECAC 7/18 - CHCAC 7/20 – C&Q 7/26 – F&B, Exec TBD – TAC

August 2017 No meetings

September 2017 9/7 – BoG (all day retreat) 9/13 - ECAC 9/19 - CHCAC 9/21 - C&Q 9/27 - F&B, Exec TBD – TAC, GOV

October 2017 10/5 BoG (place holder) 10/11 - ECAC 10/25 - F&B, Exec

November 2017 11/2 – BoG 11/8 - ECAC 11/14 - CHCAC 11/15 – F&B, Exec 11/16– C&Q TBD – TAC

December 2017 12/7 – BoG 12/13 – ECAC

46

Board of Governors

MOTION SUMMARY

Date: November 3, 2016 Motion No. FIN 100.1116

Committee: Finance & Budget

Chairperson: Michael Rembis

Issue: Accept the Investment Report for the quarter ended September 30, 2016.

Background:

Budget Impact:

Motion: To accept the Quarterly Investment Report for the quarter ending September 30, 2016, as submitted.

47

DATE: October 14, 2016

TO: Finance & Budget Committee

FROM: Marie Montgomery, Chief Financial Officer

SUBJECT: Quarterly Investment Report – September 2016 As of September 30, 2016, L.A. Care's combined investments market value was approximately $2.56 billion. Interest income, realized and unrealized gains and losses was around $4 million for the quarter. Based upon an independent compliance review performed at the end of the quarter, LA Care is in compliance with its investment policy guidelines pursuant to the California Government Code and the California Insurance Code. At quarter end $2.43 billion (or approx. 95% of total investments) were under the management of Payden and Rygel, an external professional asset management firm. The holdings of these invested funds were as follows:

U.S. Agency Securities 42% U.S. Treasury Securities 19% Corporate bonds 17% Asset Backed and Mortgage Backed Securities 13% Other 9% 100% Average credit quality: AA Average duration: 0.4 years Average yield to maturity: 0.7%

These funds are managed as two separate portfolios by Payden & Rygel based on investment style – 1) the short-term portfolio and 2) the extended term portfolio. The short-term portfolio had approximately $2.35 billion invested as of September 30, 2016, and returned 0.17% for the quarter. The comparative short term money market index used as a benchmark returned 0.03% for the quarter. The extended term portfolio had approximately $84.6 million invested and returned 0.14% for the quarter. The comparative 1-year Treasury note used as a benchmark had a return of 0.06%.

48

LA Care also invests with 2 government pooled investment funds, the Local Agency Investment Fund (LAIF) and the Los Angeles County Pooled Investment Fund (LACPIF). L.A. Care’s quarter ending investment balances were $64 million in LAIF and $70 million in LACPIF. The Local Agency Investment Fund (LAIF) yielded approximately 0.61% annualized for the quarter. The fund’s total portfolio market value as of September 30, 2016, was $68.3 billion, with a weighted average maturity of 165 days. LAIF is administered and overseen by the State Treasurer’s office. The fund’s investment holdings as of September 30, 2016, were as follows:

U.S. Treasury Securities 46%CD’s and bank notes 20%Agencies 14%Commercial paper 11%Time deposits 8%Loans 1% 100%

The Los Angeles County Pooled Investment Fund (LACPIF) yielded approximately 0.95% and 0.96% annualized for the months of July and August, respectively. (September data has not been released yet by LACPIF.) The fund’s market value as of August 31, 2016, was $24.0 billion, with a weighted average maturity of 613 days. LACPIF is administered and overseen by the Los Angeles County Treasurer. The fund’s most recent published investment holdings (August 31, 2016) were as follows:

U.S. Govt. and Agency Securities 61%Commercial paper 25%CD’s 14% 100%

Other related items: The amount placed with the Bank of America Treasury Reserve Money Market Fund, the daily money market fund sweep account with B of A, as of 9/30/2016 was $71.3 million.

49

Page | 1 Wilshire Associates Inc.

L.A Care Health Plan

Quarterly Investment Compliance Report

July 1, 2016 through September 30, 2016

OVERVIEW

The California Government Code requires the L.A. Care Treasurer to submit a quarterly report detailing its investment activity for the period. This investment report covers the three-month period from July 1, 2016 through September 30, 2016.

PAYDEN & RYGEL PORTFOLIO SUMMARY

As of September 30, 2016 the market values of the portfolios managed by Payden & Rygel are as follows:

PORTFOLIOS PAYDEN & RYGEL

CASH PORTFOLIO #2365 $2,345,662,177

LOW DURATION PORTFOLIO #2367 $84,589,167

TOTAL COMBINED PORTFOLIO $2,430,251,344

COMPLIANCE WITH ANNUAL INVESTMENT POLICY

Based on an independent compliance review of Payden & Rygel portfolios performed by Wilshire Associates (using 3rd party custodian data – BOA), L.A. Care is in compliance with the investment guidelines pursuant to the California Government Code and California Insurance Code. The Payden & Rygel investment reports for L.A. Care are available upon request. LA Care has invested funds in California’s Local Agency Investment Fund (LAIF) and the Los Angeles County Treasurer’s Pooled Investment Fund (LACPIF). In a LAIF statement dated October 3, 2016, the statement shows a September 30, 2016 balance of $64,146,855.78 with no accrued interest reflected. In the LACPIF statement dated October 6, 2016, the LACPIF September 30, 2016 balance was $70,121,091.54. The LACPIF balance does not reflect accrued interest. In the BAML report as of September 30, 2016, LA Care had a balance of $71,303,817 in the BAML Treasury money market sweep account.

50


California Government Code Compliance Verification Detail as of September 30, 2016

Maximum Permitted Maturity

Actual Permitted Maturity

Compliance #2365 #2367 #2365 #2367

Enhanced Cash

Low Duration

Enhanced Cash

Low Duration

US Treasuries 5 Years 5 Years 2.45 Years 2.79 Years YES

Federal Agencies 5 Years 5 Years 2.72 Years 2.84 Years YES

State of CA 5 Years 5 Years 1.62 Years 2.34 Years YES

Negotiable CDs 270 Days 270 Days 251 Days 251 Days YES

MTNs 5 Years 5 Years 3.02 Years 3.02 Years YES

Money Market and Mutual Funds NA NA 1 Day 1 Day YES

Mortgage and Asset Backed Securities 5 Years 5 Years 4.1 Years 4.1 Years YES

51


California Insurance Code Compliance Verification Detail as of September 30, 2016 Compliance Verification

Combined #2365 and #2367 Portfolios as of September 30, 2016

Govt. Code

Insur. Code

Sections

Section 1170-1182

53601 1191-1202

US Treasuries YES (1)(2)(3) YES (4)(5) Federal Agencies YES (1)(2)(3) YES (4)(5) State of CA YES (1)(2)(3) YES (4)(5) Negotiable CDs YES (1)(2)(3) YES (4)(5) MTNs YES (1)*(2)(3) YES (4)(5) Money Market and Mutual Funds YES (1)(2)(3) YES (4)(5) Mortgage and Asset Backed Securities YES (1)(2)(3) YES (4)(5)

* JP Morgan was approved to be held (Moody’s BAA) (This information was available in Payden reports)

(1) Approved security (2) Meets minimum rating (3) Meets diversification maximums (4) NAIC High Grade Obligations (5) Authorized by Insurance Code Sections 1174 and 1194.5 (6) Authorized by Insurance Code Section 1196.1 Based on an independent review of Payden & Rygel’s month-end portfolio performed by Wilshire Associate’s, L.A. Care’s portfolios were in compliance with its Annual Investment Guidelines and the California Government Code and the Insurance Code sections noted above. Also based on the review of the LAIF and LACPIF September 2016 reports and their respective investment guidelines, the LAIF and LACPIF investments are in compliance with the Annual Investment Policy and the California Government Code and the California Insurance Code.

52


MARKET COMMENTARY Economic Highlights

- GDP: Real GDP growth, while weaker than last year, was positive for the second quarter,

expanding 1.4% annualized. The main drag was in private investment, which fell for the third

quarter in a row. Businesses allowed inventories to actually shrink during the quarter, an event

that has not appeared in the data since 2011. The drop in private inventories detracted more than

1% from growth (-1.16%). Consumer spending continues to be the main point of strength in the

economy, growing by 4% annualized for the quarter. (chart below has 1H GDP) Source: Dept. of

Commerce (BEA)

- Interest Rates: Rates moved higher across most maturities during the quarter although no

change in the shortest end led to an uncharacteristically steep short-end of the curve. The 10-year

Treasury yield ended the quarter up 11 basis points, finishing at 1.60%. The 10- Year yield slowly

trended upward during most of the quarter but is still lower than where it stood on the eve of the

‘Brexit’ vote. Source: US Treasury

- Inflation: Consumer prices continue to move higher in 2016 but at a modest pace. The Consumer

Price Index was up 0.4% for the three months ending August and just 1.1% for the past 12

months. The 10-year breakeven inflation rate closed the third quarter at 1.60%, up from 1.40% last

quarter, and has been below 2% since September 2014. Source: Dept. of Labor (BLS), US Treasury

- Employment: Jobs growth has slowed during 2016 versus last year although total nonfarm

employment increased an average of 232,000 jobs per month during the three months ending

August 2016. However, the unemployment rate ticked higher to 4.9% as the labor force grew.

Source: Dept. of Labor (BLS)

Fixed Income Markets U.S.

Treasury yields were on a slow and steady rise for most of the third quarter. The bellwether 10-year

Treasury yield reached a historic low of 1.37% in early July before reversing course and climbing to end

the quarter at 1.60%. The Federal Open Market Committee decided to leave the overnight rate

unchanged at their September meeting, the sixth consecutive meeting with no interest rate increase.

Various market data and surveys express an expectation that the Committee will raise rates one more

time in 2016, at their December meeting. Credit spreads tightened during the quarter in both investment

grade and high yield bonds. Sovereign bond yields fell across much of Europe but ticked higher in

Japan.

53

QUARTERLY PORTFOLIO REVIEWQUARTERLY PORTFOLIO REVIEW

PAYDEN.COM

LOS ANGELES | BOSTON | LONDON | PARIS

L.A. Care Health Plan

3rd Quarter 2016

54

October 2016

Dear Client,

As we look to the closing quarter of 2016, I am reminded of twelve months ago when we were wondering whether the Federal Reserve would raise rates by the end of the year. As we all know, they increased the Federal Funds rate 0.25% at their December 2015 meeting. In the ensuing months, the U.S. economy has grown, job growth is on the right track and generally there are positive forces at work. On a global basis, there has been little change: sluggish economic growth and low or declining inflation.

What should our focus be at this time? We would like to refer you to the chart on the opposite page, which takes the four major central banks in the world and shows the growth of their balance sheets. Central bank policy used to focus on short-term interest rates, but more recently they have tried to influence economic growth and the direction of inflation by growing their balance sheets. For example, the Bank of Japan’s balance sheet is now as large as the Federal Reserve’s. Such action has had little effect on growth or inflation. But it has forced the rest of the world to look to the US bond markets for attractive buying opportunities. This has been a beneficial trend for our clients.

We find ourselves today in the same place we were last year at this time: asking when will the Federal Reserve raise rates again? December is a distinct possibility. But our expectation is the next rate hike will only have a minor effect on the short term markets and little effect on inflation, nor is it likely to inhibit the continued economic growth of the US. We believe that inflation will eventually settle in the 2-3% range and that there will be moderate growth over the next twelve months. Our focus on diversification, credit quality and liquidity will provide your portfolio with the tools to weather any unexpected surprises.

Payden & Rygel recently celebrated our 33rd anniversary. During this time of global challenges, we want to assure you that we remain independent, with the same ownership and governance since inception. Our team-oriented culture has one focus and that is to meet the needs and exceed the expectations of our clients.

My very best wishes go out to you and your family for the remainder of the year.

Joan A. Payden

President & CEO

LETTER FROM THE CEO

55

Payden&Rygel 333 S. Grand Avenue Los Angeles, California 90071 (213) 625-1900 www.payden.com

Absolute ReturnAbsolute Return

L.A. Care Health Plan Combined PortfolioPortfolio Review – 3rd Quarter 2016

Sector Allocation Maturity Distribution

PORTFOLIO RETURNSPeriods over one year annualized

Market Value $2,430,251,344Average Credit Quality AAAverage Duration 0.42 yearsAverage Yield to Maturity 0.7%

PORTFOLIO CHARACTERISTICS (As of 9/30/2016)

Market Value PercentCash $60,957,099 2.5%Money Market 164,089,356 6.8%Treasury 451,762,946 18.6%Agency 1,013,677,120 41.7%Credit 421,116,895 17.3%ABS/MBS 304,840,183 12.5%Municipal 13,807,745 0.6%

$2,430,251,344 100.0%

Percent Market Value<90 day 57.9% $1,406,583,89090 days-1 year 27.0% 656,411,7451 - 2 years 13.2% 320,920,3682 - 5 years 1.9% 46,335,341

100.0% $2,430,251,344

Periods ended 9/30/16

* iMoneyNet Institutional Money Market Yield Average** Merrill Lynch 1-3 Yr Treasury Index from inception to 3/31/2010; Merrill Lynch 1-Yr Treasury Index thereafter.

3rd Qtr2016 YTD

Trailing1 Yr

Trailing 3 Yr

Short Term Portfolio 0.17% 0.55% 0.55% 0.36%

Money Market Index* 0.03% 0.08% 0.08% 0.04%

Extended Term Portfolio 0.14% 0.85% 0.83% 0.61%

1-year Treasury Note** 0.06% 0.71% 0.54% 0.35%

Combined Portfolio 0.16% 0.56% 0.56% 0.39%

56


L.A. Care Health Plan Short Term PortfolioPortfolio Review – 3rd Quarter 2016



Market Value $2,345,662,177Average Credit Quality AAAverage Duration 0.4 yearsAverage Yield to Maturity 0.7%


Market Value PercentCash $60,736,630 2.6%Money Market 157,457,026 6.7%Treasury 435,293,631 18.6%Agency 993,287,216 42.3%Credit 397,965,516 17.0%ABS/MBS 289,717,260 12.4%Municipal 11,204,898 0.5%

$2,345,662,177 100.0%

Percent Market Value<90 day 58.8% $1,379,759,97690 days-1 year 27.0% 633,697,7801 - 2 years 12.6% 294,746,0002 - 5 years 1.6% 37,458,421

100.0% $2,345,662,177


* iMoneyNet Institutional Money Market Average

3rd Qtr2016 YTD

Trailing 1 Yr

Trailing 3 Yrs

Short Term Portfolio 0.17% 0.55% 0.55% 0.36%

Money Market Index* 0.03% 0.08% 0.08% 0.04%

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Portfolio Review and Market Update – 3rd Quarter 2016

MARKET THEMES

STRATEGY

INTEREST RATES

Treasury yields across the curve were higher. One- and two-year Treasury maturities increased by 16 and 18 basis points and ended the quarter at 0.58% and 0.76%, respectively. The front end of the US Treasury curve steepened with the yield difference between one- and two-year maturities ending at 0.18%.

Longer-maturity corporate holdings contributed to performance as the price pressure from interest rate movement was more than offset by the income generated.

SECTORS

Credit exposure was beneficial to performance. The yield premium between corporates andtreasuries compressed by seven basis points.

High-quality ABS spreads tightened and contributed positively to performance.

The MBS allocation was additive to performance as strong demand continues to shrink theyield difference between government securities and MBS.

The third quarter was marked by low volatility as investors waited for new central bank action. Post-Brexit fears remained subdued, and investors continued their search for positive yield, especially given negative rates in several developed markets. US Treasury yields migrated higher in anticipation of potential movement by the Federal Reserve. Generally positive domestic employment and economic data suggested a hike could occur, but the Fed seemed focused on inflation and global factors. Continued demand for yield drove spreads tighter in non-government sectors during the period.

The portfolio holds a diversified mix of credit sectors for income generation.

Corporate bond yield premiums remain attractive, and we expect to maintain our exposurethrough the purchase of bonds in the new issue market.

We maintained our allocation to high-quality asset-backed and mortgage-backed securities(ABS/MBS) with short duration profiles for their yield and diversification benefits.

58


L.A. Care Health Plan Extended Term PortfolioPortfolio Review – 3rd Quarter 2016



Market Value $84,589,167Average Credit Quality AAAverage Duration 0.8 yearsAverage Yield to Maturity 0.9%


Market Value PercentCash $220,470 0.3%Money Market 6,632,330 7.8%Treasury 16,469,316 19.5%Agency 20,389,903 24.1%Credit 23,151,379 27.4%ABS/MBS 15,122,922 17.9%Municipal 2,602,847 3.1%

$84,589,167 100.0%

Percent Market Value<90 day 31.7% $26,823,91490 days-1 year 26.9% 22,713,9651 - 2 years 30.9% 26,174,3682 - 5 years 10.5% 8,876,920

100.0% $84,589,167


* Merrill Lynch 1-3 Yr Treasury Index from inception to 3/31/2010; Merrill Lynch 1-Yr Treasury Index thereafter.

3rd Qtr 2016 YTDTrailing

1 YrTrailing

3 Yrs

Extended Term Portfolio 0.14% 0.85% 0.83% 0.61%

1-year Treasury Note* 0.06% 0.71% 0.54% 0.35%

59


Portfolio Review and Market Update – 3rd Quarter 2016

MARKET THEMES

STRATEGY

The portfolio holds a diversified mix of credit sectors for income generation.

Corporate bond yield premiums remain attractive, and we expect to maintain our exposurethrough the purchase of bonds in the new issue market.

We maintained our allocation to high-quality asset-backed and mortgage-backed securities(ABS/MBS) with short duration profiles for their yield and diversification benefits.

INTEREST RATES

Treasury yields across the curve were higher. One- and two-year Treasury maturities increased by 16 and 18 basis points and ended the quarter at 0.58% and 0.76%, respectively. The front end of the US Treasury curve steepened with the yield difference between one- and two-year maturities ending at 0.18%.

Longer-maturity corporate holdings contributed to performance as the price pressure from interest rate movement was more than offset by the income generated.

SECTORS

Credit exposure was beneficial to performance. The yield premium between corporates andtreasuries compressed by seven basis points.

High-quality ABS spreads tightened and contributed positively to performance.

The MBS allocation was additive to performance as strong demand continues to shrink theyield difference between government securities and MBS.

The third quarter was marked by low volatility as investors waited for new central bank action. Post-Brexit fears remained subdued, and investors continued their search for positive yield, especially given negative rates in several developed markets. US Treasury yields migrated higher in anticipation of potential movement by the Federal Reserve. Generally positive domestic employment and economic data suggested a hike could occur, but the Fed seemed focused on inflation and global factors. Continued demand for yield drove spreads tighter in non-government sectors during the period.

60

The Ever-Expanding Balance Sheets

MARKET PERSPECTIVE

$0

$1

$2

$3

$4

$5

$6

'04 '06 '08 '10 '12 '14 '16

Federal Reserve

Bank of Japan

European Central Bank

People's Bank of China

-$0.5

$0.0

$0.5

$1.0

$1.5

$2.0

BoJ ECB Fed PBoC

$1.94

$1.11

-$0.02 -$0.45

$0

$1

$2

$3

$4

$5

$6

'04 '06 '08 '10 '12 '14 '16

Federal Reserve

Bank of Japan

European Central Bank

People's Bank of China

-$0.5

$0.0

$0.5

$1.0

$1.5

$2.0

BoJ ECB Fed PBoC

$1.94

$1.11

-$0.02 -$0.45

Central banks dominate the global financial landscape now more than ever. In the old days, few could name a central banker other than Alan Greenspan. Today, Yellen, Draghi, Kuroda and Xiaochuan roll off the tongues of traders like the names of their favorite quarterbacks or midfielders. And it’s not merely due to more talkative central bankers. Ever since the global financial crisis, these monetary mavens control massive balance sheets. The chart to the right shows assets held by the four main central banks: the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BoJ) and the People’s Bank of China (PBoC). These four behemoths collectively hold $18.5 trillion in assets.

But it’s not just the size that matters–increases in two central bank balance sheets in particular have been key drivers of financial markets of late. Since the start of 2015, the BoJ balance sheet has ballooned by nearly $2 trillion, while the ECB’s balance sheet jumped by more than a trillion dollars. The result of central banks employing the world’s largest “buy-and-hold” portfolios? Asset prices near all-time highs and government bond yields near record lows, narrow credit spreads and low market volatility (buying assets and never selling or trading those assets reduces volatility, all else equal).

During the third quarter of 2016, the high volume of central bank asset purchases cast a spell of calm over financial markets. In the wake of low volatility, central banks are taking a moment to evaluate their strategies and pause from further increasing their purchases. In our view, both the ECB and BoJ seem likely to do more in the months ahead, since both central banks are failing on their inflation mandates. With this backdrop of monetary accommodation globally, maybe December provides an opportune time for the Fed to move toward slightly tighter money?

Central Bank Holdings Have Increased Over the Past Decade Balance Sheet Asset Holdings, USD Trillions

The BoJ and ECB Are Increasing Asset PurchasesChange in Asset Holdings Since January 2015, USD Trillions

Source: Federal Reserve, European Central Bank, People’s Bank of China, Bank of Japan, Bloomberg

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US DOMICILED MUTUAL FUNDS

DUBLIN DOMICILED UCITS FUNDS

CASH BALANCEPayden/Kravitz Cash Balance Plan Fund

EQUITYEquity Income Fund

GLOBAL FIXED INCOMEEmerging Markets Bond FundEmerging Markets Corporate Bond FundEmerging Markets Local Bond FundGlobal Fixed Income Fund Global Low Duration Fund

TAX-EXEMPT FIXED INCOMECalifornia Municipal Income Fund

US FIXED INCOMEAbsolute Return Bond FundCash Reserves Money Market FundCore Bond FundCorporate Bond FundFloating Rate FundGNMA FundHigh Income FundLimited Maturity FundLow Duration FundStrategic Income FundUS Government Fund

EQUITYWorld Equity Fund

FIXED INCOMEAbsolute Return Bond FundGlobal Emerging Markets Bond FundGlobal Emerging Markets Corporate Bond FundGlobal Government Bond Index FundGlobal High Yield Bond FundGlobal Inflation-Linked Bond Fund

Global Bond FundGlobal Short Bond FundSterling Corporate Bond Fund – Investment GradeUS Core Bond FundUSD Low Duration Credit Fund

LIQUIDITY FUNDSEuro Liquidity FundSterling Reserve FundUS Dollar Liquidity Fund

For more information about Payden & Rygel, contact us at a location listed below.

LOS ANGELES 333 South Grand Avenue Los Angeles, California 90071 213 625-1900

BOSTON 265 Franklin StreetBoston, Massachusetts 02110617 807-1990

LONDON1 Bartholomew LaneLondon EC2N 2AX United Kingdom+ 44 (0) 20-7621-3000

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PAYDEN.COM

LOS ANGELES | BOSTON | LONDON | PARIS

OVER 30 YEARS OF INSPIRINGC O N F I D E N C E W I T H A N UNWAVERING COMMITMENT TO OUR CLIENTS’ NEEDS.

62

Board of Governors

MOTION SUMMARY


Committee: Finance & Budget Chairperson: Michael Rembis

Issue: Amend the contract with Oracle America, Inc. (Oracle) for annual support and maintenance

services to L.A. Care’s Oracle software infrastructure.


Background: L.A. Care requests approval to amend a contract with Oracle in the amount of

$1,730,000 through November 10, 2017, for annual support and maintenance fees. L.A. Care has used software application licenses provided by Oracle since 1999 for member auto assignment, encounter data processing and repository, database for Enterprise Data Warehouse, and numerous other functions outside of the TriZetto System. A request for proposal (RFP) was not conducted, Oracle is considered a sole source vendor. Oracle’s database management application is a critical component of L.A. Care’s software infrastructure and requires specific support and maintenance that can only be provided by the expertise of the vendor.

Member Impact: This renewal directly impacts Member Support as Oracle applications are used

for member auto-assignment and encounter data processing.

Budget Impact: Sufficient funds are budgeted in the Information Technology department budget

for FY 2016-17. Additional funds will be requested in the FY 2017-18 budget.

Motion: To authorize staff to amend a contract with Oracle America, Inc. for

an amount not to exceed $1,730,000 through November 10, 2017 for annual support and maintenance services to L.A. Care’s Oracle software infrastructure.

63

Board of Governors

MOTION SUMMARY



Issue: Amend the current Unlimited License Agreement with Oracle America, Inc. (Oracle) to renew

License Support Services.


Background: L.A. Care staff requests approval to amend the Oracle Unlimited License Agreement

for $1,500,000 for the period November 10, 2016 to November 10, 2017. Oracle database licenses are a critical component of our technical infrastructure and are necessary for continued operations on our existing platform. Oracle supports L.A. Care’s transactional system for member auto assignment, encounter data processing and repository, database for Enterprise Data Warehouse and numerous other functions outside of the CORE TriZetto System. Under the current agreement, L.A. Care paid a one-time perpetual license fee that does not expire and covers all membership growth. The renewal of License Support Services is necessary for continued operations on the existing platform and for upgrade support to newer versions, as well as the addition of other application components to support identified business needs. A request for quote (RFQ) was not conducted as it is a sole source product only available through Oracle. Oracle has provided database management tools and support since 1999.

Member Impact: The Oracle renewal is necessary to effectively store and secure member data

across all lines of business to insure compliance with all regulatory agency requirements.

Budget Impact: Sufficient funds are budgeted in the Information Technology department for FY

2016-17. Additional funds will be requested for FY 2017-18.

Motion: To authorize staff to amend the Unlimited License Agreement with Oracle in the amount not to exceed $1,500,000 to renew software licenses for the period of November 10, 2016 to November 10, 2017.

64

Board of Governors

MOTION SUMMARY



Issue: Execute a contract with SunGard Availability Services to provide business continuity and

disaster recovery services.

New Contract Amendment Sole Source RFP/RFQ conducted

Background: L.A. Care staff requests approval to execute a contract with SunGard in an amount

not to exceed $670,000 from November 1, 2016 to October 31, 2019. SunGard is a leading service provider for Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) services for government, education, and healthcare clients throughout the United States. Regulatory compliance requires that L.A. Care have a BCP and DRP to enable the recovery and continuation of L.A Care’s vital technology infrastructure and systems in the event of a disaster (such as. power outage). SunGard will provide L.A Care with the following services:

Data and system recovery services, including a hot site data center, remote office space, voice communications, network services and support seven days a week, 24 hours a day.

Systems recovery support seven days per week, 24 hours a day.

Annual test services and support staff.

Dedicated space for L.A. Care staff to work in the event of the loss of use of the main building (up to 100 staff);

Increased network bandwidth at a reduced rate. Summary of Services and Fees:

Recovery Services $5,884 x 36 months $211,824.00

Managed Co-location Services $12,501 x 36 months $450,036.00

Managed Services One-Time Fee $ 5,900.00

Total $667,760.00

A request for proposal was conducted in 2013 and SunGard was re-selected due to its consistent low cost proposal, unique ability to provide business continuity and co-location recovery services, and successful 12-years relationship with L.A Care.

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Board of Governors

MOTION SUMMARY

Page 2 of 2

Member Impact: This motion will allow L.A. Care to establish a viable business continuity plan in

the event of a disaster, which insures that staff can effectively continue to support our membership during a major disaster.

Budget Impact: Sufficient funds are budgeted in the Information Technology budget for FY 2016-

17. Additional funds will be requested for FY 2017-18 and FY 2018-19.

Motion: To authorize staff to execute a contract with SunGard in an amount not to exceed $670,000 to provide Business Continuity and Disaster Recovery services for the period of November 1, 2016 to October 31, 2019.

66

Board of Governors

MOTION SUMMARY



Issue: Amend a contract with PCM-G to “true-up” L.A. Care’s annual Microsoft Licensing.


Background: L.A. Care staff requests approval to amend a contract with PCM-G in the amount of

$1,157,191.60 through May 31, 2018 (FIN 101.0415). L.A. Care currently has an enterprise agreement with Microsoft Corporation that provides a volume licensing program known as “Software Assurance”. This type of agreement enables the activation of Microsoft licensed products as they are needed and it provides L.A. Care with the most current software versions.

Under this agreement, L.A. Care must conduct an annual inventory of software deployments to account for any additional licenses acquired above the original number purchased; this is called a “true up”. Due to continual company growth, L.A. Care must true-up the items below to ensure Microsoft licensing compliance standards:

Office Professional Plus

Core Cal Client

Project Professional

Win Enterprise

Win Remote Desktop

This year’s renewal will be the second year in a three-year enterprise agreement.

Member Impact: Microsoft products are crucial for business continuity and are used company-wide

to conduct critical and daily functions that directly support L.A Care members and business partners.

Budget Impact: Sufficient funds are allocated in the Information Technology Department software

budget for FY 2016-17. Additional funds will be budgeted in the FY 2017-18 budget, as necessary.

Motion: To authorize staff to amend a contract with PCM-G in the amount of $1,157,191.60 to true-up Microsoft licensing usage through May 31, 2018.

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Board of Governors

MOTION SUMMARY



Issue: Execute a contract with a vendor not yet selected to procure equipment, installation, support

and maintenance services for Call Center / Member Services Technology Enhancements.


Background: L.A. Care staff requests approval to execute a contract with a vendor not yet selected

in an amount not to exceed $1,600,000, to upgrade from Packaged Contact Center Enterprise (PCCE) to Unified Contact Center Enterprise (UCCE) as a part of Call Center/Member Services Technology enhancements.

The Call Center/Member Services department serves as the main point of contact between L.A. Care, its members and provider base. As such it is imperative to put in place an infrastructure that can effectively facilitate call center requirements and customer service delivery. The project is intended to assist L.A. Care enhance communication with its members, meet the rising capacity for rapid growth and ensure compliance and production performance standards are met. The current suite, PCCE, is preconfigured to operate in in a specific way and does not include all functionality available. The enhanced system, UCCE, is flexible in how it can be configured and includes all functionality to allow for growth and expandability as needed, without having to do another major upgrade to meet organizational needs.

L.A. Care will conduct a competitive request for proposal (RFP) to select a vendor that will upgrade the technologies that directly support customer care.

Information Technology staff have gathered business requirements and are actively seeking pricing and proposals from the following vendors: Cameo, Insight, Dimension Data, eLoyalty Corporation, and Spanklink Communications Company. Based on preliminary research and proposals, this project is estimated to cost approximately $1,600,000 for a full upgrade from Packaged Contact Center Enterprise to Unified Contact Center Enterprise.

Member Impact: The enhancements provided by the vendor will integrate technologies, add tools,

and increase functionality to streamline operations and provide a comprehensive customer interaction network.

Budget Impact: Funds are allocated in the Information Technology Call Center Technology

strategic project for FY 2016-17.

Motion: To authorize staff to procure equipment, installation, and support and maintenance services to upgrade call center technology to Unified Contact Center Enterprise from a vendor yet to be named after a competitive selection process, in an amount not to exceed $1,600,000.

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Board of Governors

MOTION SUMMARY



Issue: Approval of Accounting & Financial Services Policy AFS-008 (Annual Investment Policy) and

Desktop Procedure (AFS.DP-008A).

Background: L.A. Care policy and procedure requires annual review and approval by the Finance

& Budget Committee of the Annual Investment Policy AFS-008 and the Desktop Procedure AFS.DP-008A. The Investment Policy is in the same format as last year, where it is comprised of the policy itself (AFS-008), which is limited to six pages per the Compliance Department, and the Desktop Procedure (AFS.DP-008A). Changes have only been made to the Desktop Procedure (AFS.DP-008A); no changes were made to the Policy (AFS-008) itself. The following material changes were made to the Desktop Procedure (AFS.DP-008A), which was last reviewed in October 2015:

1. Section 1.4.4 Securities Lending (Government Code Sections 53601 (j), 53601 (l)) – Language changed to allow for securities lending. Although the Government Code allows for securities lending, L.A. Care’s investment policy did not allow for it. However, securities lending can result in improved yield with minimal risk due to the collateral required from the counterparty.

2. Section 1.5.11 Medium Term Maturity Corporate Securities (Government Code Section 53601 (k)) – Language changed from a minimum credit rating A to A3/A-. Seyfarth Shaw LLP issued to L.A. Care a legal opinion stating that the minimum A rating in the Code includes all ranges of A, A3/A-. In late September 2016, Governor Brown signed a Bill which expands the current ambiguous securities rating wording in the Government Code from A to include all ranges of A, A3/A-, effective on 1/1/17.

Member Impact: N/A Budget Impact: N/A

Motion: To approve Accounting & Financial Services Policy AFS-008 (Annual Investment Policy) and Desktop Procedure (AFS.DP-008A), as submitted.

69

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=53601.&lawCode=GOV

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV&sectionNum=53601.

1 of 5

ANNUAL INVESTMENTS AFS-008

DEPARTMENT ACCOUNTING AND FINANCIAL SERVICES CATEGORY DATES

PP-Mandated

PP-Non-Mandated

Effective Date 1/1/1996 Review Date 8/11/2016 Next Annual Review Date 10/5/2016

Legal Review Date 8/12/2016 C&Q/BOG

Review Date 9/17/2014 BOG Motion # (if applicable)

FIN 100.1013

Supersedes Policy Number(s) FIN-001, AS-001

LINES OF BUSINESS Medi-Cal – Plan Partners MCLA Cal MediConnect Internal Operations Healthy Kids PASC-SEIU Plan L.A. Care Covered

ACCOUNTABILITY MATRIX

ATTACHMENTS AFS.DP-008A, “Annual Investments”

SUBJECT MATTER EXPERT NAME DEPARTMENT TITLE

Irene Lem Accounting and Financial Services Controller

ELECTRONICALLY APPROVED BY THE FOLLOWING OFFICER DIRECTOR COMMITTEE CHAIR

NAME Marie Montgomery Irene Lem DEPARTMENT Executive Services Accounting Services

TITLE Chief Financial Officer Controller

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AUTHORITIES Government Code of Regulations (CCR), §§53600-53609 and 53646 Title 31, Code of Federal Regulations (CFR), §§306.1 et seq. and 350.0 et seq. L.A. Care Conflict of Interest Code L.A. Care Code of Conduct California Health & Safety Code §§1346(a)(11), 1375.1, and 1376 Knox Keene Health Care Service Plan Act of 1975, Ch. 2.2, §1340 et seq. of Div. 3 of the Health

& Safety Code, including the Rules of the DMHC

REFERENCES AFS.DP-008A, “Annual Investments”

POLICY HISTORY

REVIEW DATE COMMENTS NEXT ANNUAL REVIEW DATE

01/01/1996 New Policy 01/01/1997 04/01/2012 Annual review; primarily format changes 04/01/2013 02/28/2013 Annual review; primarily format changes 02/28/2014 09/11/2014 Annual review 09/11/2015 11/05/2015 Annual review; primarily format changes 11/05/2016

Annual review; primarily format changes ##/##/2017

DESKTOP PROCEDURES Desktop procedures are incorporated by reference in all L.A. Care policies

DEFINITIONS Please visit the L.A. Care intranet for a comprehensive list of definitions used in policies:

http://insidelac/ourtoolsandresources/departmentpoliciesandprocedures

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1.0 OVERVIEW:

1.1 To establish the investment guidelines for all operating funds and Board designated reserve funds of L.A. Care Health Plan (L.A. Care) invested on and after October 1st, 2016. The objective is to ensure L.A. Care’s funds are prudently invested according to the Board of Governors’ objectives to preserve capital, provide necessary liquidity, and to achieve a market average rate of return through economic cycles.

