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): February 11, 2010
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 February 11, 2010, Molina
Healthcare, Inc. issued a press release announcing its financial results for the
fourth quarter and year ended December 31, 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
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Press
release of Molina Healthcare, Inc. issued February 11, 2010, as to
financial results for the fourth quarter and year ended December 31,
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.
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MOLINA
HEALTHCARE, INC.
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||||
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Date:
February 11, 2010
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By: /s/
Mark L. Andrews
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|||
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Mark
L. Andrews
Chief
Legal Officer, General Counsel,
and
Corporate Secretary
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||||
EXHIBIT
INDEX
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Exhibit
|
|
|
No.
|
Description
|
|
99.1
|
Press
release of Molina Healthcare, Inc. issued February 11, 2010, as to
financial results for the fourth quarter and year ended December 31,
2009.
|
Exhibit
99.1
 |
|
News Release
Contact:
Juan José
Orellana
Investor
Relations
562-435-3666,
ext. 111143
MOLINA
HEALTHCARE REPORTS
FOURTH
QUARTER AND YEAR-END 2009 RESULTS
|
·
|
Earnings
per diluted share for 2009 down 45% from
2008
|
|
·
|
Annual
premium revenues of $3.7 billion, up 18% over
2008
|
|
·
|
Aggregate
membership up 16% over 2008
|
Long Beach, California (February 11,
2010) – Molina Healthcare, Inc. (NYSE: MOH) today reported its financial
results for the fourth quarter and year ended December 31, 2009.
Net loss
for the quarter ended December 31, 2009, was $4.5 million, or $0.18 per diluted
share, compared with net income of $14.8 million, or $0.55 per diluted share,
for the quarter ended December 31, 2008. Net income for the year
ended December 31, 2009, was $30.9 million, or $1.19 per diluted share, compared
with net income of $59.6 million, or $2.15 per diluted share, for the year ended
December 31, 2008.
“Despite
an extremely difficult environment in 2009, particularly in the fourth quarter,
our company weathered the conditions and remained profitable,” said J.
Mario Molina, M.D., chief executive officer of Molina Healthcare,
Inc. “Our strong growth in enrollment and premium revenues during the
year, combined with our resolve and long-term view developed over thirty years
of providing care to low-income populations, positions us well for greater
success in 2010 and in the years ahead.”
Fiscal
Year 2010 Guidance
The
Company confirms its guidance issued on January 26, 2010, for fiscal year 2010
earnings per diluted share of $1.50, with revenue of approximately $3.9 billion,
a medical care ratio of approximately 86%, an administrative expense ratio of
approximately 11%, and net income of $39 million. The Company expects
its effective tax rate to be approximately 45% and its shares outstanding, for
the purpose of calculating diluted EPS, to be approximately 26 million for the
year ending December 31, 2010. The Company’s guidance does not
include any effect of the previously announced acquisition of the Unisys Health
Information Management (HIM) business, which is expected to close in the first
half of 2010. The Company expects the acquisition of the HIM business
to be dilutive to earnings in 2010. The Company will provide
additional information regarding the expected financial impact of the
acquisition of the HIM business at the time of closing.
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page 2
February
11, 2010
Overview
of Financial Results
Operating
results for the fourth quarter and full year 2009 were most significantly
impacted by the following:
|
·
|
Higher
utilization due to widespread influenza-related illness across the
Company’s health plans
|
|
·
|
Margin
compression related to state budget
shortfalls
|
|
·
|
Enrollment
growth and the higher costs associated with new
members
|
|
·
|
Higher
emergency room costs
|
Fourth
Quarter 2009 Compared with Fourth Quarter 2008
Net loss for the fourth
quarter of 2009 was $4.5 million compared with net income of $14.8 million in
the fourth quarter of 2008.
Premium revenue grew 19% in
the fourth quarter of 2009 compared with the fourth quarter of
2008. During 2009, membership grew 16% overall, with Florida,
California, Washington, and Ohio gaining the most members. On a
per-member per-month, or PMPM, basis, consolidated premium revenue increased
3.5%. Increased membership contributed 82% of the growth in premium
revenue in the fourth quarter of 2009 compared with the fourth quarter of 2008,
and increases in PMPM revenue, as a result of both rate changes and shifts in
member mix, contributed the remaining 18%.
Although
premium revenue PMPM grew 3.5% in the fourth quarter of 2009 compared with the
fourth quarter of 2008, the Company nevertheless experienced significant margin
compression. Net of increases in premium taxes, PMPM premium revenue
grew only 2.6% in the fourth quarter. Additionally, that portion of
the fourth quarter increase in Ohio PMPM premium revenue not linked to higher
premium taxes was absorbed by an increase in Medicaid fee
schedules. Excluding all of the Ohio premium increase and the premium
tax increases in other states, the Company’s consolidated PMPM premium revenue
increase in the fourth quarter was only 1.6%. This small increase in
PMPM premium revenue was more than offset by higher medical costs.
The
Company received PMPM premium reductions in 2009 that were in many cases
correlated with reductions in the Medicaid fee schedule that also reduced the
Company’s medical costs. However, PMPM premium reductions in
Washington and Missouri in 2009 were not fully commensurate with changes in the
Medicaid fee schedule in those states, and thus decreases in premium were not
matched by lower medical costs. In Washington, premium reductions not
linked to decreases in the Medicaid fee schedule lowered medical margin by
approximately $3.4 million in the fourth quarter. In Missouri, the
retention of the pharmacy benefit by the state effective October 1, 2009,
reduced medical margin by approximately $1.2 million in the fourth
quarter.
Investment income for the
fourth quarter of 2009 decreased 50% from the $3.6 million in investment
income earned in the fourth quarter of 2008. This decline was due
primarily to lower interest rates. The Company’s annualized portfolio
yield for the quarter ended December 31, 2009, decreased to 0.8% compared with
2.1% for the same period in 2008.
