UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 28, 2009
MOLINA
HEALTHCARE, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-31719
|
13-4204626
|
||
|
(State
of incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification Number)
|
200
Oceangate, Suite 100, Long Beach, California 90802
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (562) 435-3666
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial
Condition.
On October 28, 2009, Molina
Healthcare, Inc. issued a press release announcing its financial results for the
third quarter and nine months ended September 30, 2009. The full text
of the press release is included as Exhibit 99.1 to this report. The
information contained in the websites cited in the press release is not part of
this report.
The information in this Form 8-K and
the exhibit attached hereto shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in
any filing under the Securities Act of 1933 or the Securities Exchange Act of
1934, except as expressly set forth by specific reference in such a
filing.
Item
9.01. Financial Statements and
Exhibits.
(d) Exhibits:
|
Exhibit
|
|
|
No.
|
Description
|
|
99.1
|
Press
release of Molina Healthcare, Inc. issued October 28, 2009, as to
financial results for the third quarter and nine months ended September
30, 2009.
|
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| MOLINA HEALTHCARE, INC. | ||
| Date: October 28, 2009 | By: /s/ Mark L. Andrews | |
| Mark L. Andrews | ||
| Chief Legal Officer, General Counsel | ||
| and Corporate Secretary |
EXHIBIT
INDEX
|
Exhibit
|
|
|
No.
|
Description
|
|
99.1
|
Press
release of Molina Healthcare, Inc. issued October 28, 2009, as to
financial results for the third quarter and nine months ended September
30, 2009.
|
News Release
Contact:
Juan José
Orellana
Investor
Relations
562-435-3666,
ext. 111143
MOLINA
HEALTHCARE REPORTS
THIRD
QUARTER 2009 RESULTS
|
·
|
Diluted
earnings per share of $0.33, down 45% from the third quarter of
2008
|
|
·
|
Year-to-date
diluted earnings per share of $1.36, down 15% from
2008
|
|
·
|
Cash
flow from operating activities increases $150
million
|
|
·
|
Investment
earnings decrease $3.1 million
|
|
·
|
California
health plan loses $4.8 million in
quarter
|
|
·
|
Quarterly
premium revenues of $915 million, up
16%
|
|
·
|
Aggregate
membership up 14% over the third quarter of
2008
|
|
·
|
Guidance
withdrawn for the fourth quarter
2009
|
Long Beach, California (October 28,
2009) – Molina Healthcare, Inc. (NYSE: MOH) today reported net income for
the quarter ended September 30, 2009, of $8.6 million, or $0.33 per diluted
share, compared with net income of $16.5 million, or $0.60 per diluted share,
for the quarter ended September 30, 2008.
“Our
results in the quarter reflect the continuing rise in influenza-like illness
across the nation, particularly the dramatic surge that has occurred since
September as children have returned to school,” said J. Mario Molina, M.D.,
president and chief executive officer of Molina Healthcare. “We also
continue to be adversely affected by state budget pressures and the resulting
compressed profit margins of our health plans. Although we continue
to believe the long-term prospects for our company are promising, the near-term
uncertainty created by this unprecedented confluence of factors is likely to
continue throughout the fourth quarter.”
2009
Medical Cost and Earnings Guidance Withdrawn
The
Company currently believes that it will not achieve its previously announced
fiscal year 2009 earnings guidance of $2.15 per diluted share. Due to
several factors that make it particularly difficult to predict the Company’s
short-term medical costs and earnings, including the 2009 H1N1 flu pandemic (and
the resulting Declaration of National Emergency by the President), higher
utilization associated with new members, and state budgetary shortfalls,
including the uncertainty surrounding the Michigan state budget, the Company is
withdrawing those elements of its 2009 guidance related to its medical care
costs and earnings. The Company’s 2009 guidance, which was provided
in its second quarter earnings release on August 4, 2009, remains unchanged with
respect to its premium revenue, investment income, core G&A, administrative
expense as a percentage of total revenue, depreciation and amortization,
interest expense, total membership, diluted shares outstanding, and effective
tax rate.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
2
October
28, 2009
Overview
of Financial Results
Note: Estimates of
utilization and unit costs may not match changes in reported costs due to the
impact of shifts in case mix between the periods presented, prior period
development, the existence of pass-through contracts in which third parties
assume medical risk, and other factors. Additionally, estimates of
utilization for the three and nine months ended September 30, 2009, exclude the
month of September 2009 due to the substantial incompleteness of claims payment
data for that month.
Third
Quarter 2009 Compared with Third Quarter 2008
Net income in the third
quarter of 2009 decreased 48% to $8.6 million compared with net income of $16.5
million in the third quarter of 2008.
California health plan results
have continued to exert downward pressure on the Company’s current quarter and
year-to-date results. The California health plan lost approximately
$4.8 million, or $0.19 per diluted share, in the third quarter of
2009.
The
California health plan is currently engaged in a number of efforts to improve
its profitability. These efforts include provider re-contracting, the
restructuring of provider networks, and tighter utilization
management. The California health plan has terminated and/or
renegotiated certain of its high-cost providers. However, because the
effective date of the terminations was late in the third quarter or will occur
in the fourth quarter, the benefit of the expected cost savings will not be seen
until the fourth quarter of 2009, at the earliest. The California
health plan may also selectively reduce membership in certain regions of the
state that are operating at a loss. Effective
October 1, 2009, the California health plan received a combination of premium
rate increases and premium tax relief under its contracts with the state that
will combine to improve margins by approximately 4.9%. This premium
relief will provide an immediate benefit to the health plan’s performance in the
fourth quarter. The Company remains committed to the California
market due to its size, long-term potential, and barriers to entry.
Premium revenue grew 16% in
the third quarter of 2009 compared with the third quarter of
2008. Membership grew 14% overall, with Florida, California,
Washington, and Ohio gaining the most members. On a per-member
per-month, or PMPM, basis, consolidated premium revenue increased
2%. Increased membership contributed 87% of the growth in premium
revenue in the third quarter of 2009 compared with the third quarter of 2008,
and increases in PMPM revenue, as a result of both rate changes and shifts in
member mix, contributed the remaining 13%.