2.0 POLICY:

2.1 Investment of funds may only be made as authorized by this policy, which conforms to California Government Code (the Code) §53600 et seq., and complies with §1346(a)(11) and §1375.1 et seq. of the California Health & Safety code, specifically §1376, related to the operations of a licensed health service plan engaged in Medi-Cal, Medicare, and other programs, as well as to customary standards of prudent investment management. Should the provisions of the Code become more restrictive than those contained herein, such provisions will be considered immediately, incorporated into this policy, and appropriately adopted by the Board of Governors and L.A. Care management.

2.2 Investment Objectives: In accordance with the regulations cited herein, L.A.

Care’s primary annual investment objectives are in order of priority as follows: 2.2.1 Safety and Preservation of Capital – There are inherent risks associated

with any investment activities, including credit risk and market risk. 2.2.1.1 Credit risk will be mitigated through diversification of the

investment portfolio. 2.2.1.2 Market risk will be mitigated by matching maturity dates to coincide,

as much as possible, with L.A. Care’s cash flow requirements. It is explicitly recognized herein, however, that in a diversified portfolio, occasional capital losses are inevitable and must be considered within the context of the overall investment return.

2.2.2 Liquidity and Flexibility – The portfolio investments need to be comprised of investments for which there is a secondary market and which offer the flexibility to be sold at any time at prevailing market values with minimal risk of loss of principal and interest.

2.2.3 Total Return – L.A. Care’s portfolio will be designed to achieve a market

average rate of return similar to other authorized instruments and securities which have similar security, maturities and levels of risk.

2.3 Prudence

2.3.1 L.A. Care’s Board of Governors, Chief Financial Officer (CFO), and persons authorized to make investment decisions on behalf of L.A. Care are trustees and fiduciaries subject to the Prudent Investor Standard, defined as follows:

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2.3.1.1 The Prudent Investor Standard, as defined in Government Code §53600.3, requires that when investment officials are investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing funds on behalf of L.A. Care, the investment officials shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of L.A. Care that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of L.A. Care. The Prudent Investor Standard shall be applied in the context of managing an overall portfolio.

2.3.1.2 L.A. Care’s investment professionals acting in accordance with this policy and any applicable written procedures shall be relieved of personal responsibility for an individual security’s credit risk or market risk.

2.4 Authority to Invest

2.4.1 The CFO shall have the authority to invest L.A. Care funds and manage the investment portfolio. Such authority is derived by order from the Board of Governors. 2.4.1.1 No person may engage in an investment transaction except as

provided herein and in the procedures established by the CFO and/or Board of Governors. The CFO may designate an investment manager(s) to manage all or such portions of L.A. Care’s funds as the CFO shall determine from time to time. Such investment manager(s) shall be subject to this policy and any directions provided by the CFO. The CFO will be responsible for all actions undertaken and shall establish a system on internal controls to regulate the activities of subordinate officials, including the investment manager.

2.5 Safekeeping, Performance Benchmarks, and Investment Activities

2.5.1 Ethics and Conflict of Interest 2.5.1.1 L.A. Care’s officers and employees involved in the investment

process or having authority or influence over such activities are not permitted to have any material financial interests in financial institutions that conduct business with L.A. Care, and they are not permitted to have any personal financial investment holdings that could be materially related to the performance of L.A. Care’s investments.

2.5.1.2 L.A. Care officers and employees involved in the investment of funds will follow applicable compliance policies related to disclosure of potential conflicts to the extent the personal

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business activity or material financial interest is one capable of being known.

2.5.2 Other Investments 2.5.2.1 Any investments not specifically referred to herein or in

AFS.DP-008A, “Annual Investments” will be considered a prohibited investment.

2.6 Authorized Investments 2.6.1 Maturity and Term – All investments are subject to a maximum five year

maturity or term. 2.6.2 Eligible Instruments – L.A. Care’s policy is to invest in the high quality

instruments as permitted by the Government Code, subject to the limitations of this policy and its desktop procedures. For a complete list of the eligible investment instruments, please refer to AFS.DP-008A.

2.7 Diversification Guidelines 2.7.1 For all other securities described in AFS.DP-008A that are permitted

investments, no more than two percent of L.A. Care’s funds may be invested with any one company, corporation bank, local agency, or other investment vehicle, unless otherwise stated

2.7.2 L.A. Care’s investment manager(s), if any, must review the portfolio he/she manages to ensure compliance with L.A. Care’s diversification guidelines at the time of each purchase.

2.7.3 For more information, please refer to the “Diversification Guidelines” attachment.

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DESKTOP PROCEDURE AFS.DP-008A: ANNUAL INVESTMENT POLICY

Complements Policy AFS-008: Annual Investment Policy

The Annual Investment Policy AFS-008 establishes the investment guidelines for all Operating Funds and Board Designated Reserve Funds of L.A. Care Health Plan (“L.A. Care”) invested on and after September 1, 2014 (“Annual Investment Policy”). The objective of the Annual Investment Policy is to ensure L.A. Care’s funds are prudently invested according to the Board of Director’s objectives to preserve capital, provide necessary liquidity and to achieve a market average rate of return through economic cycles.

1.0 PROCEDURES: 1.1. Investment Objectives:

1.1.1. Safety and Preservation of Capital

1.1.1.1. Each investment transaction shall seek to ensure that the capital

losses are avoided due to market erosion of security value and institutional default or broker-dealer default. L.A. Care shall seek to preserve capital by mitigating the two types of risk, Credit Risk and Market Risk as follows: 1.1.1.1.1. Credit Risk will be mitigated through diversification

of the investment portfolio.

1.1.1.1.2. Market Risk will be mitigated by matching Maturity dates to coincide, as much as possible, with L.A. Care’s cash flow requirements. It is explicitly recognized herein, however, that in a diversified portfolio, occasional capital losses are inevitable and must be considered within the context of the overall investment return.

1.1.2. Liquidity and Flexibility

1.1.2.1. The portfolio investments need to be comprised of investments

for which there is a secondary market and which offer the flexibility to be sold at any time at prevailing market values with minimal risk of loss of principal and interest. 1.1.2.1.

1.1.3. Total Return

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1.1.3.1. L.A. Care’s portfolio will be designed to achieve a market

average rate of return similar to other authorized instruments and securities which have similar security, maturities and levels of risk. 1.1.3.1.

1.2. Authority to Invest 1.2.1. The CFO may designate an Investment Manager(s) to manage all or such

portions of L.A. Care’s funds as the CFO shall determine from time to time. Such Investment Manager(s) shall be subject to this Annual Investment Policy and any directions provided by the CFO. The CFO will be responsible for all actions undertaken and shall establish a system on internal controls to regulate the activities of subordinate officials, including the Investment Manager.

1.3. Board of Governors & Finance and Budget Committee Oversight 1.3.1. Board of Governors

1.3.1.1. The CFO is responsible for providing the Board of Governors

with an Annual Investment Policy, and the Board of Governors is responsible for adopting the Annual Investment Policy and ensuring investments are made in compliance with the AFS-008, Annual Investment Policy. Investments will be made in recognition of L.A. Care’s need to comply with tangible net equity and other solvency and financial reporting requirements set forth by the Department of Managed Health Care. This Annual Investment Policy shall be reviewed and approved annually by the Board of Governors at a public meeting pursuant to Section 53646(a) (2) of the California Government Code.

1.3.1.2. The CFO is responsible for directing L.A. Care’s investment program and for compliance with this policy pursuant to the delegation of authority to invest funds or to sell or exchange securities. The CFO shall provide a quarterly report to the Board of Governors. The CFO shall also provide the Board of Governors with a monthly report of investment transactions.

1.3.1.3. Duties and responsibilities of the Finance and Budget Committee are distinct from those of the CFO as follows:

1.3.1.3.1. The CFO and staff are responsible for the day-to-day

management of L.A. Care’s investment portfolio and the making of specific investments.

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1.3.1.3.2. The Board of Governors is responsible for the Annual Investment Policy. The Finance and Budget Committee shall not make or direct L.A. Care management to make any particular investment, purchase any particular investment product, or do business with any particular investment companies or brokers. It shall not be the purpose of the Finance and Budget Committee to provide advice to the CFO on particular investment decisions of L.A. Care.

1.3.1.4. The duties and responsibilities of the Finance and Budget

Committee shall consist of the following:

1.3.1.4.1. Review of the Annual Investment Policy annually before its consideration by the Board of Governors and recommend revisions.

1.3.1.4.2. Review L.A. Care’s investment portfolio quarterly to confirm compliance with the Annual Investment Policy, including its diversification and maturity guidelines.

1.3.1.4.3. Provide comments to the CFO regarding potential investment and potential investment strategies.

1.3.1.4.4. Periodically review investment security diversification and investment strategies with Investment Manager(s).

1.3.1.4.5. Perform such additional duties and responsibilities as may be required from time to time by specific action and direction of the Board of Governors.

1.3.2. Quarterly Review

1.3.2.1. At a minimum, the CFO shall present a quarterly report with

investment transaction information in adequate detail to allow the Finance and Budget Committee to review the investment activities of L.A. Care.

1.3.2.2. The quarterly report will be summarized and presented as a report

from the Finance and Budget Committee to the full Board of Governors in accordance with Government Code Section 53646(b).

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1.3.3. Audit 1.3.3.1. Investment transactions of L.A. Care may be reviewed during the

annual audit performed by the public accounting firm selected by the Finance and Budget Committee and approved by the Board of Governors. The results of the audit of the investment transactions shall be presented in a report prepared by the auditors to the Finance and Budget Committee and the Board of Governors for their review, acceptance, and action as the Board of Governors deems necessary. A full audit of the investment of L.A. Care may be requested by the Finance and Budget Committee or Board of Governors at any time.

1.4. Safekeeping, Performance Benchmarks, and Investment Activities

1.4.1. Safekeeping

1.4.1.1. Investments purchased shall be held by a Custodian bank acting

as agent for L.A. Care and such custody agreement shall be in compliance with Government Code Section 53608.

1.4.2. Performance Benchmarks

1.4.2.1. L.A. Care’s investment portfolio shall be designed to achieve a

market-average rate of return through economic cycles similar to authorized investment instruments, which have similar security maturities and levels of risk.

1.4.2.2. The performance benchmarks for the investment portfolio will be based upon the market indices for short term investments of comparable risk and duration. These performance benchmarks will be agreed to by the CFO and the Investment Manager(s) and the relative performance of the investment portfolio will be reviewed with the Finance and Budget Committee quarterly.

1.4.3. Ethics and Conflict of Interest

1.4.3.1. L.A. Care’s officers and employees involved in the investment of

funds shall refrain from personal business activity that could conflict or engender the perception of conflict with the proper execution of the investment activities, or which could impair their ability to make impartial investment decisions.

1.4.4. Securities Lending

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1.4.4.1. Investment securities shall not be lent to an Investment Manager or Broker-DealerSecurities lending is allowed but are subject to the conditions and restrictions in the California Government Code Sections 53601(j) and 53601(l).

1.4.5. Leverage

1.4.5.1. The investment portfolio, or investment portfolios managed by

an Investment Manager cannot be used as collateral to obtain additional investment funds

. 1.4.6. Underlying Nature of Investments

1.4.6.1. L.A. Care and its Investment Manager(s) shall not make

investments in organizations which have a line business which is visibly in conflict with public health or the mission of L.A. Care.

1.4.6.2. L.A. Care and its Investment Manager(s) shall not make investments in Negotiable Certificates of Deposit of a state or federal credit union if a member of its Board or Executive Officers also serves on the Board of Governors of that credit union.

1.4.6.3. L.A. Care will provide the Investment Manager (s) with a list of corporations that do not comply with the Annual Investment Policy and shall notify its Investment Manager(s) of any changes.

1.4.6.4. Investment Manager(s) will not enter into any investments with any institutions with which the Investment Manager is affiliated.

1.4.7. Derivatives

1.4.7.1. Investments in derivative securities are not allowed, except as permitted by this Annual Investment Policy, including but not limited to, US Treasury STRIPS as discussed in Section 1.5.3.

1.4.8. Rating Downgrades

1.4.8.1 L.A. Care may from time to time be invested in a security whose

rating is downgraded below the quality permitted in this Annual Investment Policy Desktop Procedure.

1.4.8.2 Any security held as an investment whose rating falls below the

investment guidelines or whose rating is put on notice for possible downgrade shall be immediately reviewed for action. The

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decision to retain the security until Maturity, sell or put the security, or other action shall be approved by the CFO.

1.4.9. Rating Guidelines

1.4.9.1. A security must be rated by a minimum of two rating agencies. If a security is rated by only two rating agencies, i.e., Standard & Poor’s, Moody’s or Fitch Ratings, the higher of the two ratings will apply. If a security has three ratings, the middle rating will apply.

1.4.9.2. Notwithstanding the Section 1.4.9.1, LA Care may invest in Government Pooled Funds that invest only in high grade securities or obligations.

1.4.10. Investment Manager 1.4.10.1 The CFO may designate an Investment Manager(s) to manage

any portion of the investment portfolio. Any designated Investment Managers shall be a fiduciary subject to the Prudent Investor Standard in Section 2.2.2 AFS-008, Annual Investment Policy, with respect to the funds under management. The CFO will:

1.4.10.1.1. Evaluate candidates for the role of Investment

Manager(s). The selected candidates will be reviewed and approved by the Chief Executive Officer (CEO), and Finance and Budget Committee and the Board of Governors.

1.4.10.1.2. Obtain certification from outside Investment Managers that they will purchase securities from broker-dealers (other than themselves) or financial institutions in compliance with Government Code Section 53601.5 and the AFS-008, Annual Investment Policy.

1.4.10.1.3. Provide all Investment Manager(s) with a copy of the AFS-008, Annual Investment Policy and Desktop Procedure which will be included in the Investment Manager’s contract.

1.4.10.1.4. Establish and review the targeted average maturities periodically with the Investment Manager(s).

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1.4.10.1.5. Review the investment diversification and portfolio performance monthly to ensure that the Investment Manager’s compliance with this policy, risk levels and returns are reasonable, and that investments are diversified according to the policy.

1.4.10.1.6. Investigate any investment made by the Investment Manager(s) which is not authorized by the policy for possible cause for termination of contract.

1.5. Authorized Investments

1.5.1. Maturity and Term

1.5.1.1. All investments are subject to a maximum five (5) year Maturity

or Term.

1.5.2. Eligible Instruments 1.5.2.1. L.A. Care’s Policy is to invest in the high quality instruments as

permitted by the Government Code, subject to the limitations of the AFS-008, Annual Investment Policy and Desktop Procedure.

1.5.3. U.S. Treasuries (Government Code Section 53601(b))

Types of US Treasuries Description Treasury Bills 3 months, 6 months, and one year securities and

traded at a discount. Treasury Notes and Bonds

Interest bearing instruments issued with maturities’ of 2 to 30 years

Treasury STRIPS US Treasury securities that have been separated into their component parts of principal and interest payments and recorded as such in the Federal Reserve book-entry record keeping system.

US Treasury coupon and principal STRIPS

These are not to be considered to be derivatives for the purpose of the AFS-008, Annual Investment Policy and are permitted investments.

1.5.3.1. Maximum Term: Five (5) Years

1.5.4. Federal Agencies and US Government Sponsored Enterprises (Government Code Section 53601(f))

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1.5.4.1. These are U.S. Government related organizations, the largest of which are federal intermediaries assisting credit markets, and are often simply referred to as “Agencies.” Any Federal Agency and U.S. Government Sponsored Enterprise security not specifically listed below is not a permitted investment instrument.


“Agencies” are limited to: Federal Agriculture Mortgage Association FRMDN Federal Home Loan Banks FHLB Federal Home Loan Mortgage Corporation FHLMC Federal National Mortgage Association FNMA Federal Farm Credit Banks FFCB Student Loan Marketing Association SLMA Government National Mortgage Association GNMA Small Business Administration SBA Export-Import Bank of the United States Ex-Im Bank U.S. Maritime Administration MARAD U.S. Department of Housing and Urban Developments HUD Tennessee Valley Authority TVA

1.5.5. State of California and Local Agency Obligations (Government Code Sections 53601(a), (c), (e))

1.5.5.1. Such obligations must be rated A-1, P-1, or equivalent or better short term; or Aa3/AA- or better long term, by a nationally recognized rating agency. Public agency bonds issued for private purposes (industrial development bonds) are specifically excluded as permitted investments.


1.5.6. Other States’ Obligations (Government Code Sections 53601(d) 1.5.6.1. Other states’ obligations are permitted provided that:

1.5.6.1.1. Registered treasury notes or bonds of any of the other

49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California.

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However, ownership of out of state local agency bonds is not allowed.

1.5.6.1.2. Such obligations must be rated A-1, P-1, or equivalent or better short term; or AA/Aa2 or better long term, by a nationally recognized rating agency.


1.5.7. Bankers’ Acceptances (BA) (Government Code Section 53601(g)) 1.5.7.1. These short term notes are sold at a discount, and are obligations

of the drawer (the bank’s trade finance client) as well as the bank. Once accepted, the bank is irrevocably obligated to pay the BA upon Maturity if the drawer does not pay.

1.5.7.2. Eligible Bankers’ Acceptances are Bankers’ Acceptances that are

eligible for purchase by the Federal Reserve System, and

1.5.7.3. Drawn on and accepted by a bank rated F1 or better by Fitch, or are rated A-1 for short-term deposits by Standard and Poor’s or P-1 for short-term deposits by Moody’s, or are comparably rated by a nationally recognized rating agency.

1.5.7.4. No more than five percent (5%) of L.A. Care’s investment funds

may be invested in any one commercial bank.

1.5.7.5. Maximum Term: 180 days

1.5.8. Commercial Paper (Government Code Section 53601(h)) 1.5.8.1. Commercial Paper is negotiable, although it is usually held to

Maturity. The maximum Maturity is 270 days with most Commercial Paper issued for terms of less than 30 days.

1.5.8.2. Investments in Commercial Paper must be:

1.5.8.2.1. Rated P-1 by Moody’s or A-1 or better by Standard

and Poor’s 1.5.8.2.2. Issued by corporations with a rating or ratings A-3 by

Moody’s and A- by Standard & Poor’s or better on long term debt, if any, and

1.5.8.2.3. Issued by U.S. corporations or non-U.S. corporations organized and operating within the United States and

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having total assets in excess of five hundred million dollars ($500,000,000).

1.5.8.2.4. Asset backed Commercial Paper issued by special purpose vehicles (structure investment vehicles) are prohibited.

1.5.8.3. L.A. Care’s investment funds may not be used to purchase more than ten percent (10%) of the outstanding Commercial Paper issued by any single issuer.

1.5.8.4. Maximum Term: 270 days

1.5.9. Negotiable Certificates of Deposit (CD) / Time Deposits (Government

Code Sections 53601(i)) 1.5.9.1. Negotiable Certificates of Deposit must be issued by a nationally

or state charged bank or savings association, state or federal credit unions or by a state licensed branch of a foreign bank, which have been rated as F1 or better by Fitch, or rated as A-1 for short-term deposits by Standard & Poor’s or P-1 for short-term deposits by Moody’s, or comparably rated by a nationally recognized rating agency. No investment shall be made in Negotiable Certificates of Deposit issued by a state or federal credit union if an Investment Official also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the Negotiation Certificate of Deposit.

1.5.9.2. Maximum Term: Negotiable CD’s 270 days

1.5.9.3. Maximum Term: Time Deposit 2 days

1.5.10. Repurchase Agreements (Government Code Section 53601(j))

1.5.10.1. Repurchase Agreements are permitted provided that: 1.5.10.1.1. The terms of the agreement does not exceed one year.

1.5.10.1.2. Repurchase Agreements are permitted if

collateralized by U.S. Agencies or U.S. Treasuries with any registered broker-dealer or commercial bank

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insured by the FDIC so long as at the time of the investment:

1.5.10.1.3. Such registered broker-dealer is a recognized primary

dealer, and

1.5.10.1.4. Such primary broker-dealer (or its parent) has an uninsured, unsecured and unguaranteed obligation rated P-1 short term or A-2 long term or better by Moody’s and A-1 short term or A long term or better by Standard & Poor’s.

1.5.10.2. A broker dealer master Repurchase Agreement must be signed

by the Investment Manager (acting as “Agent”) and approved by the Investment Professional prior to entering into any repurchase transaction.

1.5.10.3. The securities are held free and clear of any lien by L.A. Care’s

Custodian or Agent for the Custodian, and such third party is a:

1.5.10.3.1. Federal Reserve Bank, or

1.5.10.3.2. A bank which is a member of the Federal Deposit Insurance Corporation (FDIC) and which has a combined capital surplus and undivided profits of not less than $50 million and the Custodian shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as Agent for L.A. Care’s Custodian, and

1.5.10.3.3. A perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq., or 31 C.F.R 350.0 et seq. in such securities is created for the benefit of L.A. Care’s Custodian.

1.5.10.4. The Agent must provide L.A. Care’s Custodian and Investment

Professionals with a valuation of the collateral securities value no less frequently than weekly and shall liquidate the collateral securities if any deficiency in the required one hundred and two percent (102%) collateral percentage is not restored within two business days of such valuation.

1.5.10.5. Maximum Term: One (1) year 1.5.10.5.

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1.5.10.6. Reverse Repurchase Agreements are not allowed

1.5.11. Medium Term Maturity Corporate Securities (Government Code Section 53601(k)) 1.5.11.1. Medium Term Maturity Corporate Securities are corporate and

depository institution debt securities with a maximum remaining maturity of five years (5) or less. Medium Term Maturity Corporate Securities must:

1.5.11.1.1. Be Corporate Securities that have a rating of A23 by

Moody’s and A- by Standard and Poor’s or better with a Maturity of five (5) years or less,

1.5.11.1.2. Be issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or by any state and are operating within the United States that have total assets in excess of five hundred million dollars ($500,000,000),

1.5.11.1.3. Represent no more than five percent (5%) of the issue in the case of a specific public offering. This limitation does not apply to debt that is “continuously offered” in a mode similar to Commercial Paper. ( i.e., medium term notes (MTN’s) ),

1.5.11.1.4. Represent no more than 5% of the portfolio for both MTN’s or any corporate security of any one corporate issuer.

1.5.11.2. Maximum Term: Five (5) years

1.5.12. Money Market and Mutual Funds (Government Code Section 53601(l)

1.5.12.1. Investments in shares of beneficial interest issued by diversified management companies (Money Market Funds or Mutual Funds) must be with a company that:

1.5.12.1.1. Attained the highest ranking of the highest letter and

numerical rating provided by not less than two nationally recognized rating services, or

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1.5.12.1.2. If unrated, all funds must be invested 100% in government securities or securities backed by government collateral.

1.5.12.1.3. Any investments in a Mutual Fund must be with a Mutual Fund that invests in the securities and obligations authorized by Government Code Sections 53601(a) to (k), inclusive, and (m) to (o), inclusive.

1.5.12.1.4. Any investments in a Money Market Fund must be with a Money Mutual Fund that follows regulations specified by the SEC under the Investment Company Act of 1940.

1.5.12.1.5. Not more than ten percent (10%) of L.A. Care’s investment funds may be invested in any one Mutual Fund.

1.5.13. Mortgage or Asset Backed Securities (Government Code Section 53601(o)) 1.5.13.1. Though these securities may contain a third-party guarantee, they

are a package of assets being sold by a trust, not a debt obligation of the sponsor. Other types of “backed” debt instruments have assets (such as leases or consumer receivables) pledged to support the debt service. However, Mortgage Backed Securities primarily backed by sub-prime collateral are not allowed.

1.5.13.2. Investments in any Mortgage Pass-Through Securities,

collateralized Mortgage Obligations, Mortgage Backed or other pay through bond, equipment lease backed certificate, consumer receivable pass through certificate, or consumer receivable backed bonds must be:

1.5.13.2.1. Rated AA by a nationally recognized rating service,

and

1.5.13.2.2. Issued by an issuer having an A or better rating service by a nationally recognized rating service for its long term debt.

1.5.13.3. Maximum Term: Five (5) years

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1.5.14. Variable and Floating Rate Securities 1.5.14.1. Variable and Floating Rate Securities are an appropriate

investment when used to enhance yield and reduce risk. They should have the same stability, Lliquidity and quality as traditional market securities.

1.5.14.2. Variable and Floating Rate Securities with a final Maturity not to

exceed five (5) years as described above, must utilize traditional Money Market asset indices such as U.S. Treasury Bills, Federal Funds, Commercial Paper or LIBOR. Investment in Floating Rate Securities whose reset is calculated using more than one of the above indices are not permitted, i.e., dual index notes.

1.5.14.3. No investments shall be made in inverse floaters, range notes,

interest-only strips derived from mortgage pools, and securities that could result in zero-interest accrual if held to maturity. Zero-interest accruals means the security has the potential to realize zero interest depending upon the structure of the security. Zero coupon bonds and similar investments that start at a level below the face value are permissible because the value does increase.

1.5.15. Government Pooled Funds (Government Code Section 53601(p))

1.5.15.1. Investments are permitted in Government Pooled Funds

including, but not limited to, County Pooled Investment Funds, Joint Powers Authority Pools, the Local Agency Investment Fund, and the Voluntary Investment Program Fund.

1.5.15.2. A Joint Powers Authority Pool must retain an investment advisor

who is registered with the SEC (or exempt from registration), has assets under management in excess of $500 million, and has at least five years experience investing in instruments authorized by Government Code Sections 53601(a) to (o).

1.5.15.3. Any investments in the Voluntary Investment Program Fund

must be between $200 million and $10 billion dollars and must be approved by the Board of Governors.

1.5.15.4. For any investments in the Local Agency Investment Fund or

County Pooled Investment Fund, the CFO may provide to the Board of Governors and the auditor the most recent statement or statements received from those institutions in lieu of the information otherwise required to be provided in the quarterly

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reports pursuant to Section 1.3.2.2 of this Annual Investment Policy Desktop Procedure.

1.5.15.5. Maximum Term: Five (5) years (per Government Code

Section 53601)

1.5.16. Supranational Obligations (Government Code Section 53601(q)) 1.5.16.1. Certain supranational obligations are permitted provided that the

obligations are:

1.5.16.1.1. U.S. Dollar denominated, 1.5.16.1.2. Senior Obligations,

1.5.16.1.3. Issued or unconditionally guaranteed by the

International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank,

1.5.16.1.4. Eligible for purchase and sale within the United States, and

1.5.16.1.5. Rated AA or better by a nationally recognized rating agency.

1.6. Diversification Guidelines 1.6.1. Investment Security Diversification at the time of purchase:

Type of Security Maximum Portfolio % US Treasuries, including STRIPS 100% Federal Agencies, and US Government Enterprises 100% State Obligations (CA and others) and CA Local Agency Obligations Bankers Acceptances

25% 40%

Commercial Paper 25% Negotiable Certificates of Deposit 30% Repurchase Agreements 100% Medium Term Maturity Corporate Securities 30% Money Market Funds and Mutual Funds Combined 20%

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Mortgage and Asset Backed Securities 20% Variable and Floating Rate Securities Government Pooled Funds Certain Supranational Obligations

50% 100% 15%

1.6.2. Issuer / Counterparty Diversification Guidelines:

Issuer / Counterparty Maximum Portfolio % Any one Federal Agency or Government Sponsored Enterprise

100%

Any one Repurchase Agreement counterparty name: If Maturity / Term is less than or equal to 7 days 50% If Maturity / Term is greater than 7 days 25%

1.6.3. For all other securities described under Authorized Investments that are permitted investments, no more than two percent (2%) of L.A. Care’s funds may be invested with any one company, corporation bank, local agency, or other investment vehicle, unless otherwise stated

1.6.4. L.A. Care’s Investment Manager(s) (if any) must review the portfolio he/she manages to ensure compliance with L.A. Care’s Diversification guidelines at the time of each purchase.

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Board of Governors

MOTION SUMMARY



Issue: Approve Accounting & Financial Services Policies AFS 004 (Non-Travel and Other Expenses)

and AFS 027 (Travel and Other Expenses).

Background: The current Expense Policy covers all non-travel, business related expenses, meals, and

entertainment. The current Travel Expense Policy covers all travel, business related expenses, meals, and entertainment for L.A. Care. These policies were implemented in May, 2015. LA Care staff has been following these policies and providing the quarterly expenditure reporting to the Finance & Budget Committee and the Board of Governors. We propose that this reporting continue. The majority of the proposed changes are clarifications to the policies, as outlined below. Staff is requesting the Committee to approve these two policies.

Summary of Non-Travel and Other Related Expenses Policy changes:

Removes references to “entertainment” expenses from the policy. The expenses are related to workplace programs, employee recognition, retention and engagement not entertainment.

Clarify policy to include group training and development sessions that extend through normal break and meal times.

Includes meals during weekend and Holiday work deemed mandatory or high-priority by an Officer.

Increase the per project expense limit that require approvals from the responsible Officer, CFO, CEO, and/or Board of Governors from $5,000 to $10,000. This increase reflects the growth in the number of employees.

Changes the “extraordinary circumstances” standard to “extenuating circumstances”. This would be a more reasonable standard.

Summary of Travel Expense Policy changes:

Clarification that the policy includes travel to conferences and seminars for training and development.

Clarification on mileage reimbursement.

Provides for travel advances and use of a procurement card for certain expenses.

Allows for use of a per diem meal reimbursement for multi-day travel.

Added section for travel paid for by third parties including Form 801 reporting responsibility.

Member Impact: None


Motion: To approve Accounting & Financial Services Policies AFS 004 (Non-Travel and Other Expenses) and AFS 027 (Travel and Other Expenses), as attached, and to authorize staff to make non-significant changes.

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NON-TRAVEL AND OTHER RELATED EXPENSES AFS-004

DEPARTMENT ACCOUNTING AND FINANCIAL SERVICES

CATEGORY DATES

PP-Mandated

PP-Non-Mandated

Effective Date 8/21/1997 Review Date 5/7/2015 Next Annual Review Date 5/7/2016

Legal Review Date 9/17/2015 C&Q/BOG

Review Date 5/7/2015 BOG Motion # (if applicable)

FIN 109.0515

Supersedes Policy Number(s) AFS-004

LINES OF BUSINESS

Medi-Cal – Plan Partners MCLA Cal MediConnect Internal Operations Healthy Kids PASC-SEIU Plan L.A. Care Covered


ATTACHMENTS Project & Event Justification Form Non-Travel Meals & Event Request Form

SUBJECT MATTER EXPERT

NAME DEPARTMENT TITLE

Angela Bergman Accounting and Financial Services Director, Finance (Interim)


NAME Marie Montgomery Angela Bergman Michael Rembis

DEPARTMENT Executive Services Finance Finance and Budget Committee

TITLE Chief Financial Officer Director of Accounting and Financial Services

Treasurer of the Board of Governors

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AUTHORITIES

California Welfare & Institutions Code §14087.96 et seq.

REFERENCES AFS.DP-004A, “Non-Travel and Other Related Expenses”

POLICY HISTORY

REVIEW DATE COMMENTS NEXT ANNUAL

REVIEW DATE

05/11/2009 Supersedes policy 1900 05/11/2010 05/07/2015 Annual review 05/07/2016

DESKTOP PROCEDURES

Desktop procedures are incorporated by reference in all L.A. Care policies

DEFINITIONS

Please visit the L.A. Care intranet for a comprehensive list of definitions used in policies: http://insidelac/ourtoolsandresources/departmentpoliciesandprocedures

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1.0 OVERVIEW:

1.1 This policy establishes L.A. Care Health Plan’s (L.A. Care) policy for non-travel-related and other related expenses, incurred by employees, members of the Board of Governors, stakeholder committees, and members of the Public Advisory Committees (PACs) on behalf of L.A. Care. Please refer to policy AFS-027, “Travel Expenses,” for information on reimbursable travel and other expenses.

2.0 POLICY:

2.1 L.A. Care, as a public entity, has a fiduciary responsibility to utilize funds in a responsible and prudent manner. All employees, Board members and PAC members have a fiduciary role when requesting reimbursement for business-related expenditures, to provide adequate supporting documentation, rationale, and explanation for all reimbursable expenses.

2.2 Expenses covered under this policy. Expenses covered under this policy are Non-Travel-Related Meal and Event Expenses, and expenses that are Necessary, Reasonable, Appropriate, and Allowable. Examples of such expenses include, but are not limited to: 2.2.1 Any lunch, event, or gathering at which stakeholders are in attendance, such

as Board of Governors’ meetings, stakeholder relationship events/outreach, and education events.

2.2.2 Any lunch, event, or gathering for internal staff only (no stakeholders in attendance), such as: 2.2.2.1 Recruitment or on-boarding/orientation events, 2.2.2.2 Discretionary staff spending for recognition, retention, and

employee engagement. 2.2.2.3 Group trainings and development sessions that extend through

normal break or meal times. 2.2.2.4 Weekend or Holiday work deemed mandatory or high-priority

at the Officer level. 2.2.2.5 Extraordinary Extenuating circumstances

2.2.3 These expenses must be pre-approved in accordance with AFS.DP-004A.

2.3 Expenses not covered under this policy. Under no circumstances will L.A. Care reimburse for any expenses that are not covered under this policy. Examples of expenses which are not covered under this policy and will not be reimbursed include, but are not limited to: 2.3.1 The purchase of alcoholic beverages. 2.3.2 Routine working lunches onsite or offsite. 2.3.3 Non-travel-related meal expenses or entertainment event expenses for:

2.3.3.1 Meetings with vendors or firms seeking to do business with L.A. Care.

2.3.3.2 Birthdays, retirement, or holiday parties.

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2.3.3.3 Workplace programs and employee recognition retention and employee engagement not approved through the expense approval procedure (AFS.DP-004A).

2.3.4 Gifts. L.A. Care will not reimburse for purchases of gifts. 2.3.4.1 Expression of Concern. Contact the Human Resources

department if an expression of concern is appropriate. L.A. Care will not reimburse personal expenses for such expressions of concern.

2.3.4.2 Special Occasions. L.A. Care will not reimburse the costs of personal gifts for special occasions, including holiday gifts, flowers, or birthday cakes.

2.2.1.6 Credit Cards. L.A. Care does not provide reimbursement for credit card late payment charges, annual credit card fees, or credit card service charges for non-sufficient funds/checks.

