Bethesda, MD -(BusinessWire)- Coventry Health Care, Inc. (NYSE: CVH) recently reported consolidated operating results for the quarter ended March 31, 2013. Operating revenues totaled $3.5 billion for the quarter with net earnings of $135.4 million, or earnings per diluted share (EPS) of $1.00.
“I am pleased to report the Company’s strong start to 2013,” said Allen F. Wise, Chairman and Chief Executive Officer of Coventry. “These first quarter results position the Company well to achieve its financial and operational goals in 2013 as we look towards combining our strengths with those of Aetna after satisfying all remaining regulatory requirements.”
First Quarter 2013 Consolidated Highlights
- First quarter EPS increased by 61% from the prior year quarter excluding the $0.58 one-time impact from the previously disclosed Medicare Advantage Risk Adjustment Data Validation (RADV) prior period reserve release during the first quarter of 2012
- Total revenues were down 4.7% from the prior year quarter
- Excluding the $141.8 million favorable revenue impact of the RADV prior period reserve release during the first quarter of 2012, total revenues were down by less than 1%
- Selling, general, and administrative (SG&A) expense of 14.8% of total revenue includes costs of $11.1 million, or $0.05 EPS, associated with the pending Aetna transaction
- Medicare Advantage Coordinated Care Plan (MA-CCP) membership was 309,000, an increase of 59,000 members, or 24%, from the prior year quarter driven by successful execution during the 2013 Annual Enrollment Period
- The Company’s Kentucky Medicaid business generated a positive contribution to earnings with an MLR of 92.3% in the first quarter, an improvement of 440 basis points (bps) from the fourth quarter of 2012 and 2,860 bps from the first quarter of 2012
- The Company successfully launched Medicaid operations in the New East Zone in Pennsylvania during the quarter, bringing the Company’s total Medicaid membership in Pennsylvania to approximately 98,000
- GAAP cash flows from operations were $222.2 million, or 164% of net income
Selected First Quarter 2013 Highlights
Medicare Advantage
- Excluding the $141.8 million favorable revenue impact of the RADV prior period reserve release during the first quarter of 2012, Medicare Advantage revenue increased by 20% from the prior year quarter
- As of March 31, 2013, slightly more than 50% of the Company’s current MA-CCP membership resides in contracts rated 4.0 Stars
- The MA-CCP Medical Loss Ratio (MLR) was 84.6% in the quarter
Medicare Part D
- As of March 31, 2013, Medicare Part D membership was 1,450,000, a decrease of 8,000 members, or 1%, from the prior year quarter, driven by the reduction in Coventry’s auto-assign footprint for 2013
- The Medicare Part D MLR was 93.4% in the quarter, a decrease of 150 bps from the prior year quarter
Medicaid
- As of March 31, 2013, Medicaid membership was 892,000, a decrease of 32,000 members, or 3%, from the prior year quarter. The decrease was driven by the previously announced termination of the Company’s contract with the State of Kansas effective December 31, 2012, partially offset by expansion to additional regions in Pennsylvania throughout 2012 and 2013 and expansion in Nebraska effective July 1, 2012.
- The Medicaid MLR was 86.4% in the quarter, a decrease of 1,360 bps from the prior year quarter
Commercial
- As of March 31, 2013, total commercial membership was 2,182,000, a decrease of 22,000 members, or 1%, from the prior quarter
- The commercial risk MLR was 77.9% in the quarter, a decrease of 200 bps from the prior year quarter
Balance Sheet
- Investment portfolio in a net unrealized gain position of $88 million as of March 31, 2013
- Health Plan Days in Claims Payable (DCP) of 51.43, an increase of 2.39 days from the prior quarter
- $950 million in free cash at the parent at quarter-end
- Board of Directors approval of the Company’s first quarter 2013 cash dividend paid on April 9, 2013
- Debt-to-Capital of 24.7%, a 50 bps reduction from the prior year quarter
The complete earnings release is available here: Coventry Health Care First Quarter 2013 Earnings
Source: BusinessWire
Disclosure:
CoventryWCS is a WorkCompWire Advertising Partner.
This is not a paid placement.