Attached files
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| 8-K - MOLINA HEALTHCARE, INC. 8-K - MOLINA HEALTHCARE, INC. | a50618061.htm |
News Release
Contact:
Juan José Orellana
Investor Relations
562-435-3666, ext. 111143
MOLINA HEALTHCARE REPORTS
FIRST QUARTER 2013 RESULTS
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Full year 2013 guidance increased to $1.55 per diluted share
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Earnings per diluted share for first quarter 2013 of $0.64, up from $0.39 in first quarter of 2012
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Operating income doubles from 2012, increasing by $34 million
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Quarterly premium revenues of $1.5 billion, up 17% over 2012
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Long Beach, California (April 25, 2013) – Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results for the quarter ended March 31, 2013.
Net income for the first quarter of 2013 was $29.9 million, or $0.64 per diluted share, compared with net income of $18.1 million, or $0.39 per diluted share, for the quarter ended March 31, 2012.
“This was a strong quarter,” said J. Mario Molina, M.D., chief executive officer of Molina Healthcare, Inc. “More importantly, we continue to lay the foundation for even greater success in the future. During the first quarter, we solidified the progress we had made during the second half of 2012, we strengthened our capital position, and we continued to prepare for the opportunities and challenges of the next few years. I thank our employees, our state partners and our providers for their continued commitment to providing health care to those most in need.”
First Quarter 2013 Compared with First Quarter 2012
The Company’s financial performance in the first quarter of 2013 improved substantially over the first quarter of 2012. Among the key developments affecting first quarter 2013 performance were the following:
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The recognition of approximately $21 million of premium rate changes at the California health plan. Approximately $19 million of the premium revenue related to 2012 and 2011. Net of related expenses, the rate increases resulted in an increase of approximately $19 million to pretax income; $18 million (approximately $0.24 per diluted share) of which related to 2012 and 2011. The adjustment to premium rates resulted from the receipt of new rate sheets from the state of California that restored the rates that had existed prior to the cuts that had been taken effective July 1, 2011, and a modest increase to rates for the Company’s aged, blind, or disabled, or ABD, membership retroactive to July 1, 2011. The new premium rates are expected to increase premium revenue at the California health plan going forward by approximately $400,000 per month;
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The recognition of approximately $6 million (approximately $0.08 per diluted share) of performance revenue at the Texas health plan related to 2012. The Texas health plan recently received notice from the Texas Department of Health and Human Services that a specific measure is being removed from the calculation of performance revenue for all contracted health plans for 2012. As of December 31, 2012, the Texas health plan had not recognized approximately $6 million of revenue related to this performance measure;
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MOH Reports First Quarter 2013 Results
Page 2
April 25, 2013
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Flat inpatient utilization compared with the first quarter of 2012;
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Improved performance at the Florida, Texas, Ohio and Wisconsin health plans; and
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The immediate recognition in interest expense of approximately $6 million (approximately $0.08 per diluted share) of debt issuance fees related to the Company’s issuance of $550 million of 1.125% cash convertible senior notes (the 1.125% Notes) in February 2013. The remainder of the fees associated with that issuance will be expensed over the seven-year life of the 1.125% Notes.
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Health Plans Segment Results
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Premium Revenue
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Premium revenue for the first quarter of 2013 increased 16.7% over the first quarter of 2012, primarily due to a shift in member mix to populations generating higher premium revenue per member per month (PMPM). Medicare premium revenue was $118.4 million for the first quarter of 2013 compared with $109.8 million for the first quarter of 2012.
Growth in the Company’s ABD membership in Washington and California led to higher premium revenue PMPM in 2013. ABD membership, as a percent of total membership, has increased approximately 10% year over year. Premium revenue PMPM also increased in the first quarter of 2013 as a result of the inclusion of revenue for pharmacy benefits for the Utah health plan effective January 1, 2013, and as a result of the inclusion of revenue for inpatient facility and pharmacy benefits across all of the Texas health plan’s membership effective March 1, 2012.
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Medical Care Costs
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Medical care costs increased in the first quarter of 2013 primarily due to the same shifts in member mix and the benefit expansions that led to increased premium revenue, particularly in California, Texas and Washington. The Company’s consolidated medical care ratio, however, decreased to 86.1% in the first quarter of 2013, from 88.1% in the first quarter of 2012. Retroactive rate increases for the California health plan and increased margins at the Texas health plan were the primary drivers of the lower medical care ratio in the first quarter of 2013. Stable inpatient utilization and lower pharmacy unit costs also contributed to the lower medical care ratio in the first quarter of 2013.