Despite
the increase in premium revenue in the third quarter of 2009 compared with the
third quarter of 2008, premium revenue decreased by $10.7 million in the third
quarter of 2009 compared with the second quarter of 2009. Premium
revenue decreased approximately $10.00 PMPM sequentially as a result of premium
decreases in Michigan (approximately 1.4% effective July 1, 2009) and Washington
(approximately 7% effective August 1, 2009). In both states, rates
under the Medicaid fee schedule were reduced in a manner the Company believes to
be commensurate with the reduction in premium rates. Member mix and
utilization patterns at the Michigan and Washington health plans, however, may
differ from the assumptions built into the states’ rate development
methodologies. Through September 30, 2009, the Company did not have
sufficient claims data to determine the ultimate impact on its earnings of the
reduction in premium revenue and medical costs in Michigan and
Washington. During the third quarter of 2009, the Texas health plan
recorded adjustments to decrease premium revenue by $7.8 million relating to a
profit-sharing provision in its agreement with the state of
Texas. Effective September 1, 2009, the Florida health plan received
a blended premium rate increase of approximately 3%. Effective
October 1, 2009, the Company transitioned approximately 9,000 CHIP members from
another health plan into its Texas health plan.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
3
October
28, 2009
Investment income for the
third quarter of 2009 was $1.7 million, a $3.1 million decrease from the
$4.8 million in investment income earned in the third quarter of
2008. This 64% decline was due primarily to lower interest
rates.
Medical care costs, in the
aggregate, increased approximately 5% on a PMPM basis in the third quarter of
2009 compared with the third quarter of 2008. Medical care costs as a
percentage of premium revenue (the medical care ratio) were 86.7% for the third
quarter of 2009 compared with 84.6% for the third quarter of
2008. Excluding the California health plan, the medical care ratio
increased to 85.8% during the third quarter of 2009 compared with 83.9% during
the third quarter of 2008. Medical costs trends were consistent with
those identified by the Company in its earnings release for the second quarter
of 2009. Specifically, increased expenses were generally the result
of higher utilization rather than higher unit costs (except in the case of
outpatient costs, where both utilization and unit costs increased) and were most
pronounced in connection with physician and outpatient costs. The
2009 H1N1 flu and the costs associated with more recently enrolled members were
key factors in the higher utilization.
Physician and outpatient costs
exhibited the most significant unfavorable cost trend in the third quarter of
2009. Together, these costs increased nearly 9% on a PMPM basis
compared with the third quarter of 2008. The primary drivers of these
increased costs were emergency room utilization (up approximately 6%) and cost
per visit (up approximately 9%). This increase in utilization was
most pronounced in the California and Michigan health plans.
Inpatient facility costs
decreased approximately 5% PMPM compared with the third quarter of 2008,
despite increased utilization.
Pharmacy costs increased
approximately 4% PMPM compared with the third quarter of
2008. Pharmacy utilization increased approximately 5% year-over-year,
while unit costs (excluding rebates) decreased approximately 1%.
Capitated costs increased
approximately 9% PMPM compared with the third quarter of 2008 as a result of
rate increases received for members capitated on a percentage of premium basis
at the New Mexico health plan and the transition of members into capitated
arrangements at the California health plan.
Days in medical claims and benefits
payable were 37 days at September 30, 2009, 39 days at June 30, 2009, and
44 days at September 30, 2008. As of September 30, 2009, billed
charges in ending claims inventory have declined approximately 1%, and the
number of claims in ending inventory has declined approximately 18% compared
with September 30, 2008. As of September 30, 2009, billed charges in
ending inventory have declined approximately 16% ($28 million), and the number
of claims in inventory has declined approximately 8% compared with June 30,
2009.
Core G&A expenses (defined
as G&A expenses less premium taxes) were 7.5% of revenue in the third
quarter of 2009 compared with 8.0% in the third quarter of 2008 and 7.0% in the
second quarter of 2009. Year-over-year, premium revenue grew faster
than administrative costs, causing administrative costs, as a percentage of
revenue, to decrease. Sequentially, there was a slight increase in
the core G&A ratio as a result of the sequential premium revenue decrease
described above. On a PMPM basis, core G&A increased slightly to
$16.35 in the third quarter of 2009 compared with $16.04 in the second quarter
of 2009.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
4
October
28, 2009
Interest expense for
both periods presented includes non-cash interest expense relating to the
Company’s convertible senior notes, as a result of the adoption of FASB
Accounting Standards Codification (ASC) Subtopic 470-20, Debt with Conversion and Other
Options. The amounts recorded for this additional interest
expense totaled $1.2 million ($0.03 per diluted share) for both the third
quarter of 2009 and the third quarter of 2008.
Income taxes were recorded at
an effective rate of 34.1% in the third quarter of 2009 compared with 39.7% in
the third quarter of 2008. The Company recorded discrete tax benefits of
$1 million during the quarter ended September 30, 2009, primarily related to
higher than previously estimated tax credits and a reassessment of
liabilities for unrecognized tax benefits based on recent examination experience
and other factors. The Company’s tax rate would have been 42% for the
three months ended September 30, 2009, absent these discrete tax
benefits.
Nine
Months Ended September 30, 2009 Compared with Nine Months Ended September 30,
2008
Net income decreased 21% to
$35.3 million in the nine months ended September 30, 2009, compared with net
income of $44.8 million in the same period of 2008.
The
California health plan lost approximately $15.2 million, or $0.58 per diluted
share, during the nine months ended September 30, 2009. As described
above, the California health plan is taking several steps to improve its
profitability and will benefit in the fourth quarter from a combination of rate
increase and premium tax relief that will combine to improve margins by
approximately 4.9%, effective October 1, 2009.
Premium revenue grew
approximately 18% in the nine months ended September 30, 2009, compared with the
same period in 2008. Consolidated premium revenue increased 6% on a
PMPM basis. Increased membership contributed 67% of the growth in
premium revenue.
Investment income for the nine
months ended September 30, 2009, was $7.3 million, a $10.2 million decrease from
the $17.5 million earned in the same period in 2008. This 58%
decline was primarily due to lower interest rates in 2009. The
Company’s annualized portfolio yield for the nine months ended September 30,
2009, decreased to 1.4% compared with 3.3% for the same period in
2008.
Medical care costs, in the
aggregate, increased approximately 8% on a PMPM basis in the nine months ended
September 30, 2009, compared with the same period in 2008. The
medical care ratio was 86.5% for the nine months ended September 30, 2009,
compared with 84.9% for the same period in 2008. Excluding the
California health plan, the medical care ratio increased to 85.6% during the
nine months ended September 30, 2009, compared with 84.5% during the nine months
ended September 30, 2008. Specifically, increased expenses were
generally the result of higher utilization rather than higher unit costs (except
in the case of outpatient costs, where both utilization and unit costs
increased) and were most pronounced in connection with physician and outpatient
costs. The 2009 H1N1 flu and the costs associated with more recently
enrolled members were key factors in the higher utilization.
Analysis
of claims paid through September 30, 2009, indicates that, on a consolidated
basis, the claims reserve established at December 31, 2008, was
adequate.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
5
October
28, 2009
Physician and outpatient costs
exhibited the most significant unfavorable cost trend in the nine months ended
September 30, 2009. Together, these costs increased approximately 12%
on a PMPM basis compared with the same period in 2008. Consistent
with the Company’s experience throughout 2009, emergency room utilization (up
approximately 6%) and cost per visit (up approximately 12%) were the primary
drivers of increased cost in the nine months ended September 30,
2009.
