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Molina Healthcare Reports Third Quarter 2012 Results

Stocks in this article: MOH

Amortization of purchased intangibles relating to customer relationships is reported as amortization within the heading “Depreciation and Amortization;”

Amortization of purchased intangibles relating to contract backlog is recorded as a reduction of “Service Revenue;” and

Depreciation is recorded within the heading “Cost of Service Revenue.”

The following table presents all depreciation and amortization recorded in the Company’s consolidated statements of operations, regardless of whether the item appears as depreciation and amortization, a reduction of revenue, or as cost of service revenue.

   
Three Months Ended September 30,
2012       2011  
Amount   % of Total

Revenue

Amount   % of Total

Revenue

(Dollar amounts in thousands)
Depreciation and amortization of capitalized software $ 11,201 0.7 % $ 8,234 0.7 %
Amortization of intangible assets   4,833 0.3     5,196 0.4  
Depreciation and amortization reported as such in the consolidated statements of operations 16,034 1.0 13,430 1.1
Amortization recorded as reduction of service revenue 536 0.1 1,545 0.1
Amortization of capitalized software recorded as cost of service revenue   3,709 0.2     2,837 0.2  
Total $ 20,279 1.3 % $ 17,812 1.4 %
 
 
Nine Months Ended September 30,
2012   2011  
Amount % of Total

Revenue

Amount % of Total

Revenue

(Dollar amounts in thousands)
Depreciation, and amortization of capitalized software $ 31,524 0.7 % $ 22,859 0.7 %
Amortization of intangible assets   15,922 0.4     15,728 0.5  
Depreciation and amortization reported as such in the consolidated statements of operations 47,446 1.1 38,587 1.2
Amortization recorded as reduction of service revenue 842

-

5,277 0.1
Amortization of capitalized software recorded as cost of service revenue   10,001 0.2     8,550 0.2  
Total $ 58,289 1.3 % $ 52,414 1.5 %
         

MOLINA HEALTHCARE, INC.

UNAUDITED MEMBERSHIP DATA

 
Sept. 30,

2012

June 30,

2012

Dec. 31,

2011

Sept. 30,

2011

Total Ending Membership by Health Plan:
California 346,000 350,000 355,000 350,000
Florida 71,000 70,000 69,000 67,000
Michigan 219,000 220,000 222,000 217,000
Missouri (1) 79,000 79,000 78,000
New Mexico 90,000 89,000 88,000 89,000
Ohio 272,000 260,000 248,000 256,000
Texas 291,000 301,000 155,000 148,000
Utah 85,000 86,000 84,000 82,000
Washington 411,000 356,000 355,000 350,000
Wisconsin 41,000 42,000 42,000 41,000
Total 1,826,000 1,853,000 1,697,000 1,678,000
 
Total Ending Membership by State for the Medicare Advantage Plans:
California 7,300 7,000 6,900 6,500
Florida 900 900 800 700
Michigan 9,300 8,900 8,200 7,600
New Mexico 900 900 800 800
Ohio 200 200 200 100
Texas 1,100 800 700 600
Utah 8,300 8,300 8,400 7,400
Washington 6,100 5,700 5,000 4,500
Total 34,100 32,700 31,000 28,200
 
Total Ending Membership by State for the Aged, Blind or Disabled Population:
California 44,100 41,100 31,500 23,700
Florida 10,300 10,400 10,400 10,400
Michigan 40,700 40,000 37,500 31,600
New Mexico 5,600 5,600 5,600 5,600
Ohio 29,000 29,600 29,100 29,900
Texas 101,300 111,000 63,700 61,800
Utah 8,900 8,800 8,500 8,300
Washington 23,400 4,400 4,800 4,700
Wisconsin 1,600 1,700 1,700 1,700
Total 264,900 252,600 192,800 177,700
 

(1) The Company’s contract with the state of Missouri expired without renewal on June 30, 2012.

   

MOLINA HEALTHCARE, INC.

UNAUDITED SELECTED FINANCIAL DATA BY HEALTH PLAN

(Amounts in thousands except per member per month amounts)

 
Three Months Ended September 30, 2012  
Member

Months (1)

  Premium Revenue   Medical Care Costs  

Medical

Care

Ratio

(MCR)

Premium

Tax

Expense

MCR

Excluding

Premium

Tax

Expense (4)

Total   PMPM Total   PMPM    
California 1,041 $ 162,389 $ 156.00 $ 156,106 $ 149.96 96.1 % $ ― 96.1 %
Florida 214 57,429 268.56 48,250 225.64 84.0 (5 ) 84.0
Michigan 656 160,637 244.91 143,513 218.80 89.3 1,046 89.9
Missouri (2)

 

 