Texas Health Plan Update
The Company has previously reported on the financial challenges faced by its Texas health plan. Although first quarter results show considerable improvement over the results reported for the first quarter of 2012, management cautions investors regarding the following points:
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The first quarters of 2013 and 2012 are not meaningfully comparable. The state of Texas expanded Medicaid managed care into new regions effective March 1, 2012. Additionally, the state extended inpatient facility and pharmacy benefits into Medicaid managed care on that date. The result of these actions was to dramatically increase the Texas health plan’s revenue and medical costs between the first quarters of 2012 and 2013.
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The Texas health plan received a 4% rate increase (adding about $4 million to monthly revenue) effective September 1, 2012.
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Certain out-of-period adjustments artificially lowered the medical care ratio for the Texas health plan in the first quarter of 2013. Absent the previously described $6 million out-of-period benefit related to 2012 performance revenue and a $13.5 million benefit from favorable development of the claims liability established for the health plan at December 31, 2012, the Texas health plan’s medical care ratio for the first quarter of 2013 would have been approximately 86.6% rather than the reported medical care ratio of 80.9%.
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MOH Reports First Quarter 2013 Results
Page 3
April 25, 2013
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While management continues to work to improve the financial performance of the Texas health plan, management also believes that increased payments to certain providers are necessary. Specifically, the health plan intends to increase provider reimbursement for personal attendant services and day activity and health services effective July 1, 2013. The Company anticipates that this increase in provider payments alone will add approximately $10 million to medical expense in the second half of 2013.
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Cash Flow
Cash provided by operating activities was $20.1 million for the three months ended March 31, 2013, compared with $50.6 million for the three months ended March 31, 2012. The decrease in cash provided by operating activities was primarily due to the changes in deferred revenue and medical claims and benefits payable, partially offset by the change in accounts receivable. Deferred revenue and medical claims and benefits payable were a use of operating cash amounting to $9.4 million in the aggregate in the three months ended March 31, 2013, compared with a source of operating cash amounting to $97.9 million in the aggregate in the same period in 2012. Accounts receivable was a use of operating cash amounting to $0.6 million in the three months ended March 31, 2013, compared with $54.4 million in same period in 2012.
Cash provided by financing activities for the three months ended March 31, 2013, was $374.8 million compared with $16.0 million for the three months ended March 31, 2012, an increase of $358.8 million. The significant increase was primarily due to $538.0 million in proceeds the Company received from its offering of 1.125% Notes and $75.1 million from the sale of warrants, partially offset by $149.3 million paid for the purchased call option relating to the 1.125% Notes, $50.0 million paid for repurchases of common stock, and $40.0 million used to repay the Company’s Credit Facility.
At March 31, 2013, the Company had cash and investments of $1.6 billion, and the parent company had cash and investments of $450.5 million.
EBITDA (2)
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Three Months Ended March 31,
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2013
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2012
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(In thousands)
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Net income
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$ | 29,915 | $ | 18,089 | ||||
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Add back:
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Depreciation and amortization reported in the consolidated statements of cash flows
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21,799 | 18,339 | ||||||
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Interest expense
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13,037 | 4,298 | ||||||
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Income tax expense
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24,270 | 11,033 | ||||||
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EBITDA
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$ | 89,021 | $ | 51,759 | ||||
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(1)
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GAAP stands for U.S. generally accepted accounting principles.
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(2)
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EBITDA is not prepared in conformity with GAAP because it excludes depreciation and amortization, as well as interest expense and income tax expense. This non-GAAP financial measure should not be considered as an alternative to the GAAP measures of net income, operating income, operating margin, or cash provided by operating activities, nor should EBITDA be considered in isolation from these GAAP measures of operating performance. Management uses EBITDA as a supplemental metric in evaluating the Company’s financial performance, in evaluating financing and business development decisions, and in forecasting and analyzing future periods. For these reasons, management believes that EBITDA is a useful supplemental measure to investors in evaluating the Company’s performance and the performance of other companies in the Company’s industry.
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MOH Reports First Quarter 2013 Results
Page 4
April 25, 2013
Earnings Per Share Guidance
The Company is revising its previously issued guidance of $1.45 to reflect updated anticipated earnings per diluted share of $1.55 for fiscal year 2013. Core operations are performing better than previously anticipated. For all of 2013, the Company believes that the improved performance of its core operations will be partially offset by the following incremental expenses.
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The Company expects to increase payments to certain providers of personal attendant services and day activity and health services in Texas, effective July 1, 2013. The Company expects that this action will increase expense during the second half of 2013 by approximately $10 million.