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
3
February
11, 2010
Medical care costs, in the
aggregate, increased approximately 7% on a PMPM basis in the fourth quarter of
2009 compared with the fourth quarter of 2008. Medical care costs as
a percentage of premium revenue (the medical care ratio) were 87.5% for the
fourth quarter of 2009 compared with 84.7% for the fourth quarter of
2008. Medical care costs trends were consistent with those identified
by the Company in its earnings releases for the second and third quarters 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. Influenza-related illnesses and the costs associated with more
recently enrolled members were key factors in the higher
utilization. The Company estimates that the incremental costs
associated with influenza-related illnesses were approximately $19 million, or
$0.47 per diluted share, in the fourth quarter of 2009 compared with the fourth
quarter of 2008. 1
Physician and outpatient costs
exhibited the most significant unfavorable cost trend in the fourth quarter of
2009. Together, these costs increased 14% on a PMPM basis compared
with the fourth quarter of 2008. The primary driver of the increased
costs was emergency room utilization, which was up approximately
23%.
Inpatient facility costs
decreased approximately 4% PMPM compared with the fourth quarter of 2008,
despite increased utilization.
Pharmacy costs (including the
benefit of rebates) increased 8% on a PMPM basis compared with the fourth
quarter of 2008, excluding the Missouri health plan, where the pharmacy benefit
was retained by the state of Missouri effective October 1,
2009. Pharmacy utilization increased approximately 8% compared with
the fourth quarter of 2008, while unit costs (excluding rebates) decreased
approximately 2% quarter-over-quarter.
Capitated costs increased 10%
on a PMPM basis compared with the fourth 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 December 31, 2009, 37 days at September 30,
2009, and 41 days at December 31, 2008.
Core G&A expenses (defined
as G&A expenses less premium taxes) were 8.0% of revenue in the fourth
quarter of 2009 compared with 8.1% in the fourth quarter of 2008 and 7.5% in the
third quarter of 2009. The sequential 0.5% increase from the third
quarter in the core G&A ratio was due to expenses associated with several
Company initiatives and programs that occurred in the fourth quarter of
2009. These initiatives and programs included the relocation of the
Company’s data center to its new facility in New Mexico, Medicare 2010 open
enrollment costs, acquisition costs relating to our recently announced purchase
of HIM, growth of our New Mexico health plan’s third party administration
business, and network development costs at our Texas health plan. On
a PMPM basis, core G&A increased to $17.83 in the fourth quarter of 2009
compared with $17.44 in the fourth quarter of 2008 and $16.35 in the third
quarter of 2009.
1
Estimates of utilization and unit costs included in this release 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 months
and year ended December 31, 2009, exclude the month of December 2009 due to the
substantial incompleteness of claims payment data for that
month.
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
4
February
11, 2010
Income tax (benefit) expense
was recorded at an effective rate of (41.0%) in the fourth quarter of 2009
compared with 38.6% in the fourth quarter of 2008. The income tax
benefit recorded during the fourth quarter of 2009 was primarily due to the
Company’s pre-tax loss recognized during the quarter, and higher than previously
estimated California enterprise zone tax credits.
Year
Ended December 31, 2009 Compared with Year Ended December 31, 2008
Net income decreased 48% to
$30.9 million for the year ended December 31, 2009, compared with net income of
$59.6 million in the same period of 2008.
Premium revenue grew
approximately 18% in the year ended December 31, 2009, compared with the same
period in 2008. Consolidated premium revenue increased 5.3% on a PMPM
basis. Increased membership contributed 71% of the growth in premium
revenue.
Although
premium revenue PMPM grew 5.3% in 2009 compared with 2008, the Company
nevertheless experienced significant margin compression due to rising medical
costs.
The
Company received PMPM premium reductions in 2009 that were in many cases
correlated with reductions in the Medicaid fee schedule that also reduced the
Company’s medical costs. However, PMPM premium reductions in
Washington and Missouri in 2009 were not fully commensurate with changes in the
Medicaid fee schedule in those states, and thus decreases in premium were not
matched by lower medical costs. In Washington, premium reductions not
linked to decreases in the Medicaid fee schedule lowered medical margin by
approximately $13 million in 2009. In Missouri, the retention of the
pharmacy benefit by the state effective October 1, 2009 reduced medical margin
by approximately $1.2 million in 2009.
Investment income for the year
ended December 31, 2009, was $9.1 million, a $12 million decrease from the
$21.1 million earned in the same period in 2008. This decline
was primarily due to lower interest rates in 2009. The Company’s
annualized portfolio yield for the year ended December 31, 2009, decreased to
1.2% compared with 3.0% for the same period in 2008.
Medical care costs, in the
aggregate, increased 8% on a PMPM basis for the year ended December 31,
2009, compared with the same period in 2008. The medical care ratio
was 86.8% for the year ended December 31, 2009, compared with 84.8% for the same
period in 2008. 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. Influenza-related illnesses and the costs associated with more
recently enrolled members were key factors in the higher
utilization. The Company estimates that the incremental costs
associated with influenza-related illnesses were approximately $35 million, or
$0.83 per diluted share, in the year ended December 31, 2009 compared with the
year ended December 31, 2008.
Physician and outpatient costs
exhibited the most significant unfavorable cost trend in the year ended December
31, 2009. Together, these costs increased approximately 13% on a PMPM
basis compared with the same period in 2008. Consistent with the
Company’s experience throughout 2009, emergency room utilization (up
approximately 9%) and cost per visit (up approximately 8%) were the primary
drivers of increased cost in the year ended December 31, 2009.
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
5
February
11, 2010
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 year ended
December 31, 2009, compared with the same period in 2008. Level 1 and
Level 2 visits decreased by 9% and 6%, respectively, while Level 3, Level 4, and
Level 5 visits increased by 20%, 18%, and 20%, respectively.
Inpatient costs were flat on a
PMPM basis year-over-year despite increased utilization.
Pharmacy costs (including the
benefit of rebates) increased 6% on a PMPM basis year-over-year, excluding the
Missouri health plan, where the pharmacy benefit was retained by the state of
Missouri effective October 1, 2009. Pharmacy utilization increased
approximately 6% year-over-year, while unit costs (excluding rebates) were
flat.
