DRIVE . 46176 - (317)392-3211 . MABOR EALTH MHP Statement regarding use of UPL Funds PARTN ERS MHP owns 43 nursing homes across the State of Indiana. Our first contract was entered into January 2012. We currently contract with experienced management companies to assist in the operations of our nursing homes. Each home receives various forms of funding, including payments from Medicaid, Medicare, commercial insurance, private payments and supplemental payments such as UPL. All financial information related to MHP and the UPL program along with financial breakdowns for each facility is available to the public on the Myers and Stauffer website. Inarguably, the utilization of the UPL dollars has improved the care of Hoosier patients and been used as intended by the Indiana State Plan Amendment. The UPL program is a mutually beneficial program for county hospitals and SNFs alike. The benefits for the SNFs include additional resources, supplemental funding, staff training, sharing of best practices, access to SNF associations and improved purchasing power. The hospital and SNF relationships focus on reducing readmissions and improving quality and patient satisfaction. Major Hospital has a long and documented commitment to quality. In 2018, MHP was again named as one of the Top 100 Rural Community Hospitals, was named one of the 100 Great Community Hospitals, and received the Performance Leadership Award. It is important to note that we accomplished these metrics while maintaining costs at or below the 50th percentile. Currently our charges are 4% below the national average (CMS value based purchasing website). We are equally committed to quality in our SNFs. We are constantly looking to improve our outcomes and do our best to select SNF managers who share our commitment to quality. Major Hospital has a program of actively investing more funds in SNFs that are in geographically underserved areas or that have lower quality results and can benefit most by the additional investments. Furthermore, our SNF agreements contain clauses including an Incentive Management Fee, Capital Improvements Reserve, Capital Maintenance Reserve and a Quality Incentive Fee Reserve. Finally, we have turned down entering into a relationship with at least 26 SNFs, solely because we did not have a comfort level that our mission and values were aligned with the potential managers. There is no inquiry, audit, review or investigation into Major Health Partners. All patient service revenues that are received by Major Hospital, whether related to a nursing facility or not, are collectively used to fund our capital expenses, payroll, debt service and investments. There is no separate allocation of any of those revenue sources for specific expenses. Major Hospital?s bond obligations of $55 million over 24 years are unrelated to the UPL program. The bond covenants are in full compliance without the UPL dollars. One of our rating agencies, Fitch, gave Major Hospital a rating increase in 2019 (although rating agencies have no impact on the bond obligations). All of our bond covenant metrics are within full compliance of all debt covenants and requirements of tax exempt financing. Major Hospital?s Board of Directors receive annual compensation in accordance with Indiana Code section 16?23-1?18, of $6000 annually. No one at Major Hospital has been paid a bonus related in any way, shape or form to the UPL program. We constantly evaluate staffing at Major Hospital and our SNFs. 47.2% of revenues are allocated to staff wages and salaries and the remaining expenses include items such as: therapy, food/beverage, capital improvements, maintenance, medications, consultants, training, etc. Our allocation of revenues to staffing, salary and benefits continues to be right at the national average, which for the last several years has run between 45% and 48% for SNFs. While adequate staffing is an absolute, there is no evidence that staffing in excess of typical industry norms translates into higher quality. Several SNFs across the state have higher quality ratings with lower staffing ratios compared to peers and others who have higher staff ratios produce lower quality results. The overall quality ratings of our nursing homes are 3/5. We constantly strive to improve our outcomes with our human capital resources, whether that?s quantity, quality, additional training, resources or technology. MHP will be funding our nursing homes? participation in the Qsource program. Working in a collaborative effort with Indiana Hospital Association, our objective will be to raise all nursing home quality scores. Our goal with the program is to raise all of our nursing home quality scores to 4 and above. CMS is currently evaluating the supplemental payment program with a proposed ruling called MFAR impacts healthcare institutions throughout the United States and because it provides services for those Americans most in need, we are hopeful that CMS is willing to reconsider the consequences of the implementation of this program. For Indiana, MFAR in its current proposed form, would place $3.3 billion at risk for HIP 2.0, including $2.2 billion in federal match dollars. It would eliminate fees assessed on Major Hospital?s services that provide $5.8 million to the State of Indiana for other Medicaid programs. MFAR stands to reduce Major Hospital?s operating revenue by $27 million or 5.7% of total operating revenue. It could result in the loss of 170 well-paying jobs. It could also force the elimination of a number of community hospital services, with the result that patients will