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In March 2013, the Company adopted a performance-based equity compensation program that is expected to increase previously anticipated equity compensation expense for all of 2013 by approximately $13 million. The Company believes that performance-based equity grants align compensation with the long-term interest of investors.
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The Company notes that its revised guidance, like its previously issued guidance, does not include certain administrative costs to be incurred in 2013 related to growth in membership that the Company expects to occur in 2014. Guidance excludes such costs because the Company still lacks visibility into the size of that membership and the timing of its expected transition into the Company’s health plans.
The Company also notes that the extrapolation of its first quarter 2013 results to the full year of 2013 is inappropriate. As noted above, first quarter results benefited from the retroactive adjustment of California premium rates. Furthermore, the incremental expense noted above for Texas provider compensation, equity compensation, and the costs associated with new membership effective in 2014 were not fully reflected in first quarter results.
The Company’s management will host a conference call and webcast to discuss its first quarter results at 5:00 p.m. Eastern time on Thursday, April 25, 2013. The number to call for the interactive teleconference is (212) 231-2932. A telephonic replay of the conference call will be available from 7:00 p.m. Eastern time on Thursday, April 25, 2013, through 6:00 p.m. on Friday, April 26, 2013, by dialing (800) 633-8284 and entering confirmation number 21653764. A live broadcast of Molina Healthcare’s conference call will be available on the Company’s website, www.molinahealthcare.com, or at www.earnings.com. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides quality and cost-effective Medicaid-related solutions to meet the health care needs of low-income families and individuals and to assist state agencies in their administration of the Medicaid program. The Company’s licensed health plans in California, Florida, Michigan, New Mexico, Ohio, Texas, Utah, Washington, and Wisconsin currently serve approximately 1.8 million members, and its subsidiary, Molina Medicaid Solutions, provides business processing and information technology administrative services to Medicaid agencies in Idaho, Louisiana, Maine, New Jersey, and West Virginia, and drug rebate administration services in Florida.
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MOH Reports First Quarter 2013 Results
Page 5
April 25, 2013
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This earnings release contains “forward-looking statements” regarding the Company’s plans, expectations, and anticipated future events. Actual results could differ materially due to numerous known and unknown risks and uncertainties, including, without limitation, risk factors related to the following:
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uncertainties associated with the implementation of the Affordable Care Act, including the impact of the health insurance industry excise tax, the expansion of Medicaid eligibility in participating states to previously uninsured populations unfamiliar with managed care, the implementation of state insurance exchanges currently expected to become operational by October 1, 2013, the effect of various implementing regulations, and uncertainties regarding the impact of other federal or state health care and insurance reform measures, including the duals demonstration programs in California, Ohio, Michigan, and Texas;
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the success of our medical cost containment initiatives in Texas, and other risks associated with the expansion of our Texas health plan’s service areas in 2012;
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significant budget pressures on state governments and their potential inability to maintain current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility thresholds or criteria;
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management of our medical costs, including seasonal flu patterns and rates of utilization that are consistent with our expectations and our accruals for incurred but not reported medical costs;
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the success of our efforts to retain existing government contracts and to obtain new government contracts in connection with state requests for proposals (RFPs) in both existing and new states, and our ability to increase our revenues consistent with our expectations;
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accurate estimation of incurred but not reported medical costs across our health plans;
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risks associated with the continued growth in new Medicaid and Medicare enrollees, and the development of actuarially sound rates with respect to such new enrollees, including duals;
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retroactive adjustments to premium revenue or accounting estimates which require adjustment based upon subsequent developments, including Medicaid pharmaceutical rebates;
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continuation and renewal of the government contracts of both our health plans and Molina Medicaid Solutions and the terms under which such contracts are renewed;
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government audits and reviews, and any enrollment freeze or monitoring program that may result therefrom;
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changes with respect to our provider contracts and the loss of providers;
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the establishment of a federal or state medical cost expenditure floor as a percentage of the premiums we receive, and the interpretation and implementation of medical cost expenditure floors, administrative cost and profit ceilings, and profit sharing arrangements;
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interpretation and implementation of at-risk premium rules regarding the achievement of certain quality measures;
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approval by state regulators of dividends and distributions by our health plan subsidiaries;
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changes in funding under our contracts as a result of regulatory changes, programmatic adjustments, or other reforms;
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high dollar claims related to catastrophic illness;
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the favorable resolution of litigation, arbitration, or administrative proceedings, including our pending litigation against the state of California related to rates paid to our California plan in earlier years that were not actuarially sound;
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recognition of revenue retroactive to July 1, 2011, related to the reversal of rate cuts enacted under California Assembly Bill 97 and a rate increase for seniors and persons with disabilities;
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restrictions and covenants in any future credit facility;
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the relatively small number of states in which we operate health plans;
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the availability of adequate financing to fund and capitalize our expansion and growth activities and to meet our liquidity needs, including the interest expense and other costs associated with such financing;
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a state’s failure to renew its federal Medicaid waiver;
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inadvertent unauthorized disclosure of protected health information;
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changes generally affecting the managed care or Medicaid management information systems industries;
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increases in government surcharges, taxes, and assessments;
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changes in general economic conditions, including unemployment rates; and
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increasing consolidation in the Medicaid industry;
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and numerous other risk factors, including those discussed in the Company’s periodic reports and filings with the Securities and Exchange Commission. These reports can be accessed under the investor relations tab of the Company’s website or on the SEC’s website at www.sec.gov. Given these risks and uncertainties, we can give no assurances that the Company’s forward-looking statements will prove to be accurate, or that any other results or events projected or contemplated by the Company’s forward-looking statements will in fact occur, and we caution investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company’s judgment as of April 25, 2013, and we disclaim any obligation to update any forward-looking statements to conform the statement to actual results or changes in the Company’s expectations.
