WellCare Health Plans, Inc. (NYSE: WCG) today reported results for the first quarter ended March 31, 2012. As determined under generally accepted accounting principles (“GAAP”), net income for the first quarter of 2012 was $51.2 million, or $1.18 per diluted share, compared with $21.3 million, or $0.50 per diluted share, for the first quarter of 2011. Adjusted net income for the first quarter of 2012 was $57.3 million, or $1.32 per diluted share, compared with $28.2 million, or $0.66 per diluted share, for the first quarter of 2011.
“Growth this quarter reflects the strength of our long-term focus on Medicaid and Medicare, as well as those dually eligible for both programs,” said Alec Cunningham, WellCare’s chief executive officer. “We continue to have many important opportunities for growth in providing quality, cost-effective health care solutions to our members and government customers.”
WellCare’s first quarter results are highlighted by 22% premium revenue growth and sustained discipline in the management of medical and administrative expenses. The Company also continued to devote significant resources to expansion opportunities serving government health care programs. For example, during the first quarter, membership in special needs plans for those dually eligible for Medicare and Medicaid grew more than 60% year over year. In January, Hawaii selected WellCare’s ‘Ohana Health Plan to serve individuals, families and children through the QUEST Medicaid program. ‘Ohana also recently was awarded New Health Plan Accreditation from the National Committee for Quality Assurance. WellCare’s health care quality initiatives continued to focus on care management, including strengthening resources devoted to resolving Medicaid members’ care gaps. In addition, the Company recently has broadly deployed an enhanced case management model that integrates field-based and telephonic multi-disciplinary care teams to better address the clinical, behavioral, and socioeconomic needs of its most medically complex members.
Reclassification of Quality Improvement CostsThe Company has reassessed its reporting practices and, beginning this quarter, has reclassified to medical benefits expense certain costs related to quality improvement activities that were formerly reported as part of selling, general and administrative (“SG&A”) expense. These quality improvement costs include preventive health and wellness and care management, case and disease management, health plan accreditation costs, provider education and incentives for closing care gaps, health risk assessments and member outreach, and information technology costs related to the above activities.
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