Capitated costs increased
approximately 10% 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
7.5% of revenue in the year ended December 31, 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 $16.76 for
the year ended December 31, 2009, from $17.04 for the same period in
2008.
Interest expense for
both years 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 non-cash interest expense
totaled $4.8 million for the year ended December 31, 2009 and $4.7 million for
the year ended December 31, 2008.
Income taxes were
recorded at an effective rate of 29.2% for the year ended December 31, 2009,
compared with 40.0% for the same period in 2008. The decrease was
primarily due to discrete tax benefits recognized during the year relating to
settling tax examinations, and higher than previously estimated California
enterprise zone tax credits. As indicated above, the Company expects
its effective tax rate to increase to approximately 45% for the year ending
December 31, 2010.
Cash
Flow
Cash
provided by operating activities for the year ended December 31, 2009, was $155
million compared with $40 million for 2008, an increase of $115
million.
Significant
components of cash provided by operating activities during 2009 included the
following items:
|
·
|
Net
income, which decreased $29 million between 2008 and
2009.
|
|
·
|
Deferred
revenue, which contributed $114 million to the increase in cash provided
by operating activities between 2008 and 2009. Deferred revenue
increased substantially at the Ohio health plan between the years ended
2008 and 2009.
|
|
·
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Medical
claims and benefits payable, which contributed $43 million to the increase
in cash provided by operating activities between 2008 and
2009.
|
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
6
February
11, 2010
Cash
provided by operating activities for the quarter ended December 31, 2009, was
$25 million compared with $61 million for the fourth quarter of 2008, a decrease
of $36 million.
Significant
components of cash provided by operating activities during the fourth quarter of
2009 included the following items:
|
·
|
Net
loss, which resulted in a $19 million decrease year over
year.
|
|
·
|
Receivables,
which reduced cash provided by operating activities $34 million year over
year, primarily due to significant collections of receivables at the
California health plan in the fourth quarter of
2008.
|
At
December 31, 2009, the Company had cash and investments (not including
restricted investments) of $704.0 million, including non-current auction rate
securities with a fair value of $59.7 million. At December 31, 2009,
the parent company had unrestricted cash and investments of $45.6 million,
including auction rate securities with a fair value of $16.5
million.
EBITDA
(1)
|
(in
thousands)
|
Three
Months Ended
December
31,
|
Year
Ended
December
31,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Operating
(loss) income
|
$ | (3,722 | ) | $ | 27,467 | $ | 57,393 | $ | 112,605 | |||||||
|
Add
back:
|
||||||||||||||||
|
Depreciation
and amortization expense
|
9,642 | 8,691 | 38,110 | 33,688 | ||||||||||||
|
EBITDA
|
$ | 5,920 | $ | 36,158 | $ | 95,503 | $ | 146,293 | ||||||||
|
(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 the industry.
|
Stock
Repurchases
During
2009, the Company 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 year ended December 31,
2009, by $0.04.
Conference
Call
The
Company’s management will host a conference call and webcast to discuss its
fourth quarter and year-end results at 5:00 p.m. Eastern Time on Thursday,
February 11, 2010. The number to call for the interactive
teleconference is (212) 231-2929. A telephonic replay of the
conference call will be available from 7:00 p.m. Eastern time on Thursday,
February 11, 2010, through 6:00 p.m. on Friday, February 12, 2010, by dialing
(800) 633-8284 and entering confirmation number 21451098. 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.
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
7
February
11, 2010
About
Molina Healthcare
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 licensed health plan subsidiaries in
California, Florida, Michigan, Missouri, New Mexico, Ohio, Texas, Utah, and
Washington currently serve approximately 1.45 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 earnings release
contains “forward-looking statements” regarding the Company’s expected results
for fiscal year 2010, the Company’s pending acquisition of the HIM business of
Unisys, and other plans, expectations, and anticipated future
events. All of our forward-looking statements are based on our
current expectations and assumptions. Actual results could
differ materially due to numerous known and unknown risks and uncertainties,
including, without limitation, risk factors related to the
following:
|
§
|
budgetary
pressures on the federal and state governments and their resulting
inability to fully fund Medicaid, Medicare, or CHIP, or to maintain
current membership eligibility thresholds and
criteria;
|
|
§
|
unexpected
rate reductions or the rescission of expected rate
increases;
|
|
§
|
the
enactment of federal health care and/or insurance reform and uncertainty
regarding the likely impact of particular reform
measures;
|
|
§
|
management
of our medical costs, including flu-like illness levels and rates of
utilization that are consistent with our
expectations;
|
|
§
|
the
accurate estimation of incurred but not reported medical costs across our
health plans;
|
|
§
|
the
continuation and renewal of the government contracts of our health
plans;
|
|
§
|
the
timely closing of the HIM business acquisition, including the need to
obtain regulatory approvals, customer consents, and to satisfy other
closing conditions;
|
|
§
|
the
integration of the HIM business and its operations, as well as the
integration of any other acquisitions we may
undertake;
|
|
§
|
the
retention and renewal of the HIM business’s state government contracts on
terms consistent with our
expectations;
|
|
§
|
the
accuracy of our operating cost and capital outlay projections for the HIM
business;
|
|
§
|
the
availability of financing under our credit facility to acquire the HIM
business and to meet our liquidity
needs;
|
|
§
|
the
establishment by a state of a medical cost expenditure floor as a
percentage of the premiums we receive, including, without limitation, the
establishment of an 86% medical cost expenditure floor in the state of
Washington;
|
|
§
|
the
required establishment of a premium deficiency reserve in any of the
states in which we operate;
|
|
§
|
up-coding
by providers or billing in a manner at material variance with historic
patterns;
|
|
§
|
the
carving out by a state of particular benefits, such as pharmacy benefits,
which have historically produced a
profit;
|
|
§
|
the
transition from a non-risk to a risk-based capitation contract by our Utah
health plan;
|
|
§
|
approval
by state regulators of dividends and distributions by our
subsidiaries;
|
|
§
|
changes
in funding under our contracts as a result of regulatory changes,
programmatic adjustments, or other
reforms;
|
|
§
|
high
dollar claims related to catastrophic
illness;
|
|
§
|
the
favorable resolution of litigation or arbitration
matters;
|
and
numerous other risk factors, including those discussed in our periodic reports
and filings with the Securities and Exchange Commission. These
reports can be accessed under the investor relations tab of our Company website
or on the SEC’s website at www.sec.gov. Given
these risks and uncertainties, we can give no assurances that our
forward-looking statements will prove to be accurate, or that any other results
or events projected or contemplated by our 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
our judgment as of February 11, 2010, and we disclaim any obligation to update
any forward-looking statements to conform the statement to actual results or
changes in our expectations.