The
Company continues to observe hospitals billing for more intensive levels of care
than in the same period in 2008. The billing codes for emergency room
level of care – with Level 1 reflecting the least intensive care and Level 5
reflecting the most intensive care – changed significantly in the nine months
ended September 30, 2009, compared with the same period in 2008. As
indicated in the following table, Level 1 and Level 2 visits decreased by 16%
and 11%, respectively, while Level 3, Level 4, and Level 5 visits increased by
10%, 11%, and 13%, respectively. The Company continues to compile and
analyze the data relevant to this apparent up-coding of emergency room claims
and will be meeting with regulators and individual hospitals to ensure that
emergency room medical care is billed appropriately.
|
Emergency
Room Visits per 1,000
|
|||||
|
Level
|
|||||
|
1
|
2
|
3
|
4
|
5
|
|
|
Nine
Months Ended September 30, 2009, v. Same Period in 2008
|
-16%
|
-11%
|
10%
|
11%
|
13%
|
Inpatient costs increased less
than 1% PMPM year-over-year despite increased utilization.
Pharmacy costs increased
approximately 4% PMPM year-over-year. Pharmacy utilization increased
approximately 5% year-over-year while unit costs (excluding rebates) increased
by approximately 1%.
Capitated costs increased approximately 11% PMPM year-over-year, primarily as a result of rate increases received for members capitated on a percentage of premium basis at the New Mexico health plan and the transition of members into capitated arrangements in California.
Core G&A expenses were
7.4% of revenue in the nine months ended September 30, 2009, compared with 8.0%
in the same period in 2008. Year-over-year, premium revenue grew
faster than administrative costs, causing administrative costs, as a percentage
of revenue, to decrease. On a PMPM basis, core G&A decreased to
$16.38 in the nine months ended September 30, 2009, from $16.90 for the same
period in 2008.
Interest expense for
both nine-month periods includes non-cash interest expense relating to the
Company’s convertible senior notes, as a result of the adoption of ASC Subtopic
470-20. The amounts recorded for this additional interest expense
totaled $3.6 million for the nine months ended September 30, 2009, ($0.08 per
diluted share) and $3.5 million for the same period in 2008 ($0.08 per diluted
share).
Income taxes were
recorded at an effective rate of 31.0% for the nine months ended September 30,
2009, compared with 40.5% for the same period in 2008. The Company
recorded discrete tax benefits of $5.5 million as a result of settling tax
examinations, a reassessment of the tax liability for unrecognized tax
benefits, higher than previously estimated tax credits, and the voluntary
filing of certain accounting method changes during the nine months ended
September 30, 2009. The Company’s tax rate would have been 42% for
the nine months ended September 30, 2009, absent these discrete tax
benefits.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
6
October
28, 2009
Cash
Flow
Cash
provided by operating activities for the nine months ended September 30, 2009,
was $130 million compared with cash used in operating activities of $20 million
for 2008, an increase of $150 million.
Significant
contributors to this increase included the following:
|
·
|
Increased
deferred revenue of $82.3 million, primarily due to the timing of the Ohio
health plan’s receipt of premium payments from the state of
Ohio;
|
|
·
|
Increased
medical claims and benefits payable of $23.5 million, primarily due to the
commencement of operations of the Company’s Florida health plan in 2009;
and
|
|
·
|
Increased
collections of accounts receivable totaling $42.7 million, primarily
relating to California health plan. In the prior year, there
was a significant increase in the California health plan receivable due to
the delayed passage of the California state budget for
2008-2009.
|
At
September 30, 2009, the Company had cash and investments (not including
restricted investments) of $679.5 million, including non-current auction rate
securities with a fair value of $59.9 million. At September 30, 2009,
the parent company had unrestricted cash and investments of $54.4 million,
including auction rate securities with a fair value of $16.7
million. At December 31, 2008, the parent company had unrestricted
cash and investments of $68.9 million.
EBITDA
(1)
|
(in
thousands)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Operating
income
|
$ | 16,274 | $ | 30,429 | $ | 61,115 | $ | 85,138 | ||||||||
|
Add
back:
|
||||||||||||||||
|
Depreciation and amortization
expense
|
9,832 | 8,515 | 28,468 | 24,997 | ||||||||||||
|
EBITDA
|
$ | 26,106 | $ | 38,944 | $ | 89,583 | $ | 110,135 | ||||||||
|
(1)
|
The
Company calculates EBITDA by adding back depreciation and amortization
expense to operating income. EBITDA is not prepared in
conformity with GAAP since it excludes the provisions for income taxes,
interest expense, and depreciation and amortization
expense. This non-GAAP financial measure should not be
considered as an alternative to net income, operating income, operating
margin, or cash provided by operating activities. Management
uses EBITDA as a 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 our industry.
|
Securities
Purchase Program
Year-to-date,
the Company has purchased approximately 1.4 million shares of its common stock
for $27.7 million (average cost of $20.49 per share). These
purchases increased diluted earnings per share for the nine months ended
September 30, 2009, by $0.04. A total of approximately $12.3 million
currently remains available under the Company’s securities purchase
program.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
7
October
28, 2009
Conference
Call
The
Company’s management will host a conference call and webcast to discuss its
third quarter results at 5:00 p.m. Eastern Time on Wednesday, October 28,
2009. The telephone number for this interactive conference call is
212-231-2927, and a telephonic replay will be available from 7:00 p.m. Eastern
time through 6:00 p.m. on Thursday, October 29, 2009, by dialing (800) 633-8284
and entering confirmation number 21437533. A live webcast of the call
can be accessed on the Company’s website at www.molinahealthcare.com,
or at www.earnings.com. An
online replay will be available beginning about one hour following the
conclusion of the call and webcast.
Molina
Healthcare, Inc. is a multi-state managed care organization that arranges for
the delivery of healthcare services to persons eligible for Medicaid, Medicare,
and other government-sponsored programs for low-income families and
individuals. Molina Healthcare’s ten licensed health plan
subsidiaries in California, Florida, Michigan, Missouri, Nevada, New Mexico,
Ohio, Texas, Utah, and Washington currently serve approximately 1.4 million
members. More information about Molina Healthcare can be obtained at
www.molinahealthcare.com.