New Mexico 269 84,797 315.49 73,721 274.28 86.9 1,761 88.8
Ohio 805 306,314 380.20 253,447 314.58 82.7 23,824 89.7
Texas 890 350,810 394.10 316,716 355.80 90.3 6,289 91.9
Utah 256 73,484 287.21 62,630 244.79 85.2 85.2
Washington 1,217 274,079 225.29 236,928 194.76 86.4 4,888 88.0
Wisconsin 124 16,279 131.21 15,217 122.65 93.5 93.5
Other (3) 2,500   8,043  

91

 
5,472 $ 1,488,718 $ 272.08 $ 1,314,571 $ 240.25 88.3 % $ 37,894   90.6 %
 
 
Three Months Ended September 30, 2011  
Member

Months (1)

Premium Revenue Medical Care Costs

Medical

Care

Ratio

(MCR)

Premium

Tax

Expense

MCR

Excluding

Premium

Tax

Expense (4)

Total   PMPM Total PMPM  
California 1,049 $ 144,888 $ 138.11 $ 128,596 $ 122.58 88.8 % $ 1,114 89.4 %
Florida 199 51,569 258.96 46,009 231.04 89.2 (17 ) 89.2
Michigan 656 165,636 252.46 135,899 207.13 82.0 9,644 87.1
Missouri (2) 234 58,196 248.80 45,428 194.22 78.1 78.1
New Mexico 267 79,644 297.82 67,043 250.70 84.2 2,084 86.4
Ohio 745 232,616 312.55 182,363 245.02 78.4 18,072 85.0
Texas 414 105,577 255.25 98,954 239.24 93.7 1,613 95.2
Utah 243 69,763 286.47 55,293 227.05 79.3 79.3
Washington 1,043 211,131 202.49 174,912 167.76 82.8 3,776 84.4
Wisconsin 123 17,269 139.95 13,656 110.67 79.1 79.1
Other (3)   1,941   11,005

 

 

88
4,973 $ 1,138,230 $ 228.88 $ 959,158 $ 192.87 84.3 % $ 36,374 87.0 %
 

(1) A member month is defined as the aggregate of each month’s ending membership for the period presented.

(2) The Company’s contract with the state of Missouri expired without renewal on June 30, 2012. The Missouri health plan’s claims run-out activity subsequent to June 30, 2012, is reported in “Other.”

(3) “Other” medical care costs also include medically related administrative costs at the parent company.

(4) The MCR Excluding Premium Tax Expense represents medical costs as a percentage of premium revenues, where premium revenue is reduced by premium tax expense.

   

MOLINA HEALTHCARE, INC.

UNAUDITED SELECTED FINANCIAL DATA BY HEALTH PLAN

(Amounts in thousands except per member per month amounts)

 
Nine Months Ended September 30, 2012  

Member

Months (1)

  Premium Revenue   Medical Care Costs  

Medical

Care

Ratio

(MCR)

 

Premium

Tax

Expense

 

MCR

Excluding

Premium

Tax

Expense (4)

Total   PMPM Total   PMPM      
California 3,156 $ 491,718 $ 155.80 $ 446,694 $ 141.53 90.8 % $ 5,004 91.8 %
Florida 632 170,922 270.47 146,261 231.44 85.6 (18 ) 85.6
Michigan 1,983 491,301 247.78 419,406 211.52 85.4 11,203 87.4
Missouri (2) 483 113,818 235.63 113,101 234.15 99.4 99.4
New Mexico 801 253,418 316.56 208,668 260.66 82.3 5,971 84.3
Ohio 2,313 896,908 387.74 735,432 317.93 82.0 69,689 88.9
Texas 2,389 908,532 380.30 890,042 372.57 98.0 16,155 99.7
Utah 767 225,533 293.93 183,930 239.71 81.6 81.6
Washington 3,352 697,065 207.97 592,398 176.75 85.0 12,599 86.5
Wisconsin 374 52,209 139.46 54,861 146.54 105.1 105.1
Other (3)   7,015   32,343   350  
16,250 $ 4,308,439 $ 265.14 $ 3,823,136 $ 235.27 88.7 % $ 120,953   91.3 %
 
 
Nine Months Ended September 30, 2011  
Member

Months (1)

Premium Revenue Medical Care Costs

Medical

Care

Ratio

(MCR)

Premium

Tax

Expense

MCR

Excluding

Premium

Tax

Expense (4)

Total PMPM Total PMPM      
California 3,133 $ 418,961 $ 133.71 $ 359,844 $ 114.84 85.9 % $ 4,937 86.9 %
Florida 588 150,561 256.13 141,872 241.35 94.2 34 94.3
Michigan 2,002 495,971 247.70 399,952 199.75 80.6 29,219 85.7
Missouri (2) 722 169,988 235.45 148,135 205.18 87.1 87.1
New Mexico 808 246,223 304.71 205,659 254.51 83.5 6,472 85.8
Ohio 2,218 693,829 312.86 533,216 240.44 76.9 53,629 83.3
Texas 1,154 290,787 252.06 271,723 235.54 93.4 5,016 95.1
Utah 723 215,205 297.62 167,605 231.79 77.9 77.9
Washington 3,104 608,998 196.25 515,769 166.20 84.7 11,099 86.3
Wisconsin 364 51,526 141.42 47,450 130.23 92.1 44 92.2
Other (3)   6,389   30,824   183  
14,816 $ 3,348,438 $ 226.01 $ 2,822,049 $ 190.48

84.3

% $ 110,633   87.2 %
 

(1) A member month is defined as the aggregate of each month’s ending membership for the period presented.

