[October 30, 2014] |
|
Molina Healthcare Reports Third Quarter 2014 Results
LONG BEACH, Calif. --(Business Wire)--
Molina Healthcare, Inc. (NYSE: MOH):
-
Net income per diluted share, continuing operations, of $0.33, doubles
2013 results of $0.16.
-
Adjusted net income per diluted share, continuing operations1,
of $0.83 increases 17% over 2013 results of $0.71.
-
Membership surpasses 2.4 million.
-
Total quarterly revenue reaches $2.5 billion.
-
General and administrative expense ratio improves to a five-year low
of 7.2%.
Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results
for the third quarter of 2014.
"Molina Healthcare continues to grow and diversify," said J. Mario
Molina, M.D., chief executive officer of Molina Healthcare, Inc.
"Premium revenue grew $150 million, or almost 7%, in this quarter alone.
We continued to expand the operations of our Medicare Medicaid dual
eligible plans in California, Illinois and Ohio, and our general and
administrative expense ratio was the lowest it has been in over five
years."
Overview of Financial Results, Continuing Operations
Increased premium revenue and a lower general and administrative expense
ratio in the third quarter of 2014 offset an increase in the medical
care ratio, allowing net income per diluted share, continuing
operations, to double in the third quarter of 2014 when compared to the
third quarter of 2013.
Strong enrollment growth across all of the Company's products (Medicaid,
Medicare special needs plans and dual eligible Medicare-Medicaid Plans)
generated almost $2 billion, or 40%, more premium revenue for the nine
months ended September 30, 2014, when compared with the same period in
2013.
Despite an increase in medical care costs as a percentage of premium
revenue (the medical care ratio), higher per-member per-month (PMPM)
premiums produced an increase of 8.5%, or $52.5 million, in medical
margin for the nine months ended September 30, 2014, when compared with
the same period in 2013.
The medical care ratio increased substantially in 2014 as a result of
three developments:
-
Much of the Company's revenue growth has come from participation in
Medicaid programs covering long-term services and supports (LTSS). As
the Company has previously discussed, percentage profit margins for
LTSS benefits are generally lower than percentage profit margins for
acute medical benefits. The addition of members eligible for LTSS
benefits at the Florida and New Mexico health plans, as well as
members who have joined the Company's California, Illinois, and Ohio
health plans through participation in Medicare-Medicaid Plan
implementations, added 1.2% to the Company's consolidated medical care
ratio in the third quarter of 2014 and 0.8% for the nine months ended
September 30, 2014.
-
Increases to the Company's base premiums in recent years have not kept
pace with medical cost trends.
-
Lack of coordination in the design of profit caps and medical cost
floors in some of the Company's contracts is resulting in
counterproductive outcomes. In some instances, givebacks due to
profitable performance in one product cannot be offset against losses
in other products.
For example, at the Washington health plan, a minimum medical loss ratio
requirement for the Medicaid expansion program reduced income before
taxes by approximately $17 million for the third quarter of 2014, and
$23 million for the nine months ended September 30, 2014.
Simultaneously, the Washington health plan incurred a medical care ratio
in excess of 100% for its aged, blind or disabled members. However, the
Company is unable to offset profits from its Medicaid expansion contract
against its other contracts. The Washington health plan is therefore
left in a position where it must return profits under its Medicaid
expansion contract to the state; while it receives no relief from losses
incurred under another contract.
In a similar manner, at the New Mexico health plan, a contract provision
limiting profits on retroactively added members reduced income before
taxes by approximately $6 million for the nine months ended September
30, 2014. At the same time, the New Mexico health plan's LTSS program
operated at a medical care ratio in excess of 100%.
The Company reported substantial improvements in administrative cost
efficiency in 2014. General and administrative expenses as a percentage
of revenue declined to 7.2% for the third quarter of 2014, from 10.4%
for the same period in 2013, and was 8.2% for the year-to-date period
ended September 30, 2014, versus 9.8% in the same period of 2013. The
Company's quarterly general and administrative expense ratio has not
been below 7.2% since the second quarter of 2009.
Affordable Care Act Health Insurer Fee Update
The Company previously reported that its results have been adversely
affected by delays in reimbursement (including reimbursement for tax
effects) of the Affordable Care Act's Health Insurer Fee (ACA HIF) from
California, Michigan, New Mexico, Texas and Utah.
During the third quarter, Michigan and Utah committed to reimbursement
of the ACA HIF, but not to the reimbursement of the related tax effects.
However, both states have informally indicated that it is their desire
to reimburse the Company for those tax effects. As a result of these
developments, the Company was able to recognize an additional $11
million in ACA HIF revenue (but not amounts related to tax effects) from
Michigan and Utah during the third quarter of 2014.
Nevertheless, ACA HIF not reimbursed by California, New Mexico and
Texas, as well as tax effects not yet reimbursed by Michigan and Utah,
reduced income before taxes by approximately $6 million, or $0.07 per
diluted share, for the third quarter of 2014, and $37 million, or $0.49
per diluted share, for the nine months ended September 30, 2014
(per-share amounts for both periods are on a GAAP and adjusted basis).
While the Company remains guardedly optimistic that it will eventually
secure reimbursement from all of its state partners, it no longer
expects that all reimbursement will be secured prior to the close of
2014. Accordingly, the Company does not expect to recognize the full
amount of revenue associated with reimbursement of its ACA HIF payment
during 2014.
The following table summarizes the status of ACA HIF Medicaid revenue
recognition for the nine months ended September 30, 2014:
|
|
ACA HIF Medicaid Revenue
|
|
|
Recognized
|
|
Required Reimbursement through Sept. 30, 2014
|
|
Not
Recognized
|
|
|
(In millions)
|
Quarter 1
|
|
$
|
16.6
|
|
|
$
|
32.7
|
|
|
$
|
16.1
|
Quarter 2
|
|
17.2
|
|
|
32.7
|
|
|
15.5
|
Quarter 3
|
|
27.0
|
|
|
32.7
|
|
|
5.7
|
Nine months ended September 30, 2014
|
|
$
|
60.8
|
|
|
$
|
98.1
|
|
|
$
|
37.3
|
The Company has secured agreements allowing the recognition of
approximately $20 million of ACA HIF revenue in the fourth quarter of
2014. The Company has not yet secured agreements from the states of
California, New Mexico, Texas, Michigan (tax effect not secured), and
Utah (tax effect not secured). The total amount of ACA HIF revenue for
which agreements have not been secured is approximately $50 million for
the full year of 2014.
Texas Health Plan Quality Revenue Update
The Company's non-recognition of a portion of the Texas health plan's
quality revenue reduced income before taxes by approximately $4 million,
or $0.05 per diluted share, for the third quarter of 2014, and $18
million, or $0.23 per diluted share, for the nine months ended September
30, 2014 (per-share amounts for both periods are on a GAAP and adjusted
basis). Unless it receives clarification of the standards and full
transparency on the calculations by which quality revenue is to be
assessed by the state, the Company is unable to independently assess its
performance against those standards. As such, the Company is doubtful
that it will be able to recognize the full amount of its Texas quality
revenue in 2014.