Safe
Harbor Statement under the Private Securities Litigation Reform Act of
1995: This press
release contains “forward-looking statements” identified by words such as
“will,” “believes,” “expects” or “expectations,” “projects,” “estimates,” and
similar words and expressions. In addition, any statements that
explicitly or implicitly refer to any elements of 2009 guidance, expectations,
projections, or their underlying assumptions, or other characterizations of
future events or circumstances, are forward-looking statements. All
of our forward-looking statements are based on our current expectations and
assumptions which are subject to numerous known and unknown risks,
uncertainties, and other factors that could cause actual results to differ
materially. Such factors include, without limitation, risks related
to: both the 2009 H1N1 flu and the seasonal flu, including utilization rates
that are materially elevated above historic seasonal patterns; budgetary
pressures on the federal and state governments and their resulting inability to
fully fund Medicaid, Medicare, or CHIP, including without limitation the passage
of a final budget in Michigan; the potential need to establish a premium
deficiency reserve for the California health plan’s Los Angeles County contract
for the fourth quarter of 2009; the successful management of our medical costs
in all of our health plans; up-coding by providers or billing in a manner at
material variance with historic patterns; high rates
of utilization associated with the enrollment of new Medicaid
members; the leveraging of our administrative costs to address the needs
associated with increased enrollment; growth in our Medicaid and Medicare
enrollment consistent with our expectations; uncertainties regarding the impact
of federal healthcare reform efforts; rate revisions and the maintenance of
existing rate levels that are consistent with our assumptions and expectations;
our ability to pass on to providers any rate cuts under our government
contracts, including the reduction in provider payment levels under the Michigan
and Washington Medicaid fee schedules that are commensurate with the reduced
rates paid to our Michigan and Washington health plans; our ability to
accurately estimate incurred but not reported medical costs across all health
plans; the successful renewal and continuation of the government contracts of
all of our health plans; our limited experience operating in Florida; the
transition from a non-risk to a risk-based capitation contract by our Utah
health plan; the availability of financing to fund and capitalize our
acquisitions and start-up activities and to meet our liquidity needs; the
illiquidity of our auction rate securities; the successful and cost-effective
integration of our acquisitions; earnings seasonality; high profile qui tam
matters and negative publicity regarding Medicaid managed care and Medicare
Advantage; changes in funding under our contracts as a result of regulatory and
programmatic adjustments and reforms; approval by state regulators of dividends
and distributions by our subsidiaries; unexpected changes in member utilization
patterns, healthcare practices, or healthcare technologies; high dollar claims
related to catastrophic illness; changes in federal or state laws or regulations
or in their interpretation; the favorable resolution of litigation or
arbitration matters; and other risks and uncertainties as detailed in our
reports and filings with the Securities and Exchange Commission and available on
its website at www.sec.gov. All forward-looking statements in this
release represent our judgment as of the date of this release. We
disclaim any obligation to update any forward-looking statement to conform the
statement to actual results or changes in our expectations.
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
8
October
28, 2009
MOLINA
HEALTHCARE, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts
in thousands, except share and per-share data)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Revenue:
|
||||||||||||||||
|
Premium
revenue
|
$ | 914,805 | $ | 791,554 | $ | 2,697,796 | $ | 2,282,345 | ||||||||
|
Investment
income
|
1,707 | 4,775 | 7,336 | 17,517 | ||||||||||||
|
Total operating
revenue
|
916,512 | 796,329 | 2,705,132 | 2,299,862 | ||||||||||||
|
Expenses:
|
||||||||||||||||
|
Medical
care costs
|
792,771 | 669,355 | 2,333,865 | 1,936,531 | ||||||||||||
|
General
and administrative expenses
|
97,635 | 88,030 | 283,216 | 253,196 | ||||||||||||
|
Depreciation
and amortization
|
9,832 | 8,515 | 28,468 | 24,997 | ||||||||||||
|
Total expenses
|
900,238 | 765,900 | 2,645,549 | 2,214,724 | ||||||||||||
|
Gain
on retirement of convertible senior notes
|
− | − | 1,532 | − | ||||||||||||
|
Operating
income
|
16,274 | 30,429 | 61,115 | 85,138 | ||||||||||||
|
Interest
expense (1)
|
(3,279 | ) | (3,120 | ) | (9,917 | ) | (9,913 | ) | ||||||||
|
Income
before income taxes (1)
|
12,995 | 27,309 | 51,198 | 75,225 | ||||||||||||
|
Income
tax expense (1),
(2)
|
4,431 | 10,829 | 15,858 | 30,447 | ||||||||||||
|
Net
income (1)
|
$ | 8,564 | $ | 16,480 | $ | 35,340 | $ | 44,778 | ||||||||
|
Net
income per share: (1)
|
||||||||||||||||
|
Basic
|
$ | 0.34 | $ | 0.60 | $ | 1.36 | $ | 1.60 | ||||||||
|
Diluted
|
$ | 0.33 | $ | 0.60 | $ | 1.36 | $ | 1.59 | ||||||||
|
Weighted
average number of common shares and potentially dilutive common shares
outstanding
|
25,630 | 27,582 | 26,058 | 28,087 | ||||||||||||
|
Operating
Statistics:
|
||||||||||||||||
|
Ratio
of medical care costs paid directly to providers to premium
revenue
|
84.6 | % | 82.1 | % | 84.5 | % | 82.4 | % | ||||||||
|
Ratio
of medical care costs not paid directly to providers to premium
revenue
|
2.1 | 2.5 | 2.0 | 2.5 | ||||||||||||
|
Medical
care ratio
(3)
|
86.7 | % | 84.6 | % | 86.5 | % | 84.9 | % | ||||||||
|
General
and administrative expense ratio
excluding premium taxes
(core G&A ratio)
(4)
|
7.5 | % | 8.0 | % | 7.4 | % | 8.0 | % | ||||||||
|
Premium
taxes included in G&A expense (4)
|
3.2 | 3.1 | 3.1 | 3.0 | ||||||||||||
|
Total general and
administrative expense
ratio (4)
|
10.7 | % | 11.1 | % | 10.5 | % | 11.0 | % | ||||||||
|
Depreciation
and amortization expense ratio (4)
|
1.1 | % | 1.1 | % | 1.1 | % | 1.1 | % | ||||||||
|
Effective
tax rate (1),(2)
|
34.1 | % | 39.7 | % | 31.0 | % | 40.5 | % | ||||||||
|
(1)
|
The
Company’s 2008 results have been recast to reflect the adoption of ASC
Subtopic 470-20. This resulted in additional interest expense
of $1.2 million ($0.03 per diluted share) for the three months ended
September 30, 2008, and $3.5 million ($0.08 per diluted share) for the
nine months ended September 30,
2008.
|
|
(2)
|
The
Company recorded tax benefits totaling $5.5 million in the second and
third quarters of 2009 as a result of settling tax examinations and the
voluntary filing of certain accounting method
changes.
|
|
(3)
|
Medical
care ratio represents medical care costs as a percentage of premium
revenue.
|
|
(4)
|
Computed
as a percentage of total operating
revenue.
|
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
9
October
28, 2009
MOLINA
HEALTHCARE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Amounts
in thousands, except per-share data)
|
Sept.