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
8
February
11, 2010
MOLINA
HEALTHCARE, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts
in thousands, except per-share data)
|
Three
Months Ended
December
31,
|
Year
Ended
December
31,
|
|||||||||||||||
|
2009
|
2008
(1)
|
2009
|
2008
(1)
|
|||||||||||||
|
Revenue:
|
||||||||||||||||
|
Premium
revenue
|
$ | 962,411 | $ | 808,895 | $ | 3,660,207 | $ | 3,091,240 | ||||||||
|
Investment
income
|
1,813 | 3,609 | 9,149 | 21,126 | ||||||||||||
|
Total operating
revenue
|
964,224 | 812,504 | 3,669,356 | 3,112,366 | ||||||||||||
|
Expenses:
|
||||||||||||||||
|
Medical
care costs
|
842,371 | 684,781 | 3,176,236 | 2,621,312 | ||||||||||||
|
General
and administrative expenses
|
115,933 | 91,565 | 399,149 | 344,761 | ||||||||||||
|
Depreciation
and amortization
|
9,642 | 8,691 | 38,110 | 33,688 | ||||||||||||
|
Total expenses
|
967,946 | 785,037 | 3,613,495 | 2,999,761 | ||||||||||||
|
Gain
on purchase of convertible senior notes
|
− | − | 1,532 | − | ||||||||||||
|
Operating
(loss) income
|
(3,722 | ) | 27,467 | 57,393 | 112,605 | |||||||||||
|
Interest
expense (1)
|
(3,860 | ) | (3,318 | ) | (13,777 | ) | (13,231 | ) | ||||||||
|
(Loss)
income before income taxes (1)
|
(7,582 | ) | 24,149 | 43,616 | 99,374 | |||||||||||
|
Income
tax (benefit) expense (1)
|
(3,110 | ) | 9,329 | 12,748 | 39,776 | |||||||||||
|
Net
(loss) income (1)
|
$ | (4,472 | ) | $ | 14,820 | $ | 30,868 | $ | 59,598 | |||||||
|
Net
(loss) income per share: (1)
|
||||||||||||||||
|
Basic
|
$ | (0.18 | ) | $ | 0.55 | $ | 1.19 | $ | 2.15 | |||||||
|
Diluted
|
$ | (0.18 | ) | $ | 0.55 | $ | 1.19 | $ | 2.15 | |||||||
|
Weighted
average number of common shares and
potentially dilutive common shares outstanding
|
25,552 | 26,813 | 25,984 | 27,772 | ||||||||||||
|
Operating
Statistics:
|
||||||||||||||||
|
Ratio
of medical care costs paid directly to providers to premium
revenue
|
85.5 | % | 82.2 | % | 84.8 | % | 82.3 | % | ||||||||
|
Ratio
of medical care costs not paid directly to providers to premium
revenue
|
2.0 | 2.5 | 2.0 | 2.5 | ||||||||||||
|
Medical
care ratio
(2)
|
87.5 | % | 84.7 | % | 86.8 | % | 84.8 | % | ||||||||
|
General
and administrative expense
ratio excluding premium
taxes
(core G&A ratio)
(3)
|
8.0 | % | 8.1 | % | 7.5 | % | 8.0 | % | ||||||||
|
Premium
taxes included in G&A expense (3)
|
4.0 | 3.2 | 3.4 | 3.1 | ||||||||||||
|
Total general and
administrative
expense ratio (3)
|
12.0 | % | 11.3 | % | 10.9 | % | 11.1 | % | ||||||||
|
Depreciation
and amortization expense ratio (3)
|
1.0 | % | 1.1 | % | 1.0 | % | 1.1 | % | ||||||||
|
Effective
tax rate (1)
|
(41.0 | )% | 38.6 | % | 29.2 | % | 40.0 | % | ||||||||
|
(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 for the three
months ended December 31, 2008, and $4.5 million for the year ended
December 31, 2008.
|
|
(2)
|
Medical
care ratio represents medical care costs as a percentage of premium
revenue.
|
|
(3)
|
Computed
as a percentage of total operating
revenue.
|
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
9
February
11, 2010
MOLINA
HEALTHCARE, INC.
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts
in thousands, except per-share data)
|
Dec.
31,
2009
|
Dec.