2.2.1.7 Cellular Phone. L.A. Care will not reimburse for the cost of purchasing and/or installing a mobile/cellular telephone and/or related communications equipment, except in accordance with L.A. Care policy ITOI-09, “Laptop and Mobile Devices."

2.2.1.8 Furniture, Equipment, and Other Capital Assets. L.A. Care will not reimburse for purchases of furniture, office or computer equipment, and other capital assets. These items should be acquired through the purchasing process.

2.4 Special Considerations

2.4.1 Stationery, Books, Supplies.

2.4.1.1 Supplies should be purchased directly by L.A. Care in accordance with AFS-007. If exceptional circumstances require that the employees, Board members, or PAC members incur the expense themselves, approval must be obtained from the Purchasing department and the approval process outlined in AFS.DP-004A must be followed.

2.4.2 Tuition, Professional Licenses/Certification, Professional Exams.

2.4.2.1 For education expenses, such as tuition reimbursement where employees seek to expand and broaden their professional skills and knowledge through regionally accredited colleges, university programs, and recognized professional institutions, please see policy HR-117, “Reimbursement for Educational Expenses Policy” and consult with the Learning & Career Services department.

2.4.2.2 For reimbursement of professional expenses for employees whose positions are required by regulation to maintain current licenses, certifications, or memberships in order to perform the duties and functions of the job, please see policy HR-118, “License/Certification Renewal Expenses.”

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2.4.2.12.4.2.3 Training not covered above and done onsite, offsite, or online see policy AFS-027 “Travel and Other Expenses”.

2.4.3 Child/Dependent Care Expenses (Board and PAC Members Only)

2.4.3.1 Board members and PAC members may seek reimbursement of reasonable out-of-pocket expenses related to care-taking services for their own children and/or dependents while attending L.A. Care business-related meetings and functions. Board and PAC members are encouraged to use personal resources to limit the amount of expense incurred. All child and/or dependent care expense reimbursement requests are subject to designated L.A. Care staff review and approval.

2.4.3.2 Reimbursement for child and/or dependent care services shall not be provided to Board members or PAC members when attending meetings or events at which child and/or dependent care services have been arranged and paid for by L.A. Care unless special circumstances have been determined and pre-approved by designated L.A. Care staff.

2.4.3.3 Child and/or dependent care expenses shall not be reimbursed to L.A. Care employees.

2.4.4 Personal Property/Clothing and Household Expenses (Employees

Only).

2.4.4.1 L.A. Care has no obligation or liability to reimburse for the cost of stolen or misplaced personal property. Therefore, individuals are discouraged from using personal items for business purposes.

2.5 Disciplinary Action (Employees). Employees who violate this policy may be subject to disciplinary action up to and including immediate termination. Failure of temporary staff members to comply with this policy will result in corrective action up to ending the temporary staff member’s assignment with L.A. Care.

2.6 Board and PAC Members. If a member of the Board or a PAC member fails to meet the requirements of this policy, he or she will be notified separately of such non-compliance by the Chief Financial Officer (CFO), the Chief Executive Officer (CEO), or their designees. Any repetition of the offence or any other circumstance of non-compliance which calls for corrective action may result in removal from the position in accordance with applicable laws and/or L.A. Care policies, procedures, operating rules, or by-laws.

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DESKTOP PROCEDURE AFS.DP-004A: NON – TRAVEL AND OTHER RELATED EXPENSES

Complements Policy AFS-004: Non – Travel and Other Related Expenses

1.1 Expenses must be pre-approved in accordance with the following

procedures:

1.2 Expense Approval Process:

1.2.1 The Business Unit Manager or designee must complete and submit a

Project & Event Justification Form (See Attachment 1) prior to

expenses being incurred. Business Unit Manager or designee must

plan in advance to account for approval lead times.

1.2.2 The Business Unit Manager or designee must use the most recent

federal guidelines per diem rates for meals when determining

request amounts for expenses covered under this policy. These per

diem rates will provide per person dollar amount guidelines for

breakfast, lunch, and dinner. The GSA per diem rate guidelines can

be found at http://www.gsa.gov/portal/category/100120.

1.2.3 The Business Unit Manager or designee must complete and acquire

approval of the Project & Event Justification Form from the

responsible director and officer before submitting to Accounting

Services. Accounting Services will seek to obtain CFO and CEO

approvals. The following limits indicate when Board of Governors

approval will also be required.

1.2.3.1 Expenses of up to $105,000 per project must be approved

by Chief Financial Officer (CFO) and Chief Executive

Officer (CEO) or respective designees.

1.2.3.2 If the cost of project is greater than $105,000 per project,

approvals will be required by CEO and CFO as well as

Board of Governors. Business Unit Manager or designee

must submit a motion through his or her division first to

the Finance & Budget Committee, then to the Board of

Governors for consideration, discussion, and approval.

1.2.3.3 Business Unit Manager or designee must not submit

more than one Project & Event Justification Form for

one individual project or event in order to keep forms

under the $105,000 threshold and avoid Board of

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http://www.gsa.gov/portal/category/100120


Governors approval.

1.2.4 When the Project & Event Justification Form and motion (when

applicable) are approved, the Accounting and Finance department

will open a project code for the approved expenses and

communicate this code to the Business Unit Manager.

1.2.5 The Business Unit Manager or designee is responsible for managing

to the dollar amount of the approved expense. The per-year

spending shall not exceed the per-year dollar amount maximum of

approved Project & Event Justification Form and/or motion.

1.2.6 After the expense is approved and when the actual purchases need to

be made on expenses covered under this policy, the Business Unit

Manager or designee must submit a Non-Travel Meals Request

Form for approval in advance of the event.

1.2.6.1 Exception for Extraordinary Extenuating Circumstances. If completing a Non-Travel Meals

Request Form in advance of the event is not feasible due

to extenuating circumstances, the form may be submitted

after the event with CFO or CEO approval.

1.2.7 The Non-Travel Meals Request Form must include the assigned

project code and be approved by the operational manager and

officer. Then the form is to be submitted to the Accounting Services

department.

1.2.8 Accounting and Finance will first ensure that the Project & Event

Justification Form is properly approved, then either approves or

rejects the Non-Travel Meals Request Form (Attachment 2) based

on approved expense limits.

1.2.8.1 If approved, the Procurement Department will create a

Purchase Order for the vendor, allowing the Business

Unit Manager or designee to place the order. Signed

invoices and Check Request Forms should be submitted

to Accounts Payable along with the approved Non-

Travel Meals Request Form for payment.after the event.

1.2.8.2 If not approved, the spending cannot be paid by L.A.

Care. There is no appeals process for projects or events

not approved.

1.2.9 Monitoring and Reporting.

1.2.9.1 The Business Unit Manager or designee is responsible

for ensuring that all expenses are processed timely and

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coded with the correct project codes.

1.2.9.2 Variance reports between actual versus budgeted project

costs will be provided to Business Unit Managers on a

monthly basis. Expenditures for expenses covered under

this policy will be reported to the Board of Governors on

a quarterly basis.

1.3 Retroactive Approval. A retroactive approval is considered only in

Extenuating Circumstances. A request after the fact must be submitted to the

applicable officer and CFO (or CEO) or designee for approval. Once the CFO

(or CEO) or designee has approved the expenditure, the requestor must bring

the approval to the Accounting and Finance department for final processing.

1.4 Overages. Overages of 10% or less of the original project approval amount

can be processed with CEO approval. For overages over 10% of the original

project approval amount, the Business Unit Manager or designee must complete

the Expense Approval Process (Section 1.2).

1.5 Disputes. The CFO or designee shall make the final determination on disputed

expenses.

1.6 There is no appeals process for projects/ events not approved.

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TRAVEL AND OTHER EXPENSES AFS-027

DEPARTMENT ACCOUNTING AND FINANCIAL SERVICES

CATEGORY DATES

PP-Mandated

PP-Non-Mandated

Effective Date 8/21/19978/21/1997 Review Date 5/7/20155/7/2

015 Next Annual Review Date

5/7/20165/7/2016

Legal Review Date

4/20/20154/20/2015

C&Q/BOG Review Date

5/7/20155/7/2015

BOG Motion # (if applicable)

FIN 109.0515

Supersedes Policy Number(s) 1900

LINES OF BUSINESS

Medi-Cal – Plan Partners MCLA Cal MediConnect Internal Operations Healthy Kids PASC-SEIU Plan L.A. Care Covered


ATTACHMENTS

SUBJECT MATTER EXPERT

NAME DEPARTMENT TITLE Angela Bergman Accounting and Finance Services Interim Director, Finance


NAME Marie Montgomery Angela Bergman Michael Rembis

DEPARTMENT Executive Services Finance Finance and Budget Committee

TITLE Chief Financial Officer Director of Accounting and Financial Services

Treasurer of the Board of Governors

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AUTHORITIES

California Welfare & Institutions Code §14087.96 et seq.

REFERENCES AFS.DP-027A, “Travel and Other Expenses”

POLICY HISTORY

REVIEW DATE COMMENTS NEXT ANNUAL

REVIEW DATE

05/11/2009 New policy; supersedes 1900 05/11/2010 05/07/2015 Revised to include language from AFS-004 (split into two policies) 05/07/2016

DESKTOP PROCEDURES

Desktop procedures are incorporated by reference in all L.A. Care policies

DEFINITIONS

Please visit the L.A. Care intranet for a comprehensive list of definitions used in policies: http://insidelac/ourtoolsandresources/departmentpoliciesandprocedures

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1.0 OVERVIEW:

1.1 This policy establishes L.A. Care Health Plan’s (L.A. Care) policy for reimbursement of actual and necessary business-related travel expenses incurred by employees, members of the Board of Governors, stakeholder committees, and members of the Public Advisory Committees (PACs) on behalf of L.A. Care. Please refer to AFS-004 for information on reimbursable non-travel-related expenses.

1.2 It is not possible to anticipate every situation that may be encountered. In situations not specifically addressed in this policy, the employee is expected to use their best judgment considering the parameters and standards of the Policy.

2.0 POLICY:

2.1 L.A. Care, as a public entity, has a fiduciary responsibility to utilize funds in a responsible and prudent manner. All employees, Board members, and PAC members have a fiduciary role when requesting reimbursement for business-related expenditures, to provide adequate supporting documentation, rationale, and explanation for all reimbursable expenses.

2.2 L.A. Care will reimburse certain travel expenses, for employees, Board members, PAC members, and stakeholder committee members, when such expenses are covered under this policy and approved through the procedures in AFS.DP-027A.

2.22.3 All employees must have prior authorization to travel, which is approved by the CFO or designee.

2.4 Reimbursable and Non-Reimbursable Travel Expenses 2.3 2.3.12.4.1 Travel and Training

2.4.1.1 Travel expenses are reimbursable when incurred in connection with activities that are related to official L.A. Care business including conferences and seminars for training and development.

2.3.1.12.4.1.2 All reasonable expenses, including the cost of transportation, lodging, and miscellaneous expenses for gratuities, transportation to and from airports, etc., incurred during an authorized trip are reimbursable as outlined herein and in AFS.DP-027A.

2.4.1.3 Expenses of a personal nature, such as entertainment, movies, sightseeing, health club fees, etc., are not reimbursable. (See AFS.DP-027A for additional non-reimbursable expenses)

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2.3.22.4.2 Airlines

2.3.2.12.4.2.1 L.A. Care will reimburse acceptable air travel which is properly booked through L.A. Care’s authorized travel application in accordance with AFS.DP-027A.

2.3.2.22.4.2.2 L.A. Care will not reimburse for the following charges, and the employee, Board member, PAC member, or stakeholder committee member will be held responsible for the charges: 2.3.2.2.12.4.2.2.1 Membership fees for private clubs, air

travel clubs, airline-sponsored lounges, and frequent flier clubs.

2.3.2.2.22.4.2.2.2 The cost of any in-flight movies or other similar pay-per-view entertainment, or for any in-flight alcoholic drinks.

2.3.2.2.32.4.2.2.3 Any expenses due to the loss of personal baggage.

2.3.2.2.42.4.2.2.4 Flying personal aircraft while on L.A. Care business is strictly prohibited.

2.3.2.2.52.4.2.2.5 Cost of kennel fees and/or house-sitters.

2.3.32.4.3 Out-of-Town Lodging 2.3.3.12.4.3.1 L.A. Care will reimburse for out-of-town lodging

with appropriate approval in accordance with this policy and AFS.DP-027A. ,

2.3.3.22.4.3.2 L.A. Care will not reimburse for: 2.3.3.2.12.4.3.2.1 Charges for guaranteed reservations

that the employee, Board member, PAC member, or stakeholder committee member fails to timely cancel, unless caused by L.A. Care conflicts. (Obtain a confirmation number from the hotel verifying the cancellation of the guaranteed reservation).

2.3.3.2.22.4.3.2.2 Charges in-lieu of hotel accommodation when staying at the private residence of a friend, family member.

2.3.3.2.32.4.3.2.3 The cost of alcoholic beverages, television movies, tobacco products, mini-bar charges, personal toiletry needs, newspapers, or other incidentals.

2.3.3.2.42.4.3.2.4 Costs incurred by a spouse, family member, or significant other who accompanies the employee, Board member, PAC member, or stakeholder committee member on the business trip.

2.3.42.4.4 Parking

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2.3.4.12.4.4.1 Airport parking expenses incurred at the home airport are reimbursable. If parking is in excess of two days, reimbursement will be for long-term parking rates only. Employees, Board members, PAC members, and stakeholder committee members shall endeavor to obtain validated parking “stickers” from hosting locations whenever possible.

2.3.4.22.4.4.2 Parking fees incurred in attendance of business meetings at locations other than L.A. Care’s office are reimbursable.

2.3.52.4.5 Mileage 2.4.5.1 Mileage incurred in the use of a personal automobile while on L.A.

Care business is reimbursable at the then-prevailing amounts allowed by the Internal Revenue Service (IRS). These rates are updated annually each January 1st, and will be utilized by L.A. Care as L.A. Care’s mileage reimbursement rate. Please refer to AFS.DP-027A for more information.

2.3.5.1 Mileage for normal commuting to and from L.A. Care’s offices, and mileage incurred while receiving an Auto Allowance is not reimbursable.

2.3.5.22.4.5.2 2.3.5.32.4.5.3 Examples of reimbursable mileage include:

2.3.5.3.12.4.5.3.1 Miles from home or office to airport and return (less base mileage between home and office on a normal commute).

2.3.5.3.22.4.5.3.2 Miles from office to assigned worksite(s) (and return), as in the case of field workers (auditors; UM nurses; case workers).

2.3.5.3.32.4.5.3.3 Miles from office to offsite business meeting location(s) (and return).

2.3.5.3.42.4.5.3.4 Mileage in-lieu of airfare, if driving instead of flying to a meeting.

2.3.5.3.52.4.5.3.5 Business mileage incurred on non-scheduled work days, and holidays.

2.3.62.4.6 Rental Cars 2.4.6.1 The cost of rental cars on out-of-town travel assignments will be

reimbursed only with advance approval by the responsible officer of the respective department in accordance with this policy. Please refer to AFS.DP-027A for more information.

2.3.72.4.7 Traffic/Parking Tickets 2.4.7.1 Automobile traffic and/or parking tickets are not reimbursable.

2.3.7.1 2.3.82.4.8 Taxis and Other Public Transportation

2.4.8.1 Business-related taxi, train, and other public transportation costs while on out-of-town assignments or business are reimbursable, provided that a rental car has not been approved.

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2.4.8.2 Employees, Board members, PAC members, and stakeholder committee members are encouraged to use the most cost effective form of travel.

2.4.8.3 Taxis are acceptable modes of transportation between airports and hotels when guest transportation services are not conveniently available.

2.3.8.12.4.8.4 Ride sharing is expected for those traveling together to the same event or location. However, employees, Board members, PAC members, and stakeholder committee members are discouraged from using taxis unless necessary. Examples of trips where taxis are appropriate are trips to/from terminals and hotels when guest transportation services are not conveniently available, or when transporting heavy work papers.

2.4.8.5 Any Public transportation costs incurred for normal commuting to and from L.A. Care’s offices are not reimbursable.

2.3.92.4.9 Meals Related to Business Travel 2.3.9.12.4.9.1 L.A. Care reimburses employees, Board members,

PAC members, and stakeholder committee members for actual reasonable costs incurred for out-of-town meals while traveling on L.A. Care business. Please refer to AFS.DP-027A for more information. 2.3.9.1.12.4.9.1.1 Out-of-town is defined as over 50

miles from home or L.A. Care’s office. 2.3.9.1.22.4.9.1.2 Expenses incurred when meals are

provided by the conference are not reimbursable. 2.3.9.2 The purchase of alcoholic beverages with L.A. Care funds is

prohibited, and these expenses are not reimbursable.. 2.3.9.32.4.9.2 2.3.9.42.4.9.3 Employees whose home office is not in the Los

Angeles area will be considered travelers when required to travel to the Los Angeles Offices.

2.3.9.52.4.9.4 Please refer to AFS-004, “Non-Travel Expenses” for more information on non-travel meals.

2.4.10 Travel Funded by Grants

2.4.10.1 Travel funded by a grant or outside third party must be identified as additional reporting may be required.

2.4.10.2 This policy applies to grant-funded travel unless grant agreement specifies otherwise. .

2.4.11 Travel Paid for by Third Parties

2.4.11.1 California Fair Political Practices Commission (FPPC) mandates Public Officials and Employees to use “Form 801 Payment to Agency Report” to report certain payments received by state and

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local government agencies that are used for agency purpose and paid by third party.

2.4.11.2 All Payments made for the travel expenses of the employee must be for purposes approved by LA Care and within the limits of LA Care’s Travel Expense Policy AFS-027. Please refer to the desktop procedures AFS.DP-027A section 1.7 for additional information and a link to the form.

3.0 Special Considerations

3.1 Departmentally Paid Training, Conferences and Professional Exams

3.1.1 Training not covered in AFS-004 “Non-Travel and Other Related

Expenses” and done onsite, offsite, or online in groups of one or more employees should be purchased in advance in accordance with the policy AFS-007, “Procurement Policy,” and approved in accordance with policy AFS-006, “Authorizations and Approvals.”

2.3.9.63.1.2 Other individualized training and professional exams not covered in above can be expensed and must be submitted Concur with supporting documentation such as enrollment information, and a receipt. These expenses will be the subject to manager approval after-the-fact so employees should seek approval from his or her management prior to paying upfront for the individualized training or exams.

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ACCOUNTING & FINANCIAL SERVICES | AFS.DP-027A| EFFECTIVE DATE: 05/07/15 | REVISION DATE:

10/19/16

DESKTOP PROCEDURE AFS.DP-027A:

TRAVEL AND OTHER EXPENSES

Complements Policy and Procedure AFS-027: Travel and Other Expense Policy

1.0 PROCEDURE

1.1 Approval and Reimbursement Process

1.1.1 Prior to traveling, L.A. Care employees, Board members, PAC members, and Stakeholder Committee members must complete a travel authorization request and receive a Request ID Number. Employees wishing to be reimbursed for travel expenses can apply for applicable reimbursements by submitting Expense Reports through the Travel Reimbursement System (Concur).

1.1.2 PowerPoint instructions for using the Concur System are available on the L.A. Care intranet. http://insidelac/concur-travel-expenses

1.1.3 Travel Authorization Requests

1.1.3.1 Requests for reimbursement of airfare, hotel, and other expenses incurred beyond 50 miles from L.A. Care require a travel authorization request and shall be submitted on Concur and must be approved. No booking should be made until final approval is received. All employees must receive approval in advance for travel..

1.1.3.11.1.3.2 Travel authorizations grant approval to travel and are required for all business travel. Payment does not occur upon approval of travel authorizations. Reimbursements for expenses are processed after the travel upon approval of the Expense Report, unless the employee is approved for a Travel Advance.

1.1.3.21.1.3.3 The traveler will use their own resources for travel, including personal credit cards. Travelers who have a personal credit card, but are unable to pay for the entire cost of approved travel up front may request a Travel Advance. Employees who are required to travel but are unable us use personal resources may apply for use of company Procurement card for Hotel and Rental cars only through the Procurement Department. (See section 1.3 for details).

1.1.3.4 Approval. The request is to be completed in full and approved by the employee’s director, or senior director. Following this intermediate approval, each request is then forwarded to the responsible officer and CFO or designee for final approval. The travel authorization requests will be assigned a travel authorization number (Request ID Number) for tracking purposes. The Request ID Number is then matched to

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invoices for direct payment, and/or used as supporting documentation for Expense Report travel reimbursement.

1.1.3.31.1.3.5 If travel expenses are incurred without pre-approval due to extenuating circumstances, the requestor must provide an explanation of the circumstances and submit the request and appropriate documentation for retroactive approval in Concur. CFO approval will be required to process all reimbursements with retroactive approvals.

1.1.4 Expense Reports

1.1.4.1 Requests for reimbursement of expenses shall be submitted through Expense Reports in Concur.

1.1.4.2 Only Expense Reports with direct manager’s or director’s electronic approval will be processed and approved in accordance with Authorizations and Approvals policy (AFS-006).

1.1.4.3 Expense Report approvals for employees must be executed by direct managers and above.

1.1.4.4 No employee may approve his or her own Expense Report.

1.1.4.5 Expense Reports of the Chief Executive officer shall be reviewed and approved by the Chief Financial officer, or designee, and Chair of the Board.

1.1.4.6 Expense report approvals for members of the Board of Governors and Public Advisory Committees (PAC) shall be reviewed and approved by the Chief Financial officer and Chief Executive officer (CEO) or their respective designees.

1.1.4.7 Expense report approvals for members of Stakeholder Committees shall be reviewed and approved by the Chief Financial officer and Chief Executive officer (CEO) or their respective designees.

1.1.4.8 The Expense Report information must be filled out completely, including business purpose and location of expense/meeting and participant names and affiliations.

1.1.4.9 Expense Reports are required to be submitted monthly, although there is an additional 30 day grace period for late submissions.

1.1.4.10 Signed and approved original Expense Reports, along with required supporting documentation/receipts, shall be received for processing by the Accounts Payable Department within 6030 calendar days (inclusive of the grace period) after the expense is incurred.

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1.1.4.9.11.1.4.11 Expense Reports submitted after 6030 calendar days will not be honored unless approved by the Chief Financial officer (CFO) or designee.

1.1.4.9.21.1.4.12 Documentation Requirements:

1.1.4.12.1 Images of all required receipts should be uploaded into the electronic expense report for reimbursable expenses in excess of $2510.

1.1.4.12.2 Receipts must demonstrate proof of payment.

1.1.4.12.3 See section 1.2.5.2 for information on when travelers will be reimbursed at Per Diem rates and receipts will not be required.

1.1.4.12.4 All reimbursable expenditures must be fully documented and supported on the Expense Report in conformity with IRS Guidelinesapplicable law and L.A. Care policy.

1.1.4.9.31.1.4.12.5 If receipts cannot be obtained or have been lost, a statement to that effect shall be made on the Expense Report, along with an appropriate explanation. In the absence of a satisfactory explanation, the amount involved shall not be allowed.

1.1.4.9.41.1.4.12.6 The business purpose of the expenditure, including applicable names, titles, etc., must be provided in all cases.

1.1.4.9.4.1 L.A. Care requires that travel business meal expenses be fully documented to include names and affiliations of individuals, and business purposes of the expenditure.

1.1.4.9.4.21.1.4.12.6.1 Providing initials instead of the name is insufficient.

1.1.4.9.4.31.1.4.12.6.2 If required receipts and/or required documentation of the business purpose are not provided, the expense will not be reimbursed.

1.1.4.9.4.41.1.4.12.6.3 All requests for reimbursement are subject to reasonability. The CFO or designee shall make the final determination on disputed expenses.

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1.1.4.9.51.1.4.12.7 An itemized statement for hotel, meal and rental car charges must be attached.

1.2 Specialized Travel Expenses

1.2.1 Airlines

1.2.1.1 All L.A. Care employees, Board members, PAC members, and Stakeholder Committee members must use Concur to book air travel for L.A. Care business.

1.2.1.1.1 Exception for extenuating circumstances. Airfare may be purchased outside of Concur only if prior approval is obtained from the CFO or designee. In such cases, the purchaser will only be reimbursed for economy class accommodations.

1.2.1.1.11.2.1.1.2 Airfare purchased through the Travel Store without an approved Travel Authorization in Concur will require Business Justification and CFO approval for extenuating circumstances.

1.2.1.1.21.2.1.1.3 If the airfare is not purchased through Concur, then the purchaser must include an image of the receipt portion of the boarding pass for reimbursement. If using E-tickets, the employee, Board member, PAC member, or Stakeholder Committee member must request a passenger receipt when checking in at the ticket counter.

1.2.1.2 Frequent Flyer Benefits. Employees, Board members, PAC members, and Stakeholder Committee members may earn personal frequent flyer credit for flights taken on L.A. Care business. However, employees, Board members and PAC members may not incur abnormal travel time or incur any additional expenses for the purpose of acquiring frequent flyer mileage. Employees, Board members, PAC members, and Stakeholder Committee members may not specify that an airline reservation must be made with a specific airline to gain frequent flyer credits.

1.2.2 Out-Of-Town Lodging

1.2.2.1 Out-of-town lodging is defined as lodging located over 50 miles from home or L.A. Care’s office. Lodging within 50 miles from home or

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L.A. Care’s office is not reimbursable unless CFO or designee approval is obtained.

1.2.2.2 All hotel stays require an approved travel authorization request.

1.2.2.3 Hotels are to be booked by the traveler through Concur, and the reservation will be held by the L.A. Care Purchasing Card. Employees will then use their personal credit card to pay for the hotel upon arrival, and request reimbursement through Concur. If a personal credit card is not available, refer to section 1.3 for Travel Advances,

1.2.2.21.2.2.4 With advance approval by the CFO or designee, L.A. Care will reimburse employees, Board members, PAC members, or Stakeholder Committee members for hotel and meal charges if early check-ins or staying over an extra day to save on airfare. (e.g., L.A. Care will reimburse for reasonable hotel, parking, meal expenses if arriving early at the work location to receive a discount “Saturday stay-over” airline rate.) This policy is designed to be a net benefit to both the individual and L.A. Care. If the cost of the hotel, parking, and meal expenses exceeds the savings on the Saturday stay-over, then the excess becomes a personal cost and is not subject to reimbursement.

1.2.2.31.2.2.5 The hotel bill must be itemized on the Expense Report (e.g., business-related telephone calls, meals, and parking separated from the room charges).

1.2.2.3.11.2.2.5.1 Credit card receipts are not acceptable documentation for hotel expenses.

1.2.2.5.2 Personal items must be identified (movies, mini-bar, personal phone calls, etc.) and excluded from the reimbursement request.

1.2.2.3.21.2.2.5.3 Meal expenses reflected on the hotel bill must be claimed separately as part of Meal Expense and not part of the hotel expense. (See section 1.2.5 for details).

1.2.2.3.31.2.2.5.4 The hotel bill must show the name of the hotel, location of the hotel, date(s) registered at the hotel, room charges, and applicable taxes, laundry (reimbursable only if the stay exceeds four nights), telephone charges, and other charges (such as parking).

1.2.2.6 Hotel rates must be a reasonable amount based on the average hotel costthe standards identified by Concur for the travel destination. Travelers should seek lodging rates at or below the federal government’s per diem rate, found on the U.S. General Services Administration Website, www.gsa.gov. If these rates are not available, a hotel’s discounted government rate will be acceptable.

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1.2.2.7 If neither GSA nor government rates are available, additional justification should be provided. Exceptions to these maximum standards must be authorized by the CFO or designee.

1.2.2.41.2.2.8 L.A. Care employees, Board members, PAC members, and Stakeholder Committee members attending a conference are allowed to stay at the host hotel, even if it exceeds the average hotel cost. Exceptions to these maximum standards must be authorized by the CFO or designee.

1.2.3 Mileage

1.2.3.1 When departing from or returning to home directly from a business meeting, the amount of reimbursement will be computed by indicating the number of business miles driven less base mileage (home to office, round trip), times the allowable IRS mileage rate. Documentation of the mileage traveled and base mileage must be electronically completed and submitted by the employee.

1.2.3.2 In order to obtain reimbursement for mileage, the business purpose for the trip must be stated on the Expense Report. In case of multiple employees, Board members or PAC members sharing a personal automobile, only the employee, Board member, PAC member, or Stakeholder Committee member incurring the usage cost, is allowed reimbursement.

1.2.3.3 Mileage reimbursement applies only to the use of an employee’s, Board member’s, PAC member’s, or Stakeholder Committee member’s personal vehicle and not for any form of public transportation.

1.2.3.4 If the employee normally uses public transportation to commute to work, L.A. Care will not reimburse unused commuter fares if his/her personal auto is used for business.

1.2.3.5 All mileage reimbursements will deduct the mileage between the home and office of an employee’s normal commute if they were to have driven, regardless of if the employee actually drives to the office on a regular basis.

1.2.3.6 Mileage incurred while receiving an Auto Allowance is not reimbursable.

1.2.3.7 Mileage to attend volunteer activities is not reimbursable.

1.2.3.8 Travelers who use their personal vehicle on L.A. Car business are required to have adequate insurance coverage as required by state law.

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1.2.3.51.2.3.9 L.A. Care shall compensate property damages to an individual’ personal vehicle that occur during business travel when the individual is not at fault. L.A. Care will compensate up to $250 or the amount of the deductible on the individual’s insurance policy, whichever is the lesser amount, for each accident.

1.2.3.10 L.A.. Care shall not reimburse mileage for an employee’s standard commute to work. A transportation incentive will be provided to o eligible employees. Please refer to policy HR-122 “Transportation Incentive” for more information.

1.2.3.5.1 Car rental is not an allowable continued education expense.

1.2.4 Rental Cars

1.2.4.1 If the rental car is used for business purposes, the employee, Board member, PAC member, or Stakeholder Committee member must purchase and will be reimbursed for the optional collision coverage and/or optional personal liability coverage offered by the rental car company.

1.2.4.2 If available, those rental car companies thatrental car companies should be have negotiated special rates with L.A. Care must be used. selected from those listed in the Travel Reimbursement System to achieve the best rates possible.

1.2.4.3 When renting a car for business purposes, luxury and specialty car models are not authorized.

1.2.4.4 Economy Class vehicles should be selected whenever four or fewer individuals, including the driver, will be traveling in the rental automobile at any one time.

1.2.4.31.2.4.5 Mid-size Class vehicles may be selected in the event that more than four individuals will be riding in the rental automobile at any one time, or in the event that an economy class vehicle is not available and immediate departure is necessary.

1.2.4.41.2.4.6 If the rental car is used for business purposes, the employee, Board member, PAC member, or Stakeholder Committee member will be reimbursed for the additional expense of a Global Positioning System (GPS).

1.2.4.7 Whenever possible, an effort should be made to return the rental car with a full tank of gas and refueling options are to be declined from the rental agency., if the GPS is permanently affixed to the vehicle and the charge for the GPS is included in the daily rate rental car fee.

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Portable GPS devices are not considered to be standard equipment, but an accessory and are not reimbursable.

1.2.4.51.2.4.8 Mileage will not be reimbursed for employees who opt to use a rental car rather than their personal vehicle. Receipts may be submitted for gas expense reimbursement through Concur.

1.2.5 Meals Related to Business Travel

1.2.5.1 For single day travel, the rReimbursement amount will be based on receipts of the actual costs of meals related to business travel with a maximum reimbursement not to exceed the Federal Daily GSA Per Diem limits.

1.2.5.1.1 IOriginal itemized receipts and appropriate explanations are required for all meals on single day travel, regardless of the amount.

1.2.5.1.2 Gratuities should be reasonable and not exceed 20% unless restaurant minimum charges/ restrictions are in place, in which case these circumstances must be documented.

1.2.5.1.21.2.5.1.3 The Expense Report should include employee names if the meal was for more than one individual. The employees in attendance should all have approved travel authorizations. .

1.2.5.1.4 For meals not pertaining to travel, please follow the processes set forth in the Non-Travel Expense Policy, AFS-004.

1.2.5.1.31.2.5.1.5 For multi-day travel, L.A. Care employees, Board members, PAC members, and Stakeholder Committee members will be reimbursed at the Federal Daily Per Diem (www.gsa.gov/perdiem) maximum allowable amount for meals expenses. Receipts will not be required in the Expense Reports for these meals to be reimbursed at Per Diem. Per IRS guidelines, employees, Board members, PAC members, and Stakeholder Committee members must prove the time (dates), place, and business purpose of these meal expenses to be reimbursed at per diem. In accordance with the GSA guidelines, tThe meal expenses for first and last day of the travel is allowed at a rate of 75 % of the Federal Daily Per Diem.

1.2.61.2.5.1.6 In lieu of Per Diem, Receipts may be submitted for reimbursement less than per Diem limits.

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1.2.6.1 Receipts for Meals which exceed GSA Per Diem limits will be reimbursed only at Per Diem limits. Original itemized receipts and appropriate explanations are required for all meals, regardless of the amount, with exception of CFO or designee approval. Explanations must include names, titles, and business purpose of the meal.

1.2.6.2 The Expense Report should include participant names if the meal was for more than one individual.

1.3 Advances for Travel

1.3.1 L.A. Care employees should utilize their own financial resources (e.g., credit card) for authorized travel, meetings, conferences, etc., and obtain reimbursement after the event in accordance with this policy.

1.3.2 In cases where funding the entire cost of the travel from personal means is not feasible, Exception for financial hardship. In cases of employee financial hardshipEemployees may request a Travel Advance up to the amount requested in the Approved Travel Authorization.

1.3.3 Travel Advances may be used to cover the cost of reasonable travel expenses including lodging, meals and other expenses..

1.3.4 In cases where no personal credit card is available, arrangementss can be made to have L.A. Care pay hotel costs in advance through the company Procurement Care. A check request should be submitted to the accounting department with the request.

1.3.5 The cost of Airfare and a Rental Car should be excluded from Travel Advance requests as the preferred method is to select the Enterprise Rental Car option for corporate account billing. Airfare booked through Concur upon authority of Approved Travel Authorization will be charged to the corporate Procurement card.

1.3.6 To receive ansuch an advance for travel, the employee should fill out an Advance Request Form and receive approval from the employee’s responsible officer.

1.3.7 Prior to travel, when requesting a Travel Advance, employees must complete the following steps:

1.3.7.1 Request and receive an approved Travel Authorization from Concur.

1.3.7.2 Complete the Travel Advance Form.

1.3.7.3 Receive approval for the Travel Advance from the applicable officer.

1.3.7.4 Submit the approved form and an approved Check Request to the Accounts Payable Department to receive a check for the travel

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advance. In accordance with IRS guidelines, employees will receive the advance within 30 days of the time of the expense.