30,
2009
|
Dec.
31,
2008
(1)
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 449,469 | $ | 387,162 | ||||
|
Investments
|
170,194 | 189,870 | ||||||
|
Receivables
|
144,129 | 128,562 | ||||||
|
Income
taxes refundable
|
− | 4,019 | ||||||
|
Deferred
income taxes (1)
|
7,261 | 9,071 | ||||||
|
Prepaid
expenses and other current assets
|
14,312 | 14,766 | ||||||
|
Total
current assets
|
785,365 | 733,450 | ||||||
|
Property
and equipment, net
|
76,244 | 65,058 | ||||||
|
Goodwill
and intangible assets, net
|
214,102 | 192,599 | ||||||
|
Investments
|
59,855 | 58,169 | ||||||
|
Restricted
investments
|
42,400 | 38,202 | ||||||
|
Receivable
for ceded life and annuity contracts
|
25,926 | 27,367 | ||||||
|
Other
assets (1)
|
20,113 | 33,223 | ||||||
|
Total
assets
|
$ | 1,224,005 | $ | 1,148,068 | ||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Medical
claims and benefits payable
|
$ | 303,114 | $ | 292,442 | ||||
|
Accounts
payable and accrued liabilities
|
72,093 | 66,247 | ||||||
|
Deferred
revenue
|
90,919 | 29,538 | ||||||
|
Income
taxes payable
|
1,937 | − | ||||||
|
Total
current liabilities
|
468,063 | 388,227 | ||||||
|
Long-term
debt (1)
|
157,681 | 164,873 | ||||||
|
Deferred
income taxes (1)
|
13,423 | 12,911 | ||||||
|
Liability
for ceded life and annuity contracts
|
25,926 | 27,367 | ||||||
|
Other
long-term liabilities
|
14,140 | 22,928 | ||||||
|
Total
liabilities
|
679,233 | 616,306 | ||||||
|
Stockholders’
equity:
|
||||||||
|
Common
stock, $0.001 par value; 80,000 shares authorized,
outstanding 25,549 shares at
September 30, 2009, and 26,725 shares
at December 31,
2008
|
26 | 27 | ||||||
|
Preferred
stock, $0.001 par value; 20,000 shares authorized,
no shares
outstanding
|
− | − | ||||||
|
Additional
paid-in capital (1)
|
127,317 | 170,681 | ||||||
|
Accumulated
other comprehensive loss
|
(1,665 | ) | (2,310 | ) | ||||
|
Retained
earnings (1)
|
419,094 | 383,754 | ||||||
|
Treasury
stock, at cost; 1,201 shares at December 31, 2008
|
− | (20,390 | ) | |||||
|
Total
stockholders’ equity
|
544,772 | 531,762 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 1,224,005 | $ | 1,148,068 | ||||
|
(1)
|
The
Company’s financial position as of December 31, 2008, has been recast to
reflect adoption of ASC Subtopic 470-20. The
cumulative adjustments to reduce retained earnings totaled $3.4 million as
of January 1, 2009.
|
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
10
October
28, 2009
MOLINA
HEALTHCARE, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
|
2009
|
2008
(1)
|
2009
|
2008
(1)
|
|||||||||||||
|
Operating
activities:
|
||||||||||||||||
|
Net
income (1)
|
$ | 8,564 | $ | 16,480 | $ | 35,340 | $ | 44,778 | ||||||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||||||
|
Depreciation
and amortization
|
9,832 | 8,515 | 28,468 | 24,997 | ||||||||||||
|
Unrealized
loss (gain) on trading securities
|
101 | – | (3,509 | ) | – | |||||||||||
|
(Gain)
loss on rights agreement
|
(92 | ) | – | 3,204 | – | |||||||||||
|
Deferred
income taxes
|
(923 | ) | (920 | ) | 2,322 | (7,410 | ) | |||||||||
|
Stock-based
compensation
|
2,272 | 2,182 | 5,730 | 5,769 | ||||||||||||
|
Non-cash
interest on convertible senior notes (1)
|
1,197 | 1,187 | 3,563 | 3,497 | ||||||||||||
|
Gain
on purchase and retirement of convertible
senior notes
|
– | – | (1,532 | ) | – | |||||||||||
|
Amortization
of deferred financing costs (1)
|
344 | 359 | 1,040 | 1,076 | ||||||||||||
|
Tax
deficiency from employee stock compensation recorded as
additional
paid-in capital
|
(157 | ) | (91 | ) | (704 | ) | (247 | ) | ||||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||||||
|
Receivables
|
7,311 | (56,163 | ) | (15,567 | ) | (58,223 | ) | |||||||||
|
Prepaid
expenses and other current assets
|
(278 | ) | 82 | 454 | (1,881 | ) | ||||||||||
|
Medical
claims and benefits payable
|
(5,593 | ) | (6,754 | ) | 10,672 | (12,819 | ) | |||||||||
|
Accounts
payable and accrued liabilities
|
9,586 | 9,954 | (6,140 | ) | (666 | ) | ||||||||||
|
Deferred
revenue
|
6,743 | (31,017 | ) | 61,381 | (20,951 | ) | ||||||||||
|
Income
taxes
|
(3,464 | ) | (3,382 | ) | 5,561 | 1,809 | ||||||||||
|
Net
cash provided by (used in) operating activities
|
35,443 | (59,568 | ) | 130,283 | (20,271 | ) | ||||||||||
|
Investing
activities:
|
||||||||||||||||
|
Purchases
of property and equipment
|
(8,466 | ) | (11,216 | ) | (28,390 | ) | (28,314 | ) | ||||||||
|
Purchases
of investments
|
(55,153 | ) | (17,930 | ) | (127,335 | ) | (181,377 | ) | ||||||||
|
Sales
and maturities of investments
|
67,478 | 51,091 | 149,770 | 188,896 | ||||||||||||
|
Cash
paid in business purchase transactions
|
(10,900 | ) | – | (10,900 | ) | (1,000 | ) | |||||||||
|
Decrease
(increase) in restricted investments
|
2,336 | (6,635 | ) | (4,198 | ) | (7,491 | ) | |||||||||
|
Decrease
(increase) in other assets
|
884 | 1,599 | (1,877 | ) | (578 | ) | ||||||||||
|
(Decrease)
increase in other long-term liabilities
|
(16 | ) | 1,601 | (8,788 | ) | 4,211 | ||||||||||
|
Net
cash (used in) provided by investing activities
|
(3,837 | ) | 18,510 | (31,718 | ) | (25,653 | ) | |||||||||
|
Financing
activities:
|
||||||||||||||||
|
Treasury
stock purchases
|
– | (2,271 | ) | (27,712 | ) | (32,237 | ) | |||||||||
|
Excess
tax benefits from employee stock compensation
|
26 | 43 | 26 | 43 | ||||||||||||
|
Purchase
and retirement of convertible senior
notes
|
– | – | (9,653 | ) | – | |||||||||||
|
Proceeds
from exercise of stock options and employee stock plan
purchases
|
− | 298 | 1,081 | 1,490 | ||||||||||||
|
Net
cash provided by (used in) financing activities
|
26 | (1,930 | ) | (36,258 | ) | (30,704 | ) | |||||||||
|
Net
increase (decrease) in cash and cash equivalents
|
31,632 | (42,988 | ) | 62,307 | (76,628 | ) | ||||||||||
|
Cash
and cash equivalents at beginning of period
|
417,837 | 425,424 | 387,162 | 459,064 | ||||||||||||
|
Cash
and cash equivalents at end of period
|
$ | 449,469 | $ | 382,436 | $ | 449,469 | $ | 382,436 | ||||||||
|
(1)
|
The
Company’s 2008 unaudited condensed consolidated statements of cash flows
have been recast to reflect the adoption of ASC Subtopic
470-20.