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MOH Reports First Quarter 2013 Results
Page 6
April 25, 2013
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
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Three Months Ended March 31,
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2013
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2012
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(Amounts in thousands,
except net income per share)
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Revenue:
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Premium revenue
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$ | 1,497,608 | $ | 1,283,220 | ||||
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Premium tax
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37,000 | 42,186 | ||||||
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Service revenue
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49,756 | 42,205 | ||||||
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Investment income
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1,529 | 1,717 | ||||||
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Rental and other income
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4,694 | 4,259 | ||||||
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Total revenue
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1,590,587 | 1,373,587 | ||||||
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Expenses:
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Medical care costs
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1,288,754 | 1,130,988 | ||||||
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Cost of service revenue
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39,770 | 30,494 | ||||||
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General and administrative expenses
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141,407 | 121,474 | ||||||
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Premium tax expenses
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37,000 | 42,186 | ||||||
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Depreciation and amortization
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16,565 | 15,025 | ||||||
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Total expenses
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1,523,496 | 1,340,167 | ||||||
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Operating income
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67,091 | 33,420 | ||||||
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Other expenses (income):
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Interest expense
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13,037 | 4,298 | ||||||
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Other income
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(131 | ) | – | |||||
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Total other expenses
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12,906 | 4,298 | ||||||
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Income before income taxes
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54,185 | 29,122 | ||||||
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Income tax expense
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24,270 | 11,033 | ||||||
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Net income
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$ | 29,915 | $ | 18,089 | ||||
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Net income per share:
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Basic
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$ | 0.65 | $ | 0.39 | ||||
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Diluted
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$ | 0.64 | $ | 0.39 | ||||
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Weighted average shares outstanding:
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Basic
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45,981 | 45,998 | ||||||
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Diluted
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46,443 | 46,887 | ||||||
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Operating Statistics:
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Medical care ratio (1)
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86.1 | % | 88.1 | % | ||||
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Service revenue ratio (2)
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79.9 | % | 72.3 | % | ||||
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General and administrative expense ratio (3)
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8.9 | % | 8.8 | % | ||||
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Premium tax ratio (1)
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2.4 | % | 3.2 | % | ||||
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Effective tax rate
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44.8 | % | 37.9 | % | ||||
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(1)
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Medical care ratio represents medical care costs as a percentage of premium revenue, net of premium taxes; premium tax ratio represents premium taxes as a percentage of premium revenue.
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(2)
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Service revenue ratio represents cost of service revenue as a percentage of service revenue.
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(3)
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Computed as a percentage of total revenue.