1.3.8 The receipts and unused cash from the travel advance must be returned to L.A. on an Advance Reconciliation Form within 30 days of the conclusion of the travel, plus an additional 30 day grace period. Reconciliation Forms and cash not returned within 60 days will be taxed as wages per IRS Guidelines.

1.3.21.4 Special Considerations

1.4.1 The purchase of any capitalized assets, small equipment, furniture, etc., by employees will not be reimbursed by L.A. Care.

1.4.2 Conferences, Seminars, Training for Development and Continuing

Education. Travel to and from continuing education courses is reimbursable for employees only if pre-approved by the responsible manager and officer.

1.4.3 The cost of the seminar or conference should be included in the travel authorization, but the payment can be processed through standard Procurement processes outside of Concur.

1.5 Pre-Employment Travel

1.5.1 The Talent Acquisition department may request approval to reimburse travel expenses associated with recruiting (e.g. airfare for a candidate) by initiating a travel authorization in Concur.

1.5.2 The Human Resources division must approve all receipts, which will be subject to the requirements set forth in this policy.

1.5.3 Once all approvals have been obtained, the Talent Acquisition department will submit a Check Request form, approved by the HR department, to Finance so that a reimbursement can be made to the candidate.

1.3.2.11.5.4 The Talent Acquisition may request a Travel Advance for the candidate by following the procedure outlined in section 1.34 of this policy, which should be used to cover per diem meals and reasonable incidental expenses.y.

1.3.31.5.5 This policy provides guidelines on expense reimbursements and advances for recruiting travel only. Refer to policy HR-119, “Relocation Expenses” for guidelines on mileage and other expense reimbursements associated with relocation.

1.41.6 Travel Paid for by Third Parties

2.01.6.1 All LA Care employees who are accepting a travel payment from a third party that is for the purpose of facilitating the public’s business and is therefore not a gift or income

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must fill out the “Form 801 Payment to Agency Report” within 30 days of the use of the payments.

3.01.6.2 The full Regulation 18950.1 of the California Fair Political Practices Commission can be found here: http://www.fppc.ca.gov/content/dam/fppc/NS-Documents/LegalDiv/Regulations/Index/Chapter9-5/18950.1.pdf

1.6.3 Form 801 can be found in the following link: http://www.fppc.ca.gov/content/dam/fppc/NS-Documents/TAD/Agency%20Reports/Form%20801.pdf

1.6.4 The form must be completed in full and approved by the traveler’s manager.

1.6.5 Employees must submit a copy of the completed form to both the Finance and Legal departments.

3.11.7 Monitoring and Reporting

3.1.11.7.1 The Business Unit Manager or designee is responsible for ensuring that all expenses are processed timely and coded correctly.

3.1.21.7.2 Variance reports between actual versus budgeted costs will be provided to Business Unit Managers on a monthly basis. Expenditures for expenses covered under this policy will be reported to the Board of Governors on a quarterly basis.

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http://www.fppc.ca.gov/content/dam/fppc/NS-Documents/LegalDiv/Regulations/Index/Chapter9-5/18950.1.pdf

http://www.fppc.ca.gov/content/dam/fppc/NS-Documents/LegalDiv/Regulations/Index/Chapter9-5/18950.1.pdf

http://www.fppc.ca.gov/content/dam/fppc/NS-Documents/TAD/Agency%20Reports/Form%20801.pdf

http://www.fppc.ca.gov/content/dam/fppc/NS-Documents/TAD/Agency%20Reports/Form%20801.pdf

Board of Governors

MOTION SUMMARY



Issue: To approve Accounting & Financial Services Policy AFS 025 (Tangible Net Equity and Board-

Designated Reserves Policy).


Background:

Staff is requesting the Committee to approve updates to the policy language to accurately reflect L.A. Care’s obligation to maintain appropriate reserve levels to both meet regulatory requirements and meet expected future payments and other obligations designated by an official action of the L.A. Care Board of Governors. The updated policy no longer mentions liquidity requirements as those requirements are covered in section 2.2.2 Liquidity and Flexibility of the L.A. Care Investment Policy (AFS-008).

Member Impact: None.


Motion: To approve the Accounting & Financial Services Policy AFS 025 (Tangible Net Equity and Board-Designated Reserves Policy), as attached.

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L.A. Care HEALTH PLAN.

TITLE: TANGIBLE NET EQUITY AND WORKING CAPITALBOARDDESIGNATED FUNDS RESERVES

SERVICE AREA: FINANCE SERVICES

DEPARTMENT: ACCOUNTING AND FINANCIAL SERVICES

Policy and Procedure Number AFS-025Total No. of Pages 4

Dates Effective Date 06/08/1116Revision Date 06/08/1116Review Date Administrative YES X NO

Applies to: Medi-Cal YES NO x

Mandated YES NO x MCLA YES NO x Healthy Families YES NO x Healthy Kids YES NO x

1 .0 POLICY:

L.A. Care Health Plan's ("L.A. Care") policy is to establish, maintain, and utilize Tangible Net Equity ("TNE") and Working CapitalBoard-Designated Funds Reserve ("Liquid Reserve[s]") funds for the benefit of L.A. Care's long-term financial solvency.

1.1 Maintaining appropriate levels of reserves is a fiscal responsibility of L.A. Care and required pursuant to L.A. Care's licensure as a Licensed Health Care Service Plan pursuant to the Knox-Keene Health Care Service Plan Act of 1975, as amended [Health & Safety Code Section 1340, et-seq.] ("Act").

1.2 As required by the State of California Department of Managed Health Care ("DMHC"), L.A. Care shall maintain at all times the minimum TNE required by Section 1376 of the Act, calculated in accordance with Title 28 California Code of Regulations ("Rule[s]"), Section 1300.76. The TNE required by the Act and the Rules is a minimum required amount and is not considered by the DMHC as an appropriate or sufficient reserve amount.

1.3 In addition to setting aside funds to meet TNE requirements, L.A. Care shall establish and maintain appropriate reserves sufficient (1) to meet all of L.A. Care Board of Governors' ("Board") designated use of funds; (2) to maintain sufficient working capital for L.A. Care to continue the timely payment to Directly Contracted Providers for the provision of health care services in the event payments from the State of California, other government or private payors are delayed; and (32) to ensure solvency for both planned and unexpected events.

2.0 DEFINITIONS:

Whenever a word or term appears capitalized in this Policy and Procedure, the reader should refer to the "Definitions" below.

2.1 Tangible Net Equity ("TNE") "Tangible net equity" means net equity reduced by the value assigned to intangible assets including, but not limited to: goodwill; going concern value; organizational expense; starting-up costs; obligations of officers, directors, owners, or affiliates which are not fully secured, except short-term obligations of affiliates for goods or services arising in the normal course of business which are payable on the same terms as equivalent transactions with non-affiliates and

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Policy and Procedure Number AFS-025 Page 2 of 4

which are not past due; long term prepayments of deferred charges, and non-returnable deposits. An obligation is fully secured for the purposes of this subsection if it is secured by tangible collateral, other than by securities of the plan or an affiliate, with equity of at least one hundred and thirty percent (130%) of the amount owing. [Rule 1300.76(e)].

2.2 Board-Designated Funds — means reserves identified and accounted for in L.A. Care's financial records in order to meet expected future payments and other obligations designated by an official action of the L.A. Care Board of Governors.

2.3 Liquid Assets — means accounts or securities that can be easily converted to cash at little or no loss of value. Examples of Liquid Assets include: cash, money in bank accounts, money markets mutual funds and U.S. treasury bills.

2.4 Working Capital Reserve Funds — means the Liquid Assets identified and accounted for in L.A. Care's financial records to ensure that operations are maintained for a set period of time.

2.53 Solvency — means the degree to which the current assets of an organization exceed the current liabilities of the organization.

2.64 Undesignated Funds — means total revenues in excess of total expenses which are not designated for a specific use by the L.A. Care Board of Governors, or required to meet TNE requirements, or needed to meet Working Capital Reserve levels adopted by the L.A. Care Board of Governors.

2.7 Directly Contracted Providers — means health care providers who have contracted with L.A. Care to provide medical or administrative goods and services. This definition does not include health care service plans.

3.0 PROCEDURE/S:

3.1 Board-Designated Reserve Funds Allocation: Prior to the end of each month, L.A. Care's Chief Financial Officer ("CFO"), Chief Executive Officer ("CEO") or designee shall instruct the Director of Accounting and Financial Services or designee to identify on the balance sheet a specified dollar amount for Board-Designated Funds. Said funds shall be consistent with either a Board approved motion or resolution, or a Board approved budget or expenditure.

3.2 Working Capital Reserve Funds Allocation: L.A. Care shall maintain Working Capital Reserve Funds in sufficient amounts as defined by the Board, at all times, as adequate retained earnings permit. The amount of the funds shall be the equivalent of one (1) to one and a half (1.5) times the current payments to Directly Contracted Providers and the cost of consolidated administrative expenses for L.A. Care. The purpose of the funds shall be to ensure that there are sufficient funds to pay for all routine operational expenses, excluding Plan Partner payments, for at least thirty (30) calendar days and not more than forty-five (45) calendar days, when the State of California, other government or private payors payments are delayed.

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Regulatory Affairs & Compliance Name: Title:

Director Name: Title:

Officer Name: Title:

_____________________________ Date: c2-/ /11Andre G. Ac sta ComplianceOfficer ‘)V

1 / 4 \ Date:Patricia Mowlavi Director, ccou t F' cal

H • and A. Kahn Chief Executive Officer

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3.32 The Calculation and Reservation of Tangible Net Equity Allocation: On a monthly basis, the calculation and reservation for the TNE will be reviewed by the CFO or designee according to the Rules and, if required, adjusted as follows:

3.32.1 The calculation of TNE shall be according to Section 1300.76 of the Rules.

3.32.2 The reservation of TNE shall be according to Section 1300.84.3 of the Rules.

3.43 Financial Reporting with Respect to Board-Designated Reserve Funds: When reporting L.A. Care's financial results, the CFO or designee shall routinely update the Board as to the status of TNE, and Board-Designated Reserve Funds. and Working Capital Fund Allocations. The status report shall be rendered on a quarterly basis, or more frequently as directed by the Board. The accumulated reserves for each allocation, including TNE shall be shown on L.A. Care's balance sheet.

4.0 AUTHORITY:

4.1 Title 28, California Code of Regulations , Sections 1300.76 and 1300.84.3

4.2 Health and Safety Code Sections 1340 and 1376

5 .0 REFERENCE:

Accountability Matrix

Responsible Department(s) Policy Section #

Accounting and Finance Services Chief Executive Officer/Chief Financial Officer

3.1

APPROVAL:

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IF APPLICABLE Board of Governors Motion #:

Date:

Policy History

Date Department Policy or Section # Comment(s)

Annual Review

06/08/11 Accounting and Financial Services

AFS-025 New Policy 06/08/2012

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Board of Governors

MOTION SUMMARY

Date: November 3, 2016 Motion No. ECA 100.1116

Committee: Executive Community Advisory Committee

Chairperson: Christina Deh-Lee

Issue: Approval of additional member (s) to the Regional Community Advisory Committees (RCACs).

Background: Senate Bill 2092 requires that L.A. Care Health Plan ensure community involvement

through a Community Advisory Committee. L.A. Care’s Regional Community Advisory Committee (RCAC) structure is composed of 5-35 members per RCAC. RCAC member recruitment is on-going to ensure the highest possible community involvement.


Motion: To approve the following candidate(s) to the Regional Community Advisory Committees (RCAC) as reviewed by the Executive Community Advisory Committee (ECAC) during the October 12, 2016 ECAC meeting.

Name RCAC/CCI # Type of Member (Agency, if applicable)

Sina Nhek RCAC 2 Consumer

Vilma Diaz RCAC 5 Consumer

Maria Sandoval RCAC 7 Consumer

Richard Hernandez CCI Area 4 Consumer

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October 27, 2016 TO: Board of Governors FROM: John Baackes, Chief Executive Officer SUBJECT: CEO Report – November 2016

As we head into the holiday season, I am grateful for a productive year. Our team at L.A. Care has worked diligently towards implementing the Strategic Vision and focusing efforts internally to respond to the external environment to best meet the needs of our ever-growing membership.

I wish you all a Happy Thanksgiving and may you spend this time surrounded by those you appreciate most.

Please find below an update on organizational activities.

1. Successful Implementation of New Core Operation System (QNXT)

As I have reiterated over this past year, the completion of the CSPplus project has been the organization’s highest priority. I am proud to announce that we have successfully launched our core system, as of August 15. This milestone was reached ahead of schedule through the commitment and dedication of a core group of L.A. Care staff from across the organization.

Finishing the complex work to enable the processing of Medi-Cal claims in QNXT in mid-August was a tremendous milestone for L.A. Care. The successful loading and conversion of provider, member, and authorization data for all of our Medi-Cal members and providers is an amazing accomplishment. It sets the foundation for the next important phase of work to standardize business processes and implement of new and more efficient business practices to better serve our members and providers. It also paves the way to expand the use of the core system to serve the needs of our other member and provider populations. We intend to keep the Legacy System in operation for the next 12 months as claims in MHC are closed out.

I believe all of us should acknowledge and celebrate this great achievement.

2. Dr. Gertrude Carter Retirement Announcement

Trudi Carter, M.D., has served as L.A. Care’s Chief Medical Officer for the last four years. At the end of September, she shared her plans to retire in 2017.

I am proud and privileged to have worked with Trudi for my first 18 months at L.A. Care. Trudi is a tenacious advocate for our members and has been an avid supporter of our Strategic Vision and its implementation. It is rare for a Chief Medical Officer of a large health plan to continue to drive her

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decisions on the needs of the individuals we serve versus the business side of health care, but Trudi never loses sight. She has been an individual contributor and provided leadership for the accomplishment of many of the initiatives supporting performance improvement across L.A. Care.

Prior to joining L.A. Care, Trudi was the Chief Medical Officer at Cal Optima and prior to that, she held director and officer level roles at Catholic Healthcare West, Schaller Anderson, MedPartners, Mullikin Medical Centers and Hawthorne Community Medical Group. She was also a board certified practicing pediatrician. Most recently, she became a proud Grandmother, which will likely be her most fulfilling role yet.

We will acknowledge her properly before she leaves. The exact date of her retirement will be determined by the timing of identifying her replacement. A formal search has been launched.

3. Covered California Open Enrollment and Renewal Period

Open enrollment for new members seeking health coverage through the Health Benefit Exchange will begin on November 1, 2016 and will end January 31, 2017.

The renewal period for Covered California began on October 3, 2016 and ends December 15, 2016. For coverage to take effect on January 1, 2017, new members must enroll by December 15, 2016. Existing members were mailed a renewal notice early this month containing information about their plan. The renewal period is an ideal time to report any household changes, including adding a dependent or a change in permanent address. Members may contact L.A. Care Covered representatives at 1-855-270-2327 if they are interested with speaking to someone about changing components of their existing plan or coverage options.

4. Healthy Kids Program

The Healthy Kids program is ending December 31, 2016. L.A. Care staff are in the process of assisting current Healthy Kids members transition coverage, chiefly advocating to families for Medi-Cal eligibility screening. Currently there are 365 member ages 0-5 in the Healthy Kids population. There is no passive or automatic transition from Healthy Kids to Medi-Cal – members must apply. To facilitate this process, we have notified members about SB 75 and the expansion of full-scope Medi-Cal to all children under age 19 regardless of immigration status.

In collaboration with our community partners, we recently launched a Medi-Cal screening campaign targeting our Healthy Kids members in an effort to ensure they complete the screening. Healthy Kids families are directed to external enrollment specialists in their communities who will screen them for Medi-Cal and other programs and services.

5. Health Homes Benefit

The California Department of Health Care Services (DHCS) announced that the implementation of the State’s Health Homes Program will begin no earlier than July 1, 2018, a delay of 6 months. The Health Homes Program will be a new benefit for individuals with multiple chronic conditions and/or serious mental illness (SMI), offering person-centered, team-based, care coordination services. It is funded through the Affordable Care Act Section 2703.

Our Safety Net Initiatives team and Medi-Cal Executive Directors will work jointly towards ensuring the administration of this benefit.

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6. September Board Retreat Summary Memo

Attached for your reference is a summary memo from our Strategic Board Retreat in September. I would like to thank Secretary Dooley and Dr. Long, as well as our Board, staff, and members for their active participation. The conversation that was had will certainly inform the work that we do at L.A. Care, and I can attest that it already has.

7. Events of Interest

On October 5, 2016, I presented at the USC Gehr Family Center for Implementation Science about the intersection of Medi-Cal Managed Care and the Safety Net.

On October 11, I attended the California Association of Health Plans Conference in Palm Desert and was privileged to be on a panel with Tangerine Brigham, Director of the Office of Managed Health Care at the Department of Health Services and Steve Valentine, Vice President at Premier, Inc. We discussed lessons learned from Los Angeles related to Medi-Cal.

The Don Knabe Wellness Center at Rancho Los Amigos opened on October 12. I joined local leaders for the grand opening of the new building located at the Rancho Los Amigos National Rehabilitation Center in the city of Downey.

Local Health Plans of California partnered with L.A. Care to celebrate the monumental 50th anniversary of Medi-Cal on October 13. The anniversary celebration was generously hosted by St. Johns Well Child & Family Center. Supervisor Mark Ridley-Thomas, DHCS Director, Jennifer Kent, and Assemblyman Reggie Jones-Sawyer were among the honorable guests in attendance.

Attachment:

· Annual Board Retreat summary memo · October 2016 sponsorship list

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October 27, 2016 TO: Board of Governors FROM: John Baackes

Chief Executive Officer SUBJECT: 2016 Board of Governors Retreat Summary The Board of Governors annual retreat took place on September 1, 2016. The retreat focused on the future of Medi-Cal, the continuum of coverage, and progress on the strategic vision and re-organization of L.A. Care. A summary of the retreat can also be found in the minutes from the September 1 Board meeting. California Health and Human Services Director, Diana Dooley, and President and CEO of the Blue Shield of California Foundation (BSF), Dr. Peter Long, presented on health care integration. The panel was moderated by Jonathan Freedman of Health Management Associates. Secretary Dooley spoke on Medi-Cal and the safety net and solicited comments from the Board on State actions that would assist L.A. Care’s efforts. She discussed the background and history of the implementation of the Exchange in California and how strategic mechanisms were put in place to ensure a competitive market, including: 1) pricing at the different rating regions, 2) requirements on health plans in order to sell on the Exchange, 3) standard benefit design, 4) alignment of products on- and off- Exchange in the private market, and 5) an active purchaser model. She noted that the Exchange invested heavily in marketing in order to enroll a diverse risk mix with consumers composed of various incomes and health statuses. Secretary Dooley also stated that health plans need to be an agent for consumers; this calls for greater transparency and greater accountability for in-network providers by health plans. Finally, Secretary Dooley led a conversation on how Medi-Cal is providing high quality, efficient care for the safety net, but when additional resources are invested, the investors need to reap the benefits of these savings. Dr. Peter Long presented information on the evolution of the health care system and California’s safety net. Dr. Long discussed the journey of the U.S. health care delivery system moving from a “sick care system,” dubbed health 1.0, to our current “coordinated health care system” or health 2.0. The health care system must continue to evolve to what he calls health 3.0 or a “community integrated health system.” Health 3.0 includes health plans as key players in managing population health and ensuring providers are held responsible for providing quality health care to the community. In order to move to health 3.0 there needs to be further integration and alignment between the clinical, financial and structural components of health care. The eConsult program, piloted by L.A. and San Francisco Counties and BSF grant supported, is one example of the type of

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integration that is changing the health care practice. eConsult facilitates communication between safety-net primary care providers and specialists through a web-based system. The Board of Governors engaged in a robust question and answer session with the two presenters. Topics discussed included Medi-Cal efficiency; population health management coupled with better data collection and dissemination; behavioral health prevalence and financing; and further alignment between Medi-Cal and the Exchange for seamless coverage of the churn population. I suggested that older or obsolete regulations be repealed all-together, rather than applying work-around fixes or regulations. I reviewed L.A. Care’s Strategic Vision and reorganization. Over the last fiscal year, L.A. Care has accomplished many of the immediate goals outlined in the operating plan. Reorganization is complete, with Executive Directors heading the different product lines (strategic direction 1). Additionally, the core system conversion with the QNXT operating system went live on August 15, 2016 (strategic direction 1). We also developed a scoring tool known as the Value Initiative for IPA Performance in order to quantify an Independent Physician Association’s (IPA) performance, and determine their ranking among the other IPAs (strategic direction 2). The scoring tool will combine Healthcare Effectiveness Data and Information Set measures as well as other areas such as member satisfaction and member timeliness. L.A. Care’s National Committee for Quality Assurance score is dropping, and the report card will help to drive improved performance of the IPAs and aid in L.A. Care’s decision making. We previewed the scorecard to the IPAs with 2014 data. In order to improve access and care to those in more rural areas, L.A. Care launched a direct network in Antelope Valley (strategic direction 3).

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October Sponsorship List

Event Date Organization Event Type Location 10/22/2016 JWCH Institute, Inc. Dinner Reception City Club Los Angeles 10/23/2016 Autism Care and

Treatment Dinner Reception Four Season Hotel

Westlake 10/23/2016 Familia Unida Community Fair East Los Angeles

Civic Center 10/25/2016 California Hospital

Medical Center Foundation

Conference USC Tower

10/27/2016 California Primary Care Association

(CAHP)

Conference Long Beach Convention Center

10/27/2016 Vision y Compromiso Conference Ontario Convention Center

10/29/2016 Neighborhood Housing Services of

L.A.

Community Fair South L.A.

10/29/2016 USC Leonard Davis School of

Gerontology

Conference USC Leonard Davis School of

Gerontology

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October 26, 2016

TO: Board of Governors

FROM : John Baackes, CEO

SUBJECT: 4th Quarter FY 2015-16 Organization Goals Progress Report This progress report summarizes the status of organizational goals and tactics outlined in the Strategic Vision. This is the last report for this fiscal year, which represents the first year covered by our Strategic Vision. Among the notable activities for the fourth quarter are:

· CSPplus successfully completed implementation of Medi-Cal claims processing on QNXT and Medi-Cal authorizations conversion to QNXT/CCA, enabling faster and more accurate claims processing.

· The Antelope Valley direct network is fully operational, and additional providers have been brought on board. All available specialties in the area are now contracted, and this is responsive to DMHC concerns in that area. Additionally, L.A. Care has filed its Acupuncture and Chiropractic direct networks with the state.

· The Family Resource Centers continue making progress on expansion activities. The Inglewood site expansion is complete, and the site is working on expanding programming to serve additional visitors. We are currently working on a Community Needs Assessment to help guide programming for the Palmdale site, which is scheduled to open in February 2017.

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Key: Green – all activities on track, Yellow – most activities on track, Red – most activities not on track

Strategic Direction 1: Clear lines of accountability that simplify processes and drive efficiency and excellence Tactic Status Year 1 Milestones Updates 1.1 Ensure timely success of the core

system conversion, to support L.A. Care’s high-touch approach to serving members and providers.

Lead: Tom Schwaninger

Medi-Cal design, build and testing

Q1, Oct-Dec 2015: Requirements development behind original schedule of October 31, 2015. Completion is now targeted for January 31, 2016. Remaining business requirement documents prioritized as highly critical. Design and Build proceeding mainly in the Enrollment and Member Conversion streams. Q2, Jan-Mar 2016: CSPplus program refocused to address some operational and system issues for Cal MediConnect (CMC) for June and targeting an adjusted scope for Medi-Cal conversion, focused on Claims Payment, for September 1, 2016. Q3, Apr-Jun 2016: CSPplus is in development and test phases on all project tracks. Successful implementation of IPAs and medical groups as Networks and Providers Sync 1.2 in May 2016 were significant milestones for the CMC Remediation effort. The Medi-Cal Conversion approach has been changed to support “wave” rollouts beginning in July 1, 2016 with CMC Remediation with the next wave rollout targeted for July 15, 2016 for Antelope Valley Direct Networks. Q4, Jul-Sep 2016: CSPplus successfully completed implementation of Medi-Cal claims processing on QNXT and Medi-Cal authorizations conversion to QNXT/CCA. CMC Remediation and stabilization continues to ensure LTC compliance. Plan Partners, Duals and Partial duals claims processing conversion will be complete by the end of the year. Medi-Cal stabilization support efforts are in place and will continue through the end of the year and in 2017. Phase II strategy and operations plan development will be complete by the end of October 2016.

L.A. Care Strategic Vision (2015 – 2018)

Quarterly Progress Report July – September 2016

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Tactic Status Year 1 Milestones Updates 1.2 Identify and select competencies

needed for the functions performed at L.A. Care.

Lead: Bob Turner

Define and select core competencies including leadership and key management competencies.

Q1, Oct-Dec 2015: Internal and external resources and budget have been defined for the project. A vendor has been identified for competency assessment and the project is in contract development. Key functional roles for which to develop functional competencies have been defined and first group of trainers have been selected and scheduled to be certified by January 15, 2016. Q2, Jan-Mar 2016: Planning sessions have been completed with the Leadership Team. Management and individual contributor focus groups were conducted to assist in identifying core, leadership, and management competencies that align with L.A. Care’s Strategic Priorities. Q3, Apr-Jun 2016: Organizational Core Competency model has been drafted. Framework for Success Profiles and Individual Development Plans have been established with key Product Line Director Profiles developed. Organizational restructures and changes have delayed the completion of functional competencies for key roles. Q4, Jul-Sep 2016: Organizational Core Foundational competency model was finalized in addition to key Individual Contributor, management, and executive leadership competencies. This framework will introduce the three level model that will guide career ladders for employees. Key functional competencies were also developed for several important departments. HR business partners and recruiters have been trained on the model and are deploying this training to hiring managers. The competency model has also been integrated in the new performance management process, aligned with career development and succession planning for a fully integrated talent management strategy.

1.3 Conduct a talent assessment to match employees’ skill sets with the competencies needed for the functions we perform and bridge the gaps through learning and development strategies.

Lead: Bob Turner

N/A – this is primarily a year 2 tactic

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Tactic Status Year 1 Milestones Updates 1.4 Establish accountability for

product line performance, including financial sustainability.

Lead: John Baackes

Design and implement new org structure

Q1, Oct-Dec 2015: Executive Directors (EDs) for the following product line population segments have been hired – Medi-Cal Plan Partners, Medi-Cal TANF/MCE, and Medi-Cal SPD/CCI. EDs are developing the infrastructure to support accountability for product line performance. Recruitment is ongoing for the EDs for CMC and Commercial Products. Financial sustainability targets are being developed for budgeting purposes and will be formally established once all EDs are in place. Q2, Jan-Mar 2016: Recruitment for Executive Directors for the remaining product lines (CMC and Commercial Products) continued this quarter. An ED for CMC was selected and will join L.A. Care on April 19, 2016. The infrastructure for product line accountability continues to be built with further definition of roles and responsibilities and continued hiring of support staff. Financial sustainability targets will be developed for budgeting purposes and will be formally established once all EDs are in place. Q3, Apr-Jun 2016: The Product Management leadership team is complete with the addition of an ED of Commercial Products, who started May 19, 2016. The infrastructure supporting product line accountability continues to be built. Financial sustainability targets are being developed as part of the FY 16-17 budget process. Q4, Jul-Sep 2016: As reported in the 3rd quarter, Product Management leaders have been hired. They continue to develop and implement their business strategies specific to their product or population segment and refine their team structure. Financial sustainability targets by product were approved by the Board as part of the FY 16-17 operating budget.

1.5 Improve our access to data by centralizing data management and deploying the Enterprise Data Warehouse.

Lead: Tom Schwaninger

Enterprise Data Warehouse (EDW) framework and infrastructure implementation; initial data deployed

Q1, Oct-Dec 2015: Successfully loaded five years of initial data for members, and providers for the Medi-Cal line of business into the Enterprise Data Warehouse (EDW). Continuing to load additional sources into the EDW, re-designing reports in Oracle Business Intelligence Enterprise Edition (OBIEE), and creating the necessary Data Marts as required for the EDW.

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Tactic Status Year 1 Milestones Updates Q2, Jan-Mar 2016: Progress from prior quarter continues. Operationalizing the nightly loading of data into the warehouse is a key priority including the raw enrollment and claims data files, which will enable better visibility of LAC data end to end. Q3, Apr-Jun 2016: Nightly load of data into the warehouse has been operationalized. Updated the EDW Member and Provider daily feed software to improve data quality. Made changes to the QNXT member feed in preparation for CSPplus Medi-Cal conversion. Completed the Encounters logical data model and review. Work continues in loading raw enrollment data files and development of a complete member data glossary and definitions. Q4, Jul-Sep 2016: Completed the acquisition of member eligibility files for integration into the EDW. Implemented a new agile development methodology to quickly deliver incremental business value every 6 weeks. Started the Encounters Release and completed Sprint 1 of 3 (6 week period of time for accelerated development) to load Encounters data into the EDW.

1.6 Use data to drive decision-making across product lines and functional areas by centralizing enterprise data analytics and operationalizing data governance

Lead: Noah Paley

Create and staff Enterprise Integration department

Q1, Oct-Dec 2015: Outlined a structure for continuously assessing, improving and measuring core operations. This structure will involve the creation of: 1) a risk/planning management team to, with functional-area and IT input, summarize “as-is” workflow and data integration, establish sensible operational measures, and prepare needs assessments; 2) a process improvement team to, with functional-area and IT input, develop process flows and functionality requirements that address assessed needs; and 3) a project management team to, with functional-area and IT input, develop budgets and execution timelines for implementing approved process improvement plans. Q2, Jan-Mar 2016: Following the outlined structure provided in Q1, the three Enterprise Integration teams are currently being built. Planning Management has begun mapping the “as-is” workflow and data integration, with departmental and IT input, with the goal of achieving comprehensive, end-to-end “as-is” workflows for each health plan core function. Enterprise Integration has also guided the restructuring of the Data Governance Core Team and Council to focus on the EDW;

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Tactic Status Year 1 Milestones Updates simultaneously, Enterprise Integration is establishing the foundation for the Portfolio Management Committee to collaborate, prioritize, and agree on SRs and PMO projects in one enterprise-wide list. Q3, Apr-Jun 2016: In Q3, the Enterprise Integration team made significant contributions to workflows, identification of needs, and improvements in high-priority areas. Advanced data integration efforts related to the EDW, KPI reporting, and enterprise data definitions via the Data Governance process. The Portfolio Management Committee made tangible improvements to prioritization and throughput of Service Requests and project work requests, and is redefining the end-to-end process for work requests, portfolio management, and project execution. Q4, Jul-Sep 2016: The EDW, KPI Production and Analysis, and Data Governance initiatives have transitioned to a new department, Enterprise Data Strategy & Analytics (EDSA). Since the establishment of this team in June, good progress has been made in articulating the strategic approach, staffing plan, engagement model, and success metrics. Key directors have been hired and planning is underway to make staff realignments across L.A. Care as appropriate to build out the teams under these Directors.

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Strategic Direction 2: A network that aligns reimbursement with member risk and provider performance Tactic Status Year 1 Milestones Updates 2.1 Ensure an equitable distribution

of risk among MCLA and Plan Partners.

Lead: Marie Montgomery

Execute contracts with Plan Partners, medical groups, and IPAs with updated rates and DOFRs

Q1, Oct-Dec 2015: New five-year agreements with updated rates have been executed with Anthem Blue Cross and Care 1st/Blue Shield. Approximately 84% of MCLA lives are now assigned to PPG contracts with updated rates and DOFRs. It is anticipated that 100% of MCLA lives will be assigned to contracts with updated rates and DOFRs by 3/1/2016. These figures exclude MCLA members assigned to DHS. Q2, Jan-Mar 2016: Updated rates have been executed with all three Plan Partners (Anthem, Care 1st, and Kaiser). Approximately 97% of MCLA lives are now assigned to PPG contracts with updated rates and DOFRs (excluding members assigned to DHS). New rates are anticipated by DHCS this year, which may require another analysis of member risk across providers and updated rate amendments. Q3, Apr-Jun 2016: DHCS released updated rates for several different aid categories, which will be reflected in IPA and medical group contract amendments in Summer 2016. Q4, Jul-Sep 2016: 95.2% of the non-DHS MCLA lives are now under PPG arrangements that contain updated MCE and Family-Child rate amendments. Rate increase amendments for all non-MCE and non-Family Child aid categories for SFY 2016-17 (Jul – Jun) were sent in Sept. ’16, anticipating a 90% execution rate by Oct ’16.

2.2 Align high-risk members with providers most capable of serving their needs.

Lead: Trudi Carter

Alignment of frail elderly population with appropriate providers

Q1, Oct-Dec 2015: We have collaborated with the Alzheimer’s Association to bring training to our PPGs and internal Case Management staff in providing appropriate care coordination/case management for our members with cognitive disorders. We have also provided a continuing medical education conference to Primary Care Providers (PCPs) where one of the topics is providing assessment and care for individuals with cognitive disorders. Q2, Jan-Mar 2016: We continue to collaborate with the Alzheimer’s Association of Greater Los Angeles to educate internal Case Management and Behavioral Health staff in working with members and family of members with cognitive disorders. We have also formed an internal Frail Elderly Specialty workgroup to begin to identify this

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subpopulation and develop tactics to ensure proper alignment of members to providers. Q3, Apr-Jun 2016: Behavioral Health has planned a ‘Care for the Geriatric Population Conference’ which aims at training PCPs on performing a comprehensive evaluation as well as providing care for the frail elderlies. A pilot team based care management program for the CMC individuals over the age of 65 is set to start late July 2016 in SPA 6 & 7. Q4, Jul-Sep 2016: Hosted a CME/CUE ‘Care for the Geriatric Population Conference’ on 08/06/16 which attracted over 200 attendees. The conference was well received and resulted in a request for 2-hour CME/CEU evening training seminars on the ‘Comprehensive Assessment for the Frail Elderly in the Primary Care Settings’, which are slated to occur in late fall and early winter. The in-person face-to-face Complex Case Management Pilot Program was started in SPA 6 on 09/01/16. Currently, there is low enrollment due to the set criteria, which is under revision.

2.3 Increase dual risk contracting arrangements for direct lines of business.

Lead: Dino Kasdagly/Paul Van Duine

Initiate discussions with identified Participating Physician Groups (PPGs)

Q1, Oct-Dec 2015: (Metric: 150K Medi-Cal lives under dual risk arrangement) Discussions with identified PPGs have been initiated. 3 PPG/Hospital completed, totaling 124,989 lives under dual risk arrangements. Q2, Jan-Mar 2016: Initiative was temporarily put on hold due to concerns with internal oversight capabilities, and configuration/system issues. This strategic directive was re-launched in March 2016. Q3, Apr-Jun 2016: Two IPA/Hospital arrangements completed, totaling 126,946 lives. Discussions with identified IPAs have been initiated. Q4, Jul-Sep 2016: Within the first year of L.A. Care’s initial dual risk MCLA pilot, encounter data, claims payment, and configuration issues were identified. An executive decision was made that this initiative should be put on hold until all issues may be addressed. L.A. Care is meeting with its dual risk partners to identify and address the root cause of issues resulting in encounter inaccuracy and claims payment errors.