have to travel to access that care for those services. Moreover, according to IHCA, MFAR could result in the closure of 150 nursing homes across the state; many of which are in rural and underserved areas. This would include the potential loss of over 13,500 jobs. Major Hospital is prepared in the event that MFAR goes into effect. We would not need to increase our prices, nor would we need to implement a tax to pay off bonds or cover operating expenses. Major Hospital does not levy a state or local tax in any capacity and has not since 1993. The UPL program has helped Major Hospital construct a new state of the art Medical Center with the necessary technology and additional service lines to continue operating a high-quality, low cost, rural hospital. stance on the proposed MFAR rule is that further study and evaluation is necessary, including the impact on States, Medicaid patients, and our Healthcare System as a whole. Utilization of UPL Funds to Improve Quality and Compliance - MHP has engaged multiple, licensed Skilled Nursing Facility Administrators, and former SNF Directors of Nursing to serve as consultants, advisors and educational resources to our facilities, which adds high-level clinical and financial expertise to a multitude of rural facilities who oftentimes lack such access. 0 Major has created an internal quality-review team that personally inspects our facilities as an additional quality and care review process, which improves quality of care for the residents. - Implemented (where needed) over 400 evidence-based Policies, Procedures, and Best Practices, which are proven to improve quality of patient care. 0 Implementation of new quality improvement programs, including hospital/nursing home transfer programs and improved communication guidelines designed to improve patient safety, quality of care and efficiency. - Onsite visits quarterly (or more frequent visits as needed) designed to improve patient care, quality, and cost of care. - Value-based benchmarking metrics underscoring quality, patient safety and efficiency to implement best?practices with a goal to be in the top quartile of the SNF peer groups. 0 Implementation of quality software programs designed to maximize quality, patient safety and proper staffing ratios. 0 Performance of mock-surveys by qualified, clinical personnel to identify opportunities for improvement of care delivered to the residents. - Investments of more than $23 million in state?of?the art electronic medical record systems, which improve patient care and safety. 0 Installation of digital nurse call systems, which improve residents? ability to obtain prompt care, assistance and improved communication with staff. 0 Allowed Major and its nursing home partners to provide funding for competitive-wage jobs for thousands of Indiana citizens; including health?care and other employment and educational benefits. - Funded nursing home partners? participation in state and national professional associations, as well as national quality initiatives, including the Indiana Health Care Association (IHCA), providing access to educational and training programs for SNF employees. 0 Perhaps the most important aspect of the UPL program is to support and maintain the public?s broad access to high?quality medical services, for Indiana?s most vulnerable population of elderly Medicaid patients. More than 20% ofthe patients we serve are covered by Medicaid. - Installation of pyxis machines to improve medication security and facilitate safer and more efficient drug dispensing practices in the facilities, which is above industry standards. Investment/Infrastructu re 0 Improved facilities? ability to plan for disaster preparedness with purchases of generators, disaster preparedness and software capable of improving specific protocols and training to ensure each facility is prepared for a disaster. - Constructed a memory?care unit for residents who suffer from dementia or Alzheimer?s disease. - Major, as well as several of its nursing home partners have built new and/or renovated existing facilities in order to introduce new services (new $5 million Nephrology/Infectious Disease and dialysis center in Shelby County serving over 2,000 patients) into the community or improve the delivery of existing facilities. 0 Total economic impact of roughly 4,500 collective jobs across Indiana, $133 million in total annual payroll and a statewide economic impact of $452,473,000. - Major Hospital constructed a $125 million state-of?the-art replacement hospital in rural Shelby County, which is charged with providing health care to the citizens of Shelby County and surrounding counties, without regard to a patient?s ability to pay. - In 2019, Major Hospital spent $10,255,000 in uncompensated indigent care to local residents. 0 Investment of over $21 million in a community health and wellness center designed to combat the social determinants of health in the community, such as obesity, nutritional education, behavioral health and chronic disease management and prevention. 0 Investment of more than $500,000 in a combined community effort to address early learning childhood development and education in the community. Federal UPL dollars are an important source of funding for Hoosiers. These dollars provide the accessibility, infrastructure, facilities, technologies, and level of staffing necessary for quality care for our most vulnerable patients. MHP is proud of the quality of care provided, which is due in part to the UPL program. Respectfully submitted, 47%,4/ John Horner President CEO Major Health Partners