31,
2008
(1)
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 469,501 | $ | 387,162 | ||||
|
Investments
|
174,844 | 189,870 | ||||||
|
Receivables
|
136,654 | 128,562 | ||||||
|
Income
taxes refundable
|
6,067 | 4,019 | ||||||
|
Deferred
income taxes (1)
|
8,757 | 9,071 | ||||||
|
Prepaid
expenses and other current assets
|
15,583 | 14,766 | ||||||
|
Total
current assets
|
811,406 | 733,450 | ||||||
|
Property
and equipment, net
|
78,171 | 65,058 | ||||||
|
Goodwill
and intangible assets, net
|
214,254 | 192,599 | ||||||
|
Investments
|
59,687 | 58,169 | ||||||
|
Restricted
investments
|
36,274 | 38,202 | ||||||
|
Receivable
for ceded life and annuity contracts
|
25,455 | 27,367 | ||||||
|
Other
assets (1)
|
19,988 | 33,223 | ||||||
| $ | 1,245,235 | $ | 1,148,068 | |||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Medical
claims and benefits payable
|
$ | 316,516 | $ | 292,442 | ||||
|
Accounts
payable and accrued liabilities
|
71,732 | 81,981 | ||||||
|
Deferred
revenue
|
101,985 | 13,804 | ||||||
|
Total
current liabilities
|
490,233 | 388,227 | ||||||
|
Long-term
debt (1)
|
158,900 | 164,873 | ||||||
|
Deferred
income taxes (1)
|
12,506 | 12,911 | ||||||
|
Liability
for ceded life and annuity contracts
|
25,455 | 27,367 | ||||||
|
Other
long-term liabilities
|
15,403 | 22,928 | ||||||
|
Total
liabilities
|
702,497 | 616,306 | ||||||
|
Stockholders’
equity:
|
||||||||
|
Common
stock, $0.001 par value; 80,000 shares authorized,
outstanding 25,607 shares at
December 31, 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)
|
129,902 | 170,681 | ||||||
|
Accumulated
other comprehensive loss
|
(1,812 | ) | (2,310 | ) | ||||
|
Retained
earnings (1)
|
414,622 | 383,754 | ||||||
|
Treasury
stock, at cost; 1,201 shares at December 31, 2008
|
− | (20,390 | ) | |||||
|
Total
stockholders’ equity
|
542,738 | 531,762 | ||||||
| $ | 1,245,235 | $ | 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 Fourth Quarter and Year-End 2009 Results
Page
10
February
11, 2010
MOLINA
HEALTHCARE, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
Three
Months Ended
December
31,
|
Year
Ended
December
31,
|
|||||||||||||||
|
2009
|
2008
(1)
|
2009
|
2008
(1)
|
|||||||||||||
|
Operating
activities:
|
||||||||||||||||
|
Net
(loss) income (1)
|
$ | (4,472 | ) | $ | 14,820 | $ | 30,868 | $ | 59,598 | |||||||
|
Adjustments
to reconcile net (loss) income to net cash provided by operating
activities:
|
||||||||||||||||
|
Depreciation
and amortization
|
9,642 | 8,691 | 38,110 | 33,688 | ||||||||||||
|
Other-than-temporary
impairment on available-for-sale securities
|
− | 7,166 | − | 7,166 | ||||||||||||
|
Unrealized
loss (gain) on trading securities
|
115 | 399 | (3,394 | ) | 399 | |||||||||||
|
(Gain)
loss on rights agreement
|
(104 | ) | (6,907 | ) | 3,100 | (6,907 | ) | |||||||||
|
Deferred
income taxes
|
(2,323 | ) | 4,006 | (1 | ) | (3,404 | ) | |||||||||
|
Stock-based
compensation
|
1,755 | 2,042 | 7,485 | 7,811 | ||||||||||||
|
Non-cash
interest on convertible senior notes (1)
|
1,219 | 1,210 | 4,782 | 4,707 | ||||||||||||
|
Gain
on purchase of convertible senior notes
|
− | − | (1,532 | ) | − | |||||||||||
|
Amortization
of deferred financing costs (1)
|
832 | 359 | 1,872 | 1,435 | ||||||||||||
|
Loss
on disposal of property and equipment
|
− | 142 | − | 142 | ||||||||||||
|
Tax
deficiency from employee stock compensation recorded as
additional
paid-in capital
|
(45 | ) | (88 | ) | (749 | ) | (335 | ) | ||||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||||||
|
Receivables
|
7,475 | 41,198 | (8,092 | ) | (17,025 | ) | ||||||||||
|
Prepaid
expenses and other current assets
|
(1,271 | ) | (364 | ) | (817 | ) | (2,245 | ) | ||||||||
|
Medical
claims and benefits payable
|
13,402 | (6,345 | ) | 24,074 | (19,164 | ) | ||||||||||
|
Accounts
payable and accrued liabilities
|
(10,877 | ) | (3,455 | ) | (26,467 | ) | 10,830 | |||||||||
|
Deferred
revenue
|
17,350 | 9,602 | 88,181 | (26,300 | ) | |||||||||||
|
Income
taxes
|
(8,004 | ) | (11,774 | ) | (2,443 | ) | (9,965 | ) | ||||||||
|
Net
cash provided by operating activities
|
24,694 | 60,702 | 154,977 | 40,431 | ||||||||||||
|
Investing
activities:
|
||||||||||||||||
|
Purchases
of property and equipment
|
(7,480 | ) | (6,376 | ) | (35,870 | ) | (34,690 | ) | ||||||||
|
Purchases
of investments
|
(59,429 | ) | (81,852 | ) | (186,764 | ) | (263,229 | ) | ||||||||
|
Sales
and maturities of investments
|
54,595 | 57,628 | 204,365 | 246,524 | ||||||||||||
|
Cash
paid in business purchase transactions
|
− | − | (10,900 | ) | (1,000 | ) | ||||||||||
|
Decrease
(increase) in restricted investments
|
6,126 | (1,692 | ) | 1,928 | (9,183 | ) | ||||||||||
|
Increase in
other assets
|
(676 | ) | (8,395 | ) | (2,553 | ) | (8,973 | ) | ||||||||
|
Increase
(decrease) in other long-term liabilities
|
1,263 | 1,820 | (7,525 | ) | 6,031 | |||||||||||
|
Net
cash used in investing activities
|
(5,601 | ) | (38,867 | ) | (37,319 | ) | (64,520 | ) | ||||||||
|
Financing
activities:
|
||||||||||||||||
|
Treasury
stock purchases
|
− | (17,703 | ) | (27,712 | ) | (49,940 | ) | |||||||||
|
Excess
tax benefits from employee stock compensation
|
5 | − | 31 | 43 | ||||||||||||
|
Purchase
of convertible senior notes
|
− | − | (9,653 | ) | − | |||||||||||
|
Proceeds
from exercise of stock options and employee stock plan
purchases
|
934 | 594 | 2,015 | 2,084 | ||||||||||||
|
Net
cash provided by (used in) financing activities
|
939 | (17,109 | ) | (35,319 | ) | (47,813 | ) | |||||||||
|
Net
increase (decrease) in cash and cash equivalents
|
20,032 | 4,726 | 82,339 | (71,902 | ) | |||||||||||
|
Cash
and cash equivalents at beginning of period
|
449,469 | 382,436 | 387,162 | 459,064 | ||||||||||||
|
Cash
and cash equivalents at end of period
|
$ | 469,501 | $ | 387,162 | $ | 469,501 | $ | 387,162 | ||||||||
|
(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 Fourth Quarter and Year-End 2009 Results
Page
11
February
11, 2010
MOLINA
HEALTHCARE, INC.