The following table summarizes the status of Texas quality revenue
recognition for the nine months ended September 30, 2014:
|
Texas Quality Revenue
|
|
Recognized
|
|
Available
|
|
Not Recognized
|
|
(In millions)
|
Quarter 1
|
$
|
2.6
|
|
|
$
|
8.6
|
|
|
$
|
6.0
|
Quarter 2
|
1.1
|
|
|
8.6
|
|
|
7.5
|
Quarter 3
|
4.6
|
|
|
8.8
|
|
|
4.2
|
Nine months ended September 30, 2014
|
$
|
8.3
|
|
|
$
|
26.0
|
|
|
$
|
17.7
|
Washington Health Plan Settlement Update
As previously disclosed, the Company recorded a net decrease to premium
revenue and income before taxes of approximately $11 million, or $0.14
per diluted share, in the third quarter of 2014 as a result of the
settlements of three unrelated issues with the Washington Health Care
Authority that related to periods prior to 2014.
Income Tax Update
During the third quarter of 2014, the Internal Revenue Service (IRS)
issued final regulations related to compensation deduction limitations
applicable to certain health insurance issuers. Pursuant to these final
regulations the Company recognized a tax benefit during the third
quarter of 2014 of approximately $7 million, or $0.15 per diluted share,
for periods prior to the third quarter of 2014.
Full Year 2014 Update
The Company has previously disclosed issues relating to its inability to
fully recognize ACA HIF revenue and Texas quality revenue in 2014. These
issues, along with medical care costs that are trending higher than the
Company anticipated compared with its full year estimate, and the impact
of certain contractual provisions that limit the Company's ability to
retain profits, will adversely impact 2014 earnings. Accordingly, the
Company now expects that its net income per diluted share, continuing
operations, and adjusted net income per diluted share, continuing
operations, may fall short of the low end of the ranges for those
respective metrics as included in the Company's previously issued 2014
guidance.
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 Thursday,
October 30, 2014. The number to call for the interactive teleconference
is (212) 271-4651. A telephonic replay of the conference call will be
available from 7:00 p.m. Eastern time on Thursday, October 30, 2014,
through 6:00 p.m. on Friday, October 31, 2014, by dialing (800) 633-8284
and entering confirmation number 21733502. A live broadcast of Molina
Healthcare's conference call will be available on the Company's website, www.molinahealthcare.com.
A 30-day online replay will be available approximately an hour following
the conclusion of the live broadcast.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health
care services under the Medicaid and Medicare programs and through the
state insurance marketplaces. Through our locally operated health plans
in 11 states across the nation, Molina currently serves approximately
2.4 million members. Dr. C. David Molina founded our company in 1980 as
a provider organization serving low-income families in Southern
California. Today, we continue his mission of providing high quality and
cost-effective health care to those who need it most. For more
information about Molina Healthcare, please visit our website at www.molinahealthcare.com.
Notes:
1. Adjusted net income per diluted share, continuing operations, is a
non-GAAP financial measure used by management as a supplemental metric
in evaluating its financial performance, its financing and business
decisions, and in forecasting and planning for future periods. This
measure is not determined in accordance with accounting principles
generally accepted in the United States of America (GAAP) and should not
be viewed as a substitute for the most directly comparable GAAP measure,
which is diluted net income per share, continuing operations. See below
for reconciliations of the Company's non-GAAP measures to the most
directly comparable GAAP measures.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This earnings release contains "forward-looking
statements" regarding the Company's plans, expectations, and anticipated
future events. Actual results could differ materially due to numerous
known and unknown risks and uncertainties. Those known risks and
uncertainties include, but are not limited to, the following:
-
uncertainties associated with the implementation of the Affordable
Care Act, including the full grossed up reimbursement by states of the
non-deductible health insurer fee, the expansion of Medicaid
eligibility in the states that participate to previously uninsured
populations unfamiliar with managed care, the implementation of state
insurance marketplaces, the effect of various implementing
regulations, and uncertainties regarding the impact of other federal
or state health care and insurance reform measures, including the dual
eligibles demonstration programs in California, Illinois, Michigan,
Ohio, and South Carolina;
-
newly FDA-approved specialty drugs such as Sovaldi, Olysio,
Harvoni, and other specialty drugs that are exorbitantly priced but
not factored into the calculation of our capitated rates;
-
significant budget pressures on state governments and their
potential inability to maintain current rates, to implement expected
rate increases, or to maintain existing benefit packages or membership
eligibility thresholds or criteria;
-
management of our medical costs, including seasonal flu patterns
and rates of utilization that are consistent with our expectations,
and our ability to reduce over time the high medical costs commonly
associated with new patient populations;
-
the accurate estimation of incurred but not paid medical costs
across our health plans;
-
retroactive adjustments to premium revenue or accounting estimates
which require adjustment based upon subsequent developments, including
Medicaid pharmaceutical rebates or retroactive premium rate increases;
-
efforts by states to recoup previously paid amounts;
-
the success of our efforts to retain existing government contracts
and to obtain new government contracts in connection with state
requests for proposals (RFPs) in both existing and new states,
including the success of the proposal of Molina Medicaid Solutions in
New Jersey;
-
the continuation and renewal of the government contracts of both
our health plans and Molina Medicaid Solutions and the terms under
which such contracts are renewed, including the extension of the
Louisiana contract of Molina Medicaid Solutions through 2015;
-
complications, member confusion, or enrollment backlogs related to
the annual renewal of Medicaid coverage;
-
government audits and reviews, and any fine, enrollment freeze, or
monitoring program that may result therefrom;
-
changes with respect to our provider contracts and the loss of
providers;
-
federal or state medical cost expenditure floors, administrative
cost and profit ceilings, and profit sharing arrangements;
-
the interpretation and implementation of at-risk premium rules
regarding the achievement of certain quality measures, including 2014
at-risk premium rules in the state of Texas;
-
approval by state regulators of dividends and distributions by our
health plan 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 or unfavorable resolution of litigation, arbitration,
or administrative proceedings, including pending qui tam actions in
Florida and California, and the litigation commenced against us by the
state of Louisiana alleging that Molina Medicaid Solutions and its
predecessors used an incorrect reimbursement formula for the payment
of pharmaceutical claims;
-
the relatively small number of states in which we operate health
plans;
-
our management of a portion of College Health Enterprises' hospital
in Long Beach, California;
-
the availability of adequate financing on acceptable terms to fund
and capitalize our expansion and growth, repay our outstanding
indebtedness at maturity and meet our liquidity needs, including the
interest expense and other costs associated with such financing;
-
the failure of a state in which we operate to renew its federal
Medicaid waiver;
-
cyber-attacks or other privacy or data security incidents resulting
in an inadvertent unauthorized disclosure of protected health
information;
-
changes generally affecting the managed care or Medicaid management
information systems industries;
-
increases in government surcharges, taxes, and assessments;
-
public alarm associated with the Ebola virus, or any actual
widespread epidemic;
-
changes in general economic conditions, including unemployment
rates;
-
increasing consolidation in the Medicaid industry;
and numerous other risk factors, including those discussed in the
Company's periodic reports and filings with the Securities and Exchange
Commission. These reports can be accessed under the investor relations
tab of the Company's website or on the SEC's website at www.sec.gov.