(2) The Company’s contract with the state of Missouri expired without renewal on June 30, 2012. The Missouri health plan’s claims run-out activity subsequent to June 30, 2012, is reported in “Other.”

(3) “Other” medical care costs also include medically related administrative costs of the parent company.

(4) The MCR Excluding Premium Tax Expense represents medical costs as a percentage of premium revenues, where premium revenue is reduced by premium tax expense.

 
   

MOLINA HEALTHCARE, INC. UNAUDITED SELECTED FINANCIAL DATA(Amounts 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 September 30,
2012       2011  
Amount   PMPM   % of

Total

Amount   PMPM   % of

Total

Fee for service $ 908,201 $ 165.97 69.1 % $ 698,995 $ 140.55 72.9 %
Pharmacy 219,823 40.17 16.7 89,191 17.93 9.3
Capitation 142,714 26.08 10.9 129,315 26.00 13.5
Other   43,833   8.03 3.3     41,657   8.39 4.3  
Total $ 1,314,571 $ 240.25 100.0 % $ 959,158 $ 192.87 100.0 %
 
Nine Months Ended September 30,
2012   2011  
Amount PMPM % of

Total

Amount PMPM % of

Total

Fee for service $ 2,666,470 $ 164.09 69.8 % $ 2,050,430 $ 138.40 72.7 %
Pharmacy 606,004 37.29 15.9 268,637 18.13 9.5
Capitation 417,643 25.70 10.9 383,955 25.92 13.6
Other   133,019   8.19 3.4     119,027   8.03 4.2  
Total $ 3,823,136 $ 235.27 100.0 % $ 2,822,049 $ 190.48 100.0 %
 
       

 

The following table provides the details of the Company’s medical claims and benefits payable as of the dates indicated:

 
Sept. 30,

2012

Dec. 31,

2011

Sept. 30,

2011

(In thousands)
Fee-for-service claims incurred but not paid (IBNP) $ 414,725 $ 301,020 $ 283,160
Capitation payable 55,314 53,532 49,259
Pharmacy 42,681 26,178 16,615
Other   23,743   21,746   12,021
$ 536,463 $ 402,476 $ 361,055

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 periods” represent the amount by which the Company’s original estimate of claims and benefits payable at the beginning of the period were (more) or less 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 as of the periods indicated:

         

Nine Months Ended

September 30,

Three Months Ended

September 30,

Year Ended

Dec. 31,

2011

2012   2011 2012   2011
(Dollars in thousands, except per-member amounts)
Balances at beginning of period $ 402,476 $ 354,356 $ 525,538 $ 341,613 $ 354,356
Components of medical care costs related to:
Current period 3,860,825 2,871,515 1,361,539 990,449 3,911,803
Prior periods   (37,689 )   (49,466 )   (46,968 )   (31,291 )   (51,809 )
Total medical care costs   3,823,136     2,822,049     1,314,571     959,158     3,859,994  
Payments for medical care costs related to:
Current period 3,332,896 2,522,374 875,236 670,066 3,516,994
Prior periods   356,253     292,976     428,410     269,650     294,880  
Total paid   3,689,149     2,815,350     1,303,646     939,716     3,811,874  
Balances at end of period $ 536,463   $ 361,055   $ 536,463   $ 361,055   $ 402,476  
Benefit from prior period as a percentage of:
Balance at beginning of period 9.4 % 14.0 % 8.9 % 9.2 % 14.6 %
Premium revenue 0.9 % 1.5 % 3.2 % 2.7 % 1.1 %
Total medical care costs 1.0 % 1.8 % 3.6 % 3.3 % 1.3 %
 
Claims Data:
Days in claims payable, fee for service 45 39 45 39 40
Number of members at end of period 1,826,000 1,678,000 1,826,000 1,678,000 1,697,000
Number of claims in inventory at end of period 163,600 132,200 163,600 132,200 111,100
Billed charges of claims in inventory at end of period $ 304,600 $ 187,000 $ 304,600 $ 187,000 $ 207,600
Claims in inventory per member at end of period 0.09 0.08 0.09 0.08 0.07
Billed charges of claims in inventory per member at end of period $ 166.81 $ 111.44 $ 166.81 $ 111.44 $ 122.33
Number of claims received during the period 15,455,000 12,864,800 5,079,200 4,149,600 17,207,500
Billed charges of claims received during the period $ 14,339,700 $ 10,573,900 $ 4,951,000 $ 3,610,700 $ 14,306,500




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