UNAUDITED
MEMBERSHIP DATA
|
Total
Ending Membership By Health Plan(1):
|
Dec.
31,
2009
|
Sept.
30,
2009
|
Dec.
31,
2008
|
|||||||||
|
California
|
351,000 | 355,000 | 322,000 | |||||||||
|
Florida
(2)
|
50,000 | 43,000 | − | |||||||||
|
Michigan
|
223,000 | 210,000 | 206,000 | |||||||||
|
Missouri
|
78,000 | 78,000 | 77,000 | |||||||||
|
New
Mexico
|
94,000 | 90,000 | 84,000 | |||||||||
|
Ohio
|
216,000 | 208,000 | 176,000 | |||||||||
|
Texas
|
40,000 | 31,000 | 31,000 | |||||||||
|
Utah
|
69,000 | 69,000 | 61,000 | |||||||||
|
Washington
|
334,000 | 327,000 | 299,000 | |||||||||
|
Total
|
1,455,000 | 1,411,000 | 1,256,000 | |||||||||
|
Total
Ending Membership By State for the
Medicare Advantage Plans (1):
|
||||||||||||
|
California
|
2,100 | 1,900 | 1,500 | |||||||||
|
Michigan
|
3,300 | 2,700 | 1,700 | |||||||||
|
New
Mexico
|
400 | 400 | 300 | |||||||||
|
Texas
|
500 | 500 | 400 | |||||||||
|
Utah
|
4,000 | 3,500 | 2,400 | |||||||||
|
Washington
|
1,300 | 1,100 | 1,000 | |||||||||
|
Total
|
11,600 | 10,100 | 7,300 | |||||||||
|
Total
Ending Membership By State for the Aged, Blind or Disabled
Population:
|
||||||||||||
|
California
|
13,900 | 13,700 | 12,700 | |||||||||
|
Florida
(2)
|
8,800 | 8,700 | − | |||||||||
|
Michigan
|
32,200 | 30,200 | 30,300 | |||||||||
|
New
Mexico
|
5,700 | 5,700 | 6,300 | |||||||||
|
Ohio
|
22,600 | 19,600 | 19,000 | |||||||||
|
Texas
|
17,600 | 17,500 | 16,200 | |||||||||
|
Utah
|
7,500 | 7,700 | 7,300 | |||||||||
|
Washington
|
3,200 | 3,200 | 3,000 | |||||||||
|
Total
|
111,500 | 106,300 | 94,800 | |||||||||
|
Three
Months Ended
|
Year
Ended
|
|||||||||||||||||||
|
Total
Member Months (1),(3)
by Health Plan:
|
Dec.
31, 2009
|
Sept.
30, 2009
|
Dec.
31, 2008
|
Dec.
31, 2009
|
Dec.
31, 2008
|
|||||||||||||||
|
California
|
1,059,000 | 1,065,000 | 956,000 | 4,135,000 | 3,721,000 | |||||||||||||||
|
Florida
(2)
|
141,000 | 109,000 | – | 386,000 | – | |||||||||||||||
|
Michigan
|
651,000 | 629,000 | 622,000 | 2,523,000 | 2,526,000 | |||||||||||||||
|
Missouri
|
232,000 | 232,000 | 232,000 | 927,000 | 910,000 | |||||||||||||||
|
New
Mexico
|
279,000 | 264,000 | 254,000 | 1,042,000 | 970,000 | |||||||||||||||
|
Ohio
|
637,000 | 618,000 | 533,000 | 2,411,000 | 1,998,000 | |||||||||||||||
|
Texas
|
119,000 | 93,000 | 91,000 | 402,000 | 348,000 | |||||||||||||||
|
Utah
|
206,000 | 203,000 | 177,000 | 793,000 | 659,000 | |||||||||||||||
|
Washington
|
997,000 | 979,000 | 892,000 | 3,847,000 | 3,514,000 | |||||||||||||||
|
Total
|
4,321,000 | 4,192,000 | 3,757,000 | 16,466,000 | 14,646,000 | |||||||||||||||
|
(1)
|
Effective
December 31, 2009, the Company no longer serves members in
Nevada. Current and prior period membership data has been
adjusted to remove the Nevada membership. Because Nevada had
fewer than 1,000 members, there was no adjustment to the “Total Ending
Membership by Health Plan.”
|
|
(2)
|
The
Florida health plan began serving members in late December
2008.
|
|
(3)
|
A total member month is defined as
the aggregate of each month’s ending membership for the period
presented.
|
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
12
February
11, 2010
MOLINA
HEALTHCARE, INC.