Given these risks and uncertainties, we can give no assurances that the
Company's forward-looking statements will prove to be accurate, or that
any other results or events projected or contemplated by the Company's
forward-looking statements will in fact occur, and we caution investors
not to place undue reliance on these statements. All forward-looking
statements in this release represent the Company's judgment as of
October 30, 2014, and we disclaim any obligation to update any
forward-looking statements to conform the statement to actual results or
changes in the Company's expectations.
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Amounts in thousands, except net income per share)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium revenue
|
|
$
|
2,316,759
|
|
|
$
|
1,584,656
|
|
|
$
|
6,424,238
|
|
|
$
|
4,583,818
|
|
Service revenue
|
|
52,557
|
|
|
51,100
|
|
|
156,419
|
|
|
150,528
|
|
Premium tax revenue
|
|
81,240
|
|
|
43,723
|
|
|
203,053
|
|
|
127,606
|
|
Health insurer fee revenue (1)
|
|
29,427
|
|
|
-
|
|
|
67,785
|
|
|
-
|
|
Investment income
|
|
2,041
|
|
|
1,740
|
|
|
5,615
|
|
|
4,884
|
|
Other revenue
|
|
2,327
|
|
|
5,860
|
|
|
8,523
|
|
|
16,476
|
|
Total revenue
|
|
2,484,351
|
|
|
1,687,079
|
|
|
6,865,633
|
|
|
4,883,312
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical care costs
|
|
2,097,836
|
|
|
1,383,213
|
|
|
5,753,793
|
|
|
3,965,834
|
|
Cost of service revenue
|
|
40,067
|
|
|
40,113
|
|
|
117,831
|
|
|
119,188
|
|
General and administrative expenses
|
|
178,879
|
|
|
176,233
|
|
|
560,205
|
|
|
478,990
|
|
Premium tax expenses
|
|
81,240
|
|
|
43,723
|
|
|
203,053
|
|
|
127,606
|
|
Health insurer fee expenses (1)
|
|
22,308
|
|
|
-
|
|
|
66,443
|
|
|
-
|
|
Depreciation and amortization
|
|
24,242
|
|
|
18,871
|
|
|
67,835
|
|
|
52,449
|
|
Total operating expenses
|
|
2,444,572
|
|
|
1,662,153
|
|
|
6,769,160
|
|
|
4,744,067
|
|
Operating income
|
|
39,779
|
|
|
24,926
|
|
|
96,473
|
|
|
139,245
|
|
Other expenses, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
14,419
|
|
|
13,532
|
|
|
42,234
|
|
|
38,236
|
|
Other expense (income), net
|
|
863
|
|
|
(24
|
)
|
|
810
|
|
|
3,347
|
|
Total other expenses, net
|
|
15,282
|
|
|
13,508
|
|
|
43,044
|
|
|
41,583
|
|
Income from continuing operations before income tax expense
|
|
24,497
|
|
|
11,418
|
|
|
53,429
|
|
|
97,662
|
|
Income tax expense
|
|
8,427
|
|
|
3,865
|
|
|
24,784
|
|
|
43,791
|
|
Income from continuing operations
|
|
16,070
|
|
|
7,553
|
|
|
28,645
|
|
|
53,871
|
|
Income (loss) from discontinued operations,
net of tax
|
|
52
|
|
|
16
|
|
|
(214
|
)
|
|
8,184
|
|
Net income
|
|
$
|
16,122
|
|
|
$
|
7,569
|
|
|
$
|
28,431
|
|
|
$
|
62,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.33
|
|
|
$
|
0.16
|
|
|
$
|
0.60
|
|
|
$
|
1.15
|
|
Discontinued operations
|
|
-
|
|
|
-
|
|
|
(0.01
|
)
|
|
0.18
|
|
Diluted net income per share
|
|
$
|
0.33
|
|
|
$
|
0.16
|
|
|
$
|
0.59
|
|
|
$
|
1.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
48,644
|
|
|
47,062
|
|
|
48,088
|
|
|
46,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Statistics, Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical care ratio (2)
|
|
90.6
|
%
|
|
87.3
|
%
|
|
89.6
|
%
|
|
86.5
|
%
|
Service revenue ratio (3)
|
|
76.2
|
%
|
|
78.5
|
%
|
|
75.3
|
%
|
|
79.2
|
%
|
General and administrative expense ratio (4)
|
|
7.2
|
%
|
|
10.4
|
%
|
|
8.2
|
%
|
|
9.8
|
%
|
Premium tax ratio (2)
|
|
3.4
|
%
|
|
2.7
|
%
|
|
3.1
|
%
|
|
2.7
|
%
|
Effective tax rate
|
|
34.4
|
%
|
|
33.9
|
%
|
|
46.4
|
%
|
|
44.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Health insurer fee expenses represent insurer fees
levied by the federal government under the Affordable Care Act,
which are not tax deductible. Associated revenues represent state
and federal reimbursement of such fees (including the related
income tax effect) for Medicaid and Medicare insurers.
|
(2) Medical care ratio represents medical care costs as
a percentage of premium revenue; premium tax ratio represents
premium tax expenses as a percentage of premium revenue plus
premium tax revenue. Medical care costs include costs incurred for
providing long term services and supports (LTSS).
|
(3) Service revenue ratio represents cost of service
revenue as a percentage of service revenue.
|
(4) Computed as a percentage of total revenue.