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2.4 Reassess and enforce performance standards for providers in our networks.

Lead: Trudi Carter

Development, validation, and piloting of PPG performance scoring tool

Q1, Oct-Dec 2015: An interdisciplinary collaborative is drafting a 2016 version of a scoring tool. Much progress has been made for some measures by translating separate scores and surveys into a normalized merged score using the CMS recommended methodology of the “Attainment Score.” Challenges persist in translating the various Compliance audit scores and comment-based feedback tools into an appropriately reflective numeric score. The tool will be finalized in February. Q2, Jan-Mar 2016: The interdisciplinary collaborative continues refining the newly titled, “Value Initiative for IPA Performance” (VIIP) scoring tool. After various iterations, the final list of metrics has been selected and include aggregated scores for HEDIS, Access to Care, Member Satisfaction with Clinical Groups, Utilization and soon, Encounter Timeliness. An internal grid of “Additional Factors” was developed and rated by Clinical Assurance and PNO. These include unique factors the IPA provides such as distinctive provider or specialty services or geographic coverage and a measure for responsiveness to L.A. Care. These materials will be used in discussion with IPAs for performance improvement. Q3, Apr-Jun 2016: Via the VIIP project, met with 18 of the 27 MCLA PPGs to introduce them to the program, the scoring tool, and to receive feedback. IPAs and groups are submitting action plans for collation into issues lists and best practices for sharing. Plan Partner groups will be addressed specifically though the Medi-Cal Plan Partner product line team. Preparing for the refresh of data with new CG-CAHPS, Access & Availability and HEDIS data. The refreshed scores based on 2015 data will be ready in September. Q4, Jul-Sep 2016: The L.A. Care VIIP Leadership Team met with all 27 MCLA IPAs to introduce them to the program, the scoring tool, and to receive feedback. The VIIP workgroup is working closely with QI receiving and collating action plans for best practice for performance excellence in the VIIP domains. The Plan Partner Group has completed documentation for coordination of the program with Anthem and Care1st’s IPAs. Working on the refresh of the score reports, which adds more UM measures and the entire domain, Encounter Timeliness. Reports and ranking will be shared with the Steering Committee October 17th and released to IPAs soon after.

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Strategic Direction 3: Tailored models of care for the specific needs of our member populations Tactic Status Year 1 Milestones Updates 3.1 Improve our capability to

develop and support direct networks for subpopulations within our membership.

Lead: Trudi Carter

Implement direct network for Antelope Valley

Q1, Oct-Dec 2015: The Antelope Valley Community Access Network became effective January 1, 2016 for Medi-Cal. Q2, Jan-Mar 2016: Renamed L.A. Care Community Access Network Antelope Valley (CAN AV) was successfully launched. Additionally, L.A. Care is establishing a direct network of chiropractic and acupuncture practitioners in LA County in order to reduce our reliance on vendor networks. L.A. Care recently completed its analysis of CMC direct network contracting opportunities with the goal of reducing CMC opt-out rates. Q3, Apr-Jun 2016: A contract template for transgender services has been completed along with rates. The chiropractic and acupuncture direct network continues to expand by region. Contracting is expanding its hospital reach by contracting with additional facilities (i.e. Palmdale). Q4, Jul-Sep 2016: CAN AV is fully operational, and additional providers have been brought on board. All available specialties in the area are now contracted. Additionally, L.A. Care has filed its Acupuncture and Chiropractic direct networks with the state.

3.2 Develop tailored population health management programs for the unique needs of our vulnerable, high-risk, and other subpopulations.

Lead: Trudi Carter

Develop and implement a new model of care for the frail elderly (CMC only)

Q1, Oct-Dec 2015: The CMC model of care has been updated to reflect current processes. A scope of work has been developed to outline activities necessary for tailoring the model of care to the CMC population and for improving the health management program. The SOW will be initiated in January 2016 with leadership from a consultant and key internal departments. Q2, Jan-Mar 2016: Our engagement with a Model of Care consultant is fully underway and a project team structure, including an executive steering committee and multiple cross-functional work groups, has been implemented. The team’s key focus is to better engage frail dual members in Care Management through an in-home assessment process, re-aligned care management staffing, improved Delegated Support Team

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structure, and consistent messaging across clinical, member services, provider, and marketing outreach. Q3, Apr-Jun 2016: The Model of Care (MOC) teams have made significant progress. The Delegated Entities team created a survey to ascertain care management practices of the IPAs and groups. The survey was fielded on June 24th. Follow up meetings will be scheduled for mid-July. The Home Assessment team identified an assessment tool to be conducted during in-home visits to better identify member needs for ADLS, environmental risk, food security, and additional services. Next steps are to implement the tool in SPA 6 and 7. The Care Management team has developed an internal structure for enhanced care management including identification of dedicated staff, creation of job descriptions, and updated work flows. The Member Engagement team is reviewing prospective and current member materials for key messages related to care management and the MOC. Apple Care has been engaged as a pilot site to implement the enhanced MOC, improve care management, increase ICP/ICT participation, and to identify best practices. Q4, Jul-Sep 2016: The development phase of the MOC pilot has been completed and we are now in the second phase focusing on implementation. One PPG has been selected to test transferring responsibility for care management of high risk members to the group. This PPG will assume care management of high risk members during the pilot implementation phase. L.A. Care will monitor for appropriateness of ICP/ICT, compliance with requirements, and outcomes. Other PPGs in SPA 6 and 7 will be supported in their current care management efforts by L.A. Care. A Care Management Support Team has been formed to assist with difficult LTC placements, provision of additional data, and enhanced communication.

3.3 Pilot direct networks for certain member subpopulations.

Lead: Dino Kasdagly/Paul Van Duine

Implement Antelope Valley Direct Network, IMD Direct Network, and Transgender Direct Network (surgical component only)

Q1, Oct-Dec 2015: The Antelope Valley Community Access Network became effective January 1, 2016 for Medi-Cal. Currently evaluating other areas in L.A. County for direct network development. Work on transgender network continuing. Q2, Jan-Mar 2016: CAN AV was successfully launched. Provider Network Operations is currently evaluating CCI utilization data to identify direct network contracting opportunities. Development and deployment of a network strategy will occur in Q3.

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Q3, Apr-Jun 2016: CAN AV continues to expand the network based on membership needs by contracting with multi-specialty groups and ancillary providers. Q4, Jul-Sep 2016: CAN AV is fully operational. Other areas with access problems are being explored for direct network potential. Transgender agreements have been signed for a wide spectrum of professional services, and a local hospital contract, where surgeons can perform these services, is in the final stages of negotiation.

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Strategic Direction 4: Recognized leader in improving health outcomes for low income and vulnerable populations Tactic Status Year 1 Milestones Updates 4.1 Develop an L.A. Care brand that

articulates our value proposition. Lead: R. Lightner/F. Oaxaca

Complete environmental scan and develop workplan for rebranding

Q1, Oct-Dec 2015: Completed, aggregated and reviewed all L.A. Care internal consumer research for integration into the “Parent Brand” planning. This includes Awareness and Image surveys for L.A. Care Covered and Medi-Cal and focus groups for L.A. Care Covered and CMC. Milestone completion delayed due to other priorities. Q2, Jan-Mar 2016: Conducted meeting with selected LT and management team members on the creative direction for the Parent Brand Refresh initiative. Feedback to be incorporated into the plan and presented in Q3. Q3, Apr-Jun 2016: Change in timing of environmental scan due to reorganization and finalization of direction from LT. Feedback to be incorporated into the workplan and presented at the end of September. Q4, Jul-Sep 2016: Review of 1st round of creative concepts for the Brand Refresh initiative was conducted in July, second round of creative scheduled to be reviewed early in Q1 2017. RFP for “Stakeholder” surveys and focus groups were distributed in late September.

4.2 Actively support safety net providers’ ability to perform their delegated functions and succeed in managed care environment.

Lead: Maria Calleros

Optimize alternative data submission processes for DHS HEDIS-related health services

Q1, Oct-Dec 2015: Safety Net Initiatives (SNI) and Quality Improvement continue to support safety net providers (DHS) to improve their HEDIS scores by working through data submission processes such as timelines, data sources, and format. This collaboration has increased transparency and communication channels between L.A. Care and DHS, resulting in a better understanding of data gaps and strategies to remedy any potential data barriers. DHS will build on significant improvements for 20 measures from HEDIS Reporting Year 2015 for Reporting Year 2016. SNI also partnered with PNO and Facility Site Review (FSR) to implement a policy to reflect provider capacity of DHS attending physicians practicing fewer than 8 hours per week, and collaborated with IT, PMO, and PNO to document requirements for direct member assignment to DHS and Community Clinic providers. Q2, Jan-Mar 2016: SNI continues to maintain a strong operational relationship with safety net providers via the Joint Operations Meetings

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with DHS and Managed Care Operations & Policy Roundtable meetings with CCALAC & HCLA. Recent progress includes the completion of Phase I of the DHS Claims Backlog, through development, implementation, and maintenance of system changes, as well as reporting metrics to avoid future claims being misdirected to DHS in error. With the recent change in the CSPplus timeline for clinic assignment implementation from September 2016 to Q2 of CY2017, SNI is currently collaborating with IT, PMO, and PNO to explore alternative solutions to current DHS empanelment challenges. Q3, Apr-Jun 2016: The design of the Community Health Worker pilot and clinic selection phases have been completed and at present, SNI is working to hire Care Navigators to be trained in mid-July and deployed to clinics in September. Though the CSPplus timeline has pushed back the implementation of clinic assignment methodology for Medi-Cal members assigned to community clinic organizations, other activities are on track for completion. LA Care and DHS have partnered to complete alternate data submissions and chart review for HEDIS RY2016 on time. Q4, Jul-Sep 2016: DHS’s final administrative rates for HEDIS Reporting Year 2016/Measurement Year 2015 showed improvement in Childhood immunizations (CIS-3) and sustained the gains from the previous year on Monitoring Persistent Medication (MPM) and Comprehensive Diabetes Care (CDC) HbA1c testing. While there were losses in perinatal care, cervical cancer screening, and breast cancer screening measures, DHS’ shift to 837 encounter data submission in MY2016 has already increased administrative rates relative to the same time period the prior year. L.A. Care conducted a training on managed care processes, including case management, and LGBTQ Health cultural competency, for 86 DHS service coordinators and care navigators on September 30, 2016.

4.3 Capitalize on our community resources such as our public advisory committees to ensure that we are a responsive, accountable and responsible partner in support of the L.A. Care brand.

Lead: John Baackes

ECAC/RCAC budget process improved; CHIF grants broadened

Q1, Oct-Dec 2015: Launched workplan project survey for all 15 advisory areas, analyzed results, and results are in process of being vetted. CHIF grants broadened to include community wellness and prevention and healthcare reform. Government Affairs is continuing work with legislature (MCO tax models and legislative briefings) to advocate for organization and members.

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Q2, Jan-Mar 2016: · Hosted the first Saturday Conference for 2016 on Behavioral Health

Treatments in the Primary Care Setting on February 27, 2016 with 260 attendees.

· The Family Resource Centers are currently focused on expansion efforts. A 7,000 sq. ft. facility has been selected in the city of Palmdale. A motion for approval will be presented to the Board of Directors in April.

· Working with LA County and author’s office on SB 997 to ensure that children enrolled in Healthy Kids (0–5 yrs) and My Health LA (administered by LA County) have a seamless transition into Medi-Cal program.

Q3, Apr-Jun 2016: · Community Health Workers continue to conduct outreach and

education to varied non-profit, school and faith based. Education efforts included but was not limited to Diabetes, Dementia, and Access to Care.

· Continued sponsoring systems improvement efforts such as the Insure the Uninsured Project Behavioral Health Workgroups and partnering with L.A. County Department of Health Services on the Medi-Cal 2020 Waiver Initiatives.

· On June 28th, J. Baackes and C. Fields met with senior staff in Washington, DC from the following offices: House Energy and Commerce Committee, House Energy and Commerce Committee, and the Senate Finance Committee. The purpose of the meeting was to discuss duals coordination issues on ways to improve the program and raise awareness of L.A. Care and key issues.

Q4, Jul-Sep 2016: · Community Outreach and Engagement worked closely with Board

Services, Communications and Sales to conduct Board of Governors Election, and continue to work collaboratively with community stakeholders and participate in branded events to promote product lines and advisory committees.

· The Family Resource Centers continue making progress on expansion activities. The Inglewood site expansion is complete, and the site is working on expanding programming to serve additional visitors. We

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are currently working on a Community Needs Assessment to help guide programming for the Palmdale site.

· L.A. Care remains an active partner with L.A. County Department of Health Services on the Medi-Cal of 2020 Waiver Initiatives (e.g., Whole Person Care Pilot). In the third quarter, staff conducted over 15 continuing medical education (CME) programs for providers on topics including LGBTQ cultural competency, diagnosis and treatment of dementia, palliative and hospice care services, and other areas pertinent to the larger Los Angeles community.

· On August 19, 2016, Government Affairs Department held the second of a series of briefings for legislative district staffers. The briefing featured a Senior Health Attorney from the Western Center on Law & Poverty who discussed the recent statutory changes to the Medi-Cal Estate Recovery Program and what advocates are doing to communicate changes in the law that will benefit consumers.

4.4 Optimize the financially

responsible growth potential of Cal MediConnect and L.A. Care Covered.

Lead: John Baackes

Determine membership and financial targets for CMC and LACC

Q1, Oct-Dec 2015: The FY 2015-2016 budget, which was approved by the Board in September 2015, includes financial and membership targets for CMC and LACC product lines. The targets are being revised/updated in January 2016 for approval by the Board. Q2, Jan-Mar 2016: The Board approved the revised FY 2015-2016 budget with updated financial and membership targets for CMC and LACC on February 4, 2016. Additional critical analyses of CMC and LACC growth potential will be conducted once Product Executive Directors are identified and established. Q3, Apr-Jun 2016: Financial and membership targets are currently being developed for inclusion in the FY 16-17 budget. Staff continues to analyze the optimal growth potential for CMC and LACC. Q4, Jul-Sep 2016: · LACC and CMC financial and membership targets have been set. · LACC 2017 Open Enrollment readiness is underway. Initiatives

include customer solutions training, member outreach campaign targeted at retention and new member growth, focus on face of LA and product positioning (price, network and benefits), campaign theme development and execution, and execution of QHP 2017-2019 contract.

145


· Developed a migration plan of moving identified CCI members who are likely members for CMC. The CMC team developed and rolled out its strategic plan for 2017 which identifies key strategic initiatives to achieve profitability, growth, Model of Care and operational efficiency.

4.5 Foster innovative approaches to

improving health status of our members and the quality of care provided by our safety net.

Lead: John Baackes

Begin LANES implementation, Community Health Worker program piloted, CHIF grants broadened

Q1, Oct-Dec 2015: HITEC-LA is on track to reach its meaningful use goal of 3,000 providers in 1Q 2016. LANES launch for DHS expected in 1Q 2016. CMS awarded L.A. Care a Transforming Clinical Practice Initiative grant of up to $15.8M over four years to help 3,100 L.A. County clinicians improve care for patients with diabetes and/or depression. Los Angeles Practice Transformation Networks launched this quarter with Network Partner. Community Health Workers Advisory Committee formed. Q2, Jan-Mar 2016:

· HITEC-LA was awarded $10.8M over three years from DHCS to continue the program, which is expected to reach its meaningful use goal of 3,000 providers.

· The Advisory Committee selected Care Navigators as the Community Health Worker model best suited for local clinics. The Pilot has been renamed the Care Navigator Apprentice Pilot. In Q2, the Advisory Committee finalized: (1) standardize clinic readiness assessment (2) selection criteria for participating clinics (3) recruitment process and screening of Care Navigators (4) care Navigator job description & core competencies roles (5) Clinic participation Request for Application.

· Released the Community Health Investment Fund (CHIF) “Cross Sector Partnership” RFA, which addresses social determinants of health as well as preventive strategies that can be replicated in clinical and non-clinical settings.

Q3, Apr-Jun 2016: · HITEC-LA achieved all federal Health IT Regional Extension Center

program goals, ended services, and is performing closeout activities for the program which will conclude Q4. HITEC-LA continues meaningful use support for the next three years.

· DHS executed a contract with LANES, becoming its first customer. A long term funder of LANES, L.A. Care is negotiating its contract to join. LANES is pursuing ten significant Medi-Cal organizations to contract.

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· CMS Transforming Clinical Practice Initiative: Los Angeles Practice Transformation Network (LAPTN) achieved its enrollment goal of 3,100 clinicians, 90% serve the safety net. As the first of four grant years starts to wind down, LAPTN continues to be a top performer, leading program participants nationally in practice assessments completed and baseline data collected.

· A number of CHIF initiatives were either released for proposals or implemented during this period that addressed the improvement of clinical and social environments for our members. Those initiatives include the Cross-Sector Partnerships, Community Wellness, and the Robert E. Tranquada M.D. Safety Net infrastructure initiatives.

Q4, Jul-Sep 2016: · HITEC-LA completed closeout activities after achieving all goals for

the Health IT Regional Extension Center program. · eManagement enrolled 40 solo practices and completed training with

them. eManagement launched in September 2016, and practices are conducting depression, anxiety, and substance abuse screenings for their L.A. Care members.

· The Community Health Worker project is in pre-implementation phase. Ten Care Navigators have been hired, trained, and have been partially deployed to their assigned clinics. Clinic Mentors and clinic care teams have also completed trainings focused on integrating Care Navigators into selected clinical care teams at each clinic.

· L.A. Care will be awarded a third year of funding from the Blue Shield of California Foundation to support the L.A. County Whole Person Care (WPC) pilot. The WPC pilot will provide support to vulnerable adults with coordination between physical health, mental health, substance use disorder, and social service providers. The $150,000 grant from the Blue Shield Foundation will provide project management support to develop WPC infrastructure and program design assistance for the new reentry health program.

· For FY 2015-16, CHIF funded 48 projects totaling $5.0 million. At its September 2016 meeting, L.A. Care’s Board approved an augmented $10.0 CHIF budget for FY 2016-17, with $4.0 million of that allocation to support Los Angeles County’s WPC initiative under the new California Medi-Cal waiver.

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October 27, 2016 To: Board of Governors From: Gertrude S. Carter, MD, Chief Medical Officer

Subject: CMO Report for November 2016 Health Services 1. Promotion of Two Senior Leaders in Health Services: Dr. Clayton Chau has been promoted to Senior

Medical Director, Health Services and Lynnette Hutcherson RN has been promoted to Senior Director, Health Services. They will serve as the clinical and operational leads for Clinical Provider Services, Clinical Member Services, Clinical Assurance, Health Education, Cultural & Linguistics, Provider Education and Health Services Reporting and Support. Both bring considerable experience in Health Services functions here at L.A. Care as well as in the California marketplace.

Behavioral Health 1) Regional Center Transition: The transition of the Behavioral Health Therapy (BHT) benefit for

members with Autism Spectrum Disorder (ASD) was a successful process. Our program is currently serving over 2,000 members, including those newly diagnosed with ASD. On average 30-40 new cases are referred to the ASD Program on a monthly basis. The ASD team receives and processes 200 calls per month from members, providers and Regional Centers to clarify the benefit and assist with coordination of care. L.A. Care has continued to build an ASD Provider Network to encompass approximately 75 vendors that employ over 4,500 individual providers. We continue to hold monthly ASD stakeholders meetings with all seven regional centers as well as all five Los Angeles Medi-Cal Health Care Plan and will continue to do so until the end of the year.

2) eManagement Program: Due to a contracting delay, the eManagement provider Program for Behavioral Health was delayed by two months. The eManagement Program fully launched on September 1, 2016. In the first month of implementation the program has enrolled well over 45 physicians. This brings the program to 22.5% of the 200 enrollee goal. The program supplies L.A. Care providers with additional resources and support for behavioral health, as well as financial incentives to improve care for patients with issues including mental health and/or substance abuse. The primary goals of the program are to improve the care of members through increased mental health screening, assess member and provider satisfaction with the program, and analyze where reduction of clinical costs may be feasible.

Case Management (CM) 1) Updates to new core operating system and user interface: The Case Management department has

begun planning on Phase II of the Clinical CareAdvance (CCA) transition to optimize the system capabilities around workflow automation. For example, data mining for potential members who could benefit from case management based on changes in utilization patterns may be transitioned from separate reporting in Health Outcomes and Analysis cases to CCA and directly into Case Management for triage.

148

2) CMC Integrated CM Pilot: In collaboration with Medicare Operations, the department is close to launching the integrated Cal MediConnect (CMC) case management model using AppleCare as a partner. The project will have a more high touch engagement of members, using Interdisciplinary Care Teams that go into the member’s home and community.

3) CM Leadership: The Case Management Director, Anna Edwards RNP, will be leaving the department

effective November 4. Anna has been the Director of CM for over five years and has been a major contributor to the successful growth of the program both internally and with our delegates. Health Services is actively recruiting to fill her position.

Utilization Management (UM) 1) MediCal Transportation Benefit: California Assembly Bill 2394, MediCal Non-Medical Transportation

chartered by Eduardo Garcia, was approved on September 25, 2016. The new legislation adds nonmedical transportation to obtain covered MediCal services to the schedule of benefits. L.A. Care is in the process of revising the way we provide all transportation services including non-medical transportation.

2) Direct Network: Health Services and UM leadership have begun planning for the provision of Health Services activities for UM and CM onsite within a Family Resource Center. As Antelope Valley has been the first site selected with the goal to provide a local presence in the community, UM has begun recruitment and hiring for staff who reside in Antelope Valley. Program development and training will be completed by 4th Quarter 2016 with a goal to be onsite by January 1, 2017.

Healthcare Outcomes and Analysis 1) Value Initiative for IPA Performance: HO&A has completed the 2015 data refresh and scorecard

documentation for John Baackes’ Strategic Goal 2, Tactic 4. Paul Van Duine is coordinating the program efforts for communication and QI is working closely to enhance collaboration of improvement of scores. Domains addressed in the Score are: Access to Care, Member Satisfaction, HEDIS, Utilization rates and Encounter Timeliness akin to other publically reported ratings. The 2015 Report cards are scheduled to be delivered in the coming weeks and next steps will be discussed in the October VIIP Steering Committee meeting scheduled to take place in the end of October.

2) Member and Provider Surveys: The Off-season Member Satisfaction Survey is underway currently and should be complete in early 2017. Contracting for all 2017 surveys is in progress. The Provider Satisfaction and Access to Care Surveys are in early phases as well. A great deal of effort was put into Provider Data Integrity for these surveys in order to revise the 2015 submission and learn from the issues revealed for future surveys.

Health Information Technology (HIT) 1) HITEC-LA: HITEC-LA completed closeout activities after achieving all goals for the HIT Regional

Extension Center program. HITEC-LA continues meaningful use support through 2018 under a $10.8 million California Technical Assistance Program award to assist 2,165 Medi-Cal primary care providers and specialists.

2) LAPTN: L.A. Care met its enrollment goal of 3,200 clinicians for the Transforming Clinical Practice Initiative; 90% serve the safety net. Baseline practice assessments were completed and baseline data was collected. As a result of LAPTN’s strong performance in its first year, CMS approved the year 2 budget.

149

Quality Improvement (QI) 1) Access and Availability: QI staff is working hard for the end of year quality initiatives. First and foremost,

QI staff has worked with the Participating Provider Groups (PPG) on improvement of Access and Availability performance. L.A. Care has a new vendor this year, Center for Study of Services (CSS); all the preliminary prep work has been completed and the vendor will field the audit starting the last week of October. Results will be available March 2017.

2) National Commission on Quality Assurance (NCQA) Mock Audit: The NCQA mock audit took place September 20-21, 2016. There were significant improvements since the last review. There remains work to be done in preparation for 2017 accreditation; the look-back period for the re-certification audit is April 2015- March 2017. The NCQA submission will take place by April 4, 2017, and on-site review will be on May 22-23, 2017.

3) Healthcare Effectiveness Data and Information Set (HEDIS): QI Webinars were conducted for PPGs

in September by line of business with emphasis on closing gaps in care for HEDIS and improving member experience. Attendance was good and feedback was positive. An end-of-year HEDIS strategy is underway to facilitate closing gaps in care with initial focus on low denominators, smaller PPGs and members with no claims/encounters with a PCP in the previous 15 months.

4) Member Satisfaction: QI staff met with a top performing PPG in Member Satisfaction on September 26,

2016 to gain insight into their member experience initiatives. The group reported a 26% improvement in patients’ physician ratings within one year as part of training to physicians and office staff in collaboration with a consulting group. Best practices were discussed and QI staff is reviewing proposals for potential health plan initiatives.

Managed Long Term Services and Supports (MLTSS) Managed Long Term Services and Supports (MLTSS) continues to serve 73,000 unique members through its Multipurpose Senior Services Program (MSSP), Community Based Adult Services (CBAS), In-Home Supportive Services (IHSS), and Long Term Care (LTC) Nursing Facility programs. Of these, about four percent are Cal MediConnect, 22 percent are Medi-Cal only, and 74 percent are full or partial dually eligible member “opt outs,” with primary care and case management provided by a Medicare physician. The MLTSS team has been working with key partners on two important initiatives: the LTC Quality Improvement Committee and a Caregiver Study. 1) Long-Term Care Quality Improvement Committee: The 10 person quality committee meets quarterly

and reports to L.A. Care’s Quality Oversight Committee (QOC). This cross functional committee includes representation from MLTSS, Behavioral Health, and Quality Improvement departments, as well as administrators from three LA. Care-contracted nursing facilities. The Committee has addressed important issues related to contracting, credentialing and oversight of our LTC nursing facilities. In coordination with Provider Network Management, the Committee developed a webinar to help nursing facilities better understand and manage behavioral health issues among residents.

2) Caregiver Study: The Caregiver Study was developed (including survey and focus groups) to profile the L.A. Care caregiver population and better understand their needs. A cross-departmental Caregiver Work Group has been established to create a multi-faceted approach to caregiver support including: caregiver needs assessment; respite care; and training and support. This caregiver support initiative is scheduled to launch in early 2017.

Pharmacy Pharmacy, working with Navitus (L.A. Care’s Pharmacy Benefit Manager), continues to have improvement in key organizational measures:

150

1) Medicating Therapy Management (MTM): 2016 results show good progress and we are on track to achieve 40% completion of Comprehensive Medication Reviews (CMR) at the end of the year. However, the new CMS cut points for CMR completion rates have been recently published and a CMR completion rate of >76% is needed to achieve 5 Stars. We have developed a plan with Navitus to increase our CMR completion rate to at least >72% to ensure a Star rating of at least 4 at the end of 2016.

2) Opioid Utilization Monitoring Program: We are continuing our Opioid Utilization Monitoring program with good success. The program involves notifying prescribers when the patient uses three or more prescribers and three or more pharmacies. In addition we have begun our Pharmacy Home Program, which involves identifying patients who on are more than 120 morphine equivalent dose (med) per day and restricting them to just one pharmacy of their choice.

151

October 27, 2016 To: Board of Governors From: Gertrude S. Carter, MD, Chief Medical Officer

Subject: CMO Report for November 2016 Health Services 1. Promotion of Two Senior Leaders in Health Services: Dr. Clayton Chau has been promoted to Senior

Medical Director, Health Services and Lynnette Hutcherson RN has been promoted to Senior Director, Health Services. They will serve as the clinical and operational leads for Clinical Provider Services, Clinical Member Services, Clinical Assurance, Health Education, Cultural & Linguistics, Provider Education and Health Services Reporting and Support. Both bring considerable experience in Health Services functions here at L.A. Care as well as in the California marketplace.

Behavioral Health 1) Regional Center Transition: The transition of the Behavioral Health Therapy (BHT) benefit for

members with Autism Spectrum Disorder (ASD) was a successful process. Our program is currently serving over 2,000 members, including those newly diagnosed with ASD. On average 30-40 new cases are referred to the ASD Program on a monthly basis. The ASD team receives and processes 200 calls per month from members, providers and Regional Centers to clarify the benefit and assist with coordination of care. L.A. Care has continued to build an ASD Provider Network to encompass approximately 75 vendors that employ over 4,500 individual providers. We continue to hold monthly ASD stakeholders meetings with all seven regional centers as well as all five Los Angeles Medi-Cal Health Care Plan and will continue to do so until the end of the year.

2) eManagement Program: Due to a contracting delay, the eManagement provider Program for Behavioral Health was delayed by two months. The eManagement Program fully launched on September 1, 2016. In the first month of implementation the program has enrolled well over 45 physicians. This brings the program to 22.5% of the 200 enrollee goal. The program supplies L.A. Care providers with additional resources and support for behavioral health, as well as financial incentives to improve care for patients with issues including mental health and/or substance abuse. The primary goals of the program are to improve the care of members through increased mental health screening, assess member and provider satisfaction with the program, and analyze where reduction of clinical costs may be feasible.

Case Management (CM) 1) Updates to new core operating system and user interface: The Case Management department has

begun planning on Phase II of the Clinical CareAdvance (CCA) transition to optimize the system capabilities around workflow automation. For example, data mining for potential members who could benefit from case management based on changes in utilization patterns may be transitioned from separate reporting in Health Outcomes and Analysis cases to CCA and directly into Case Management for triage.

152

2) CMC Integrated CM Pilot: In collaboration with Medicare Operations, the department is close to launching the integrated Cal MediConnect (CMC) case management model using AppleCare as a partner. The project will have a more high touch engagement of members, using Interdisciplinary Care Teams that go into the member’s home and community.

3) CM Leadership: The Case Management Director, Anna Edwards RNP, will be leaving the department

effective November 4. Anna has been the Director of CM for over five years and has been a major contributor to the successful growth of the program both internally and with our delegates. Health Services is actively recruiting to fill her position.

Utilization Management (UM) 1) MediCal Transportation Benefit: California Assembly Bill 2394, MediCal Non-Medical Transportation

chartered by Eduardo Garcia, was approved on September 25, 2016. The new legislation adds nonmedical transportation to obtain covered MediCal services to the schedule of benefits. L.A. Care is in the process of revising the way we provide all transportation services including non-medical transportation.

2) Direct Network: Health Services and UM leadership have begun planning for the provision of Health Services activities for UM and CM onsite within a Family Resource Center. As Antelope Valley has been the first site selected with the goal to provide a local presence in the community, UM has begun recruitment and hiring for staff who reside in Antelope Valley. Program development and training will be completed by 4th Quarter 2016 with a goal to be onsite by January 1, 2017.

Healthcare Outcomes and Analysis 1) Value Initiative for IPA Performance: HO&A has completed the 2015 data refresh and scorecard

documentation for John Baackes’ Strategic Goal 2, Tactic 4. Paul Van Duine is coordinating the program efforts for communication and QI is working closely to enhance collaboration of improvement of scores. Domains addressed in the Score are: Access to Care, Member Satisfaction, HEDIS, Utilization rates and Encounter Timeliness akin to other publically reported ratings. The 2015 Report cards are scheduled to be delivered in the coming weeks and next steps will be discussed in the October VIIP Steering Committee meeting scheduled to take place in the end of October.

2) Member and Provider Surveys: The Off-season Member Satisfaction Survey is underway currently and should be complete in early 2017. Contracting for all 2017 surveys is in progress. The Provider Satisfaction and Access to Care Surveys are in early phases as well. A great deal of effort was put into Provider Data Integrity for these surveys in order to revise the 2015 submission and learn from the issues revealed for future surveys.

Health Information Technology (HIT) 1) HITEC-LA: HITEC-LA completed closeout activities after achieving all goals for the HIT Regional

Extension Center program. HITEC-LA continues meaningful use support through 2018 under a $10.8 million California Technical Assistance Program award to assist 2,165 Medi-Cal primary care providers and specialists.

2) LAPTN: L.A. Care met its enrollment goal of 3,200 clinicians for the Transforming Clinical Practice Initiative; 90% serve the safety net. Baseline practice assessments were completed and baseline data was collected. As a result of LAPTN’s strong performance in its first year, CMS approved the year 2 budget.

153

Quality Improvement (QI) 1) Access and Availability: QI staff is working hard for the end of year quality initiatives. First and foremost,

QI staff has worked with the Participating Provider Groups (PPG) on improvement of Access and Availability performance. L.A. Care has a new vendor this year, Center for Study of Services (CSS); all the preliminary prep work has been completed and the vendor will field the audit starting the last week of October. Results will be available March 2017.

2) National Commission on Quality Assurance (NCQA) Mock Audit: The NCQA mock audit took place September 20-21, 2016. There were significant improvements since the last review. There remains work to be done in preparation for 2017 accreditation; the look-back period for the re-certification audit is April 2015- March 2017. The NCQA submission will take place by April 4, 2017, and on-site review will be on May 22-23, 2017.

3) Healthcare Effectiveness Data and Information Set (HEDIS): QI Webinars were conducted for PPGs

in September by line of business with emphasis on closing gaps in care for HEDIS and improving member experience. Attendance was good and feedback was positive. An end-of-year HEDIS strategy is underway to facilitate closing gaps in care with initial focus on low denominators, smaller PPGs and members with no claims/encounters with a PCP in the previous 15 months.

4) Member Satisfaction: QI staff met with a top performing PPG in Member Satisfaction on September 26,

2016 to gain insight into their member experience initiatives. The group reported a 26% improvement in patients’ physician ratings within one year as part of training to physicians and office staff in collaboration with a consulting group. Best practices were discussed and QI staff is reviewing proposals for potential health plan initiatives.

Managed Long Term Services and Supports (MLTSS) Managed Long Term Services and Supports (MLTSS) continues to serve 73,000 unique members through its Multipurpose Senior Services Program (MSSP), Community Based Adult Services (CBAS), In-Home Supportive Services (IHSS), and Long Term Care (LTC) Nursing Facility programs. Of these, about four percent are Cal MediConnect, 22 percent are Medi-Cal only, and 74 percent are full or partial dually eligible member “opt outs,” with primary care and case management provided by a Medicare physician. The MLTSS team has been working with key partners on two important initiatives: the LTC Quality Improvement Committee and a Caregiver Study. 1) Long-Term Care Quality Improvement Committee: The 10 person quality committee meets quarterly

and reports to L.A. Care’s Quality Oversight Committee (QOC). This cross functional committee includes representation from MLTSS, Behavioral Health, and Quality Improvement departments, as well as administrators from three LA. Care-contracted nursing facilities. The Committee has addressed important issues related to contracting, credentialing and oversight of our LTC nursing facilities. In coordination with Provider Network Management, the Committee developed a webinar to help nursing facilities better understand and manage behavioral health issues among residents.

