BETHESDA, Md.–(BUSINESS WIRE)–Coventry Health Care, Inc. (NYSE: CVH) today reported consolidated operating results for the quarter and fiscal year ended December 31, 2010. Operating revenues totaled $3.0 billion for the quarter with net earnings of $150.3 million, or $1.01 earnings per diluted share (EPS). These results include a favorable impact from the Medicare Advantage Private Fee-for-Service (MA-PFFS) product of $0.05 EPS. Excluding the impact of MA-PFFS results(1), core earnings for the quarter were $142.1 million, or $0.96 EPS.
“More importantly, I am pleased with the long-term positioning of our core businesses including our health plans and our ability to seize opportunities and grow in 2012 and beyond.”
For the year ended December 31, 2010, total operating revenues were $11.6 billion with net earnings of $438.6 million, or $2.97 EPS. These results include a favorable impact from the MA-PFFS product of $0.45 EPS and an unfavorable impact from the previously announced Louisiana provider class action litigation of $1.18 EPS. Excluding the impact of MA-PFFS results(1) and the provider class action charge(2), core earnings for the year were $546.4 million, or $3.70 EPS.
“I continue to be pleased with the fundamental performance of our seven core businesses which exceeded our expectations during 2010. This should position us well as we enter 2011, a year with unique challenges and opportunities as we implement healthcare reform mandates,” said Allen F. Wise, chairman and chief executive officer of Coventry. “More importantly, I am pleased with the long-term positioning of our core businesses including our health plans and our ability to seize opportunities and grow in 2012 and beyond.”
Fourth Quarter 2010 Consolidated Highlights
- Closed the Mercy Health Plan acquisition on October 1, 2010, adding approximately 180,000 members and strengthening our position in the Midwest region
- Commercial risk membership of 1,641,000, an increase of 108,000 members sequentially
- Sequential membership growth in Medicare Advantage, Medicare Part D, and Medicaid
- Excellent liquidity position
- Approximately $850 million of deployable free cash at the parent
- Debt to Capital of 27.6%
Selected Fourth Quarter and Full Year 2010 Highlights
- Health Plan Commercial Group Risk. Reported commercial group risk premium yields rose to $316.34 per member per month (PMPM) in the quarter, an increase of 3.1% from the prior year quarter. Reported commercial group risk premium yields rose to $314.58 PMPM for the full year, an increase of 4.3% from the prior full year. The health plan commercial group risk medical loss ratio (MLR) was 81.3% in the quarter, a decrease of 160 basis points (bps) from the prior year quarter. The health plan commercial group risk MLR was 79.2% for the full year, a decrease of 270 bps from the prior full year.
- Medicare Advantage. As of December 31, 2010, Medicare Advantage Coordinated Care Plan (MA-CCP) membership was 224,000, an increase of 38,000 members from the prior year quarter, largely driven by the acquisition of Mercy Health Plans which closed on October 1, 2010. The MA-CCP MLR was 84.1% in the quarter and 82.0% for the full year. During the fourth quarter, the MA-PFFS product line contributed $0.05 EPS largely due to favorable medical cost experience during the claims run-out process. When combined with the $0.40 EPS contribution reported through the third quarter, the total full year contribution from the MA-PFFS product line was $0.45 EPS. As previously announced, the Company did not renew this product line effective January 1, 2010.
- Medicare Part D. As of December 31, 2010, Medicare Part D membership was 1,628,000, a decrease of 55,000 members from the prior year quarter. The Medicare Part D MLR was 64.7% in the quarter, an increase of 30 bps from the prior year quarter. The Medicare Part D MLR was 83.7% for the full year, a decrease of 200 bps from the prior full year.
- Medicaid. As of December 31, 2010, Medicaid membership was 468,000, an increase of 66,000 members from the prior year quarter, largely driven by new markets in Nebraska and Pennsylvania. The Medicaid MLR was 85.4% in the quarter, a decrease of 40 bps from the prior year quarter. The Medicaid MLR was 85.7% for the full year, a decrease of 190 bps from the prior full year.
SOURCE: BusinessWire
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