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
|
|
(Amounts in thousands,
except per-share data)
|
ASSETS
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,598,596
|
|
|
$
|
935,895
|
|
Investments
|
|
842,683
|
|
|
703,052
|
|
Receivables
|
|
425,683
|
|
|
298,935
|
|
Income taxes refundable
|
|
7,679
|
|
|
32,742
|
|
Deferred income taxes
|
|
30,817
|
|
|
26,556
|
|
Prepaid expenses and other current assets
|
|
82,062
|
|
|
42,484
|
|
Total current assets
|
|
2,987,520
|
|
|
2,039,664
|
|
Property, equipment, and capitalized software, net
|
|
328,547
|
|
|
292,083
|
|
Deferred contract costs
|
|
51,179
|
|
|
45,675
|
|
Intangible assets, net
|
|
85,035
|
|
|
98,871
|
|
Goodwill
|
|
236,635
|
|
|
230,738
|
|
Restricted investments
|
|
93,119
|
|
|
63,093
|
|
Derivative asset
|
|
222,997
|
|
|
186,351
|
|
Other assets
|
|
51,108
|
|
|
46,462
|
|
|
|
$
|
4,056,140
|
|
|
$
|
3,002,937
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
Current liabilities:
|
|
|
|
|
|
|
Medical claims and benefits payable
|
|
$
|
1,123,846
|
|
|
$
|
669,787
|
|
Accounts payable and accrued liabilities
|
|
609,444
|
|
|
319,965
|
|
Deferred revenue
|
|
190,856
|
|
|
122,216
|
|
Current maturities of long-term debt
|
|
11,927
|
|
|
182,008
|
|
Total current liabilities
|
|
1,936,073
|
|
|
1,293,976
|
|
Convertible senior notes
|
|
697,210
|
|
|
416,368
|
|
Lease financing obligations
|
|
160,412
|
|
|
159,394
|
|
Lease financing obligations - related party
|
|
39,258
|
|
|
27,092
|
|
Deferred income taxes
|
|
7,719
|
|
|
580
|
|
Derivative liability
|
|
222,877
|
|
|
186,239
|
|
Other long-term liabilities
|
|
28,300
|
|
|
26,351
|
|
Total liabilities
|
|
3,091,849
|
|
|
2,110,000
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock, $0.001 par value; 150,000 shares authorized;
outstanding: 48,279 shares at September 30, 2014 and 45,871 shares
at December 31, 2013
|
|
48
|
|
|
46
|
|
Preferred stock, $0.001 par value; 20,000 shares authorized, no
shares issued and outstanding
|
|
-
|
|
|
-
|
|
Additional paid-in capital
|
|
383,300
|
|
|
340,848
|
|
Accumulated other comprehensive loss
|
|
(617
|
)
|
|
(1,086
|
)
|
Retained earnings
|
|
581,560
|
|
|
553,129
|
|
Total stockholders' equity
|
|
964,291
|
|
|
892,937
|
|
|
|
$
|
4,056,140
|
|
|
$
|
3,002,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS,
CONTINUING AND DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Amounts in thousands)
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
16,122
|
|
|
$
|
7,569
|
|
|
$
|
28,431
|
|
|
$
|
62,055
|
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
33,810
|
|
|
24,128
|
|
|
99,464
|
|
|
68,035
|
|
Deferred income taxes
|
|
(12,397
|
)
|
|
(16,287
|
)
|
|
(10,705
|
)
|
|
(38,442
|
)
|
Stock-based compensation
|
|
5,659
|
|
|
8,504
|
|
|
16,115
|
|
|
20,654
|
|
Amortization of convertible senior notes and lease financing
obligations
|
|
6,740
|
|
|
6,440
|
|
|
20,195
|
|
|
16,128
|
|
Other, net
|
|
2,152
|
|
|
4,396
|
|
|
3,875
|
|
|
14,406
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
47,831
|
|
|
(80,191
|
)
|
|
(126,748
|
)
|
|
(144,285
|
)
|
Prepaid expenses and other assets
|
|
15,305
|
|
|
(4,696
|
)
|
|
(51,582
|
)
|
|
(27,552
|
)
|
Medical claims and benefits payable
|
|
199,664
|
|
|
167,219
|
|
|
454,059
|
|
|
138,176
|
|
Accounts payable and accrued liabilities
|
|
136,894
|
|
|
37,959
|
|
|
314,391
|
|
|
20,991
|
|
Deferred revenue
|
|
144,911
|
|
|
78,439
|
|
|
68,640
|
|
|
(17,410
|
)
|
Income taxes
|
|
9,047
|
|
|
(9,988
|
)
|
|
25,063
|
|
|
(1,012
|
)
|
Net cash provided by operating activities
|
|
605,738
|
|
|
223,492
|
|
|
841,198
|
|
|
111,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of investments
|
|
(248,020
|
)
|
|
(95,802
|
)
|
|
(616,324
|
)
|
|
(627,953
|
)
|
Sales and maturities of investments
|
|
147,188
|
|
|
78,380
|
|
|
473,836
|
|
|
227,800
|
|
Purchases of equipment
|
|
(34,101
|
)
|
|
(29,197
|
)
|
|
(71,771
|
)
|
|
(64,426
|
)
|
Increase in restricted investments
|
|
(8,679
|
)
|
|
(8,290
|
)
|
|
(24,301
|
)
|
|
(21,124
|
)
|
Net cash paid in business combinations
|
|
(7,500
|
)
|
|
(57,684
|
)
|
|
(7,500
|
)
|
|
(57,684
|
)
|
Other, net
|
|
(7,832
|
)
|
|
2,989
|
|
|
(15,220
|
)
|
|
1,971
|
|
Net cash used in investing activities
|
|
(158,944
|
)
|
|
(109,604
|
)
|
|
(261,280
|
)
|
|
(541,416
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of convertible senior notes, net of deferred
financing costs
|
|
123,387
|
|
|
-
|
|
|
123,387
|
|
|
537,973
|
|
Proceeds from sale-leaseback transactions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
158,694
|
|
Purchase of call option
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(149,331
|
)
|
Proceeds from issuance of warrants
|
|
-
|
|
|
-
|
|
|
-
|
|
|
75,074
|
|
Treasury stock purchases
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(50,000
|
)
|
Principal payments on term loan
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(47,471
|
)
|
Repayment of amounts borrowed under credit facility
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(40,000
|
)
|
Contingent consideration liabilities settled
|
|
-
|
|
|
-
|
|
|
(50,349
|
)
|
|
-
|
|
Proceeds from employee stock plans
|
|
11
|
|
|
304
|
|
|
7,628
|
|
|
5,156
|
|
Other, net
|
|
1,053
|
|
|
(306
|
)
|
|
2,117
|
|
|
363
|
|
Net cash provided by (used in) financing activities
|
|
124,451
|
|
|
(2
|
)
|
|
82,783
|
|
|
490,458
|
|
Net increase in cash and cash equivalents
|
|
571,245
|
|
|
113,886
|
|
|
662,701
|
|
|
60,786
|
|
Cash and cash equivalents at beginning of period
|
|
1,027,351
|
|
|
742,670
|
|
|
935,895
|
|
|
795,770
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,598,596
|
|
|
$
|
856,556
|
|
|
$
|
1,598,596
|
|
|
$
|
856,556
|
|
MOLINA HEALTHCARE, INC. UNAUDITED NON-GAAP FINANCIAL
MEASURES
The Company uses two non-GAAP financial measures as supplemental metrics
in evaluating its financial performance, making financing and business
decisions, and forecasting and planning for future periods. For these
reasons, management believes such measures are useful supplemental
measures to investors in comparing the Company's performance to the
performance of other public companies in the health care industry. These
non-GAAP financial measures should be considered as supplements to, and
not as substitutes for or superior to, GAAP measures. The first of these
non-GAAP measures is earnings before interest, taxes, depreciation and
amortization (EBITDA). The following table reconciles net income, which
the Company believes to be the most comparable GAAP measure, to EBITDA.