2) Caregiver Study: The Caregiver Study was developed (including survey and focus groups) to profile the L.A. Care caregiver population and better understand their needs. A cross-departmental Caregiver Work Group has been established to create a multi-faceted approach to caregiver support including: caregiver needs assessment; respite care; and training and support. This caregiver support initiative is scheduled to launch in early 2017.

Pharmacy Pharmacy, working with Navitus (L.A. Care’s Pharmacy Benefit Manager), continues to have improvement in key organizational measures:

154

1) Medicating Therapy Management (MTM): 2016 results show good progress and we are on track to achieve 40% completion of Comprehensive Medication Reviews (CMR) at the end of the year. However, the new CMS cut points for CMR completion rates have been recently published and a CMR completion rate of >76% is needed to achieve 5 Stars. We have developed a plan with Navitus to increase our CMR completion rate to at least >72% to ensure a Star rating of at least 4 at the end of 2016.

2) Opioid Utilization Monitoring Program: We are continuing our Opioid Utilization Monitoring program with good success. The program involves notifying prescribers when the patient uses three or more prescribers and three or more pharmacies. In addition we have begun our Pharmacy Home Program, which involves identifying patients who on are more than 120 morphine equivalent dose (med) per day and restricting them to just one pharmacy of their choice.

155

Board of Governors

MOTION SUMMARY

Date: November 3, 2016 Motion No. BOG 100.1116

Committee: Chairperson: Mark Gamble

Issue: Execute a contract with Michael S. Kenny & Co. to provide consulting services for the Los

Angeles County Department of Health Services.


Background: On behalf of the Los Angeles County Department of Health Services (DHS), L.A.

Care staff requests approval to execute a contract with Michael S. Kenny & Co. from November 1, 2016 to October 31, 2017, in the amount of $344,220. The vendor will provide DHS with consultant services related to the core patient information system, known as the Managed Care Core System (MCCS). The current contract with Kenny & Co. was approved under Motion SAC A.0216.

Through the Safety Net Transition and Support Agreement, L.A. Care established the DHS Quality Improvement Program (QIP) to support DHS quality improvement and transformation efforts in connection with providing patient services. In accordance with QIP policies and procedures, DHS submitted a request in September 2016 for L.A. Care to procure project management services from Michael S. Kenny & Co. to support DHS replacement of the information technology system and core system of record for Medi-Cal managed care patients, known as the Managed care Core System (MCSS) implementation project. The vendor will provide project planning support, process mapping services, and implement change leadership activities to guide and ensure effective execution of the MCSS project.

Michael S. Kenny & Co. is considered a sole source vendor. DHS chose Michael S. Kenny & Co. in 2013 through a competitive bidding process to assist in preparing for Medi-Cal expansion. DHS continued working with this vendor to improve its managed care infrastructure.

Member Impact: DHS facilities provide Medi-Cal managed care services to over 200,000 L.A.

Care members. DHS relies on its Managed Care Core System to accurately track enrollment of the DHS/L.A. Care members, process service authorizations, and pay claims in connection with health care services rendered to DHS/L.A. Care members.

Budget Impact: There is no budget impact on L.A. Care. The DHS QIP will cover all expenditures

stemming from the contract with Michael S. Kenny & Co.

Motion: To authorize L.A. Care to execute a contract with Michael S. Kenny & Co. in the amount of $344,220 to provide consulting services from November 1, 2016 to October 31, 2107.

156

Board of Governors

MOTION SUMMARY

Date: November 3, 2016 Motion No. BOG 101.1116

Committee: Chairperson: Mark Gamble


Issue: To authorize RR Donnelly (Moore Wallace) as the vendor to provide printing services and

postage services for the 2017 Medi-Cal Provider Directory. These funds were allocated and approved by the Board of Governors as a component of the 2016-17 budget.

Background: L.A. Care staff requests approval for RR Donnelly (Moore Wallace) in the amount of

$4,358,368 (Printing $1,694,968.00 and Postage $2,663,400). Funding for this activity was included in the 2016-2017 budget that was approved by the Board. The vendor will provide L.A. Care with printing 680,000 units of the Medi-Cal Provider Directory for benefit year 2017. As part of a regulatory mandate, L.A. Care is required to provide members with a directory in all threshold languages. A request for proposal was not conducted on this vendor. L.A. Care has used this vendor since 2008 and are pleased with their work. Other departments, including Member Services, Health Education, Quality Improvement and MORE Department use this vendor for printing collateral and mailings. RR Donnelly was the most economical in pricing. A contract is currently in place through December 31, 2017.

Member Impact: The printing and distribution of the Medi-Cal Provider Directory is an annual

effort that informs L.A. Care members about their provider and changes related to their benefit coverage and care. It serves as an additional tool to assist members in navigating the Medi-Cal landscape and maximizing the value they receive from their health coverage. Budget Impact: Sufficient funds are budgeted in the Sales & Marketing Department budget for

this fiscal year.

Motion: To authorize RR Donnelly (Moore Wallace) as the vendor to provide printing services and postage in the amount of $4,358,368.00 for the 2017 Medi-Cal Provider directory as listed in the 2016-17 budget.

157

Board of Governors

MOTION SUMMARY

Date: November 3, 2016

Motion No. BOG 102.1116

Committee:

Chairperson: Mark Gamble

Issue: With the accompanying memo, staff is recommending a Community Health Investment Fund (CHIF)

program approach and priorities for FY 2016-17. The CHIF program will focus on investments that address barriers to care for vulnerable populations, health prevention and education in clinical and non-clinical environments, care integration and coordination, improving the financial performance of safety net providers, addressing social determinants that impact health, support for infrastructure capacity and cross-sector partnerships to strengthen overall supports for low-income Los Angeles County patients, including L.A. Care members.

Background: In September 2016, as part of the general organizational budget, the L.A. Care Board of

Governors approved a CHIF funding allocation of $10 million for fiscal year 2016-17. All grant considerations will include discussions with the Senior Director of Strategic Planning and Chief Executive Officer (CEO). Staff will solicit applications, convene a review committee composed of internal staff and community experts, administratively select the grantees and report approved grants over $150,000 to the Board. Upon approval, a grant agreement will be delivered to the grantee outlining responsibilities and accountability to perform according to agreed objectives.

Member Impact: CHIF funds will help to support safety net provider projects to increase access and improve quality of care for underserved populations, including L.A. Care members.

Budget Impact: In September 2016, as part of the general organizational budget, the L.A. Care Board of Governors approved a CHIF funding allocation of $10 million for fiscal year 2016-17.

Motion: 1. To approve the use of the Community Health Investment Fund (CHIF) FY 2016-17 allocation of up to $10 million in the following priority categories: (1) to support safety net clinics’ infrastructure to provide high quality and coordinated services to help them thrive in a managed care environment, recommended at $2.5 million, (2) to expand access to high-barrier services for low-income and vulnerable populations, recommended at $2.5 million, and (3) to improve community health for underserved populations by addressing the social determinants that lead to poor health outcomes, recommended at $1.0 million. Additionally, $4.0 million is recommended for the Los Angeles County Department of Health Services’ Flexible Housing Subsidy Pool fund to provide housing for homeless individuals, including L.A. Care members. These funds will also support the goals of the Whole Person Care initiative under the new California Medi-Cal waiver.

2. Delegate authority to implement the CHIF program to the CEO and also to approve grant investments of up to $150,000 per applicant. Allow for CEO to adjust maximum or minimum priority category amounts noted above to align with community needs and requests. All other policies and approvals related to grant making investments will remain in place.

158

October 10, 2016

TO: Board of Governors

FROM : Wendy Schiffer, Senior Director, Strategic Planning Roland Palencia, Director, Community Benefit Programs SUBJECT: Community Benefits, CHIF Program Priorities for FY 2016-17

In 2000, the Board of Governors established the L.A. Care Community Health Investment Fund (CHIF) program to improve health care access and quality of care for underserved populations and to support the safety net that serves them.1 Since then, CHIF has funded more than 400 projects for over $51 million, benefitting community clinics, social service organizations, and Los Angeles County health system.

On September 1, 2016, the Board of Governors approved a CHIF funding allocation of $10 million as part of L.A. Care’s fiscal year 2016-17 budget. This increase from the prior funding level of $5 million was recommended based on L.A. Care’s increased membership and revenues, and its overall good financial performance since implementation of the Affordable Care Act.

CHIF Priorities Align with L.A. Care’s Strategic Vision L.A. Care is unique among health plans as our mission explicitly includes support for the safety net. CHIF funding is integral to L.A. Care’s Strategic Vision for achieving our mission, specifically Strategic Direction 4 which describes L.A. Care as a “Recognized leader in improving health outcomes for low income and vulnerable populations in Los Angeles County.” The CHIF program supports two tactics under this Strategic Direction:

· Tactic 4.3 which mobilizes our community resources to ensure that we are responsive and accountable to the needs of our members and constituents, and

· Tactic 4.4 which fosters innovative approaches to improving health status of our members and the quality of care provided by the safety net.

CHIF projects will also align with the Triple Aim goal to improve population health and patient experience in a cost effective manner. Additionally, all funded projects will aim to have the following features: systemic change, financial and programmatic sustainability, and long-term impact to support the safety net to thrive in the evolving healthcare reform environment. CHIF will provide no funding for direct services, including those funded through third party reimbursement.

1 For purposes of the CHIF program, the safety net includes private non-profit stand-alone medical, dental and mental health providers and public health services provided by the Los Angeles County Departments of Health Services, Public and Mental Health.

159

Community Benefits, CHIF Program Priorities FY 2016-17 Page 2 of 4 To best support L.A. Care’s strategic vision, staff has developed three overarching CHIF priorities:

(1) Support safety net clinics’ infrastructure to provide high quality and coordinated services and help them to thrive in a managed care environment (recommended at $2.5 million).

(2) Expand access to high-barrier services for low-income and vulnerable populations (recommended at $2.5 million).

(3) Improve community health for underserved populations by addressing the social conditions that lead to poor health outcomes (recommended at $1 million).

Additionally, $4 million is recommended for the Los Angeles County Department of Health Services’ Flexible Housing Subsidy Pool fund to provide housing for homeless individuals, including L.A. Care members. This will also support the goals of the Whole Person Care initiative under the new California Medi-Cal waiver.

To select these priorities, Community Benefits staff solicited input from L.A. Care management staff throughout the organization and also consulted with a number of grantees and philanthropic partners that invest in the safety net. Within each priority area, CHIF funds will be distributed via a combination of initiatives that will require a request for applications (RFA) process as well as community-initiated proposals by individual organizations (ad hocs) that do not fit into any of the initiatives but align with priority areas.

Proposed CHIF Priority Areas and Allocations for FY 2016-17 1. Support Safety Net Clinics’ infrastructure to provide high quality and coordinated services and help

them to thrive in a managed care environment. This CHIF priority will support projects that address the infrastructure capacity needs of safety net providers in the context of healthcare reform and its evolving demands on the safety net. Examples of projects that could be funded under this priority area include:

· Projects that provide optimal physical clinical and non-clinical space at safety net clinics to expand access, improve quality of care, enhance workflow systems and increase efficiency.

· Improving clinics’ financial strength (continuing to support the Advancing the Financial Strength of Private Non-profit Safety Net Clinics program launched early last year).

· Technology infrastructure improvements that include hardware and software, data gathering, data analytics, data flow and interpretation to promote evidence-based care to improve quality, enhance access and impact specific HEDIS measures.

· Equipping clinics to collect and use patient experience and utilization data to drive and improve quality of care.

· Development of patient engagement technology such as online patient portals, texting support, video visits (telemedicine) and online appointment scheduling.

· Workforce development to develop the clinical and medical personnel capacities of the safety net. efforts to promote value-based payments (VBP or Payment Reform) projects that support transition to VBP to promote quality and value of health services that are connected to outcomes to reward value.

160

Community Benefits, CHIF Program Priorities FY 2016-17 Page 3 of 4 The recommended allocation for this goal priority is $2.5 million, and the average individual grant amount may range from $25,000 to $500,000. The funds may be distributed in the form of initiatives such as the Robert E. Tranquada, M.D. Safety Net infrastructure initiative or through community-initiated ad hocs requests that do not fit in any of the initiatives released under this priority. 2. Expand access to high-barrier services for low-income and vulnerable populations. This priority addresses the services that remain difficult for low-income and vulnerable populations to access, such as dental, mental health, substance use disorder treatment and specialty care. This priority area also addresses gaps within and between clinical and other health-related high-barrier systems of care or sectors that directly impact the quality of care for low income patients. Activities in this priority area aim to reduce fragmentation of care by connecting physical, mental, oral health, and substance use disorder services with one another. Projects may also focus on particular underserved populations that face unique barriers to care, such as the developmentally disabled, foster care youth, or re-entry (formerly incarcerated) populations. Examples of projects that could be funded under this priority area include:

· Expansion of oral health services in underserved areas, populations or by specific service need. · Partnerships between community clinics and social services agencies to integrate other wrap-

around services that address social needs such as housing, food and transportation. · Expanded access to substance use disorder services and provide resources for planning, training ,

certification, and other non-reimbursable third party payor services. The recommended allocation for this goal priority is $2.5 million. The average individual grant amount may range from $25,000 to $500,000. The funds may be distributed in the form of initiatives such as care coordination, oral health, cross-sector partnership initiatives or through ad hocs requests that do not fit in any of the initiatives under this priority.

3. Improve community health for underserved populations by addressing the social conditions that lead to poor health outcomes. This priority focuses on social determinants of health and supports community efforts designed to improve physical and social environments that enable individuals and communities to live in optimal health. Projects will engage in strategic partnerships to address the environmental and social conditions that impact health that go beyond healthcare services by partnering with sectors which sole focus might not directly address medical or health issues yet it promotes a comprehensive approach to community wellness. Examples of projects that could be funded under this priority area include:

· Design and implementation of prevention and education activities in environments that are not exclusively clinical or even health focused but that address other social determinants that clearly impact health outcomes such as economic equity and financial security, food security, environmental justice, educational or training opportunities or safe neighborhoods.

161

Community Benefits, CHIF Program Priorities FY 2016-17 Page 4 of 4

· Community-wide coalition efforts that seek to address larger systemic health, infrastructure or social determinant issues with a large impact on health, resulting in “one good solution that solves many problems”.

· Outreach, enrollment, and retention efforts for benefit programs that enhance economic security such as CalFresh and Earned Income Tax Credit.

The recommended allocation for this goal priority is $1.0 million. The average individual grant amount may range from $25,000 to $250,000. The funds may be distributed in the form of initiatives such as community wellness initiatives or through ad hocs requests that do not fit in any of the initiatives under this priority.

4. L.A. County’s Whole Person Care Initiative An additional $4 million is recommended to address homelessness and to provide support services that complement Los Angeles County’s Whole Person Care initiative under the California Medi-Cal waiver. Through the Department of Health Services’ Flexible Housing Subsidy Pool fund, CHIF funds will help to secure housing and supportive services to homeless Medi-Cal beneficiaries, many of whom are L.A. Care members. It will also support the Los Angeles County’s Whole Person Care initiative to create and deploy highly needed new community resources necessary to address and mitigate the social determinants of health that impact LA Care’s ability to improve health outcomes of its frequent user and high-cost members. This CHIF contribution helps Los Angeles County to leverage as much as $90 million per year over the next five years through the Whole Person Care pilot. Application and Approval Process In the attached motion, staff is requesting the delegation of authority to the Chief Executive Officer (CEO) to implement these CHIF priorities and for CEO to approve grant investments of up to $150,000 per applicant. As these categories are estimates, the motion also allows the CEO to adjust maximum or minimum categorical amounts to align with evolving community requests and needs. Staff will solicit applications, convene a review committee, administratively select the grantees and then report the approved grants of up to $150,000 to the Board. Both initiative and ad hoc grants will be reviewed by committees composed of L.A. Care staff members and community subject matter experts. L.A. Care departments and offices that have participated in previous review committees have included Health Services, Strategic Planning, Finance, Health Information Technology, Safety Net Initiatives, Health Education & Cultural and Linguistic Services, and Provider Network Operations. As in previous years, staff will submit an annual Community Health Investment Fund Summary for the previous fiscal year that highlights grant outcomes, areas of impact, areas for improvement, media coverage and community-wide acknowledgements.

162

APPROVED 163

APPROVED 164

APPROVED 165

APPROVED 166

APPROVED 167

APPROVED 168

APPROVED 169

APPROVED 170

APPROVED 171

APPROVED 172

APPROVED 173

DATE: September 16, 2016



SUBJECT: Monthly Investment Transaction Report for August 2016 In an effort to keep the Committee apprised of L.A. Care’s investment portfolios and to comply with California Government Code Section 53607, attached are the investment transaction details from August 1 to August 31, 2016. L.A. Care's total investment market value as of August 31, 2016 was $2.5 billion. This includes our funds invested with the government pooled funds. L.A. Care has approximately $64 million invested with the statewide Local Agency Investment Fund (LAIF), and $70 million invested with the Los Angeles County Pooled Investment Fund (LACPIF). The remainder, $2.4 billion, is managed by Payden & Rygel, an external professional asset management firm, and is divided to two separate portfolios based on investment style:

1. The Short-term Portfolio, and, 2. The Extended Portfolio

Transactions within those two portfolios are included in the attached report.

180

TRANSACTIONS BY TYPE

Account Name: L.A. CARE HEALTH PLAN 08/01/2016Account Number: through 08/31/2016

Trade Settlement Transaction Maturity Coupon Accrued Interest TotalDate Date Type Units Description Date Rate CUSIP Proceeds / (Cost) (Purch) or Sold Amount

07/29/16 08/01/16 Buy 920,000.000 U.S. TREASURY NOTE 06/30/18 0.63 912828R93 (919,425.00) (500.00) (919,925.00)

08/01/16 08/02/16 Buy 11,570,000.000 BANK OF NOVA SCOTIA HOUST 02/10/17 1.09 06417GMB (11,570,000.00) (351.38) (11,570,351.38)

08/02/16 08/02/16 Buy 2,000,000.000 FHLB DISCOUNT NOTE 08/10/16 313384B57 (1,999,906.67) (1,999,906.67)


08/01/16 08/02/16 Buy 50,000,000.000 U.S. TREASURY NOTE 06/30/17 0.63 912828XJ4 (50,029,296.88) (28,023.10) (50,057,319.98)


08/03/16 08/03/16 Buy 10,000,000.000 FHLB DISCOUNT NOTE 08/17/16 313384C49 (9,999,163.89) (9,999,163.89)

08/03/16 08/03/16 Buy 20,000,000.000 FHLMC DISCOUNT NOTE 09/01/16 313396E33 (19,996,101.11) (19,996,101.11)

08/02/16 08/03/16 Buy 13,000,000.000 TORONTO DOMIN NY YCD FRN 02/03/17 1.05 89113WFP (13,000,000.00) (13,000,000.00)

08/03/16 08/04/16 Buy 14,000,000.000 FHLB DISCOUNT NOTE 09/21/16 313384G78 (13,994,960.00) (13,994,960.00)



08/03/16 08/04/16 Buy 7,600,000.000 FHLB DISCOUNT NOTE 09/14/16 313384F87 (7,597,663.00) (7,597,663.00)



08/03/16 08/04/16 Buy 30,400,000.000 FNMA 09/20/17 1.00 3135G0PP2 (30,499,229.86) (113,155.56) (30,612,385.42)

08/03/16 08/04/16 Buy 40,000,000.000 U.S. TREASURY NOTE 09/30/17 0.63 912828TS9 (40,001,562.50) (86,065.57) (40,087,628.07)

08/03/16 08/04/16 Buy 35,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 (34,993,003.89) (34,993,003.89)

08/05/16 08/05/16 Buy 10,000,000.000 FFCB DISCOUNT NOTE 09/07/16 313312E97 (9,997,800.00) (9,997,800.00)

08/04/16 08/05/16 Buy 19,227,000.000 FNMA 10/26/17 0.88 3135G0PQ (19,266,129.83) (46,264.97) (19,312,394.80)

Payden & Rygel 181




08/01/16 08/10/16 Buy 4,600,000.000 TOYOTA 2016-C A2A CAR 01/15/19 1.00 89237WAB (4,599,776.90) (4,599,776.90)

08/10/16 08/11/16 Buy 28,000,000.000 FFCB 3ML FRN 05/09/18 0.79 3133EFYA9 (28,072,151.52) (1,232.54) (28,073,384.06)

08/10/16 08/11/16 Buy 22,500,000.000 FHLB DISCOUNT NOTE 09/07/16 313384E96 (22,495,528.13) (22,495,528.13)






08/05/16 08/25/16 Buy 2,000,000.000 CA LOS ANGELES REDEV AGY T 09/01/17 0.89 54465AGH (2,000,000.00) (2,000,000.00)



08/29/16 08/30/16 Buy 12,280,000.000 BANK OF TOKYO-MITSUBISHI Y 05/26/17 1.37 06538M7K9 (12,280,000.00) (12,280,000.00)

08/30/16 08/30/16 Buy 50,000,000.000 FHLB DISCOUNT NOTE 10/12/16 313384K40 (49,982,979.17) (49,982,979.17)




08/30/16 08/30/16 Buy 20,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 (19,999,787.22) (19,999,787.22)

08/30/16 08/31/16 Buy 15,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 (14,999,935.21) (14,999,935.21) 716,397,000.000 (716,556,461.28) (303,616.22) (716,860,077.50)

Payden & Rygel 182




08/01/16 08/01/16 Coupon BRANCH BANKING & TRUST FR 05/01/19 1.29 07330NAM 5,054.26 5,054.26

08/01/16 08/01/16 Coupon BRANCH BANKING & TRUST FR 05/01/19 1.29 07330NAM 1,964.09 1,964.09

08/01/16 08/01/16 Coupon BNY MELLON FRN 08/01/18 1.32 06406HCM 1,708.70 1,708.70




08/01/16 08/01/16 Coupon HOUSING URBAN DEVELOPMEN 08/01/16 0.83 911759LX4 6,640.00 6,640.00

08/01/16 08/01/16 Coupon COCA-COLA FRN 11/01/16 0.86 191216BC3 939.17 939.17

08/01/16 08/01/16 Coupon COCA-COLA FRN 11/01/16 0.86 191216BC3 1,841.50 1,841.50

08/01/16 08/01/16 Coupon COCA-COLA FRN 11/01/16 0.86 191216BC3 1,684.97 1,684.97

08/01/16 08/01/16 Coupon US BANK CINCINNATI FRN 01/30/17 0.98 90331HMD 1,133.68 1,133.68






08/02/16 08/02/16 Coupon FFCB 1ML FRN 01/02/18 0.54 3133EEWS 4,281.70 4,281.70

08/03/16 08/03/16 Coupon APPLE FRN 05/03/18 1.01 037833AG5 8,496.58 8,496.58



Payden & Rygel 183




08/04/16 08/04/16 Coupon FFCB 1ML FRN 05/04/18 0.61 3133EF5Z6 1,450.92 1,450.92

08/04/16 08/04/16 Coupon FFCB 1ML FRN 08/04/17 0.53 3133EDUD 4,349.04 4,349.04

08/04/16 08/04/16 Coupon NGN 2010-R1 1A 1MOFRN NCUA 10/07/20 0.92 62888VAA6 18,773.75 18,773.75

08/04/16 08/04/16 Coupon NGN 2010-R2 1A 1MOFRN NCUA 11/06/17 0.84 62888UAA8 1,208.03 1,208.03


08/04/16 08/04/16 Coupon NGN 2011-R1 1A 1MOFRN NCUA 01/08/20 0.94 62888YAA0 6,249.43 6,249.43


08/04/16 08/04/16 Coupon NGN 2011-R2 1A 1MOFRN NCUA 02/06/20 0.89 62889CAA7 750.00 750.00

08/04/16 08/04/16 Coupon NGN 2011-R4 1A 1MOFRN NCUA 03/06/20 0.87 62889FAA0 3,656.92 3,656.92

08/04/16 08/04/16 Coupon NGN 2011-R4 1A 1MOFRN NCUA 03/06/20 0.87 62889FAA0 436.39 436.39

08/06/16 08/06/16 Coupon APPLE FRN 05/06/19 1.09 037833AP5 12,114.76 12,114.76

08/06/16 08/06/16 Coupon IBM 02/06/17 1.25 459200HC8 31,250.00 31,250.00

08/08/16 08/08/16 Coupon IBM FRN 02/06/18 0.98 459200JA0 10,759.08 10,759.08

08/08/16 08/08/16 Coupon IBM FRN 02/06/18 0.98 459200JA0 1,291.09 1,291.09

08/08/16 08/08/16 Coupon IBM FRN 02/06/18 0.98 459200JA0 1,291.09 1,291.09

08/08/16 08/08/16 Coupon RABOBANK NEDERLAND YCD 08/08/16 0.71 21685VML0 26,980.00 26,980.00

08/09/16 08/09/16 Coupon NGN 2011-R3 1A 1MO FRN NCU 03/11/20 0.90 62889EAA3 3,232.53 3,232.53

08/09/16 08/09/16 Coupon NGN 2011-R3 1A 1MO FRN NCU 03/11/20 0.90 62889EAA3 366.35 366.35


08/10/16 08/10/16 Coupon MERCK & CO FRN 02/10/17 0.93 58933YAN5 2,526.23 2,526.23

Payden & Rygel 184




08/10/16 08/10/16 Coupon MERCK & CO FRN 02/10/17 0.93 58933YAN5 1,542.74 1,542.74

08/14/16 08/14/16 Coupon BANK OF AMERICA 02/14/17 1.25 06050TLT7 4,375.00 4,375.00

08/14/16 08/14/16 Coupon PACCAR FINANCIAL 08/14/18 1.75 69371RM6 18,375.00 18,375.00

08/15/16 08/15/16 Coupon BANK OF AMERICA FRN 02/14/17 1.29 06050TLU4 9,974.51 9,974.51

08/15/16 08/15/16 Coupon BANK OF AMERICA FRN 02/14/17 1.29 06050TLU4 3,837.42 3,837.42

08/15/16 08/15/16 Coupon CHASE 2014-A1 A1 CDT 01/15/19 1.15 161571GJ7 3,354.17 3,354.17



08/15/16 08/15/16 Coupon CHASE 2015-A3 A CDT 1MOFRN 04/15/19 0.76 161571GW 4,534.37 4,534.37

08/15/16 08/15/16 Coupon CHEVRON FRN 11/15/17 0.99 166764AK6 7,546.36 7,546.36



08/15/16 08/15/16 Coupon DRYROCK 2014-2 A 1MOFRN CD 03/16/20 0.85 06742LAC7 7,072.74 7,072.74


08/15/16 08/15/16 Coupon DRYROCK 2014-2 A 1MOFRN CD 03/16/20 0.85 06742LAC7 109.63 109.63

08/01/16 08/15/16 Coupon FHLMC #G15842 15YR 04/01/19 4.50 3128MEWB 42,888.72 42,888.72

08/15/16 08/15/16 Coupon GE CAPITAL CORP FRN 05/15/17 1.10 36962G7H1 2,427.84 2,427.84


08/15/16 08/15/16 Coupon HONDA 2015-1 A2 CAR 06/15/17 0.70 43814KAB7 115.65 115.65


Payden & Rygel 185




08/15/16 08/15/16 Coupon HONDA 2016-2 A2 CAR 09/15/18 1.13 43814QAB4 9,699.17 9,699.17

08/15/16 08/15/16 Coupon JOHN DEERE 2013-B A3 EQP 08/15/17 0.87 477879AC4 165.79 165.79

08/15/16 08/15/16 Coupon JOHN DEERE 2014-A A3 EQP 04/16/18 0.92 47787VAC5 1,154.79 1,154.79

08/15/16 08/15/16 Coupon JOHN DEERE 2015-A A2A EQP 02/15/18 0.87 47787UAB9 1,509.35 1,509.35

08/15/16 08/15/16 Coupon JOHN DEERE 2015-A A2A EQP 02/15/18 0.87 47787UAB9 39.96 39.96


08/15/16 08/15/16 Coupon JOHN DEERE 2016-A A2 EQP 10/15/18 1.15 47788MAB 33.54 33.54

08/15/16 08/15/16 Coupon JPMORGAN CHASE FRN 02/15/17 1.34 46623EJZ3 2,143.84 2,143.84

08/15/16 08/15/16 Coupon JPMORGAN CHASE 02/15/17 1.35 46623EJY6 20,250.00 20,250.00

08/15/16 08/15/16 Coupon PFIZER FRN 05/15/17 0.97 717081DP5 1,961.81 1,961.81


08/15/16 08/15/16 Coupon TOYOTA 2014-B A3 CAR 03/15/18 0.76 89231RAC8 1,431.89 1,431.89

08/15/16 08/15/16 Coupon TOYOTA 2015-A A2 CAR 07/17/17 0.71 89236WAB 307.60 307.60


08/15/16 08/15/16 Coupon TOYOTA 2015-A A3 CAR 02/15/19 1.12 89236WAC 3,080.00 3,080.00


08/15/16 08/15/16 Coupon TOYOTA 2015-B A2A GREEN CA 11/15/17 0.77 89237CAB7 1,755.14 1,755.14

08/15/16 08/15/16 Coupon TOYOTA 2015-C A2A CAR 02/15/18 0.92 89231TAB6 3,813.36 3,813.36

08/15/16 08/15/16 Coupon TOYOTA 2016-A A2A CAR 07/16/18 1.03 89237KAB9 30.04 30.04

08/15/16 08/15/16 Coupon TOYOTA 2016-B A2A CAR 10/15/18 1.02 89231UAB3 4,165.00 4,165.00

Payden & Rygel 186




08/15/16 08/15/16 Coupon USAA 2014-1 A3 CAR 12/15/17 0.58 90290KAC9 59.05 59.05



08/16/16 08/16/16 Coupon FFCB 1ML FRN 04/16/18 0.56 3133EEZC7 3,173.02 3,173.02


08/17/16 08/17/16 Coupon FFCB 1ML FRN 01/17/18 0.54 3133EEZM5 4,267.50 4,267.50

08/18/16 08/18/16 Coupon HONDA 2016-1 A2 CAR 06/18/18 1.01 43814NAB1 2,609.17 2,609.17

08/18/16 08/18/16 Coupon MERCK & CO FRN 05/18/18 1.16 58933YAH8 8,568.11 8,568.11

08/18/16 08/18/16 Coupon MERCK & CO FRN 05/18/18 1.16 58933YAH8 4,180.74 4,180.74

08/20/16 08/20/16 Coupon FFCB 1ML FRN 06/20/19 0.70 3133EGGJ8 2,912.92 2,912.92


08/20/16 08/20/16 Coupon FHLMC 1ML FRN 04/20/17 0.52 3134G72G5 2,719.57 2,719.57

08/20/16 08/20/16 Coupon VOLKSWAGEN 2013-2 A3 CAR 04/20/18 0.70 92867PAC7 2,294.62 2,294.62

08/20/16 08/20/16 Coupon VOLKSWAGEN 2013-2 A3 CAR 04/20/18 0.70 92867PAC7 382.44 382.44

08/21/16 08/21/16 Coupon HONDA 2015-2 A3 CAR 02/21/19 1.04 43813NAC0 4,285.67 4,285.67

08/22/16 08/22/16 Coupon APPLE FRN 02/22/19 1.47 037833BR0 2,458.96 2,458.96

08/22/16 08/22/16 Coupon BNY MELLON FRN 05/22/18 1.19 06406HDC 19,862.37 19,862.37

08/22/16 08/22/16 Coupon BMW 2016-1 A2A LEASE 01/22/18 1.17 05581RAB2 8,216.00 8,216.00

08/22/16 08/22/16 Coupon GEDFT 2014-2 A 1MOFRN FLOO 10/20/19 0.96 36159LCN4 3,262.32 3,262.32


Payden & Rygel 187




08/22/16 08/22/16 Coupon GEDFT 2014-2 A 1MOFRN FLOO 10/20/19 0.96 36159LCN4 794.12 794.12

08/22/16 08/22/16 Coupon INTL FINANCE CORP FRN 01/20/17 0.68 45950VHJ8 3,009.19 3,009.19

08/22/16 08/22/16 Coupon PEPSICO 02/22/17 0.95 713448CL0 5,225.00 5,225.00



08/22/16 08/22/16 Coupon QUALCOMM FRN 05/18/18 1.08 747525AH6 14,897.12 14,897.12

08/23/16 08/23/16 Coupon APPLE 02/23/18 1.30 037833BN9 4,095.00 4,095.00

08/23/16 08/23/16 Coupon APPLE 02/23/18 1.30 037833BN9 6,500.00 6,500.00

08/23/16 08/23/16 Coupon CATERPILLAR FRN 02/23/18 1.52 14912L6Q9 24,219.77 24,219.77

08/24/16 08/24/16 Coupon WELLS FARGO FRN 05/24/19 1.43 94988J5E3 2,934.84 2,934.84

08/25/16 08/25/16 Coupon BMW 2014-A A3 CAR 11/26/18 0.97 09658UAC3 1,248.60 1,248.60

08/25/16 08/25/16 Coupon BMW 2016-A A2A CAR 05/25/19 0.99 05582QAB3 13,475.00 13,475.00

08/25/16 08/25/16 Coupon FFCB 1ML FRN 05/25/18 0.61 3133EGCH 6,549.78 6,549.78

08/01/16 08/25/16 Coupon FHMS K708 A2 CMBS 01/25/19 2.13 3137AQT24 2,378.50 2,378.50


08/01/16 08/25/16 Coupon FHMS K710 A2 CMBS 05/25/19 1.88 3137ARPY6 2,997.11 2,997.11

08/01/16 08/25/16 Coupon FHMS K710 A2 CMBS 05/25/19 1.88 3137ARPY6 345.22 345.22

08/01/16 08/25/16 Coupon FHMS KJ04 A1 CMBS 10/25/20 1.38 3137BPCF4 7,200.60 7,200.60

08/01/16 08/25/16 Coupon FNA 2012-M9 ASQ2 CMBS 12/25/17 1.51 3136A7L26 1,868.95 1,868.95

08/01/16 08/25/16 Coupon FNA 2013-M1 ASQ2 CMBS 11/25/16 1.07 3136ABPT4 143.45 143.45

Payden & Rygel 188




08/01/16 08/25/16 Coupon FNA 2013-M7 ASQ2 CMBS 03/26/18 1.23 3136AEGM 1,324.74 1,324.74

08/01/16 08/25/16 Coupon FNA 14-M1 ASQ2 CMBS 11/25/18 2.32 3136AHUV 3,525.13 3,525.13

08/01/16 08/25/16 Coupon FNA 2014-M5 FA 1MOFRN CMBS 01/25/17 0.82 3136AJ2A3 30.64 30.64

08/01/16 08/25/16 Coupon FNA 2014-M8 FA 1MOFRN CMBS 05/25/18 0.77 3136AKQJ5 793.42 793.42

