Molina Healthcare

History

Molina Healthcare was founded in 1980 by C. David Molina, an emergency room physician in Long Beach, CA. He had seen an influx of patients using the emergency room for common illnesses such as a sore throat or the flu because they were being turned away by doctors who would not accept Medi-Cal. As a result of his emergency room work, Dr. Molina established his first primary care clinic with the goal of treating the lowest-income patients, regardless of their ability to pay.

The company is now run by Dr. Molina’s son, J. Mario Molina, MD, who is also a physician. He is the current president and CEO of the company. John Molina, Mario’s younger brother, is the current CFO of Molina Healthcare. The two took over the Molina’s operations after their father died in 1996 and continued to expand the company. According to SEC filings, in 2013 Dr. Mario Molina received total compensation of $11,903,124 and John Molina received $6,362,104. Altogether the top five executives at Molina Healthcare - J. Mario Molina, John C. Molina, Terry P. Bayer, Joseph W. White and Jeff D. Barlow - were paid a total of $26,425,047. C. David Molina’s daughter Martha Bernadett, MD is also a part of Molina Healthcare. Since receiving two Robert Wood Johnson Foundation awards in 2002, Dr. Bernadett has served as the Executive Vice President of Research and Innovation at Molina Healthcare. She founded the Molina Institute for Cultural Competency, Book Buddies and the Molina Foundation, a non-profit organization to promote access to education and health care to reduce disparities.

Clinic Expansion

The first Molina Medical clinic was opened in Wilmington, CA in 1980. Since then, 29 clinics have opened in Northern California, Southern California, Washington, New Mexico, Florida and Utah. Molina Medical Group (MMG) also runs state-owned clinics in Fairfax County, Virginia. The clinics were opened to provide health care to low-income families and individuals.

Becoming an HMO

Molina Healthcare has focused on government-paid health care programs such as SCHIP and Medicaid since it became a health maintenance organization in 1985. From 1985 to 1997, the company was only in California.

Expansion of Health Plans

As of 2015, Molina Healthcare entered into an agreement to acquire some assets of the Medicaid and MIChild businesses of HealthPlus of Michigan and its subsidiary - HealthPlus Partners, Inc. In a similar deal, Molina Healthcare of Florida, Inc., which is a wholly owned subsidiary of the company, inked a deal to acquire some assets of Preferred Medical Plan, Inc.'s Floridian Medicaid business in 2015. Additionally, the signed an agreement with MyCare Chicago to purchase some Medicaid business assets. In 2015, Molina Healthcare acquired Providence Human Services (PHS) and Providence Community Services in a $200 million deal to expand their coverage into the behavioral and mental health services. In 2015, PHS underwent a rebranding to become Pathways. As of September 30, 2015, Molina Healthcare had over 3.5 million members in its health plans. The health plans are operated by the respective subsidiaries in its states, each of which is a licensed HMO.

Going Public

Molina Healthcare filed with the Securities and Exchange Commission for an initial stock offering in December 2002 and went public in July 2003 with a stock offering of $102 million. The shares were priced at $17.50, and Molina raised approximately $124 million in the initial public offering. In its stock market debut, Molina sold 6.6 million shares at $20.30, making the company the third-best first day gainer of 2003. As of 2013, Molina sold 296 million shares at $34.58. Molina Healthcare was the first company from Inc. Magazine’s Inner City 100 list to go public. As of February 20, 2014, there were approximately 125 holders of record of common stock.

Entering Medicare Market

Molina Healthcare entered the Medicare market in 2006. The company currently offers Medicare health plan options in eleven states: California, Florida, Illinois, Michigan, New Mexico, Ohio, South Carolina, Texas, Utah, Washington, and Wisconsin.

Entering MMIS Market

Molina Healthcare acquired Unisys’ health information management business in December 2010 to create Molina Medicaid Solutions (MMS). MMS has Medicaid Management Information Systems (MMIS) contracts with Idaho, Louisiana, Maine, New Jersey and West Virginia. In June 2011 the state of Louisiana selected CNSI, a Maryland-based health care technology services company, to replace Molina as the state’s MMIS and fiscal agent operations. However, in March 2013, Gov. Bobby Jindal canceled that contract. A new fiscal agent has yet to be named. MMS also gained a contract with the U.S. Virgin Islands. Molina Medicaid Solutions will administer operations for the territory out of its West Virginia location.

Entering Health Insurance Marketplace

Beginning in 2014, Molina Healthcare offers Marketplace plans in nine states where it offers Medicaid health plans – Covered California, Washington Healthplanfinder, and New Mexico Health Insurance Exchange through State Facilitated Marketplaces; Texas, Utah, Wisconsin, Ohio and Florida through Federally Facilitated Marketplace; and Michigan through Partnership Marketplace On November 16, 2016 the Seattle Times reported that about 11 million people currently get their coverage through the exchange.

Dual Eligible Demonstration Projects

Molina was selected to participate in dual eligible demonstration projects in California, Ohio, Illinois, Michigan, South Carolina and Texas to serve patients who are eligible for both Medicare and Medicaid.

Awards and Recognitions

Molina Healthcare was awarded the 2011 Alfred P. Sloan Award for Business Excellence in Workplace Flexibility. The award ranks Molina Healthcare in the top 20 percent of employers nationally in terms of its programs, policies and culture for creating an effective and flexible workplace. In 2006, Molina Healthcare was named among the 100 best corporate citizens by Business Ethics magazine. Time Magazine recognized Dr. J. Mario Molina, CEO of Molina Healthcare, as one of the 25 most influential Hispanics in America.

Other Awards and Recognitions

Labor Litigation

In April 2011, a lawsuit was filed against the company and its outsourcing firm Cognizant Technologies in California state court. Both companies are accused of discriminating against American workers who claim they were fired and replaced with H-1B workers. The companies are accused of violating numerous federal and state labor laws. In July, the U.S. District Court, Central District of California ruled that there were no federal claims, which the plaintiff’s attorney had acknowledged in his Declaration in Support of (the plaintiff’s) Motion to Remand. Molina has expressed confidence it will “win in court because specific allegations have been examined and found false.”