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Amounts in thousands)
|
Net income
|
|
$
|
16,122
|
|
|
$
|
7,569
|
|
|
$
|
28,431
|
|
|
$
|
62,055
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, and amortization of intangible assets and capitalized
software
|
|
29,307
|
|
|
24,128
|
|
|
83,513
|
|
|
68,035
|
Interest expense
|
|
14,419
|
|
|
13,532
|
|
|
42,234
|
|
|
38,236
|
Income tax expense
|
|
8,439
|
|
|
3,962
|
|
|
24,436
|
|
|
33,745
|
EBITDA
|
|
$
|
68,287
|
|
|
$
|
49,191
|
|
|
$
|
178,614
|
|
|
$
|
202,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The second of these non-GAAP measures is adjusted net income, continuing
operations (including adjusted net income per diluted share). The
following tables reconcile net income from continuing operations (and
net income per diluted share), which the Company believes to be the most
comparable GAAP measure, to adjusted net income, continuing operations
(and adjusted net income per diluted share).
|
|
|
|
|
Three Months Ended September 30,
|
|
2014
|
|
2013
|
|
|
(In thousands, except per diluted share amounts)
|
Net income, continuing operations
|
|
$
|
16,070
|
|
|
$
|
0.33
|
|
|
$
|
7,553
|
|
|
$
|
0.16
|
Adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, and amortization of capitalized software
|
|
15,275
|
|
|
0.31
|
|
|
11,821
|
|
|
0.25
|
Amortization of convertible senior notes and lease financing
obligations
|
|
4,246
|
|
|
0.09
|
|
|
4,058
|
|
|
0.08
|
Stock-based compensation
|
|
1,739
|
|
|
0.04
|
|
|
7,010
|
|
|
0.15
|
Amortization of intangible assets
|
|
3,189
|
|
|
0.06
|
|
|
3,378
|
|
|
0.07
|
Change in fair value of derivatives, net
|
|
1
|
|
|
-
|
|
|
(1
|
)
|
|
-
|
Adjusted net income, continuing operations
|
|
$
|
40,520
|
|
|
$
|
0.83
|
|
|
$
|
33,819
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
2014
|
|
2013
|
|
|
(In thousands, except per diluted share amounts)
|
Net income, continuing operations
|
|
$
|
28,645
|
|
|
$
|
0.60
|
|
|
$
|
53,871
|
|
|
$
|
1.15
|
Adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, and amortization of capitalized software
|
|
42,887
|
|
|
0.89
|
|
|
33,375
|
|
|
0.71
|
Amortization of convertible senior notes and lease financing
obligations
|
|
12,723
|
|
|
0.26
|
|
|
10,161
|
|
|
0.21
|
Stock-based compensation
|
|
10,960
|
|
|
0.23
|
|
|
17,026
|
|
|
0.36
|
Amortization of intangible assets
|
|
9,727
|
|
|
0.20
|
|
|
9,485
|
|
|
0.20
|
Change in fair value of derivatives, net
|
|
(5
|
)
|
|
-
|
|
|
3,582
|
|
|
0.08
|
Adjusted net income, continuing operations
|
|
$
|
104,937
|
|
|
$
|
2.18
|
|
|
$
|
127,500
|
|
|
$
|
2.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED HEALTH PLANS SEGMENT MEMBERSHIP DATA,
CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30, 2014
|
|
June 30, 2014
|
|
Dec. 31, 2013
|
|
Sept. 30, 2013
|
Ending Membership by Health Plan:
|
|
|
|
|
|
|
|
|
|
|
|
California
|
|
496,000
|
|
|
455,000
|
|
|
368,000
|
|
|
363,000
|
Florida (1)
|
|
98,000
|
|
|
58,000
|
|
|
89,000
|
|
|
84,000
|
Illinois
|
|
21,000
|
|
|
6,000
|
|
|
4,000
|
|
|
-
|
Michigan
|
|
238,000
|
|
|
244,000
|
|
|
213,000
|
|
|
213,000
|
New Mexico
|
|
207,000
|
|
|
195,000
|
|
|
168,000
|
|
|
172,000
|
Ohio
|
|
337,000
|
|
|
302,000
|
|
|
255,000
|
|
|
261,000
|
South Carolina (2)
|
|
118,000
|
|
|
119,000
|
|
|
-
|
|
|
-
|
Texas
|
|
249,000
|
|
|
247,000
|
|
|
252,000
|
|
|
258,000
|
Utah
|
|
83,000
|
|
|
83,000
|
|
|
86,000
|
|
|
87,000
|
Washington
|
|
473,000
|
|
|
461,000
|
|
|
403,000
|
|
|
409,000
|
Wisconsin
|
|
84,000
|
|
|
85,000
|
|
|
93,000
|
|
|
95,000
|
|
|
2,404,000
|
|
|
2,255,000
|
|
|
1,931,000
|
|
|
1,942,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Membership by Program:
|
|
|
|
|
|
|
|
|
|
|
|
Temporary Assistance for Needy Families (TANF)
|
|
1,608,900
|
|
|
1,564,500
|
|
|
1,503,800
|
|
|
1,519,200
|
Medicaid Expansion (3)
|
|
314,500
|
|
|
232,300
|
|
|
-
|
|
|
-
|
Aged, Blind or Disabled (ABD)
|
|
314,400
|
|
|
305,300
|
|
|
288,600
|
|
|
283,200
|
Children's Health Insurance Program (CHIP)
|
|
69,000
|
|
|
77,000
|
|
|
99,200
|
|
|
101,500
|
Medicare Special Needs Plans
|
|
46,400
|
|
|
44,000
|
|
|
39,400
|
|
|
38,100
|
Medicare-Medicaid Plan (MMP) - Medicaid Only (4)(5)
|
|
20,500
|
|
|
8,400
|
|
|
-
|
|
|
-
|
MMP - Integrated (4)(6)
|
|
14,400
|
|
|
5,200
|
|
|
-
|
|
|
-
|
Health Insurance Marketplaces (3)
|
|
15,900
|
|
|
18,300
|
|
|
-
|
|
|
-
|
|
|
2,404,000
|
|
|
2,255,000
|
|
|
1,931,000
|
|
|
1,942,000
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Enrollment at the Florida health plan declined between the
first and second quarters of 2014 due to a reassignment of
membership as part of the implementation of Florida's Managed
Medical Assistance program. In the third quarter of 2014, such
enrollment increased by approximately 40,000 members due primarily
to the addition of certain service areas effective August 1, 2014.