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MOH Reports First Quarter 2013 Results
Page 7
April 25, 2013
MOLINA HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
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(Unaudited)
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March 31,
2013
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Dec. 31,
2012
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(Amounts in thousands,
except per share data)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 1,169,511 | $ | 795,770 | ||||
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Investments
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341,946 | 342,845 | ||||||
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Receivables
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150,251 | 149,682 | ||||||
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Deferred income taxes
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25,753 | 32,443 | ||||||
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Prepaid expenses and other current assets
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39,577 | 28,386 | ||||||
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Total current assets
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1,727,038 | 1,349,126 | ||||||
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Property, equipment, and capitalized software, net
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237,735 | 221,443 | ||||||
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Deferred contract costs
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53,813 | 58,313 | ||||||
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Intangible assets, net
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72,864 | 77,711 | ||||||
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Goodwill and indefinite-lived intangible assets
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151,088 | 151,088 | ||||||
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Auction rate securities
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13,600 | 13,419 | ||||||
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Restricted investments
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55,117 | 44,101 | ||||||
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Derivative asset
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147,385 | – | ||||||
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Other assets
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29,449 | 19,621 | ||||||
| $ | 2,488,089 | $ | 1,934,822 | |||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Medical claims and benefits payable
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$ | 491,145 | $ | 494,530 | ||||
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Accounts payable and accrued liabilities
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159,986 | 184,034 | ||||||
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Deferred revenue
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135,804 | 141,798 | ||||||
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Income taxes payable
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14,944 | 6,520 | ||||||
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Current maturities of long-term debt
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1,167 | 1,155 | ||||||
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Total current liabilities
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803,046 | 828,037 | ||||||
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Long-term debt
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642,005 | 261,784 | ||||||
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Deferred income taxes
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31,353 | 37,900 | ||||||
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Derivative liabilities
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223,647 | 1,307 | ||||||
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Other long-term liabilities
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23,839 | 23,480 | ||||||
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Total liabilities
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1,723,890 | 1,152,508 | ||||||
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Stockholders’ equity:
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Common stock, $0.001 par value; 80,000 shares authorized;
outstanding: 45,415 shares at March 31, 2013 and 46,762 shares
at December 31, 2012
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45 | 47 | ||||||
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Preferred stock, $0.001 par value; 20,000 shares authorized,
no shares issued and outstanding
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– | – | ||||||
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Additional paid-in capital
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234,236 | 285,524 | ||||||
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Accumulated other comprehensive loss
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(197 | ) | (457 | ) | ||||
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Treasury stock, at cost; 111 shares at December 31, 2012
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– | (3,000 | ) | |||||
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Retained earnings
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530,115 | 500,200 | ||||||
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Total stockholders’ equity
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764,199 | 782,314 | ||||||
| $ | 2,488,089 | $ | 1,934,822 | |||||
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MOH Reports First Quarter 2013 Results
Page 8
April 25, 2013
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended
March 31,
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2013
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2012
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(Amounts in thousands)
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Operating activities:
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Net income
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$ | 29,915 | $ | 18,089 | ||||
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Adjustments to reconcile net income to net cash provided
by operating activities:
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Depreciation and amortization
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21,799 | 18,339 | ||||||
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Deferred income taxes
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(16 | ) | 8,263 | |||||
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Stock-based compensation
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4,421 | 4,666 | ||||||
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Gain on sale of subsidiary
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– | (1,747 | ) | |||||
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Non-cash interest on convertible senior notes
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3,723 | 1,443 | ||||||
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Change in fair value of derivatives
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(119 | ) | – | |||||
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Amortization of premium/discount on investments
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1,502 | 1,850 | ||||||
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Amortization of deferred financing costs
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1,248 | 258 | ||||||
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Tax deficiency from employee stock compensation
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(42 | ) | (31 | ) | ||||
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Changes in operating assets and liabilities:
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Receivables
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(569 | ) | (54,356 | ) | ||||
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Prepaid expenses and other current assets
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(8,956 | ) | (5,640 | ) | ||||
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Medical claims and benefits payable
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(3,385 | ) | 53,357 | |||||
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Accounts payable and accrued liabilities
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(31,847 | ) | (34,796 | ) | ||||
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Deferred revenue
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(5,994 | ) | 44,543 | |||||
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Income taxes
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8,424 | (3,663 | ) | |||||
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Net cash provided by operating activities
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20,104 | 50,575 | ||||||
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Investing activities:
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Purchases of equipment
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(11,167 | ) | (13,505 | ) | ||||
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Purchases of investments
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(76,012 | ) | (88,199 | ) | ||||
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Sales and maturities of investments
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75,647 | 65,767 | ||||||
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Proceeds from sale of subsidiary, net of cash surrendered
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– | 9,162 | ||||||
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Decrease (increase) in deferred contract costs
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1,756 | (12,993 | ) | |||||
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Increase in restricted investments
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(11,016 | ) | (493 | ) | ||||
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Change in other noncurrent assets and liabilities
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(408 | ) | (2,457 | ) | ||||
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Net cash used in investing activities
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(21,200 | ) | (42,718 | ) | ||||
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Financing activities:
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Proceeds from issuance of 1.125% Notes, net of deferred issuance costs
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537,973 | – | ||||||
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Purchase of call option relating to 1.125% Notes
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(149,331 | ) | – | |||||
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Proceeds from issuance of warrants
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75,074 | – | ||||||
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Treasury stock purchases
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(50,000 | ) | – | |||||
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Repayment of amounts borrowed under credit facility
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(40,000 | ) | – | |||||
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Amount borrowed under credit facility
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– | 10,000 | ||||||
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Principal payments on term loan
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(291 | ) | (301 | ) | ||||
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Proceeds from employee stock plans
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235 | 2,748 | ||||||
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Excess tax benefits from employee stock compensation
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1,177 | 3,592 | ||||||
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Net cash provided by financing activities
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374,837 | 16,039 | ||||||
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Net increase in cash and cash equivalents
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373,741 | 23,896 | ||||||
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Cash and cash equivalents at beginning of period
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795,770 | 493,827 | ||||||
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Cash and cash equivalents at end of period
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$ | 1,169,511 | $ | 517,723 | ||||
-MORE-
MOH Reports First Quarter 2013 Results
Page 9
April 25, 2013
MOLINA HEALTHCARE, INC.