08/01/16 08/25/16 Coupon FNA 2014-M6 FA 1MOFRN CMBS 12/25/17 0.76 3136AJ7D2 484.45 484.45

08/01/16 08/25/16 Coupon FNA 2015-M10 FA 1MOFRN CMB 03/25/19 0.72 3136ANA98 5,151.86 5,151.86

08/01/16 08/25/16 Coupon FNA 2015-M12 FA 1MOFRN CMB 04/25/20 0.81 3136AP3Z3 6,428.57 6,428.57

08/01/16 08/25/16 Coupon FNA 2015-M13 ASQ2 CMBS 09/25/19 1.65 3136AQDQ 5,761.00 5,761.00

08/01/16 08/25/16 Coupon FNA 2015-M3 FA 1MOFRN CMBS 06/25/18 0.69 3136AMMC 702.49 702.49

08/01/16 08/25/16 Coupon FNA 2015-M4 FA 1MOFRN CMBS 09/25/18 0.68 3136AMTM 6,786.56 6,786.56

08/01/16 08/25/16 Coupon FNA 2015-M7 ASQ2 CMBS 04/25/18 1.55 3136ANJY4 4,843.75 4,843.75

08/01/16 08/25/16 Coupon FNA 2015-M8 FA 1MOFRN CMBS 11/25/18 0.64 3136ANMF 5,872.26 5,872.26

08/01/16 08/25/16 Coupon FNA 2015-M8 FA 1MOFRN CMBS 11/25/18 0.64 3136ANMF 788.81 788.81


08/01/16 08/25/16 Coupon FNA 2016-M6 ASQ2 CMBS 06/25/19 1.79 3136ASPX8 13,685.00 13,685.00

08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,996.10 3,996.10

08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,996.10 3,996.10

08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,996.10 3,996.10

08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,996.10 3,996.10

08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,996.10 3,996.10

Payden & Rygel 189




08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,996.10 3,996.10

08/01/16 08/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,196.88 3,196.88

08/01/16 08/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,601.45 4,601.45

08/01/16 08/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,601.45 4,601.45

08/01/16 08/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,601.45 4,601.45

08/01/16 08/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,601.45 4,601.45

08/01/16 08/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 1,303.78 1,303.78

08/26/16 08/26/16 Coupon FHLMC C 5/26/16 Q 02/26/18 1.05 3134G8L98 47,250.00 47,250.00

08/28/16 08/28/16 Coupon FHLB 08/28/17 0.75 3130A62S5 28,125.00 28,125.00

08/31/16 08/31/16 Coupon U.S. TREASURY NOTE 02/28/17 0.50 912828J35 125,000.00 125,000.00

08/31/16 08/31/16 Coupon U.S. TREASURY NOTE 02/28/17 0.50 912828J35 125,000.00 125,000.00 1,030,763.33 1,030,763.33

08/01/16 08/01/16 Income (882.150) ADJ NET P&I USD (882.15) (882.15)

08/01/16 08/01/16 Income 8,736.480 STIF INT USD 8,736.48 8,736.48 7,854.330 7,854.33 7,854.33

08/30/16 08/30/16 Contributn 250,000,000.000 NM USD 250,000,000.00 250,000,000.00

07/29/16 08/01/16 Sell Long 920,000.000 U.S. TREASURY NOTE 06/15/18 1.13 912828XF2 927,811.55 1,329.10 929,140.65

08/01/16 08/02/16 Sell Long 3,000,000.000 FHLB DISCOUNT NOTE 08/03/16 313384A66 2,999,161.50 821.67 2,999,983.17

08/02/16 08/02/16 Sell Long 5,500,000.000 FHLB DISCOUNT NOTE 08/03/16 313384A66 5,498,470.69 1,506.39 5,499,977.08

Payden & Rygel 190







08/01/16 08/02/16 Sell Long 25,000,000.000 U.S. TREASURY NOTE 04/30/17 0.50 912828K66 24,998,067.25 31,929.35 25,029,996.60




08/03/16 08/03/16 Sell Long 2,000,000.000 FHLB DISCOUNT NOTE 08/12/16 313384B73 1,999,820.00 105.00 1,999,925.00

08/03/16 08/04/16 Sell Long 50,000,000.000 FHLB DISCOUNT NOTE 10/28/16 313384M48 49,961,583.33 3,000.00 49,964,583.33



08/03/16 08/04/16 Sell Long 18,800,000.000 U.S. TREASURY NOTE 10/31/17 0.75 912828TW 18,824,234.38 36,782.61 18,861,016.99

08/04/16 08/04/16 Sell Long 50,000,000.000 TVA DISCOUNT NOTE 09/06/16 880592E89 49,985,437.51 2,416.67 49,987,854.17

08/17/16 08/17/16 Sell Long 20,000,000.000 FHLMC DISCOUNT NOTE 09/01/16 313396E33 19,996,117.78 1,882.22 19,998,000.00 343,290,000.000 343,199,237.55 181,549.78 343,380,787.33

08/04/16 08/04/16 Pay Princpl 538,602.277 NGN 2010-R1 1A 1MOFRN NCUA 10/07/20 0.92 62888VAA6 538,602.28 538,602.28

08/04/16 08/04/16 Pay Princpl 50,471.760 NGN 2010-R2 1A 1MOFRN NCUA 11/06/17 0.84 62888UAA8 50,471.76 50,471.76


08/04/16 08/04/16 Pay Princpl 153,050.265 NGN 2011-R1 1A 1MOFRN NCUA 01/08/20 0.94 62888YAA0 153,050.26 153,050.26


Payden & Rygel 191




08/04/16 08/04/16 Pay Princpl 19,076.240 NGN 2011-R2 1A 1MOFRN NCUA 02/06/20 0.89 62889CAA7 19,076.24 19,076.24

08/04/16 08/04/16 Pay Princpl 351,123.793 NGN 2011-R4 1A 1MOFRN NCUA 03/06/20 0.87 62889FAA0 351,123.79 351,123.79


08/09/16 08/09/16 Pay Princpl 109,675.999 NGN 2011-R3 1A 1MO FRN NCU 03/11/20 0.90 62889EAA3 109,676.00 109,676.00



08/01/16 08/15/16 Pay Princpl 713,744.050 FHLMC #G15842 15YR 04/01/19 4.50 3128MEWB 713,744.05 713,744.05

08/15/16 08/15/16 Pay Princpl 139,733.687 HONDA 2015-1 A2 CAR 06/15/17 0.70 43814KAB7 139,733.69 139,733.69


08/15/16 08/15/16 Pay Princpl 95,665.440 JOHN DEERE 2013-B A3 EQP 08/15/17 0.87 477879AC4 95,665.44 95,665.44

08/15/16 08/15/16 Pay Princpl 158,442.718 JOHN DEERE 2014-A A3 EQP 04/16/18 0.92 47787VAC5 158,442.72 158,442.72

08/15/16 08/15/16 Pay Princpl 358,384.072 JOHN DEERE 2015-A A2A EQP 02/15/18 0.87 47787UAB9 358,384.07 358,384.07



08/15/16 08/15/16 Pay Princpl 267,390.833 TOYOTA 2014-B A3 CAR 03/15/18 0.76 89231RAC8 267,390.83 267,390.83

08/15/16 08/15/16 Pay Princpl 229,484.172 TOYOTA 2015-A A2 CAR 07/17/17 0.71 89236WAB 229,484.17 229,484.17


08/15/16 08/15/16 Pay Princpl 455,567.998 TOYOTA 2015-B A2A GREEN CA 11/15/17 0.77 89237CAB7 455,568.00 455,568.00

08/15/16 08/15/16 Pay Princpl 619,263.134 TOYOTA 2015-C A2A CAR 02/15/18 0.92 89231TAB6 619,263.13 619,263.13

08/15/16 08/15/16 Pay Princpl 59,925.787 USAA 2014-1 A3 CAR 12/15/17 0.58 90290KAC9 59,925.79 59,925.79

Payden & Rygel 192






08/20/16 08/20/16 Pay Princpl 490,736.902 VOLKSWAGEN 2013-2 A3 CAR 04/20/18 0.70 92867PAC7 490,736.90 490,736.90


08/25/16 08/25/16 Pay Princpl 143,329.694 BMW 2014-A A3 CAR 11/26/18 0.97 09658UAC3 143,329.69 143,329.69

08/01/16 08/25/16 Pay Princpl 41.510 FHMS K708 A2 CMBS 01/25/19 2.13 3137AQT24 41.51 41.51

08/01/16 08/25/16 Pay Princpl 30.980 FHMS K708 A2 CMBS 01/25/19 2.13 3137AQT24 30.98 30.98

08/01/16 08/25/16 Pay Princpl 14,681.152 FHMS KJ04 A1 CMBS 10/25/20 1.38 3137BPCF4 14,681.15 14,681.15

08/01/16 08/25/16 Pay Princpl 20,374.882 FNA 2012-M9 ASQ2 CMBS 12/25/17 1.51 3136A7L26 20,374.88 20,374.88

08/01/16 08/25/16 Pay Princpl 74,326.280 FNA 2013-M1 ASQ2 CMBS 11/25/16 1.07 3136ABPT4 74,326.28 74,326.28

08/01/16 08/25/16 Pay Princpl 240,698.832 FNA 2013-M7 ASQ2 CMBS 03/26/18 1.23 3136AEGM 240,698.83 240,698.83

08/01/16 08/25/16 Pay Princpl 106,327.340 FNA 14-M1 ASQ2 CMBS 11/25/18 2.32 3136AHUV 106,327.34 106,327.34

08/01/16 08/25/16 Pay Princpl 6,397.640 FNA 2014-M5 FA 1MOFRN CMBS 01/25/17 0.82 3136AJ2A3 6,397.64 6,397.64

08/01/16 08/25/16 Pay Princpl 44,420.060 FNA 2014-M8 FA 1MOFRN CMBS 05/25/18 0.77 3136AKQJ5 44,420.06 44,420.06

08/01/16 08/25/16 Pay Princpl 86,825.240 FNA 2014-M6 FA 1MOFRN CMBS 12/25/17 0.76 3136AJ7D2 86,825.24 86,825.24

08/01/16 08/25/16 Pay Princpl 74,154.500 FNA 2015-M10 FA 1MOFRN CMB 03/25/19 0.72 3136ANA98 74,154.50 74,154.50

08/01/16 08/25/16 Pay Princpl 201,830.500 FNA 2015-M12 FA 1MOFRN CMB 04/25/20 0.81 3136AP3Z3 201,830.50 201,830.50

08/01/16 08/25/16 Pay Princpl 37,657.452 FNA 2015-M3 FA 1MOFRN CMBS 06/25/18 0.69 3136AMMC 37,657.45 37,657.45

08/01/16 08/25/16 Pay Princpl 441,248.500 FNA 2015-M4 FA 1MOFRN CMBS 09/25/18 0.68 3136AMTM 441,248.50 441,248.50

08/01/16 08/25/16 Pay Princpl 95,869.360 FNA 2015-M8 FA 1MOFRN CMBS 11/25/18 0.64 3136ANMF 95,869.36 95,869.36

Payden & Rygel 193






08/01/16 08/25/16 Pay Princpl 63,211.500 FNMA #725046 15YR 11/01/18 4.50 31402CP71 63,211.50 63,211.50







08/01/16 08/25/16 Pay Princpl 79,211.000 FNR 2003-80 LA 08/25/18 4.50 31393DQ3 79,211.00 79,211.00




08/01/16 08/25/16 Pay Princpl 22,443.640 FNR 2003-80 LA 08/25/18 4.50 31393DQ3 22,443.64 22,443.64 8,318,226.124 8,318,226.11 8,318,226.11

08/01/16 08/01/16 Mature Long 1,600,000.000 HOUSING URBAN DEVELOPMEN 08/01/16 0.83 911759LX4 1,600,000.00 1,600,000.00

08/03/16 08/03/16 Mature Long 50,000,000.000 FNMA DISCOUNT NOTE 08/03/16 313588A62 49,991,333.33 8,666.67 50,000,000.00

08/08/16 08/08/16 Mature Long 9,000,000.000 RABOBANK NEDERLAND YCD 08/08/16 0.71 21685VML0 9,000,000.00 9,000,000.00

08/10/16 08/10/16 Mature Long 2,300,000.000 FHLB DISCOUNT NOTE 08/10/16 313384B57 2,299,610.92 389.08 2,300,000.00


Payden & Rygel 194




08/10/16 08/10/16 Mature Long 10,700,000.000 FHLB DISCOUNT NOTE 08/10/16 313384B57 10,698,424.72 1,575.28 10,700,000.00








08/11/16 08/11/16 Mature Long 50,000,000.000 U.S. TREASURY BILL 08/11/16 912796JF7 49,997,833.33 2,166.67 50,000,000.00

08/17/16 08/17/16 Mature Long 29,000,000.000 FHLB DISCOUNT NOTE 08/17/16 313384C49 28,991,892.08 8,107.92 29,000,000.00

08/17/16 08/17/16 Mature Long 2,265,000.000 FHLB DISCOUNT NOTE 08/17/16 313384C49 2,264,456.40 543.60 2,265,000.00




08/17/16 08/17/16 Mature Long 10,000,000.000 FHLB DISCOUNT NOTE 08/17/16 313384C49 9,999,163.89 836.11 10,000,000.00

08/17/16 08/17/16 Mature Long 6,010,000.000 FNMA DISCOUNT NOTE 08/17/16 313588C45 6,009,151.59 848.41 6,010,000.00

08/24/16 08/24/16 Mature Long 50,000,000.000 FHLB DISCOUNT NOTE 08/24/16 313384D30 49,982,222.22 17,777.78 50,000,000.00

08/24/16 08/24/16 Mature Long 5,000,000.000 FHLB DISCOUNT NOTE 08/24/16 313384D30 4,998,222.22 1,777.78 5,000,000.00

Payden & Rygel195




Fixed Income - cont.08/24/16 08/24/16 Mature Long 20,000,000.000 FHLB DISCOUNT NOTE 08/24/16 313384D30 19,995,644.44 4,355.56 20,000,000.00

361,735,000.000 361,673,235.57 61,764.44 361,735,000.00

08/10/16 08/10/16 Withdrawal (75,000,000.000) WD USD (75,000,000.00) (75,000,000.00)



08/31/16 08/31/16 Withdrawal (10.000) WD USD (10.00) (10.00) 250,000,010.000) (250,000,010.00) (250,000,010.00)

Payden & Rygel 196


Account Name: L.A. CARE HEALTH PLAN-LOW DURATION PORT 08/01/2016Account Number: through 08/31/2016


07/29/16 08/01/16 Buy 45,000.000 U.S. TREASURY NOTE 06/30/18 0.63 912828R93 (44,971.88) (24.46) (44,996.34)

08/01/16 08/02/16 Buy 690,000.000 BANK OF NOVA SCOTIA HOUST 02/10/17 1.09 06417GMB (690,000.00) (20.96) (690,020.96)

07/29/16 08/02/16 Buy 890,000.000 FNMA 08/02/19 0.88 3135G0N33 (888,504.80) (888,504.80)


08/02/16 08/03/16 Buy 840,000.000 TORONTO DOMIN NY YCD FRN 02/03/17 1.05 89113WFP (840,000.00) (840,000.00)

07/28/16 08/04/16 Buy 420,000.000 APPLE 08/02/19 1.10 037833CB4 (419,580.00) (419,580.00)

08/01/16 08/08/16 Buy 440,000.000 MICROSOFT 08/08/19 1.10 594918BN3 (439,546.80) (439,546.80)

08/01/16 08/10/16 Buy 300,000.000 TOYOTA 2016-C A2A CAR 01/15/19 1.00 89237WAB (299,985.45) (299,985.45)

08/08/16 08/15/16 Buy 160,000.000 BERKSHIRE HATHAWAY FRN 08/15/19 1.08 084664CL3 (160,000.00) (160,000.00)

08/25/16 08/26/16 Buy 400,000.000 FHLB DISCOUNT NOTE 09/21/16 313384G78 (399,919.11) (399,919.11)

08/29/16 08/30/16 Buy 840,000.000 BANK OF TOKYO-MITSUBISHI Y 05/26/17 1.37 06538M7K9 (840,000.00) (840,000.00) 7,025,000.000 (7,023,679.92) (1,166.34) (7,024,846.26)

08/01/16 08/01/16 Coupon BB&T CORPORATION FRN 02/01/19 1.42 05531FAR4 1,081.58 1,081.58

08/01/16 08/01/16 Coupon HOUSING URBAN DEVELOPMEN 08/01/17 0.93 911759LY2 930.00 930.00

08/01/16 08/01/16 Coupon US BANK CINCINNATI FRN 01/30/17 0.98 90331HMD 906.94 906.94

08/08/16 08/08/16 Coupon IBM FRN 02/06/18 0.98 459200JA0 1,721.45 1,721.45

08/14/16 08/14/16 Coupon BANK OF AMERICA 02/14/17 1.25 06050TLT7 2,500.00 2,500.00


08/15/16 08/15/16 Coupon CHASE 2014-A1 A1 CDT 01/15/19 1.15 161571GJ7 479.17 479.17

08/15/16 08/15/16 Coupon CHASE 2015-A3 A CDT 1MOFRN 04/15/19 0.76 161571GW 503.82 503.82

Payden & Rygel 197








08/15/16 08/15/16 Coupon HONDA 2016-2 A2 CAR 09/15/18 1.13 43814QAB4 941.67 941.67

08/15/16 08/15/16 Coupon JOHN DEERE 2014-A A3 EQP 04/16/18 0.92 47787VAC5 572.62 572.62



08/15/16 08/15/16 Coupon TOYOTA 2013-B A3 CAR 07/17/17 0.89 89236VAC4 54.65 54.65



08/15/16 08/15/16 Coupon TOYOTA 2015-B A2A GREEN CA 11/15/17 0.77 89237CAB7 187.38 187.38

08/15/16 08/15/16 Coupon TOYOTA 2016-B A2A CAR 10/15/18 1.02 89231UAB3 425.00 425.00


08/18/16 08/18/16 Coupon HONDA 2013-4 A3 CAR 09/18/17 0.69 43814FAC6 98.27 98.27

08/18/16 08/18/16 Coupon HONDA 2016-1 A2 CAR 06/18/18 1.01 43814NAB1 252.50 252.50

08/18/16 08/18/16 Coupon JPMORGAN CHASE FRN 11/18/16 1.25 46623EKB4 2,282.53 2,282.53

08/20/16 08/20/16 Coupon FHLMC 1ML FRN 04/20/17 0.52 3134G72G5 444.44 444.44


08/21/16 08/21/16 Coupon HONDA 2015-2 A3 CAR 02/21/19 1.04 43813NAC0 216.67 216.67

Payden & Rygel 198




08/22/16 08/22/16 Coupon APPLE FRN 02/22/19 1.47 037833BR0 223.54 223.54

08/22/16 08/22/16 Coupon BNY MELLON FRN 05/22/18 1.19 06406HDC 2,090.78 2,090.78

08/22/16 08/22/16 Coupon BMW 2016-1 A2A LEASE 01/22/18 1.17 05581RAB2 728.00 728.00


08/23/16 08/23/16 Coupon APPLE 02/23/18 1.30 037833BN9 390.00 390.00

08/25/16 08/25/16 Coupon BMW 2013-A A3 CAR 11/27/17 0.67 05578XAC2 60.24 60.24

08/25/16 08/25/16 Coupon BMW 2016-A A2A CAR 05/25/19 0.99 05582QAB3 770.00 770.00

08/25/16 08/25/16 Coupon FFCB 1ML FRN 05/25/18 0.61 3133EGCH 935.68 935.68

08/01/16 08/25/16 Coupon FHMS KJ04 A1 CMBS 10/25/20 1.38 3137BPCF4 675.06 675.06

08/01/16 08/25/16 Coupon FNA 2014-M4 ASQ2 CMBS 01/25/17 1.27 3136AJB21 124.03 124.03




08/01/16 08/25/16 Coupon FNA 2015-M13 ASQ2 CMBS 09/25/19 1.65 3136AQDQ 548.67 548.67

08/01/16 08/25/16 Coupon FNA 2015-M4 FA 1MOFRN CMBS 09/25/18 0.68 3136AMTM 572.01 572.01


08/01/16 08/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 2,300.73 2,300.73

08/26/16 08/26/16 Coupon FHLMC C 5/26/16 Q 02/26/18 1.05 3134G8L98 4,410.00 4,410.00

08/28/16 08/28/16 Coupon FHLB 08/28/17 0.75 3130A62S5 3,150.00 3,150.00

Payden & Rygel199




Fixed Income - cont.08/29/16 08/29/16 Coupon FFCB 1ML FRN 08/29/17 0.56 3133EDTT9 738.01 738.01

42,576.98 42,576.98

08/01/16 08/01/16 Income 123.680 STIF INT USD 123.68 123.68

07/29/16 08/01/16 Sell Long 45,000.000 U.S. TREASURY NOTE 06/15/18 1.13 912828XF2 45,382.09 65.01 45,447.10

08/01/16 08/02/16 Sell Long 400,000.000 U.S. TREASURY NOTE 01/31/17 0.50 912828H78 400,156.25 10.87 400,167.12

08/01/16 08/02/16 Sell Long 1,200,000.000 U.S. TREASURY NOTE 01/31/17 0.50 912828H78 1,200,468.75 32.61 1,200,501.36


07/29/16 08/02/16 Sell Long 890,000.000 U.S. TREASURY NOTE 06/15/19 0.88 912828R85 892,465.38 1,021.31 893,486.69

08/02/16 08/03/16 Sell Long 1,500,000.000 FHLB DISCOUNT NOTE 02/10/17 313385BS4 1,494,189.58 2,070.00 1,496,259.58

08/29/16 08/30/16 Sell Long 400,000.000 FHLB DISCOUNT NOTE 09/21/16 313384G78 399,923.76 12.44 399,936.20 6,435,000.000 6,432,431.19 5,766.59 6,438,197.78




08/15/16 08/15/16 Pay Princpl 39,563.712 TOYOTA 2013-B A3 CAR 07/17/17 0.89 89236VAC4 39,563.71 39,563.71




Payden & Rygel 200





08/18/16 08/18/16 Pay Princpl 45,397.872 HONDA 2013-4 A3 CAR 09/18/17 0.69 43814FAC6 45,397.87 45,397.87


08/25/16 08/25/16 Pay Princpl 30,373.133 BMW 2013-A A3 CAR 11/27/17 0.67 05578XAC2 30,373.13 30,373.13


08/01/16 08/25/16 Pay Princpl 37,253.580 FNA 2014-M4 ASQ2 CMBS 01/25/17 1.27 3136AJB21 37,253.58 37,253.58






08/01/16 08/25/16 Pay Princpl 39,605.500 FNR 2003-80 LA 08/25/18 4.50 31393DQ3 39,605.50 39,605.50 621,318.093 621,318.09 621,318.09

Payden & Rygel 201

DATE: October 14, 2016



SUBJECT: Monthly Investment Transaction Report for September 2016 To keep the Committee apprised of L.A. Care’s investment portfolios and to comply with California Government Code Section 53607, attached are the investment transaction details from September 1 to September 30, 2016. L.A. Care's total investment market value as of September 30, 2016 was $2.56 billion. This includes our funds invested with the government pooled funds. L.A. Care has approximately $64 million invested with the statewide Local Agency Investment Fund (LAIF), and $70 million invested with the Los Angeles County Pooled Investment Fund (LACPIF). The remainder, $2.43 billion, is managed by Payden & Rygel, an external professional asset management firm, and is divided to two separate portfolios based on investment style:

1. The Short-term Portfolio, and, 2. The Extended Portfolio

Transactions within those two portfolios are included in the attached report.

202




08/31/16 09/01/16 Buy 22,800,000.000 FHLB DISCOUNT NOTE 10/03/16 313384J34 (22,794,528.00) (22,794,528.00)

08/31/16 09/01/16 Buy 10,500,000.000 FHLMC DISCOUNT NOTE 10/03/16 313396J38 (10,497,666.67) (10,497,666.67)

08/31/16 09/01/16 Buy 50,000,000.000 U.S. TREASURY BILL 09/08/16 912796JK6 (49,998,274.31) (49,998,274.31)

09/01/16 09/08/16 Buy 50,000,000.000 U.S. TREASURY BILL 03/09/17 912796KM0 (49,881,068.06) (49,881,068.06)

09/06/16 09/09/16 Buy 4,050,000.000 JOHN DEERE CAPITAL CORP FR 10/09/19 1.26 24422ETK5 (4,050,000.00) (4,050,000.00)

09/09/16 09/09/16 Buy 16,000,000.000 FFCB DISCOUNT NOTE 10/03/16 313312J35 (15,997,546.67) (15,997,546.67)

09/07/16 09/09/16 Buy 7,900,000.000 MIZUHO BANK LTD YCD FRN 03/07/17 1.27 60689DH89 (7,900,000.00) (277.94) (7,900,277.94)

09/07/16 09/09/16 Buy 10,890,000.000 RABOBANK NEDERLAND NY YCD 04/21/17 1.07 21684BXH2 (10,873,229.40) (44,667.15) (10,917,896.55)

09/08/16 09/12/16 Buy 12,800,000.000 NORDEA BANK FINLAND YCD 06/05/17 1.28 65558LSV5 (12,800,000.00) (12,800,000.00)

08/29/16 09/14/16 Buy 20,688,000.000 FHLMC C 12/14/16 Q 09/14/18 1.15 3134GAJQ8 (20,688,000.00) (20,688,000.00)

09/13/16 09/15/16 Buy 12,210,000.000 BNP PARIBAS NY YCD 06/08/17 1.36 05582WDX (12,210,000.00) (12,210,000.00)

09/14/16 09/16/16 Buy 11,900,000.000 SVENSKA HANDELSBANKEN NY 03/14/17 1.09 86958JCV9 (11,900,000.00) (719.10) (11,900,719.10)

09/20/16 09/21/16 Buy 50,000,000.000 FNMA DISCOUNT NOTE 09/22/16 313588G82 (49,999,652.78) (49,999,652.78)

09/20/16 09/21/16 Buy 50,000,000.000 FNMA DISCOUNT NOTE 09/22/16 313588G82 (49,999,652.78) (49,999,652.78)

09/12/16 09/21/16 Buy 10,600,000.000 USAA 2016-1 A2 CAR 03/15/19 1.07 90327CAB6 (10,599,735.00) (10,599,735.00)


09/22/16 09/22/16 Buy 50,000,000.000 FHLB DISCOUNT NOTE 09/23/16 313384G94 (49,999,680.56) (49,999,680.56)

09/19/16 09/22/16 Buy 30,000,000.000 U.S. TREASURY BILL 10/20/16 912796JQ3 (29,994,960.00) (29,994,960.00)


09/23/16 09/23/16 Buy 40,000,000.000 FHLB DISCOUNT NOTE 09/26/16 313384H44 (39,999,266.67) (39,999,266.67)

Payden & Rygel 203




09/20/16 09/23/16 Buy 4,085,000.000 JP MORGAN CHASE 09/21/18 1.45 48125LRF1 (4,083,080.05) (4,083,080.05)

09/26/16 09/28/16 Buy 13,930,000.000 CREDIT AGRICOLE NY YCD 03/24/17 1.22 22534HRM (13,930,000.00) (13,930,000.00)

09/28/16 09/28/16 Buy 50,000,000.000 FHLB DISCOUNT NOTE 10/26/16 313384M22 (49,992,183.33) (49,992,183.33)


09/26/16 09/28/16 Buy 13,850,000.000 SKANDINAVISKA ENSKILDA BAN 03/27/17 1.10 83050FLW9 (13,850,000.00) (13,850,000.00)

09/27/16 09/29/16 Buy 14,000,000.000 DNB NOR BANK YCD 03/28/17 1.09 23340QSK0 (14,000,000.00) (14,000,000.00)

09/27/16 09/29/16 Buy 1,720,000.000 CA UNIV OF CALIFORNIA TXB 05/15/18 1.30 91412GPZ2 (1,727,344.40) (8,297.28) (1,735,641.68)








09/28/16 09/30/16 Buy 13,940,000.000 SWEDBANK NY YCD 03/29/17 1.07 87019URN (13,940,000.00) (13,940,000.00)

09/30/16 09/30/16 Buy 50,000,000.000 U.S. TREASURY BILL 10/20/16 912796JQ3 (49,997,777.78) (49,997,777.78) 869,963,000.000 (869,779,157.16) (53,961.47) (869,833,118.63)

09/01/16 09/01/16 Coupon BRANCH BANKING & TRUST FR 12/01/16 1.27 07330NAF2 704.73 704.73

09/01/16 09/01/16 Coupon BRANCH BANKING & TRUST FR 12/01/16 1.27 07330NAF2 4,228.36 4,228.36


Payden & Rygel 204






09/01/16 09/01/16 Coupon CATERPILLAR FINANCIAL 03/01/18 1.30 14912L5P2 15,418.00 15,418.00

09/01/16 09/01/16 Coupon CISCO SYSTEMS FRN 03/01/19 1.34 17275RAQ 1,199.12 1,199.12

09/01/16 09/01/16 Coupon CISCO SYSTEMS FRN 03/01/19 1.34 17275RAQ 644.53 644.53



09/01/16 09/01/16 Coupon COCA-COLA 09/01/16 1.80 191216AU4 48,339.00 48,339.00



09/01/16 09/01/16 Coupon ELI LILLY & CO 03/01/18 1.25 532457BK3 5,000.00 5,000.00

09/01/16 09/01/16 Coupon PNC BANK FRN 06/01/18 1.26 69353REN4 11,173.40 11,173.40

09/01/16 09/01/16 Coupon EXXON MOBIL FRN 03/01/18 0.89 30231GAM 6,836.84 6,836.84

09/01/16 09/01/16 Coupon EXXON MOBIL 03/01/19 1.71 30231GAP7 25,571.80 25,571.80

09/02/16 09/02/16 Coupon CHEVRON FRN 03/02/18 1.01 166764AW 5,467.61 5,467.61



09/02/16 09/02/16 Coupon CHEVRON 03/02/18 1.37 166764AV2 8,190.00 8,190.00

09/02/16 09/02/16 Coupon FFCB 1ML FRN 01/02/18 0.56 3133EEWS 5,030.02 5,030.02

09/02/16 09/02/16 Coupon FFCB 3ML FRN 03/02/18 0.81 3133EEDP2 3,351.87 3,351.87

Payden & Rygel 205




09/03/16 09/03/16 Coupon CATERPILLAR FINANCIAL 03/03/17 1.00 14912L5Z0 11,250.00 11,250.00

09/03/16 09/03/16 Coupon CISCO SYSTEMS 03/03/17 1.10 17275RAT9 2,915.00 2,915.00


09/04/16 09/04/16 Coupon FFCB 1ML FRN 05/04/18 0.64 3133EF5Z6 1,522.47 1,522.47

09/04/16 09/04/16 Coupon FFCB 1ML FRN 08/04/17 0.56 3133EDUD 4,597.47 4,597.47

09/04/16 09/04/16 Coupon PNC BANK 03/04/19 1.95 69353REV6 4,972.50 4,972.50

09/04/16 09/04/16 Coupon PNC BANK 03/04/19 1.95 69353REV6 48,750.00 48,750.00

09/06/16 09/06/16 Coupon AMERICAN EXPRESS FRN 06/05/17 1.11 0258M0DN 6,434.29 6,434.29

09/06/16 09/06/16 Coupon BNY MELLON FRN 03/06/18 1.28 06406HCK3 715.62 715.62

09/06/16 09/06/16 Coupon BNY MELLON FRN 03/06/18 1.28 06406HCK3 1,431.24 1,431.24

09/06/16 09/06/16 Coupon CATERPILLAR FINANCIAL FRN 03/03/17 1.07 14912L5Y3 7,214.46 7,214.46



09/06/16 09/06/16 Coupon CATERPILLAR FINANCIAL FRN 03/03/17 1.07 14912L5Y3 687.78 687.78

09/06/16 09/06/16 Coupon PACCAR FINANCIAL FRN 06/06/17 1.03 69371RL95 333.54 333.54

09/06/16 09/06/16 Coupon PACCAR FINANCIAL FRN 06/06/17 1.03 69371RL95 6,337.23 6,337.23


09/06/16 09/06/16 Coupon PACCAR FINANCIAL FRN 06/06/17 1.03 69371RL95 7,004.31 7,004.31

09/06/16 09/06/16 Coupon TORONTO DOMIN NY YCD FRN 02/03/17 1.09 89113WFP 12,939.55 12,939.55

09/06/16 09/06/16 Coupon EXXON MOBIL 03/06/18 1.31 30231GAL6 17,421.75 17,421.75

Payden & Rygel 206





09/07/16 09/07/16 Coupon BANK OF AMERICA FRN 12/07/18 1.59 06050TMF6 16,400.45 16,400.45


09/07/16 09/07/16 Coupon BERKSHIRE HATHAWAY FRN 03/07/18 1.38 084664CF6 6,801.47 6,801.47



09/07/16 09/07/16 Coupon NGN 2010-R1 1A 1MOFRN NCUA 10/07/20 0.97 62888VAA6 23,372.02 23,372.02





09/07/16 09/07/16 Coupon NGN 2011-R2 1A 1MOFRN NCUA 02/06/20 0.92 62889CAA7 951.44 951.44

09/07/16 09/07/16 Coupon NGN 2011-R4 1A 1MOFRN NCUA 03/06/20 0.90 62889FAA0 4,430.53 4,430.53

09/07/16 09/07/16 Coupon NGN 2011-R4 1A 1MOFRN NCUA 03/06/20 0.90 62889FAA0 528.70 528.70

09/08/16 09/08/16 Coupon STRYKER 03/08/19 2.00 863667AK7 9,790.00 9,790.00

09/08/16 09/08/16 Coupon STRYKER 03/08/19 2.00 863667AK7 9,888.89 9,888.89


09/10/16 09/10/16 Coupon CHARLES SCHWAB 03/10/18 1.50 808513AK1 9,000.00 9,000.00

09/12/16 09/12/16 Coupon BANK OF NOVA SCOTIA HOUST 02/10/17 1.08 06417GMB 14,758.00 14,758.00

09/12/16 09/12/16 Coupon FFCB 3ML FRN 09/12/17 0.78 3133EETJ9 14,814.04 14,814.04

Payden & Rygel 207




09/12/16 09/12/16 Coupon NGN 2011-R3 1A 1MO FRN NCU 03/11/20 0.92 62889EAA3 4,097.76 4,097.76



09/12/16 09/12/16 Coupon TEXAS INSTRUMENTS 03/12/17 0.88 882508AX2 2,187.50 2,187.50


09/12/16 09/12/16 Coupon US BANK OHIO FRN 09/11/17 1.05 90331HMJ9 1,622.93 1,622.93

09/12/16 09/12/16 Coupon US BANK OHIO FRN 09/11/17 1.05 90331HMJ9 6,491.71 6,491.71