|
(2) The South Carolina health plan began serving members under
the state of South Carolina's new full-risk Medicaid managed care
program effective January 1, 2014.
|
(3) Medicaid Expansion membership phased in, and Health Insurance
Marketplaces became available for consumers to access coverage,
beginning January 1, 2014.
|
(4) Medicare-Medicaid Plans serve members who are dually eligible
for Medicare and Medicaid. The Company's MMP implementations in
California and Illinois offered coverage beginning in April 2014
and Ohio beginning in June 2014.
|
(5) MMP members who receive Medicaid coverage only from the
Company.
|
(6) MMP members who receive both Medicaid and Medicare coverage
from the Company.
|
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA,
CONTINUING OPERATIONS
(In thousands, except percentages and per-member-per-month
amounts)
|
|
|
|
|
|
Three Months Ended September 30, 2014
|
|
Member
Months (1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR (2)
|
|
Medical Margin
|
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
California
|
|
1,451
|
|
|
$
|
384,147
|
|
|
$
|
264.79
|
|
|
$
|
327,389
|
|
|
$
|
225.66
|
|
|
85.2
|
%
|
|
$
|
56,758
|
|
Florida
|
|
243
|
|
|
106,275
|
|
|
437.47
|
|
|
103,898
|
|
|
427.69
|
|
|
97.8
|
|
|
2,377
|
|
Illinois (3)
|
|
38
|
|
|
34,514
|
|
|
906.78
|
|
|
28,333
|
|
|
744.41
|
|
|
82.1
|
|
|
6,181
|
|
Michigan
|
|
727
|
|
|
208,873
|
|
|
287.15
|
|
|
177,680
|
|
|
244.27
|
|
|
85.1
|
|
|
31,193
|
|
New Mexico
|
|
652
|
|
|
284,058
|
|
|
435.67
|
|
|
265,697
|
|
|
407.51
|
|
|
93.5
|
|
|
18,361
|
|
Ohio
|
|
994
|
|
|
454,410
|
|
|
457.17
|
|
|
395,098
|
|
|
397.49
|
|
|
86.9
|
|
|
59,312
|
|
South Carolina
|
|
355
|
|
|
95,455
|
|
|
268.97
|
|
|
74,489
|
|
|
209.89
|
|
|
78.0
|
|
|
20,966
|
|
Texas
|
|
748
|
|
|
337,430
|
|
|
451.24
|
|
|
306,577
|
|
|
409.98
|
|
|
90.9
|
|
|
30,853
|
|
Utah
|
|
250
|
|
|
78,703
|
|
|
315.04
|
|
|
75,270
|
|
|
301.30
|
|
|
95.6
|
|
|
3,433
|
|
Washington
|
|
1,410
|
|
|
280,883
|
|
|
199.18
|
|
|
274,213
|
|
|
194.45
|
|
|
97.6
|
|
|
6,670
|
|
Wisconsin
|
|
252
|
|
|
42,933
|
|
|
170.40
|
|
|
38,107
|
|
|
151.25
|
|
|
88.8
|
|
|
4,826
|
|
Other (4)
|
|
-
|
|
|
9,078
|
|
|
-
|
|
|
31,085
|
|
|
-
|
|
|
-
|
|
|
(22,007
|
)
|
|
|
7,120
|
|
|
$
|
2,316,759
|
|
|
$
|
325.40
|
|
|
$
|
2,097,836
|
|
|
$
|
294.65
|
|
|
90.6
|
%
|
|
$
|
218,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2013
|
|
Member
Months (1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR (2)
|
|
Medical Margin
|
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
California
|
|
1,076
|
|
|
$
|
184,235
|
|
|
$
|
171.16
|
|
|
$
|
166,774
|
|
|
$
|
154.93
|
|
|
90.5
|
%
|
|
$
|
17,461
|
|
Florida
|
|
251
|
|
|
67,688
|
|
|
269.58
|
|
|
60,127
|
|
|
239.46
|
|
|
88.8
|
|
|
7,561
|
|
Illinois
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Michigan
|
|
641
|
|
|
174,706
|
|
|
272.65
|
|
|
143,498
|
|
|
223.95
|
|
|
82.1
|
|
|
31,208
|
|
New Mexico
|
|
435
|
|
|
130,318
|
|
|
299.19
|
|
|
111,599
|
|
|
256.21
|
|
|
85.6
|
|
|
18,719
|
|
Ohio
|
|
786
|
|
|
280,964
|
|
|
357.66
|
|
|
245,148
|
|
|
312.07
|
|
|
87.3
|
|
|
35,816
|
|
South Carolina
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Texas
|
|
780
|
|
|
320,657
|
|
|
411.17
|
|
|
287,446
|
|
|
368.59
|
|
|
89.6
|
|
|
33,211
|
|
Utah
|
|
261
|
|
|
84,525
|
|
|
323.83
|
|
|
66,555
|
|
|
254.98
|
|
|
78.7
|
|
|
17,970
|
|
Washington
|
|
1,234
|
|
|
294,808
|
|
|
238.96
|
|
|
254,430
|
|
|
206.23
|
|
|
86.3
|
|
|
40,378
|
|
Wisconsin
|
|
287
|
|
|
39,676
|
|
|
138.36
|
|
|
27,694
|
|
|
96.58
|
|
|
69.8
|
|
|
11,982
|
|
Other (3)(4)
|
|
-
|
|
|
7,079
|
|
|
-
|
|
|
19,942
|
|
|
-
|
|
|
-
|
|
|
(12,863
|
)
|
|
|
5,751
|
|
|
$
|
1,584,656
|
|
|
$
|
275.55
|
|
|
$
|
1,383,213
|
|
|
$
|
240.52
|
|
|
87.3
|
%
|
|
$
|
201,443
|
|
(1)
|
|
A member month is defined as the aggregate of each month's ending
membership for the period presented.
|
(2)
|
|
The MCR represents medical costs as a percentage of premium revenue.
|
(3)
|
|
The Illinois health plan's results prior to October 1, 2013, were
insignificant and reported in "Other."
|
(4)
|
|
"Other" medical care costs include primarily medically related
administrative costs at the parent company, and direct delivery
costs.