UNAUDITED DEPRECIATION AND AMORTIZATION DATA
Depreciation and amortization related to the Company’s Health Plans segment is all recorded in “Depreciation and Amortization” in the consolidated statements of income. Depreciation and amortization related to the Company’s Molina Medicaid Solutions segment is recorded within three different headings in the consolidated statements of income as follows:
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Amortization of purchased intangibles relating to customer relationships is reported as amortization within the heading “Depreciation and Amortization;”
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Amortization of purchased intangibles relating to contract backlog is recorded as a reduction of “Service Revenue;” and
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Depreciation is recorded within the heading “Cost of Service Revenue.”
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The following table presents all depreciation and amortization recorded in the Company’s consolidated statements of income, regardless of whether the item appears as depreciation and amortization, a reduction of revenue, or as cost of service revenue.
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Three Months Ended March 31,
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2013
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2012
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Amount
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% of Total
Revenue
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Amount
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% of Total
Revenue
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(Dollar amounts in thousands)
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Depreciation and amortization of
capitalized software
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$ | 12,447 | 0.8 | % | $ | 9,472 | 0.7 | % | ||||||||
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Amortization of intangible assets
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4,118 | 0.3 | 5,553 | 0.4 | ||||||||||||
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Depreciation and amortization reported
as such in the consolidated statements
of income
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16,565 | 1.1 | 15,025 | 1.1 | ||||||||||||
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Amortization recorded as reduction
of service revenue
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729 | – | 153 | – | ||||||||||||
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Amortization of capitalized software recorded as cost of service revenue
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4,505 | 0.3 | 3,161 | 0.2 | ||||||||||||
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Total
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$ | 21,799 | 1.4 | % | $ | 18,339 | 1.3 | % | ||||||||
-MORE-
MOH Reports First Quarter 2013 Results
Page 10
April 25, 2013
UNAUDITED MEMBERSHIP DATA
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March 31,
2013
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Dec. 31,
2012
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March 31,
2012
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Total Ending Membership by Health Plan:
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California
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332,000 | 336,000 | 351,000 | |||||||||
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Florida
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75,000 | 73,000 | 69,000 | |||||||||
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Michigan
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217,000 | 220,000 | 222,000 | |||||||||
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Missouri (1)
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– | – | 81,000 | |||||||||
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New Mexico
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91,000 | 91,000 | 89,000 | |||||||||
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Ohio
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242,000 | 244,000 | 249,000 | |||||||||
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Texas
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274,000 | 282,000 | 280,000 | |||||||||
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Utah
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87,000 | 87,000 | 86,000 | |||||||||
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Washington
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416,000 | 418,000 | 356,000 | |||||||||
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Wisconsin
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86,000 | 46,000 | 42,000 | |||||||||
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Total
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1,820,000 | 1,797,000 | 1,825,000 | |||||||||
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Total Ending Membership by State for the
Medicare Advantage Plans:
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California
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7,700 | 7,700 | 6,900 | |||||||||
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Florida
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600 | 900 | 800 | |||||||||
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Michigan
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9,200 | 9,700 | 8,500 | |||||||||
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New Mexico
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900 | 900 | 900 | |||||||||
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Ohio
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300 | 300 | 200 | |||||||||
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Texas
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1,900 | 1,500 | 800 | |||||||||
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Utah
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7,600 | 8,200 | 8,100 | |||||||||
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Washington
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6,100 | 6,500 | 5,200 | |||||||||
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Total
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34,300 | 35,700 | 31,400 | |||||||||
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Total Ending Membership by State for the
Aged, Blind or Disabled Population:
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California
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44,600 | 44,700 | 37,300 | |||||||||
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Florida
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10,400 | 10,300 | 10,500 | |||||||||
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Michigan
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44,000 | 41,900 | 38,800 | |||||||||
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New Mexico
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5,800 | 5,700 | 5,600 | |||||||||
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Ohio
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28,200 | 28,200 | 29,700 | |||||||||
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Texas
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94,200 | 95,900 | 109,000 | |||||||||
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Utah
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9,200 | 9,000 | 8,700 | |||||||||
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Washington
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31,300 | 30,000 | 4,700 | |||||||||
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Wisconsin
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1,600 | 1,700 | 1,700 | |||||||||
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Total
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269,300 | 267,400 | 246,000 | |||||||||
____________
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(1)
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The Company’s contract with the state of Missouri expired without renewal on June 30, 2012.