|
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
11
October
28, 2009
MOLINA
HEALTHCARE, INC.
UNAUDITED
MEMBERSHIP DATA
|
Total
Ending Membership By Health Plan:
|
Sept.
30,
2009
|
June
30,
2009
|
Dec.
31,
2008
|
Sept.
30,
2008
|
||||||||||||
|
California
|
355,000 | 349,000 | 322,000 | 313,000 | ||||||||||||
|
Florida
(1)
|
43,000 | 29,000 | − | – | ||||||||||||
|
Michigan
|
210,000 | 207,000 | 206,000 | 207,000 | ||||||||||||
|
Missouri
|
78,000 | 78,000 | 77,000 | 77,000 | ||||||||||||
|
Nevada
(2)
|
– | – | − | – | ||||||||||||
|
New
Mexico
|
90,000 | 85,000 | 84,000 | 84,000 | ||||||||||||
|
Ohio
|
208,000 | 203,000 | 176,000 | 179,000 | ||||||||||||
|
Texas
|
31,000 | 30,000 | 31,000 | 29,000 | ||||||||||||
|
Utah
|
69,000 | 64,000 | 61,000 | 55,000 | ||||||||||||
|
Washington
|
327,000 | 323,000 | 299,000 | 295,000 | ||||||||||||
|
Total
|
1,411,000 | 1,368,000 | 1,256,000 | 1,239,000 | ||||||||||||
|
Total
Ending Membership By State for the Medicare
Advantage Plans:
|
||||||||||||||||
|
California
|
1,900 | 1,600 | 1,500 | 1,600 | ||||||||||||
|
Michigan
|
2,700 | 2,100 | 1,700 | 1,700 | ||||||||||||
|
Nevada
|
300 | 400 | 700 | 600 | ||||||||||||
|
New
Mexico
|
400 | 400 | 300 | 200 | ||||||||||||
|
Texas
|
500 | 400 | 400 | 400 | ||||||||||||
|
Utah
|
3,500 | 3,100 | 2,400 | 2,200 | ||||||||||||
|
Washington
|
1,100 | 1,000 | 1,000 | 1,000 | ||||||||||||
|
Total
|
10,400 | 9,000 | 8,000 | 7,700 | ||||||||||||
|
Total
Ending Membership By State for the Aged, Blind or Disabled
Population:
|
||||||||||||||||
|
California
|
13,700 | 13,100 | 12,700 | 12,500 | ||||||||||||
|
Florida
(1)
|
8,700 | 6,000 | − | – | ||||||||||||
|
Michigan
|
30,200 | 29,900 | 30,300 | 30,400 | ||||||||||||
|
New
Mexico
|
5,700 | 5,700 | 6,300 | 6,500 | ||||||||||||
|
Ohio
|
19,600 | 19,700 | 19,000 | 19,700 | ||||||||||||
|
Texas
|
17,500 | 17,000 | 16,200 | 16,200 | ||||||||||||
|
Utah
|
7,700 | 7,600 | 7,300 | 7,000 | ||||||||||||
|
Washington
|
3,200 | 3,000 | 3,000 | 3,000 | ||||||||||||
|
Total
|
106,300 | 102,000 | 94,800 | 95,300 | ||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||
|
Total
Member Months (3)
by
Health Plan:
|
Sept.
30,
2009
|
June
30,
2009
|
Sept.
30,
2008
|
Sept.
30,
2009
|
Sept.
30,
2008
|
|||||||||||||||
|
California
|
1,065,000 | 1,031,000 | 936,000 | 3,076,000 | 2,765,000 | |||||||||||||||
|
Florida
(1)
|
109,000 | 75,000 | – | 245,000 | – | |||||||||||||||
|
Michigan
|
629,000 | 623,000 | 627,000 | 1,872,000 | 1,904,000 | |||||||||||||||
|
Missouri
|
232,000 | 232,000 | 228,000 | 695,000 | 678,000 | |||||||||||||||
|
Nevada
|
1,000 | 1,000 | 2,000 | 3,000 | 6,000 | |||||||||||||||
|
New
Mexico
|
264,000 | 251,000 | 249,000 | 763,000 | 716,000 | |||||||||||||||
|
Ohio
|
618,000 | 596,000 | 530,000 | 1,774,000 | 1,465,000 | |||||||||||||||
|
Texas
|
93,000 | 92,000 | 87,000 | 283,000 | 257,000 | |||||||||||||||
|
Utah
|
203,000 | 200,000 | 161,000 | 587,000 | 482,000 | |||||||||||||||
|
Washington
|
979,000 | 952,000 | 884,000 | 2,850,000 | 2,622,000 | |||||||||||||||
|
Total
|
4,193,000 | 4,053,000 | 3,704,000 | 12,148,000 | 10,895,000 | |||||||||||||||
|
(1)
|
The
Florida health plan began serving members in late December
2008.
|
|
(2)
|
Less
than 1,000 members.
|
|
(3)
|
A
total member month is defined as the aggregate of each month’s ending
membership for the period
presented.
|
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
12
October
28, 2009
MOLINA
HEALTHCARE, INC.