UNAUDITED
SELECTED FINANCIAL DATA BY HEALTH PLAN
(Dollars
in thousands except per member per month amounts)
|
Three
Months Ended December 31, 2009
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 127,716 | $ | 120.56 | $ | 115,506 | $ | 109.03 | 90.4 | % | $ | 6,035 | ||||||||||||
|
Florida
(1)
|
35,910 | 254.97 | 34,882 | 247.67 | 97.1 | 6 | ||||||||||||||||||
|
Michigan
|
151,845 | 233.07 | 121,457 | 186.43 | 80.0 | 8,361 | ||||||||||||||||||
|
Missouri
|
52,507 | 226.21 | 45,954 | 197.97 | 87.5 | – | ||||||||||||||||||
|
New
Mexico
|
102,079 | 365.48 | 87,090 | 311.82 | 85.3 | 3,008 | ||||||||||||||||||
|
Ohio
|
216,849 | 340.60 | 189,796 | 298.11 | 87.5 | 15,759 | ||||||||||||||||||
|
Texas
|
41,205 | 347.41 | 31,633 | 266.71 | 76.8 | 683 | ||||||||||||||||||
|
Utah
|
51,912 | 252.21 | 49,528 | 240.63 | 95.4 | – | ||||||||||||||||||
|
Washington
|
179,617 | 180.21 | 156,251 | 156.77 | 87.0 | 5,033 | ||||||||||||||||||
|
Other
(2),(3)
|
2,771 | – | 10,274 | – | – | 2 | ||||||||||||||||||
|
Consolidated
|
$ | 962,411 | $ | 222.68 | $ | 842,371 | $ | 194.91 | 87.5 | % | $ | 38,887 | ||||||||||||
|
Three
Months Ended December 31, 2008
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 108,888 | $ | 113.88 | $ | 94,448 | $ | 98.78 | 86.7 | % | $ | 3,308 | ||||||||||||
|
Florida
(1)
|
– | – | – | – | – | – | ||||||||||||||||||
|
Michigan
|
132,113 | 212.58 | 100,914 | 162.38 | 76.4 | 6,734 | ||||||||||||||||||
|
Missouri
|
59,771 | 258.25 | 44,836 | 193.72 | 75.0 | – | ||||||||||||||||||
|
New
Mexico
|
86,262 | 339.44 | 70,762 | 278.45 | 82.0 | 3,190 | ||||||||||||||||||
|
Ohio
|
168,554 | 316.51 | 154,169 | 289.50 | 91.5 | 9,378 | ||||||||||||||||||
|
Texas
|
30,019 | 328.94 | 22,095 | 242.12 | 73.6 | 549 | ||||||||||||||||||
|
Utah
|
41,400 | 234.19 | 38,076 | 215.38 | 92.0 | – | ||||||||||||||||||
|
Washington
|
178,486 | 200.00 | 148,123 | 165.97 | 83.0 | 2,871 | ||||||||||||||||||
|
Other
(2),(3)
|
3,402 | – | 11,358 | – | – | 2 | ||||||||||||||||||
|
Consolidated
|
$ | 808,895 | $ | 215.24 | $ | 684,781 | $ | 182.21 | 84.7 | % | $ | 26,032 | ||||||||||||
|
(1)
|
The
Florida health plan began serving members in late December
2008.
|
|
(2)
|
Effective
December 31, 2009, the Company no longer served members in
Nevada. Premium revenue
and medical care costs relating to the Nevada
health plan have been included in
“Other.”
|
|
(3)
|
“Other”
medical care costs also include medically related administrative costs at
the parent company.
|
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
13
February
11, 2010
MOLINA
HEALTHCARE, INC.
UNAUDITED
SELECTED FINANCIAL DATA BY HEALTH PLAN (Continued)
(Dollars
in thousands except per member per month amounts)
|
Year
Ended December 31, 2009
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 481,717 | $ | 116.49 | $ | 443,892 | $ | 107.34 | 92.2 | % | $ | 16,446 | ||||||||||||
|
Florida
(1)
|
102,232 | 264.94 | 95,936 | 248.62 | 93.8 | 16 | ||||||||||||||||||
|
Michigan
|
557,421 | 220.94 | 454,431 | 180.12 | 81.5 | 31,023 | ||||||||||||||||||
|
Missouri
|
230,222 | 248.25 | 191,585 | 206.59 | 83.2 | – | ||||||||||||||||||
|
New
Mexico (2)
|
404,026 | 387.67 | 346,044 | 332.03 | 85.7 | 11,043 | ||||||||||||||||||
|
Ohio
|
803,521 | 333.33 | 691,402 | 286.82 | 86.1 | 47,849 | ||||||||||||||||||
|
Texas
|
134,860 | 335.69 | 110,794 | 275.78 | 82.2 | 2,513 | ||||||||||||||||||
|
Utah
|
207,297 | 261.43 | 190,319 | 240.02 | 91.8 | – | ||||||||||||||||||
|
Washington
|
726,137 | 188.77 | 613,876 | 159.58 | 84.5 | 14,175 | ||||||||||||||||||
|
Other
(3),(4)
|
12,774 | – | 37,957 | – | – | 57 | ||||||||||||||||||
|
Consolidated
|
$ | 3,660,207 | $ | 222.24 | $ | 3,176,236 | $ | 192.85 | 86.8 | % | $ | 123,122 | ||||||||||||
|
Year
Ended December 31, 2008
|
||||||||||||||||||||||||
|
Premium
Revenue
|
Medical
Care Costs
|
Medical
Care
Ratio
|
Premium
Tax
Expense
|
|||||||||||||||||||||
|
Total
|
PMPM
|
Total
|
PMPM
|
|||||||||||||||||||||
|
California
|
$ | 417,027 | $ | 112.06 | $ | 363,776 | $ | 97.75 | 87.2 | % | $ | 12,503 | ||||||||||||
|
Florida
(1)
|
– | – | – | – | – | – | ||||||||||||||||||
|
Michigan
|
509,782 | 201.86 | 405,683 | 160.64 | 79.6 | 26,710 | ||||||||||||||||||
|
Missouri
|
225,280 | 247.62 | 184,298 | 202.58 | 81.8 | – | ||||||||||||||||||
|
New
Mexico (2)
|
348,576 | 359.45 | 286,004 | 294.92 | 82.1 | 11,713 | ||||||||||||||||||
|
Ohio
|
602,826 | 301.76 | 549,182 | 274.91 | 91.1 | 30,505 | ||||||||||||||||||
|
Texas
|
110,178 | 316.32 | 84,324 | 242.09 | 76.5 | 1,995 | ||||||||||||||||||
|
Utah
|
155,991 | 236.75 | 139,011 | 210.98 | 89.1 | – | ||||||||||||||||||
|
Washington
|
709,943 | 202.02 | 575,085 | 163.64 | 81.0 | 11,668 | ||||||||||||||||||
|
Other
(3),(4)
|
11,637 | – | 33,949 | – | – | 21 | ||||||||||||||||||
|
Consolidated
|
$ | 3,091,240 | $ | 210.97 | $ | 2,621,312 | $ | 178.90 | 84.8 | % | $ | 95,115 | ||||||||||||
|
(1)
|
The
Florida health plan began serving members in late December
2008.