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-MORE-
MOH Reports First Quarter 2013 Results
Page 11
April 25, 2013
UNAUDITED SELECTED FINANCIAL DATA BY HEALTH PLAN
(Amounts in thousands except per member per month amounts)
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Three Months Ended March 31, 2013
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Member
Months (1)
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Premium Revenue
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Medical Care Costs
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MCR (4)
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Total
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PMPM
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Total
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PMPM
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California
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1,001 | $ | 187,788 | $ | 187.55 | $ | 159,763 | $ | 159.56 | 85.1 | % | |||||||||||||
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Florida
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223 | 58,164 | 260.13 | 49,404 | 220.95 | 84.9 | ||||||||||||||||||
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Michigan
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652 | 166,557 | 255.52 | 146,748 | 225.13 | 88.1 | ||||||||||||||||||
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New Mexico
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274 | 84,000 | 306.97 | 72,149 | 263.66 | 85.9 | ||||||||||||||||||
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Ohio
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726 | 268,808 | 370.44 | 227,454 | 313.45 | 84.6 | ||||||||||||||||||
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Texas
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832 | 329,451 | 395.96 | 266,449 | 320.24 | 80.9 | ||||||||||||||||||
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Utah
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259 | 74,956 | 289.59 | 65,029 | 251.24 | 86.8 | ||||||||||||||||||
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Washington
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1,250 | 298,286 | 238.70 | 261,397 | 209.18 | 87.6 | ||||||||||||||||||
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Wisconsin
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200 | 27,124 | 135.53 | 23,664 | 118.24 | 87.2 | ||||||||||||||||||
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Other (2) (3)
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– | 2,474 | – | 16,697 | – | – | ||||||||||||||||||
| 5,417 | $ | 1,497,608 | $ | 276.49 | $ | 1,288,754 | $ | 237.93 | 86.1 | % | ||||||||||||||
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Three Months Ended March 31, 2012
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Member
Months (1)
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Premium Revenue
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Medical Care Costs
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MCR (4)
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Total
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PMPM
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Total
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PMPM
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California
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1,059 | $ | 159,376 | $ | 150.47 | $ | 141,349 | $ | 133.45 | 88.7 | % | |||||||||||||
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Florida
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208 | 56,183 | 269.84 | 49,569 | 238.07 | 88.2 | ||||||||||||||||||
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Michigan
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665 | 159,866 | 240.40 | 134,211 | 201.82 | 84.0 | ||||||||||||||||||
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Missouri (2)
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243 | 56,613 | 233.32 | 53,120 | 218.93 | 93.8 | ||||||||||||||||||
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New Mexico
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266 | 79,273 | 298.28 | 67,111 | 252.52 | 84.7 | ||||||||||||||||||
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Ohio
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746 | 270,672 | 363.07 | 236,701 | 317.51 | 87.4 | ||||||||||||||||||
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Texas
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592 | 195,039 | 329.21 | 180,089 | 303.97 | 92.3 | ||||||||||||||||||
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Utah
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252 | 75,138 | 297.59 | 57,881 | 229.24 | 77.0 | ||||||||||||||||||
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Washington
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1,067 | 211,794 | 198.50 | 181,425 | 170.04 | 85.7 | ||||||||||||||||||
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Wisconsin
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125 | 17,142 | 136.97 | 16,886 | 134.92 | 98.5 | ||||||||||||||||||
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Other (3)
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– | 2,124 | – | 12,646 | – | – | ||||||||||||||||||
| 5,223 | $ | 1,283,220 | $ | 245.67 | $ | 1,130,988 | $ | 216.53 | 88.1 | % | ||||||||||||||
____________
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(1)
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A member month is defined as the aggregate of each month’s ending membership for the period presented.
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(2)
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The Company’s contract with the state of Missouri expired without renewal on June 30, 2012. The Missouri health plan’s claims run-out activity subsequent to June 30, 2012, is reported in “Other.”
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(3)
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“Other” medical care costs also include medically related administrative costs at the parent company.