UNAUDITED
SELECTED FINANCIAL DATA BY HEALTH PLAN
(Dollars
in thousands except per member per month amounts)
|
Three
Months Ended September 30, 2009
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 122,048 | $ | 114.61 | $ | 112,663 | $ | 105.80 | 92.3 | % | $ | 3,700 | ||||||||||||
|
Florida
(1)
|
27,292 | 250.27 | 25,931 | 237.80 | 95.0 | 10 | ||||||||||||||||||
|
Michigan
|
136,262 | 216.74 | 110,577 | 175.89 | 81.2 | 7,478 | ||||||||||||||||||
|
Missouri
|
60,867 | 261.76 | 50,075 | 215.35 | 82.3 | – | ||||||||||||||||||
|
Nevada
|
1,245 | 1,166.51 | 1,477 | 1,384.09 | 118.7 | – | ||||||||||||||||||
|
New
Mexico
|
105,721 | 400.04 | 86,678 | 327.99 | 82.0 | 2,953 | ||||||||||||||||||
|
Ohio
|
204,565 | 331.22 | 175,187 | 283.65 | 85.6 | 11,167 | ||||||||||||||||||
|
Texas
(2)
|
26,299 | 282.13 | 26,904 | 288.61 | 102.3 | 574 | ||||||||||||||||||
|
Utah
|
46,849 | 231.14 | 43,346 | 213.86 | 92.5 | – | ||||||||||||||||||
|
Washington
|
182,096 | 185.99 | 151,099 | 154.33 | 83.0 | 3,131 | ||||||||||||||||||
|
Other
(3)
|
1,561 | 8,834 | 59 | |||||||||||||||||||||
|
Consolidated
|
$ | 914,805 | $ | 218.17 | $ | 792,771 | $ | 189.07 | 86.7 | % | $ | 29,072 | ||||||||||||
|
Three
Months Ended September 30, 2008
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 102,383 | $ | 109.37 | $ | 91,224 | $ | 97.45 | 89.1 | % | $ | 2,995 | ||||||||||||
|
Florida
(1)
|
– | – | – | – | – | – | ||||||||||||||||||
|
Michigan
|
127,535 | 203.39 | 101,596 | 162.03 | 79.7 | 6,412 | ||||||||||||||||||
|
Missouri
|
59,223 | 259.17 | 47,730 | 208.88 | 80.6 | – | ||||||||||||||||||
|
Nevada
|
2,196 | 1,053.04 | 2,499 | 1198.68 | 113.8 | – | ||||||||||||||||||
|
New
Mexico
|
84,386 | 338.65 | 73,723 | 295.86 | 87.4 | 2,838 | ||||||||||||||||||
|
Ohio
|
162,553 | 306.74 | 148,660 | 280.52 | 91.5 | 8,851 | ||||||||||||||||||
|
Texas
|
30,986 | 357.01 | 24,730 | 284.93 | 79.8 | 510 | ||||||||||||||||||
|
Utah
|
41,860 | 260.24 | 36,012 | 223.88 | 86.0 | – | ||||||||||||||||||
|
Washington
|
178,639 | 202.19 | 136,609 | 154.62 | 76.5 | 2,959 | ||||||||||||||||||
|
Other
(3)
|
1,793 | – | 6,572 | – | – | (5 | ) | |||||||||||||||||
|
Consolidated
|
$ | 791,554 | $ | 213.70 | $ | 669,355 | $ | 180.71 | 84.6 | % | $ | 24,560 | ||||||||||||
|
(1)
|
The
Florida health plan began serving members in late December
2008.
|
|
(2)
|
The
year-over-year increase in the Texas health plan’s medical care ratio was
due to a $7.8 million reduction in revenue relating to our profit sharing
agreement with the state of Texas. Absent this revenue
adjustment, the Texas health plan’s medical care ratio for the third
quarter of 2009 would have been
79%.
|
|
(3)
|
“Other”
medical care costs represent primarily medically related administrative
costs at the parent company.
|
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
13
October
28, 2009
MOLINA
HEALTHCARE, INC.
UNAUDITED
SELECTED FINANCIAL DATA BY HEALTH PLAN
(Dollars
in thousands except per member per month amounts)
|
Nine
Months Ended September 30, 2009
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 354,001 | $ | 115.09 | $ | 328,386 | $ | 106.76 | 92.8 | % | $ | 10,411 | ||||||||||||
|
Florida
(1)
|
66,322 | 270.67 | 61,054 | 249.17 | 92.1 | 10 | ||||||||||||||||||
|
Michigan
|
405,576 | 216.72 | 332,974 | 177.93 | 82.1 | 22,662 | ||||||||||||||||||
|
Missouri
|
177,715 | 255.62 | 145,631 | 209.47 | 82.0 | – | ||||||||||||||||||
|
Nevada
|
3,969 | 1,203.07 | 2,680 | 812.45 | 67.5 | – | ||||||||||||||||||
|
New
Mexico (2)
|
301,947 | 395.79 | 258,954 | 339.43 | 85.8 | 8,035 | ||||||||||||||||||
|
Ohio
|
586,672 | 330.73 | 501,606 | 282.77 | 85.5 | 32,090 | ||||||||||||||||||
|
Texas
|
93,655 | 330.78 | 79,161 | 279.59 | 84.5 | 1,830 | ||||||||||||||||||
|
Utah
|
155,385 | 264.67 | 140,791 | 239.81 | 90.6 | – | ||||||||||||||||||
|
Washington
|
546,520 | 191.76 | 457,625 | 160.57 | 83.7 | 9,142 | ||||||||||||||||||
|
Other
(3)
|
6,034 | 25,003 | 55 | |||||||||||||||||||||
|
Consolidated
|
$ | 2,697,796 | $ | 222.08 | $ | 2,333,865 | $ | 192.12 | 86.5 | % | $ | 84,235 | ||||||||||||
|
Nine
Months Ended September 30, 2008
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 308,139 | $ | 111.44 | $ | 269,328 | $ | 97.40 | 87.4 | % | $ | 9,195 | ||||||||||||
|
Florida
(1)
|
– | – | – | – | – | – | ||||||||||||||||||
|
Michigan
|
377,669 | 198.36 | 304,769 | 160.08 | 80.7 | 19,976 | ||||||||||||||||||
|
Missouri
|
165,509 | 244.00 | 139,462 | 205.60 | 84.3 | – | ||||||||||||||||||
|
Nevada
|
6,382 | 1,184.30 | 6,632 | 1,230.61 | 103.9 | – | ||||||||||||||||||
|
New
Mexico (2)
|
262,314 | 366.55 | 215,242 | 300.77 | 82.1 | 8,523 | ||||||||||||||||||
|
Ohio
|
434,272 | 296.40 | 395,013 | 269.60 | 91.0 | 21,127 | ||||||||||||||||||
|
Texas
|
80,159 | 311.84 | 62,229 | 242.08 | 77.6 | 1,446 | ||||||||||||||||||
|
Utah
|
114,591 | 237.69 | 100,935 | 209.37 | 88.1 | – | ||||||||||||||||||
|
Washington
|
531,457 | 202.71 | 426,962 | 162.85 | 80.3 | 8,797 | ||||||||||||||||||
|
Other
(3)
|
1,853 | – | 15,959 | – | – | 19 | ||||||||||||||||||
|
Consolidated
|
$ | 2,282,345 | $ | 209.49 | $ | 1,936,531 | $ | 177.75 | 84.9 | % | $ | 69,083 | ||||||||||||
|
(1)
|
The
Florida health plan began serving members in late December
2008.