|
|
|
|
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT FINANCIAL DATA,
CONTINUING OPERATIONS
(In thousands, except percentages and per-member-per-month
amounts)
|
|
|
|
|
|
Nine Months Ended September 30, 2014
|
|
Member Months (1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR (2)
|
|
Medical Margin
|
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
California
|
|
4,040
|
|
|
$
|
1,059,860
|
|
|
$
|
262.34
|
|
|
$
|
889,656
|
|
|
$
|
220.21
|
|
|
83.9
|
%
|
|
$
|
170,204
|
|
Florida
|
|
742
|
|
|
312,864
|
|
|
421.80
|
|
|
290,224
|
|
|
391.28
|
|
|
92.8
|
|
|
22,640
|
|
Illinois (3)
|
|
69
|
|
|
68,948
|
|
|
998.03
|
|
|
63,299
|
|
|
916.26
|
|
|
91.8
|
|
|
5,649
|
|
Michigan
|
|
2,077
|
|
|
567,706
|
|
|
273.28
|
|
|
476,392
|
|
|
229.33
|
|
|
83.9
|
|
|
91,314
|
|
New Mexico
|
|
1,818
|
|
|
777,120
|
|
|
427.55
|
|
|
702,257
|
|
|
386.36
|
|
|
90.4
|
|
|
74,863
|
|
Ohio
|
|
2,615
|
|
|
1,061,335
|
|
|
405.81
|
|
|
909,142
|
|
|
347.62
|
|
|
85.7
|
|
|
152,193
|
|
South Carolina
|
|
1,109
|
|
|
287,928
|
|
|
259.69
|
|
|
249,437
|
|
|
224.97
|
|
|
86.6
|
|
|
38,491
|
|
Texas
|
|
2,239
|
|
|
978,492
|
|
|
437.00
|
|
|
897,434
|
|
|
400.80
|
|
|
91.7
|
|
|
81,058
|
|
Utah
|
|
745
|
|
|
233,931
|
|
|
314.13
|
|
|
215,564
|
|
|
289.47
|
|
|
92.1
|
|
|
18,367
|
|
Washington
|
|
4,050
|
|
|
941,303
|
|
|
232.40
|
|
|
877,418
|
|
|
216.63
|
|
|
93.2
|
|
|
63,885
|
|
Wisconsin
|
|
782
|
|
|
118,386
|
|
|
151.48
|
|
|
100,059
|
|
|
128.03
|
|
|
84.5
|
|
|
18,327
|
|
Other (4)
|
|
-
|
|
|
16,365
|
|
|
-
|
|
|
82,911
|
|
|
-
|
|
|
-
|
|
|
(66,546
|
)
|
|
|
20,286
|
|
|
$
|
6,424,238
|
|
|
$
|
316.69
|
|
|
$
|
5,753,793
|
|
|
$
|
283.64
|
|
|
89.6
|
%
|
|
$
|
670,445
|
|
|
|
|
|
|
Nine Months Ended September 30, 2013
|
|
Member Months (1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR (2)
|
|
Medical Margin
|
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
California
|
|
3,132
|
|
|
$
|
552,950
|
|
|
$
|
176.54
|
|
|
$
|
497,314
|
|
|
$
|
158.78
|
|
|
89.9
|
%
|
|
$
|
55,636
|
|
Florida
|
|
712
|
|
|
187,689
|
|
|
263.62
|
|
|
161,446
|
|
|
226.76
|
|
|
86.0
|
|
|
26,243
|
|
Illinois
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Michigan
|
|
1,941
|
|
|
508,748
|
|
|
262.14
|
|
|
432,105
|
|
|
222.65
|
|
|
84.9
|
|
|
76,643
|
|
New Mexico
|
|
984
|
|
|
298,767
|
|
|
303.59
|
|
|
252,001
|
|
|
256.07
|
|
|
84.3
|
|
|
46,766
|
|
Ohio
|
|
2,234
|
|
|
819,879
|
|
|
367.03
|
|
|
688,266
|
|
|
308.11
|
|
|
83.9
|
|
|
131,613
|
|
South Carolina
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Texas
|
|
2,417
|
|
|
969,063
|
|
|
400.90
|
|
|
829,854
|
|
|
343.31
|
|
|
85.6
|
|
|
139,209
|
|
Utah
|
|
781
|
|
|
236,992
|
|
|
303.41
|
|
|
193,261
|
|
|
247.42
|
|
|
81.5
|
|
|
43,731
|
|
Washington
|
|
3,722
|
|
|
892,627
|
|
|
239.85
|
|
|
779,339
|
|
|
209.41
|
|
|
87.3
|
|
|
113,288
|
|
Wisconsin
|
|
780
|
|
|
104,540
|
|
|
134.04
|
|
|
82,543
|
|
|
105.84
|
|
|
79.0
|
|
|
21,997
|
|
Other (3)(4)
|
|
-
|
|
|
12,563
|
|
|
-
|
|
|
49,705
|
|
|
-
|
|
|
-
|
|
|
(37,142
|
)
|
|
|
16,703
|
|
|
$
|
4,583,818
|
|
|
$
|
274.43
|
|
|
$
|
3,965,834
|
|
|
$
|
237.43
|
|
|
86.5
|
%
|
|
$
|
617,984
|
|
(1)
|
|
A member month is defined as the aggregate of each month's ending
membership for the period presented.
|
(2)
|
|
The MCR represents medical costs as a percentage of premium revenue.
|
(3)
|
|
The Illinois health plan's results prior to October 1, 2013, were
insignificant and reported in "Other."
|
(4)
|
|
"Other" medical care costs include primarily medically related
administrative costs at the parent company, and direct delivery
costs.
|
|
|
|
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 from continuing operations for the periods indicated:
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
2014
|
|
2013
|
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
Fee for service
|
|
$
|
1,469,765
|
|
|
$
|
206.43
|
|
|
70.1
|
%
|
|
$
|
928,165
|
|
|
$
|
161.39
|
|
67.1
|
%
|
Pharmacy
|
|
337,150
|
|
|
47.35
|
|
|
16.1
|
|
|
237,073
|
|
|
41.22
|
|
17.1
|
|
Capitation
|
|
190,277
|
|
|
26.73
|
|
|
9.1
|
|
|
162,554
|
|
|
28.27
|
|
11.8
|
|
Direct delivery
|
|
24,863
|
|
|
3.49
|
|
|
1.1
|
|
|
9,612
|
|
|
1.67
|
|
0.7
|
|
Other
|
|
75,781
|
|
|
10.65
|
|
|
3.6
|
|
|
45,809
|
|
|
7.97
|
|
3.3
|
|
|
|
$
|
2,097,836
|
|
|
$
|
294.65
|
|
|
100.0
|
%
|
|
$
|
1,383,213
|
|
|
$
|
240.52
|
|
100.0
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
2014
|
|
2013
|
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
Fee for service
|
|
$
|
4,028,863
|
|
|
$
|
198.61
|
|
|
70.0
|
%
|
|
$
|
2,674,785
|
|
|
$
|
160.14
|
|
67.5
|
%
|
Pharmacy
|
|
919,374
|
|
|
45.32
|
|
|
16.0
|
|
|
691,903
|
|
|
41.42
|
|
17.4
|
|
Capitation
|
|
536,533
|
|
|
26.45
|
|
|
9.3
|
|
|
441,287
|
|
|
26.42
|
|
11.1
|
|
Direct delivery
|
|
69,947
|
|
|
3.45
|
|
|
1.2
|
|
|
27,739
|
|
|
1.66
|
|
0.7
|
|
Other
|
|
199,076
|
|
|
9.81
|
|
|
3.5
|
|
|
130,120
|
|
|
7.79
|
|
3.3
|
|
|
|
$
|
5,753,793
|
|
|
$
|
283.64
|
|
|
100.0
|
%
|
|
$
|
3,965,834
|
|
|
$
|
237.43
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides the details of the Company's medical
claims and benefits payable as of the dates indicated:
|
|
|
|
|
|
|
|
Sept. 30,
2014
|
|
Dec. 31,
2013
|
Fee-for-service claims incurred but not paid (IBNP)
|
|
$
|
796,433
|
|
|
$
|
424,173
|
Pharmacy payable
|
|
62,322
|
|
|
45,037
|
Capitation payable
|
|
31,535
|
|
|
20,267
|
Other (1)
|
|
233,556
|
|
|
180,310
|
|
|
$
|
1,123,846
|
|
|
$
|
669,787
|
|
|
|
|
|
|
|
|
(1) "Other" medical claims and benefits payable include amounts
payable to certain providers for which the Company acts as an
intermediary on behalf of various state agencies without assuming
financial risk. Such receipts and payments do not impact our
consolidated statements of income. Such non-risk provider payables
amounted to $136.0 million and $151.3 million as of September 30,
2014 and December 31, 2013, respectively.