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(4)
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The MCR represents medical costs as a percentage of premium revenues, where premium revenue is reduced by premium tax expense.
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-MORE-
MOH Reports First Quarter 2013 Results
Page 12
April 25, 2013
UNAUDITED SELECTED FINANCIAL DATA
(Amounts in thousands except per member per month amounts)
The following tables provide the details of the Company’s medical care costs for the periods indicated:
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Three Months Ended March 31,
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2013
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2012
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Amount
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PMPM
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% of Total
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Amount
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PMPM
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% of Total
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Fee-for-service
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$ | 867,648 | $ | 160.18 | 67.3 | % | $ | 777,267 | $ | 148.81 | 68.7 | % | ||||||||||||
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Pharmacy
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231,838 | 42.80 | 18.0 | 173,237 | 33.17 | 15.3 | ||||||||||||||||||
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Capitation
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140,324 | 25.91 | 10.9 | 136,038 | 26.04 | 12.0 | ||||||||||||||||||
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Other
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48,944 | 9.04 | 3.8 | 44,446 | 8.51 | 4.0 | ||||||||||||||||||
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Total
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$ | 1,288,754 | $ | 237.93 | 100.0 | % | $ | 1,130,988 | $ | 216.53 | 100.0 | % | ||||||||||||
The following table provides the details of the Company’s medical claims and benefits payable as of the dates indicated:
|
March 31,
2013
|
Dec. 31,
2012
|
March 31,
2012
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Fee-for-service claims incurred but not paid (IBNP)
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$ | 378,926 | $ | 377,614 | $ | 347,307 | ||||||
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Capitation payable
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45,048 | 49,066 | 37,289 | |||||||||
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Pharmacy
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39,495 | 38,992 | 38,443 | |||||||||
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Other
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27,676 | 28,858 | 32,794 | |||||||||
| $ | 491,145 | $ | 494,530 | $ | 455,833 | |||||||
-MORE-
MOH Reports First Quarter 2013 Results
Page 13
April 25, 2013
MOLINA HEALTHCARE, INC.
UNAUDITED CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
The Company’s claims liability includes an allowance for adverse claims development based on historical experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior periods” represent the amount by which the Company’s original estimate of claims and benefits payable at the beginning of the period were (more) or less than the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported. The following table shows the components of the change in medical claims and benefits payable as of the periods indicated:
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Three Months Ended
March 31,
|
Year Ended
Dec. 31,
|
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2013
|
2012
|
2012
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(Dollars in thousands,
except per-member amounts)
|
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Balances at beginning of period
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$ | 494,530 | $ | 402,476 | $ | 402,476 | ||||||
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Components of medical care costs related to:
|
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Current period
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1,347,181 | 1,167,580 | 5,136,055 | |||||||||
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Prior periods
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(58,427 | ) | (36,592 | ) | (39,295 | ) | ||||||
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Total medical care costs
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1,288,754 | 1,130,988 | 5,096,760 | |||||||||
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Payments for medical care costs related to:
|
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Current period
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916,426 | 750,994 | 4,649,363 | |||||||||
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Prior periods
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375,713 | 326,637 | 355,343 | |||||||||
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Total paid
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1,292,139 | 1,077,631 | 5,004,706 | |||||||||
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Balances at end of period
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$ | 491,145 | $ | 455,833 | $ | 494,530 | ||||||
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Benefit from prior period as a percentage of:
|
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Balance at beginning of period
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11.8 | % | 9.1 | % | 9.8 | % | ||||||
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Premium revenue
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3.8 | % | 2.8 | % | 0.7 | % | ||||||
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Total medical care costs
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4.5 | % | 3.2 | % | 0.8 | % | ||||||
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Claims Data:
|
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Days in claims payable, fee-for-service
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38 | 44 | 40 | |||||||||
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Number of members at end of period
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1,820,000 | 1,825,000 | 1,797,000 | |||||||||
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Number of claims in inventory at end of period
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135,400 | 260,800 | 122,700 | |||||||||
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Billed charges of claims in inventory at end of period
|
$ | 236,700 | $ | 403,800 | $ | 255,200 | ||||||
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Claims in inventory per member at end of period
|
0.07 | 0.14 | 0.07 | |||||||||
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Billed charges of claims in inventory per member
at end of period
|
$ | 130.05 | $ | 221.26 | $ | 142.01 | ||||||
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Number of claims received during the period
|
5,271,000 | 4,855,600 | 20,842,400 | |||||||||
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Billed charges of claims received during the period
|
$ | 5,170,700 | $ | 4,337,000 | $ | 19,429,300 | ||||||
END