|
|
(2)
|
The
medical care ratio of the New Mexico health plan was 85.8% for the nine
months ended September 30, 2009, up from 82.1% in the same period in
2008. During the same period in 2008, the New Mexico health
plan had recognized $12.9 million of premium revenue due to the reversal
of amounts previously recorded as payable to the state of New
Mexico. Absent this revenue adjustment, the New Mexico health
plan’s medical care ratio would have been 86.3% for the same period in
2008.
|
|
(3)
|
“Other”
medical care costs represent primarily medically related administrative
costs at the parent company.
|
-MORE-
MOH Reports
Third Quarter 2009 Results
Page
14
October
28, 2009
MOLINA
HEALTHCARE, INC.
UNAUDITED
SELECTED FINANCIAL DATA
(Dollars
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:
|
Three
Months Ended
September
30, 2009
|
Three
Months Ended
September
30, 2008
|
|||||||||||||||||||||||
|
Amount
|
PMPM
|
%
of Total
Medical
Care
Costs
|
Amount
|
PMPM
|
%
of Total
Medical
Care
Costs
|
|||||||||||||||||||
|
Fee-for-service
|
$ | 515,164 | $ | 122.86 | 65.0 | % | $ | 439,699 | $ | 118.71 | 65.7 | % | ||||||||||||
|
Capitation
|
140,551 | 33.52 | 17.7 | 113,920 | 30.76 | 17.0 | ||||||||||||||||||
|
Pharmacy
|
104,274 | 24.87 | 13.2 | 88,414 | 23.86 | 13.2 | ||||||||||||||||||
|
Other
|
32,782 | 7.82 | 4.1 | 27,322 | 7.38 | 4.1 | ||||||||||||||||||
|
Total
|
$ | 792,771 | $ | 189.07 | 100.0 | % | $ | 669,355 | $ | 180.71 | 100.0 | % | ||||||||||||
|
Nine
Months Ended
September
30, 2009
|
Nine
Months Ended
September
30, 2008
|
|||||||||||||||||||||||
|
Amount
|
PMPM
|
%
of Total
Medical
Care
Costs
|
Amount
|
PMPM
|
%
of Total
Medical
Care
Costs
|
|||||||||||||||||||
|
Fee-for-service
|
$ | 1,521,371 | $ | 125.24 | 65.2 | % | $ | 1,262,327 | $ | 115.87 | 65.2 | % | ||||||||||||
|
Capitation
|
413,351 | 34.03 | 17.7 | 335,418 | 30.79 | 17.3 | ||||||||||||||||||
|
Pharmacy
|
306,168 | 25.20 | 13.1 | 263,372 | 24.17 | 13.6 | ||||||||||||||||||
|
Other
|
92,975 | 7.65 | 4.0 | 75,414 | 6.92 | 3.9 | ||||||||||||||||||
|
Total
|
$ | 2,333,865 | $ | 192.12 | 100.0 | % | $ | 1,936,531 | $ | 177.75 | 100.0 | % | ||||||||||||
The
following table provides the details of the Company’s medical claims and
benefits payable as of the dates indicated:
|
Sept.
30,
2009
|
June
30,
2009
|
Sept.
30,
2008
|
||||||||||
|
Fee-for-service
claims incurred but not paid (IBNP)
|
$ | 237,495 | $ | 244,987 | $ | 238,967 | ||||||
|
Capitation
payable
|
39,361 | 34,657 | 33,443 | |||||||||
|
Pharmacy
payable
|
21,100 | 22,367 | 18,136 | |||||||||
|
Other
|
5,158 | 6,696 | 8,241 | |||||||||
|
Total medical claims and
benefits payable
|
$ | 303,114 | $ | 308,707 | $ | 298,787 | ||||||
-MORE-
MOH
Reports Third Quarter 2009 Results
Page
15
October
28, 2009
MOLINA
HEALTHCARE, INC.
CHANGE
IN MEDICAL CLAIMS AND BENEFITS PAYABLE
(Dollars
in thousands, except per-member amounts)
(Unaudited)
The
Company’s claims liability includes an allowance for adverse claims development
based on historical experience and other factors including, but not limited to,
variation 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
negative 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
exceeded the actual amount of the liability based on information (principally
the payment of claims) developed since that liability was first
reported. The benefit of this prior period development may be offset
by the addition of a reserve for adverse claims development when estimating the
liability at the end of the period (captured in “Components of medical care costs
related to: Current period”). The following table shows the
components of the change in medical claims and benefits payable as of the
periods indicated:
|
Nine
Months Ended
|
||||||||
|
Sept.
30,
2009
|
Sept.
30,
2008
|
|||||||
|
Balances
at beginning of period
|
$ | 292,442 | $ | 311,606 | ||||
|
Components
of medical care costs related to:
|
||||||||
|
Current period
|
2,381,903 | 1,996,385 | ||||||
|
Prior periods
|
(48,038 | ) | (59,854 | ) | ||||
|
Total
medical care costs
|
2,333,865 | 1,936,531 | ||||||
|
Payments
for medical care costs related to:
|
||||||||
|
Current period
|
2,089,417 | 1,721,191 | ||||||
|
Prior periods
|
233,776 | 228,159 | ||||||
|
Total
paid
|
2,323,193 | 1,949,350 | ||||||
|
Balances
at end of period
|
$ | 303,114 | $ | 298,787 | ||||
|
Benefit
from prior period as a percentage of:
|
||||||||
|
Balance at beginning of
period
|
16.4 | % | 19.2 | % | ||||
|
Premium revenue
|
1.8 | % | 2.6 | % | ||||
|
Total medical care
costs
|
2.1 | % | 3.1 | % | ||||
|
Days
in claims payable
|
37 | 44 | ||||||
|
Number
of members at end of period
|
1,411,000 | 1,239,000 | ||||||
|
Number
of claims in inventory at end of period
|
107,700 | 131,100 | ||||||
|
Billed
charges of claims in inventory at end of period
|
$ | 145,500 | $ | 147,100 | ||||
|
Claims
in inventory per member at end of period
|
0.08 | 0.11 | ||||||
|
Billed
charges of claims in inventory per member at end of period
|
$ | 103.12 | $ | 118.72 | ||||
|
Number
of claims received during the period
|
9,427,400 | 8,234,500 | ||||||
|
Billed
charges of claims receivedduring the period
|
$ | 7,180,800 | $ | 5,754,700 | ||||
-END-