09/14/16 09/14/16 Coupon WELLS FARGO FRN 09/14/18 1.26 94974BGD 21,041.63 21,041.63

09/15/16 09/15/16 Coupon BB&T CORPORATION FRN 06/15/18 1.71 05531FAP8 5,797.92 5,797.92

09/15/16 09/15/16 Coupon BB&T CORPORATION FRN 06/15/18 1.71 05531FAP8 1,159.58 1,159.58




09/15/16 09/15/16 Coupon CHASE 2015-A3 A CDT 1MOFRN 04/15/19 0.77 161571GW 4,697.43 4,697.43

09/15/16 09/15/16 Coupon CISCO SYSTEMS FRN 06/15/18 1.16 17275RAY8 18,693.89 18,693.89

09/15/16 09/15/16 Coupon CISCO SYSTEMS FRN 06/15/18 1.16 17275RAY8 8,707.42 8,707.42

09/15/16 09/15/16 Coupon JOHN DEERE CAPITAL CORP FR 12/15/17 1.07 24422ESQ3 8,071.59 8,071.59




Payden & Rygel 208







09/15/16 09/15/16 Coupon HONDA 2016-2 A2 CAR 09/17/18 1.13 43814QAB4 9,699.17 9,699.17

09/15/16 09/15/16 Coupon HOME DEPOT FRN 09/15/17 1.22 437076BJ0 3,919.58 3,919.58

09/15/16 09/15/16 Coupon HOME DEPOT FRN 09/15/17 1.22 437076BJ0 10,517.55 10,517.55

09/15/16 09/15/16 Coupon JOHN DEERE 2013-B A3 EQP 08/15/17 0.87 477879AC4 96.44 96.44

09/15/16 09/15/16 Coupon JOHN DEERE 2014-A A3 EQP 04/16/18 0.92 47787VAC5 1,033.32 1,033.32

09/15/16 09/15/16 Coupon JOHN DEERE 2015-A A2A EQP 02/15/18 0.87 47787UAB9 1,249.52 1,249.52



09/15/16 09/15/16 Coupon JOHN DEERE 2016-A A2 EQP 10/15/18 1.15 47788MAB 33.54 33.54

09/15/16 09/15/16 Coupon JOHN DEERE 2016-B A2 EQP 02/15/19 1.09 47788NAB4 13,370.67 13,370.67

09/15/16 09/15/16 Coupon U.S. TREASURY NOTE 03/15/19 1.00 912828P95 8,200.00 8,200.00

09/15/16 09/15/16 Coupon TOYOTA 2014-B A3 CAR 03/15/18 0.76 89231RAC8 1,262.54 1,262.54





09/15/16 09/15/16 Coupon TOYOTA 2015-B A2A GREEN CA 11/15/17 0.77 89237CAB7 1,462.82 1,462.82

Payden & Rygel 209




09/15/16 09/15/16 Coupon TOYOTA 2015-C A2A CAR 02/15/18 0.92 89231TAB6 3,338.59 3,338.59

09/15/16 09/15/16 Coupon TOYOTA 2016-A A2A CAR 07/16/18 1.03 89237KAB9 30.04 30.04

09/15/16 09/15/16 Coupon TOYOTA 2016-B A2A CAR 10/15/18 1.02 89231UAB3 4,165.00 4,165.00

09/15/16 09/15/16 Coupon TOYOTA 2016-C A2A CAR 01/15/19 1.00 89237WAB 4,472.22 4,472.22

09/15/16 09/15/16 Coupon U.S. TREASURY NOTE 09/15/18 1.00 912828L40 9,800.00 9,800.00




09/15/16 09/15/16 Coupon WACHOVIA FRN 06/15/17 1.12 929903DU3 5,893.75 5,893.75





09/18/16 09/18/16 Coupon HONDA 2016-1 A2 CAR 06/18/18 1.01 43814NAB1 2,609.17 2,609.17

09/19/16 09/19/16 Coupon FFCB 1ML FRN 01/17/18 0.56 3133EEZM5 4,926.53 4,926.53

09/19/16 09/19/16 Coupon FHLB 03/19/18 0.88 3130A7CX1 40,775.00 40,775.00

09/20/16 09/20/16 Coupon BMW 2016-1 A2A LEASE 01/22/18 1.17 05581RAB2 7,189.00 7,189.00



09/20/16 09/20/16 Coupon FHLMC 1ML FRN 04/20/17 0.54 3134G72G5 2,862.81 2,862.81

Payden & Rygel 210




09/20/16 09/20/16 Coupon FNMA 09/20/17 1.00 3135G0PP2 152,000.00 152,000.00




09/20/16 09/20/16 Coupon INTL FINANCE CORP FRN 01/20/17 0.70 45950VHJ8 2,748.72 2,748.72

09/20/16 09/20/16 Coupon VOLKSWAGEN 2013-2 A3 CAR 04/20/18 0.70 92867PAC7 2,008.36 2,008.36


09/21/16 09/21/16 Coupon FNMA 3ML FRN 03/21/18 0.81 3135G0L35 60,760.89 60,760.89


09/21/16 09/21/16 Coupon HONDA 2015-2 A3 CAR 02/21/19 1.04 43813NAC0 4,285.67 4,285.67

09/22/16 09/22/16 Coupon AMERICAN EXPRESS FRN 09/22/17 1.17 0258M0DS 1,306.17 1,306.17



09/22/16 09/22/16 Coupon BB&T CORPORATION 03/22/17 2.15 05531FAK9 24,187.50 24,187.50

09/22/16 09/22/16 Coupon BB&T CORPORATION 03/22/17 2.15 05531FAK9 1,612.50 1,612.50

09/25/16 09/25/16 Coupon BMW 2014-A A3 CAR 11/26/18 0.97 09658UAC3 1,132.74 1,132.74

09/25/16 09/25/16 Coupon BMW 2016-A A2A CAR 05/25/19 0.99 05582QAB3 11,550.00 11,550.00




Payden & Rygel 211




09/01/16 09/25/16 Coupon FHMS K710 A2 CMBS 05/25/19 1.88 3137ARPY6 2,997.11 2,997.11

09/01/16 09/25/16 Coupon FHMS K710 A2 CMBS 05/25/19 1.88 3137ARPY6 345.22 345.22

09/01/16 09/25/16 Coupon FHMS KJ04 A1 CMBS 10/25/20 1.38 3137BPCF4 7,183.76 7,183.76

09/01/16 09/25/16 Coupon FNA 2012-M9 ASQ2 CMBS 12/25/17 1.51 3136A7L26 1,843.26 1,843.26

09/01/16 09/25/16 Coupon FNA 2013-M1 ASQ2 CMBS 11/25/16 1.07 3136ABPT4 76.94 76.94

09/01/16 09/25/16 Coupon FNA 2013-M7 ASQ2 CMBS 03/26/18 1.23 3136AEGM 1,077.33 1,077.33

09/01/16 09/25/16 Coupon FNA 14-M1 ASQ2 CMBS 11/25/18 2.32 3136AHUV 3,319.30 3,319.30



09/01/16 09/25/16 Coupon FNA 2014-M6 FA 1MOFRN CMBS 12/25/17 0.80 3136AJ7D2 451.84 451.84

09/01/16 09/25/16 Coupon FNA 2015-M10 FA 1MOFRN CMB 03/25/19 0.77 3136ANA98 5,349.74 5,349.74

09/01/16 09/25/16 Coupon FNA 2015-M12 FA 1MOFRN CMB 04/25/20 0.85 3136AP3Z3 6,581.02 6,581.02

09/01/16 09/25/16 Coupon FNA 2015-M13 ASQ2 CMBS 09/25/19 1.65 3136AQDQ 5,761.00 5,761.00

09/01/16 09/25/16 Coupon FNA 2015-M3 FA 1MOFRN CMBS 06/25/18 0.73 3136AMMC 713.82 713.82

09/01/16 09/25/16 Coupon FNA 2015-M4 FA 1MOFRN CMBS 09/25/18 0.72 3136AMTM 6,863.77 6,863.77

09/01/16 09/25/16 Coupon FNA 2015-M7 ASQ2 CMBS 04/25/18 1.55 3136ANJY4 4,843.75 4,843.75

09/01/16 09/25/16 Coupon FNA 2015-M8 FA 1MOFRN CMBS 11/25/18 0.68 3136ANMF 6,110.17 6,110.17



09/01/16 09/25/16 Coupon FNA 2016-M6 ASQ2 CMBS 06/25/19 1.79 3136ASPX8 13,685.00 13,685.00

Payden & Rygel 212




09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,759.06 3,759.06

09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,759.06 3,759.06

09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,759.06 3,759.06

09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,759.06 3,759.06

09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,759.06 3,759.06

09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,759.06 3,759.06

09/01/16 09/25/16 Coupon FNMA #725046 15YR 11/01/18 4.50 31402CP71 3,007.25 3,007.25

09/01/16 09/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,304.41 4,304.41

09/01/16 09/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,304.41 4,304.41

09/01/16 09/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,304.41 4,304.41

09/01/16 09/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 4,304.41 4,304.41

09/01/16 09/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 1,219.61 1,219.61

09/26/16 09/26/16 Coupon BANK OF AMERICA 03/26/18 1.65 06050TLY6 21,862.50 21,862.50


09/30/16 09/30/16 Coupon U.S. TREASURY NOTE 09/30/17 0.63 912828TS9 20,078.13 20,078.13



09/30/16 09/30/16 Coupon U.S. TREASURY NOTE 09/30/17 0.63 912828TS9 125,000.00 125,000.00 1,675,060.47 1,675,060.47

Payden & Rygel 213




09/01/16 09/01/16 Income 2,755.950 ADJ NET P&I USD 2,755.95 2,755.95

09/01/16 09/01/16 Income 1,386.440 STIF INT USD 1,386.44 1,386.44 4,142.390 4,142.39 4,142.39

09/30/16 09/30/16 Contributn 275,000,000.000 NM USD 275,000,000.00 275,000,000.00

09/01/16 09/07/16 Sell Long 885,000.000 JOHN DEERE CAPITAL CORP 01/16/18 1.35 24422EST7 888,805.50 1,692.56 890,498.06

09/01/16 09/07/16 Sell Long 310,000.000 PACCAR FINANCIAL 03/09/18 1.45 69371RM4 311,894.10 2,222.53 314,116.63

09/06/16 09/09/16 Sell Long 585,000.000 JOHN DEERE CAPITAL CORP 01/16/18 1.35 24422EST7 588,088.80 1,162.69 589,251.49

09/09/16 09/09/16 Sell Long 30,000,000.000 FHLMC DISCOUNT NOTE 09/19/16 313396G56 29,965,175.00 32,775.00 29,997,950.00



09/20/16 09/23/16 Sell Long 990,000.000 WELLS FARGO FRN 05/24/19 1.43 94988J5E3 995,227.20 1,175.99 996,403.19

09/23/16 09/26/16 Sell Long 30,000,000.000 U.S. TREASURY BILL 10/20/16 912796JQ3 29,997,680.00 720.00 29,998,400.00

09/27/16 09/27/16 Sell Long 16,000,000.000 FFCB DISCOUNT NOTE 10/03/16 313312J35 15,997,626.67 1,840.00 15,999,466.67

09/27/16 09/27/16 Sell Long 1,800,000.000 FHLB DISCOUNT NOTE 10/03/16 313384J34 1,799,589.00 351.00 1,799,940.00

09/27/16 09/27/16 Sell Long 21,000,000.000 FHLB DISCOUNT NOTE 10/03/16 313384J34 20,995,275.00 4,095.00 20,999,370.00

09/27/16 09/27/16 Sell Long 4,000,000.000 FHLB DISCOUNT NOTE 10/03/16 313384J34 3,999,796.67 83.33 3,999,880.00

09/27/16 09/27/16 Sell Long 10,500,000.000 FHLMC DISCOUNT NOTE 10/03/16 313396J38 10,497,771.67 1,895.83 10,499,667.50

09/28/16 09/28/16 Sell Long 50,000,000.000 FHLB DISCOUNT NOTE 10/12/16 313384K40 49,984,826.40 11,479.16 49,996,305.56


Payden & Rygel 214





09/28/16 09/29/16 Sell Long 3,100,000.000 FHLB DISCOUNT NOTE 10/12/16 313384K40 3,099,006.28 736.25 3,099,742.53 259,170,000.000 259,058,449.14 117,571.46 259,176,020.60

09/07/16 09/07/16 Pay Princpl 455,110.233 NGN 2010-R1 1A 1MOFRN NCUA 10/07/20 0.97 62888VAA6 455,110.23 455,110.23





09/07/16 09/07/16 Pay Princpl 15,566.942 NGN 2011-R2 1A 1MOFRN NCUA 02/06/20 0.92 62889CAA7 15,566.94 15,566.94









09/15/16 09/15/16 Pay Princpl 67,486.211 JOHN DEERE 2013-B A3 EQP 08/15/17 0.87 477879AC4 67,486.21 67,486.21



Payden & Rygel 215






09/15/16 09/15/16 Pay Princpl 270,636.340 TOYOTA 2014-B A3 CAR 03/15/18 0.76 89231RAC8 270,636.34 270,636.34




09/15/16 09/15/16 Pay Princpl 664,261.688 TOYOTA 2015-C A2A CAR 02/15/18 0.92 89231TAB6 664,261.69 664,261.69






09/25/16 09/25/16 Pay Princpl 143,691.544 BMW 2014-A A3 CAR 11/26/18 0.97 09658UAC3 143,691.54 143,691.54

09/01/16 09/25/16 Pay Princpl 2,244.950 FHMS K708 A2 CMBS 01/25/19 2.13 3137AQT24 2,244.95 2,244.95

09/01/16 09/25/16 Pay Princpl 1,675.330 FHMS K708 A2 CMBS 01/25/19 2.13 3137AQT24 1,675.33 1,675.33


09/01/16 09/25/16 Pay Princpl 18,026.558 FNA 2012-M9 ASQ2 CMBS 12/25/17 1.51 3136A7L26 18,026.56 18,026.56

09/01/16 09/25/16 Pay Princpl 82,195.320 FNA 2013-M1 ASQ2 CMBS 11/25/16 1.07 3136ABPT4 82,195.32 82,195.32

09/01/16 09/25/16 Pay Princpl 1,133.616 FNA 2013-M7 ASQ2 CMBS 03/26/18 1.23 3136AEGM 1,133.62 1,133.62

09/01/16 09/25/16 Pay Princpl 1,652.440 FNA 14-M1 ASQ2 CMBS 11/25/18 2.32 3136AHUV 1,652.44 1,652.44

Payden & Rygel 216






09/01/16 09/25/16 Pay Princpl 114,245.640 FNA 2014-M6 FA 1MOFRN CMBS 12/25/17 0.80 3136AJ7D2 114,245.64 114,245.64

09/01/16 09/25/16 Pay Princpl 73,749.300 FNA 2015-M10 FA 1MOFRN CMB 03/25/19 0.77 3136ANA98 73,749.30 73,749.30

09/01/16 09/25/16 Pay Princpl 59,509.200 FNA 2015-M12 FA 1MOFRN CMB 04/25/20 0.85 3136AP3Z3 59,509.20 59,509.20

09/01/16 09/25/16 Pay Princpl 24,340.442 FNA 2015-M3 FA 1MOFRN CMBS 06/25/18 0.73 3136AMMC 24,340.44 24,340.44















Payden & Rygel 217





09/01/16 09/25/16 Pay Princpl 22,518.870 FNR 2003-80 LA 08/25/18 4.50 31393DQ3 22,518.87 22,518.87 7,636,733.923 7,636,733.93 7,636,733.93

09/01/16 09/01/16 Mature Long 5,371,000.000 COCA-COLA 09/01/16 1.80 191216AU4 5,371,000.00 5,371,000.00

09/01/16 09/01/16 Mature Long 487,000.000 COCA-COLA 09/01/16 1.80 191216AU4 487,000.00 487,000.00

09/01/16 09/01/16 Mature Long 700,000.000 COCA-COLA 09/01/16 1.80 191216AU4 700,000.00 700,000.00

09/01/16 09/01/16 Mature Long 40,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 39,989,866.67 10,133.33 40,000,000.00

09/01/16 09/01/16 Mature Long 35,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 34,993,003.89 6,996.11 35,000,000.00

09/01/16 09/01/16 Mature Long 20,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 19,999,787.22 212.78 20,000,000.00

09/01/16 09/01/16 Mature Long 15,000,000.000 U.S. TREASURY BILL 09/01/16 912796JH3 14,999,935.21 64.79 15,000,000.00

09/07/16 09/07/16 Mature Long 10,000,000.000 FFCB DISCOUNT NOTE 09/07/16 313312E97 9,997,800.00 2,200.00 10,000,000.00

09/07/16 09/07/16 Mature Long 22,500,000.000 FHLB DISCOUNT NOTE 09/07/16 313384E96 22,495,528.13 4,471.87 22,500,000.00




09/07/16 09/07/16 Mature Long 3,400,000.000 FHLB DISCOUNT NOTE 09/07/16 313384E96 3,399,484.33 515.67 3,400,000.00




09/08/16 09/08/16 Mature Long 50,000,000.000 U.S. TREASURY BILL 09/08/16 912796JK6 49,998,274.31 1,725.69 50,000,000.00

Payden & Rygel 218




09/14/16 09/14/16 Mature Long 9,100,000.000 FHLB DISCOUNT NOTE 09/14/16 313384F87 9,096,036.44 3,963.56 9,100,000.00




09/14/16 09/14/16 Mature Long 20,000,000.000 FNMA DISCOUNT NOTE 09/14/16 313588F83 19,992,066.67 7,933.33 20,000,000.00

09/14/16 09/14/16 Mature Long 9,000,000.000 FNMA DISCOUNT NOTE 09/14/16 313588F83 8,996,468.25 3,531.75 9,000,000.00

09/19/16 09/19/16 Mature Long 30,000,000.000 FHLMC DISCOUNT NOTE 09/19/16 313396G56 29,964,350.00 35,650.00 30,000,000.00

09/21/16 09/21/16 Mature Long 31,150,000.000 FHLB DISCOUNT NOTE 09/21/16 313384G78 31,133,438.58 16,561.42 31,150,000.00




09/22/16 09/22/16 Mature Long 50,000,000.000 FNMA DISCOUNT NOTE 09/22/16 313588G82 49,999,652.78 347.22 50,000,000.00

09/22/16 09/22/16 Mature Long 50,000,000.000 FNMA DISCOUNT NOTE 09/22/16 313588G82 49,999,652.78 347.22 50,000,000.00

09/23/16 09/23/16 Mature Long 50,000,000.000 FHLB DISCOUNT NOTE 09/23/16 313384G94 49,999,680.56 319.44 50,000,000.00

09/26/16 09/26/16 Mature Long 40,000,000.000 FHLB DISCOUNT NOTE 09/26/16 313384H44 39,999,266.67 733.33 40,000,000.00 632,603,000.000 632,457,562.85 145,437.17 632,603,000.00

09/01/16 09/01/16 Withdrawal (8,146.190) CUSTODY FEE USD (8,146.19) (8,146.19)



Payden & Rygel 219





09/26/16 09/26/16 Withdrawal (50,000,000.000) WD USD (50,000,000.00) (50,000,000.00) 250,008,146.190) (250,008,146.19) (250,008,146.19)

Payden & Rygel 220




09/06/16 09/09/16 Buy 250,000.000 JOHN DEERE CAPITAL CORP FR 10/09/19 1.26 24422ETK5 (250,000.00) (250,000.00)

09/07/16 09/09/16 Buy 480,000.000 MIZUHO BANK LTD YCD FRN 03/07/17 1.27 60689DH89 (480,000.00) (16.89) (480,016.89)

09/07/16 09/09/16 Buy 660,000.000 RABOBANK NEDERLAND NY YCD 04/21/17 1.07 21684BXH2 (658,983.60) (2,707.10) (661,690.70)

09/08/16 09/12/16 Buy 850,000.000 NORDEA BANK FINLAND YCD 06/05/17 1.28 65558LSV5 (850,000.00) (850,000.00)

08/29/16 09/14/16 Buy 844,000.000 FHLMC C 12/14/16 Q 09/14/18 1.15 3134GAJQ8 (844,000.00) (844,000.00)

09/13/16 09/15/16 Buy 740,000.000 BNP PARIBAS NY YCD 06/08/17 1.36 05582WDX (740,000.00) (740,000.00)

09/15/16 09/16/16 Buy 850,000.000 FHLMC 10/12/18 0.88 3137EAED7 (849,634.50) (849,634.50)

09/14/16 09/16/16 Buy 720,000.000 SVENSKA HANDELSBANKEN NY 03/14/17 1.09 86958JCV9 (720,000.00) (43.51) (720,043.51)

09/12/16 09/21/16 Buy 600,000.000 USAA 2016-1 A3 CAR 06/15/20 1.20 90327CAC4 (599,901.30) (599,901.30)

09/26/16 09/27/16 Buy 800,000.000 FHLB DISCOUNT NOTE 10/25/16 313384L98 (799,863.11) (799,863.11)

09/27/16 09/29/16 Buy 800,000.000 CA UNIV OF CALIFORNIA TXB 05/15/18 1.30 91412GPZ2 (803,416.00) (3,859.20) (807,275.20)

09/29/16 09/30/16 Buy 3,600,000.000 U.S. TREASURY NOTE 01/15/18 0.88 912828H37 (3,609,421.88) (6,591.03) (3,616,012.91) 11,194,000.000 (11,205,220.39) (13,217.73) (11,218,438.12)

09/01/16 09/01/16 Coupon CISCO SYSTEMS FRN 03/01/19 1.34 17275RAQ 599.56 599.56

09/01/16 09/01/16 Coupon ILLINOIS TOOL WORKS 02/25/17 0.90 452308AS8 1,800.00 1,800.00

09/01/16 09/01/16 Coupon JOHNSON & JOHNSON 03/01/19 1.13 478160BR4 843.75 843.75

09/01/16 09/01/16 Coupon ELI LILLY & CO 03/01/18 1.25 532457BK3 625.00 625.00

09/01/16 09/01/16 Coupon PNC BANK FRN 06/01/18 1.26 69353REN4 1,396.68 1,396.68

09/01/16 09/01/16 Coupon EXXON MOBIL 03/01/18 1.44 30231GAU 1,280.71 1,280.71

09/02/16 09/02/16 Coupon CHEVRON FRN 03/02/18 1.01 166764AW 918.56 918.56

Payden & Rygel 221




09/02/16 09/02/16 Coupon CHEVRON 03/02/18 1.37 166764AV2 1,365.00 1,365.00


09/06/16 09/06/16 Coupon CATERPILLAR FINANCIAL FRN 03/03/17 1.07 14912L5Y3 937.88 937.88


09/06/16 09/06/16 Coupon TORONTO DOMIN NY YCD FRN 02/03/17 1.09 89113WFP 836.09 836.09



09/07/16 09/07/16 Coupon BERKSHIRE HATHAWAY 03/07/18 1.45 084664CE9 1,662.67 1,662.67

09/08/16 09/08/16 Coupon STRYKER 03/08/19 2.00 863667AK7 890.00 890.00

09/09/16 09/09/16 Coupon PACCAR FINANCIAL 03/09/18 1.45 69371RM4 797.50 797.50

09/10/16 09/10/16 Coupon CHARLES SCHWAB 03/10/18 1.50 808513AK1 1,500.00 1,500.00

09/12/16 09/12/16 Coupon BANK OF NOVA SCOTIA HOUST 02/10/17 1.08 06417GMB 880.12 880.12

09/12/16 09/12/16 Coupon TEXAS INSTRUMENTS 03/12/17 0.88 882508AX2 875.00 875.00


09/12/16 09/12/16 Coupon US BANK OHIO FRN 09/11/17 1.05 90331HMJ9 908.84 908.84

09/14/16 09/14/16 Coupon WELLS FARGO FRN 09/14/18 1.26 94974BGD 1,133.01 1,133.01

09/15/16 09/15/16 Coupon CHASE 2014-A1 A1 CDT 01/15/19 1.15 161571GJ7 479.17 479.17

09/15/16 09/15/16 Coupon CHASE 2015-A3 A CDT 1MOFRN 04/15/19 0.77 161571GW 521.94 521.94

09/15/16 09/15/16 Coupon CISCO SYSTEMS FRN 06/15/18 1.16 17275RAY8 983.89 983.89


Payden & Rygel 222






09/15/16 09/15/16 Coupon HONDA 2016-2 A2 CAR 09/17/18 1.13 43814QAB4 941.67 941.67

09/15/16 09/15/16 Coupon HOME DEPOT FRN 09/15/17 1.22 437076BJ0 444.22 444.22

09/15/16 09/15/16 Coupon JOHN DEERE 2014-A A3 EQP 04/16/18 0.92 47787VAC5 512.39 512.39


09/15/16 09/15/16 Coupon JOHN DEERE 2016-B A2 EQP 02/15/19 1.09 47788NAB4 872.00 872.00




09/15/16 09/15/16 Coupon TOYOTA 2015-B A2A GREEN CA 11/15/17 0.77 89237CAB7 156.17 156.17

09/15/16 09/15/16 Coupon TOYOTA 2016-B A2A CAR 10/15/18 1.02 89231UAB3 425.00 425.00

09/15/16 09/15/16 Coupon TOYOTA 2016-C A2A CAR 01/15/19 1.00 89237WAB 291.67 291.67

09/15/16 09/15/16 Coupon U.S. TREASURY NOTE 09/15/18 1.00 912828L40 575.00 575.00


09/18/16 09/18/16 Coupon HONDA 2013-4 A3 CAR 09/18/17 0.69 43814FAC6 72.17 72.17

09/18/16 09/18/16 Coupon HONDA 2016-1 A2 CAR 06/18/18 1.01 43814NAB1 252.50 252.50

09/19/16 09/19/16 Coupon FHLB 03/19/18 0.88 3130A7CX1 3,806.25 3,806.25

09/20/16 09/20/16 Coupon BMW 2016-1 A2A LEASE 01/22/18 1.17 05581RAB2 637.00 637.00


Payden & Rygel 223







09/21/16 09/21/16 Coupon HONDA 2015-2 A3 CAR 02/21/19 1.04 43813NAC0 216.67 216.67

09/22/16 09/22/16 Coupon AMERICAN EXPRESS FRN 09/22/17 1.17 0258M0DS 725.65 725.65

09/25/16 09/25/16 Coupon BMW 2013-A A3 CAR 11/27/17 0.67 05578XAC2 43.28 43.28

09/25/16 09/25/16 Coupon BMW 2016-A A2A CAR 05/25/19 0.99 05582QAB3 660.00 660.00


09/01/16 09/25/16 Coupon FHMS KJ04 A1 CMBS 10/25/20 1.38 3137BPCF4 673.48 673.48

09/01/16 09/25/16 Coupon FNA 2014-M4 ASQ2 CMBS 01/25/17 1.27 3136AJB21 84.53 84.53




09/01/16 09/25/16 Coupon FNA 2015-M13 ASQ2 CMBS 09/25/19 1.65 3136AQDQ 548.67 548.67



09/01/16 09/25/16 Coupon FNR 2003-80 LA 08/25/18 4.50 31393DQ3 2,152.20 2,152.20


09/29/16 09/29/16 Coupon FFCB 1ML FRN 08/29/17 0.57 3133EDTT9 776.83 776.83


Payden & Rygel 224





09/30/16 09/30/16 Coupon U.S. TREASURY NOTE 03/31/18 0.88 912828Q45 8,750.00 8,750.00

09/30/16 09/30/16 Coupon U.S. TREASURY NOTE 03/31/18 0.88 912828Q45 9,843.75 9,843.75 89,466.57 89,466.57

09/01/16 09/01/16 Income 118.320 STIF INT USD 118.32 118.32

09/01/16 09/02/16 Sell Long 500,000.000 FHLB DISCOUNT NOTE 02/10/17 313385BS4 498,096.11 920.00 499,016.11

09/01/16 09/07/16 Sell Long 400,000.000 PACCAR FINANCIAL 05/18/18 1.40 69371RM5 402,308.00 1,695.56 404,003.56

09/01/16 09/07/16 Sell Long 50,000.000 PACCAR FINANCIAL 03/09/18 1.45 69371RM4 50,305.50 358.47 50,663.97

09/07/16 09/08/16 Sell Long 1,000,000.000 FHLB DISCOUNT NOTE 02/10/17 313385BS4 996,173.56 1,932.00 998,105.56

09/08/16 09/09/16 Sell Long 500,000.000 U.S. TREASURY NOTE 10/31/17 0.75 912828TW 500,292.97 1,345.11 501,638.08

09/09/16 09/12/16 Sell Long 1,050,000.000 FHLMC 1ML FRN 04/20/17 0.54 3134G72G5 1,050,690.90 347.12 1,051,038.02

09/14/16 09/15/16 Sell Long 2,000,000.000 U.S. TREASURY NOTE 05/31/17 0.63 912828SY7 2,000,000.00 3,654.37 2,003,654.37

09/15/16 09/16/16 Sell Long 261,000.000 U.S. TREASURY NOTE 05/31/18 0.88 912828R51 261,479.18 673.89 262,153.07

09/15/16 09/16/16 Sell Long 500,000.000 U.S. TREASURY NOTE 06/15/19 0.88 912828R85 499,824.22 1,111.68 500,935.90

09/28/16 09/28/16 Sell Long 800,000.000 FHLB DISCOUNT NOTE 10/25/16 313384L98 799,863.11 4.89 799,868.00

09/29/16 09/30/16 Sell Long 1,600,000.000 FFCB 1ML FRN 08/29/17 0.57 3133EDTT9 1,601,272.00 25.19 1,601,297.19

09/29/16 09/30/16 Sell Long 2,000,000.000 U.S. TREASURY NOTE 05/31/17 0.63 912828SY7 2,000,781.25 4,166.67 2,004,947.92 10,661,000.000 10,661,086.80 16,234.95 10,677,321.75

Payden & Rygel 225












09/18/16 09/18/16 Pay Princpl 45,263.159 HONDA 2013-4 A3 CAR 09/18/17 0.69 43814FAC6 45,263.16 45,263.16


09/25/16 09/25/16 Pay Princpl 28,487.479 BMW 2013-A A3 CAR 11/27/17 0.67 05578XAC2 28,487.48 28,487.48


09/01/16 09/25/16 Pay Princpl 26,470.020 FNA 2014-M4 ASQ2 CMBS 01/25/17 1.27 3136AJB21 26,470.02 26,470.02




09/01/16 09/25/16 Pay Princpl 986.950 FNA 2015-M4 FA 1MOFRN CMBS 09/25/18 0.72 3136AMTM 986.95 986.95

09/01/16 09/25/16 Pay Princpl 342.920 FNA 2015-M4 FA 1MOFRN CMBS 09/25/18 0.72 3136AMTM 342.92 342.92

Payden & Rygel226




Fixed Income - cont.09/01/16 09/25/16 Pay Princpl 39,738.250 FNR 2003-80 LA 08/25/18 4.50 31393DQ3 39,738.25 39,738.25

577,161.119 577,161.13 577,161.13

Payden & Rygel 227

Board of Governors

MOTION SUMMARY


Committee: Finance & Budget

Chairperson: Michael Rembis

Issue: Amend contracts with Cognizant and Infosys for professional services to support various

strategic initiatives.

New Contract Amendment Sole Source RFP/RFQ was conducted Background: Staff requests approval to amend contracts with Cognizant (Schedule A-16) and Infosys

(Schedule A-21) for ongoing and new professional services for L.A. Care’s Information Technology (IT) Department. Each contract will be for $5,000,000, with the total for the two not to exceed $10,000,000.

Additional staff is needed to manage ongoing and new strategic projects for Fiscal Year 2017. The professional services are imperative to ensure continuity and completion of projects currently underway, as well as ongoing system maintenance and enhancements.

A request for quote was conducted in the spring of 2015 for both of these vendors to provide staff augmentation services. Both of the vendors have the experience and knowledge of L.A. Care’s systems and requirements, possess an extensive resource pool, have irreplaceable historical project knowledge required to meet critical project milestones, are considered preferred, and have proven to be instrumental in L.A. Care’s ongoing initiatives and new strategies. There is an immediate need for professional resources to maintain project continuity, support the existing project work load, and ensure timely project implementations.

Member Impact: The improvements to the enrollment system that will be realized with the

completion of this work will help reduce access to care issues for L.A. Care members.

Budget Impact: Sufficient funds are available in the Information Technology Department from

Strategic Projects for FY 2016-17.

Motion: To authorize staff to contract with Cognizant for an amount not to exceed $5,000,000 (total contract not to exceed $9,500,000) and Infosys for an amount not to exceed $5,000,000 (total contract not to exceed $9,000,000) for professional services through September 30, 2017.

228

Board of Governors

MOTION SUMMARY

Date: November 3, 2016

Motion No. FIN 110.1116


Issue: Execute a contract with a vendor not yet selected to provide services for L.A Care’s new

encounters system project, which will enhance L.A. Care’s enterprise systems.

New Contract Amendment Sole Source RFP/RFQ conducted

Background: Staff requests approval to execute a contract with a vendor not yet selected in an

amount not to exceed $6,000,000 through September 30, 2018 for the new encounters system strategic project. L.A. Care is building a new encounters system to improve encounters data infrastructure and will purchase pre-processing claims data management software and implementation services from a vendor not yet selected to support a growing member population and expanded lines of business with increased complexity. The business need for encounters data is extensive and the business functions impacted include revenue determination, quality of care measurement, and understanding cost of care trends. Encounters data processing and reporting are critical components of L.A. Care’s short and long-term performance.

L.A. Care will conduct a competitive request for proposal (RFP), to select a vendor that will assist with development, design, implementation, integration, and testing services for the new encounters system project. The vendors to be potentially considered are Edifecs, Trizetto, and Tibco. A vendor to provide integrators will also be chosen through a competitive selection process. L.A. Care will work with the selected vendors to minimize disruption and any additional training costs.

Although the scope of work has been not been fully determined, the vendor will deliver the following (but not limited to):

Building and maintaining the project plan and deliverables

Business impact analysis of applications and systems

System integration and testing

Implementation of the deliverables

Manage defects, issues and system changes

Member Impact: The California Department of Health Care Services (DHCS) now includes the

Encounter data submission quarterly quality measure in the member allocation algorithm. The new encounters system will assist L.A. Care in optimizing our encounter data submission to DHCS.

Budget Impact: Funds are budgeted in the Information Technology (IT) department under the

Strategic Project New Encounters System for FY2016-17, and additional funds will be included in the FY2017--18 IT Strategic Projects budget for continued work on the new system.

229

Board of Governors

MOTION SUMMARY

Motion: To delegate authority to the Chief Executive Officer to execute a contract in an amount not to exceed $6,000,000 through September 30, 2018 with a vendor not yet selected to provide services for L.A. Care’s new encounters system strategic project.

230

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