|
|
(2)
|
The
medical care ratio of the New Mexico health plan was 85.7% for the year
ended December 31, 2009, up from 82.1% in the same period in
2008. During 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 85.2% for the year ended December 31,
2008.
|
|
(3)
|
Effective
December 31, 2009, the Company no longer served members in
Nevada. Premium revenue and medical care costs relating to the
Nevada health plan have been included in
“Other.”
|
|
(4)
|
“Other”
medical care costs also include medically related administrative costs at
the parent company.
|
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
14
February
11, 2010
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
December
31, 2009
|
Three
Months Ended
December
31, 2008
|
|||||||||||||||||||||||
|
Amount
|
PMPM
|
%
of Total Medical Care Costs
|
Amount
|
PMPM
|
%
of Total Medical Care Costs
|
|||||||||||||||||||
|
Fee-for-service
|
$ | 556,118 | $ | 128.68 | 66.0 | % | $ | 447,479 | $ | 119.07 | 65.3 | % | ||||||||||||
|
Capitation
|
145,187 | 33.59 | 17.2 | 115,022 | 30.61 | 16.8 | ||||||||||||||||||
|
Pharmacy
|
108,617 | 25.13 | 12.9 | 92,812 | 24.70 | 13.6 | ||||||||||||||||||
|
Other
|
32,449 | 7.51 | 3.9 | 29,468 | 7.83 | 4.3 | ||||||||||||||||||
|
Total
|
$ | 842,371 | $ | 194.91 | 100.0 | % | $ | 684,781 | $ | 182.21 | 100.0 | % | ||||||||||||
|
Year
Ended
December
31, 2009
|
Year
Ended
December
31, 2008
|
|||||||||||||||||||||||
|
Amount
|
PMPM
|
%
of Total Medical Care Costs
|
Amount
|
PMPM
|
%
of Total Medical Care Costs
|
|||||||||||||||||||
|
Fee-for-service
|
$ | 2,077,489 | $ | 126.14 | 65.4 | % | $ | 1,709,806 | $ | 116.69 | 65.2 | % | ||||||||||||
|
Capitation
|
558,538 | 33.91 | 17.6 | 450,440 | 30.74 | 17.2 | ||||||||||||||||||
|
Pharmacy
|
414,785 | 25.18 | 13.1 | 356,184 | 24.31 | 13.6 | ||||||||||||||||||
|
Other
|
125,424 | 7.62 | 3.9 | 104,882 | 7.16 | 4.0 | ||||||||||||||||||
|
Total
|
$ | 3,176,236 | $ | 192.85 | 100.0 | % | $ | 2,621,312 | $ | 178.90 | 100.0 | % | ||||||||||||
The
following table provides the details of the Company’s medical claims and
benefits payable as of the dates indicated:
|
Dec.
31, 2009
|
Sept.
30, 2009
|
Dec.
31, 2008
|
||||||||||
|
Fee-for-service
claims incurred but not paid (IBNP)
|
$ | 246,508 | $ | 237,495 | $ | 236,492 | ||||||
|
Capitation
payable
|
39,995 | 39,361 | 28,111 | |||||||||
|
Pharmacy
payable
|
20,609 | 21,100 | 18,837 | |||||||||
|
Other
|
9,404 | 5,158 | 9,002 | |||||||||
|
Total medical claims and
benefits payable
|
$ | 316,516 | $ | 303,114 | $ | 292,442 | ||||||
-MORE-
MOH
Reports Fourth Quarter and Year-End 2009 Results
Page
15
February
11, 2010
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:
|
Year
Ended
|
||||||||
|
Dec.
31,
2009
|
Dec.
31,
2008
|
|||||||
|
Balances
at beginning of period
|
$ | 292,442 | $ | 311,606 | ||||
|
Components
of medical care costs related to:
|
||||||||
|
Current period
|
3,227,794 | 2,683,399 | ||||||
|
Prior periods
|
(51,558 | ) | (62,087 | ) | ||||
|
Total
medical care costs
|
3,176,236 | 2,621,312 | ||||||
|
Payments
for medical care costs related to:
|
||||||||
|
Current period
|
2,919,240 | 2,413,128 | ||||||
|
Prior periods
|
232,922 | 227,348 | ||||||
|
Total
paid
|
3,152,162 | 2,640,476 | ||||||
|
Balances
at end of period
|
$ | 316,516 | $ | 292,442 | ||||
|
Benefit
from prior period as a percentage of:
|
||||||||
|
Balance at beginning of
period
|
17.6 | % | 19.9 | % | ||||
|
Premium revenue
|
1.4 | % | 2.0 | % | ||||
|
Total medical care
costs
|
1.6 | % | 2.4 | % | ||||
|
Days
in claims payable
|
37 | 41 | ||||||
|
Number
of members at end of period
|
1,455,000 | 1,256,000 | ||||||
|
Number
of claims in inventory at end of period
|
93,100 | 87,300 | ||||||
|
Billed
charges of claims in inventory at end of period
|
$ | 131,400 | $ | 115,400 | ||||
|
Claims
in inventory per member at end of period
|
0.06 | 0.07 | ||||||
|
Billed
charges of claims in inventory per member at end of period
|
$ | 90.31 | $ | 91.88 | ||||
|
Number
of claims received during the period
|
12,930,100 | 11,095,100 | ||||||
|
Billed
charges of claims receivedduring the period
|
$ | 9,769,000 | $ | 7,794,900 | ||||
-END-