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC. UNAUDITED CHANGE IN MEDICAL
CLAIMS AND BENEFITS PAYABLE
The Company's claims liability includes an allowance for adverse claims
development based on historical experience and other factors including,
but not limited to, variations in claims payment patterns, changes in
utilization and cost trends, known outbreaks of disease, and large
claims. The Company's reserving methodology is consistently applied
across all periods presented. The amounts displayed for "Components of
medical care costs related to: Prior period" represent the amount by
which the Company's original estimate of claims and benefits payable at
the beginning of the period were more than the actual amount of the
liability based on information (principally the payment of claims)
developed since that liability was first reported. The following table
shows the components of the change in medical claims and benefits
payable from continuing and discontinued operations as of the periods
indicated:
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31, 2013
|
|
|
|
|
2014
|
|
2013
|
|
|
|
(Dollars in thousands, except per-member amounts)
|
Balances at beginning of period
|
|
$
|
669,787
|
|
|
$
|
494,530
|
|
|
$
|
494,530
|
|
Components of medical care costs related to:
|
|
|
|
|
|
|
|
|
|
Current period
|
|
5,795,404
|
|
|
4,021,461
|
|
|
5,434,443
|
|
Prior period
|
|
(41,033
|
)
|
|
(54,040
|
)
|
|
(52,779
|
)
|
Total medical care costs
|
|
5,754,371
|
|
|
3,967,421
|
|
|
5,381,664
|
|
|
|
|
|
|
|
|
|
|
|
Change in non-risk provider payables
|
|
(15,344
|
)
|
|
83,671
|
|
|
111,267
|
|
Payments for medical care costs related to:
|
|
|
|
|
|
|
|
|
|
Current period
|
|
4,841,429
|
|
|
3,534,392
|
|
|
4,932,195
|
|
Prior period
|
|
443,539
|
|
|
378,524
|
|
|
385,479
|
|
Total paid
|
|
5,284,968
|
|
|
3,912,916
|
|
|
5,317,674
|
|
Balances at end of period
|
|
$
|
1,123,846
|
|
|
$
|
632,706
|
|
|
$
|
669,787
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from prior period as a percentage of:
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period
|
|
6.1
|
%
|
|
10.9
|
%
|
|
10.7
|
%
|
Premium revenue, trailing twelve months
|
|
0.5
|
%
|
|
0.9
|
%
|
|
0.9
|
%
|
Medical care costs, trailing twelve months
|
|
0.6
|
%
|
|
1.0
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Claims Data:
|
|
|
|
|
|
|
|
|
|
Days in claims payable, fee for service
|
|
50
|
|
|
41
|
|
|
43
|
|
Number of members at end of period
|
|
2,404,000
|
|
|
1,942,000
|
|
|
1,931,000
|
|
Number of claims in inventory at end of period
|
|
315,900
|
|
|
137,100
|
|
|
145,800
|
|
Billed charges of claims in inventory at end of period
|
|
$
|
749,300
|
|
|
$
|
257,600
|
|
|
$
|
276,500
|
|
Claims in inventory per member at end of period
|
|
0.13
|
|
|
0.07
|
|
|
0.08
|
|
Billed charges of claims in inventory per member
at end of period
|
|
$
|
311.69
|
|
|
$
|
132.65
|
|
|
$
|
143.19
|
|
Number of claims received during the period
|
|
19,703,300
|
|
|
15,751,500
|
|
|
21,317,500
|
|
Billed charges of claims received during the period
|
|
$
|
21,506,500
|
|
|
$
|
15,848,900
|
|
|
$
|
21,414,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOLINA HEALTHCARE, INC.
ACA HIF MEDICAID REVENUE DETAILS BY HEALTH PLAN
(In thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended Sept. 30, 2014
|
|
Required ACA HIF Reimbursement through Dec.
31, 2014
|
|
|
March 31, 2014
|
|
June 30, 2014
|
|
Sept. 30, 2014
|
|
|
|
|
Gross (1)
|
California
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
11,616
|
Florida
|
|
1,416
|
|
|
1,473
|
|
|
1,487
|
|
|
4,376
|
|
|
5,835
|
Illinois
|
|
40
|
|
|
42
|
|
|
40
|
|
|
122
|
|
|
162
|
Michigan
|
|
-
|
|
|
-
|
|
|
8,011
|
|
|
8,011
|
|
|
17,471
|
New Mexico
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11,322
|
Ohio
|
|
7,791
|
|
|
8,117
|
|
|
6,912
|
|
|
22,820
|
|
|
30,426
|
Texas
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
18,518
|
Utah
|
|
-
|
|
|
-
|
|
|
3,000
|
|
|
3,000
|
|
|
5,332
|
Washington
|
|
6,229
|
|
|
6,489
|
|
|
6,217
|
|
|
18,935
|
|
|
25,246
|
Wisconsin
|
|
1,080
|
|
|
1,126
|
|
|
1,372
|
|
|
3,578
|
|
|
4,771
|
Medicaid
|
|
16,556
|
|
|
17,247
|
|
|
27,039
|
|
|
60,842
|
|
|
130,699
|
Medicare
|
|
2,892
|
|
|
3,199
|
|
|
3,068
|
|
|
9,159
|
|
|
12,212
|
|
|
$
|
19,448
|
|
|
$
|
20,446
|
|
|
$
|
30,107
|
|
|
$
|
70,001
|
|
|
$
|
142,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts in the table include the full economic impact of the
excise tax including premium tax and the income tax effect.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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