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March 15, 2008
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MHMR March 15, 2008: Volume 16, Number 5
Black Tuesday for MCO stocks…Medicare HMO lives rise…Humana to expand in Vegas…United completes Sierra deal…Medicare PFFS lives up 83%...Medicare HMO lives rise 9%...Medicare PDP lives rise 3.6%...Medicare PPO lives rise 63%...WellPoint slashes profit outlook…Aetna reaffirms ’08 outlook…Coventry cuts ’08 profit forecast…NY AG expands investigation…Medco breaks ground…Magellan promotes Lerer…Cigna extends Healthways pact…HealthSpring says P4P works…MCO stocks fall 16.5…Services stocks fall 3.7%...and more…
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BLACK TUESDAY FOR MCO STOCKS
Managed care stocks were down 13% in midday trading on Tuesday, March 11, according to an MHMR tally of 13 leading issues.
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HUMANA TO BUY UNITED VEGAS MA HMO
Humana Inc. (Louisville, KY) has agreed to acquire UnitedHealth Group’s individual SecureHorizons Medicare Advantage HMO plans in Nevada’s Clark and Nye counties, affecting 25,000 members, for $185 million in cash.
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UNITED COMPLETES ACQUISITION OF SIERRA
After a year-long delay, UnitedHealth Group (Minnetonka, MN) said it had completed the acquisition of Sierra Health Services (Las Vegas, NV) in a deal valued at $2.6 billion (MHMR, March 15, 2007).
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WELLPOINT SLASHES ’08 PROFIT OUTLOOK
WellPoint Inc. (Indianapolis), a company that had routinely put up 15% annual profit growth numbers, announced that it was slashing its 2008 earnings forecast because of higher-than-expected costs, lower-than-expected enrollment and a softening economy.
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COVENTRY CUTS 2008 PROFIT FORECAST
Shares in Coventry Inc. (Bethesda, MD) fell 4% on March 17 after the company cut its 2008 profit forecast, citing higher than expected flu costs and lower than expected investment income.
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HEALTH NET REVIEWS ’08 OUTLOOK
Health Net (Woodland Hills, CA) said that in light of “recent events in our industry,” the company is reviewing its first quarter and full-year 2008 projections to determine whether any adjustments need to be made. The company said it will provide an update on its outlook for the year after its March 19-20 investor and analysts meetings.
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MEDICARE PFFS LIVES RISE 81.3%
Medicare Advantage private fee-for-service membership increased 81.3% to 1.865 million as of Jan. 1, 2008, compared to 1.028 million as of Jan. 1, 2007, according to an MHMR tally of figures from the Centers for Medicare & Medicaid Services.
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MEDCO BREAKS GROUND ON INDIANA MAIL ORDER FACILITY
Medco Health Solutions (Franklin Lakes, NJ) broke ground on a $140 million automated mail order drug facility in AllPoints at Anson, IN. The facility, which will have 1300 employees, is expected to open in 2009 and distribute 1 million scripts weekly by 2012.
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MEDICARE HMO LIVES UP 9.4%
Medicare Advantage HMO lives increased 9.4% to 6.087 million as of Jan. 1, 2008, compared to 5.566 million as of Jan. 1, 2007, according to an MHMR tally of figures from the Centers for Medicare & Medicaid Services.
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CIGNA EXTENDS CONTRACT WITH HEALTHWAYS
Under a three-year contract extension, Cigna Corp. (Philadelphia) will continue to receive disease management support services from Healthways (Nashville, TN), the two companies said.
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MEDICARE PDP LIVES INCREASE 3.6%
Medicare Part D prescription drug plan lives rose 3.6% to 17.154 million as of Jan. 1, 2008, compared to 16.553 million as of Jan. 1, 2007, according to an MHMR tally of figures from the Centers for Medicare & Medicaid Services.
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P4P PROGRAM YIELDS RESULTS, HEALTHSPRING SAYS
HealthSpring (Nashville, TN) said that preliminary results from its physician pay-for-performance pilot program show that preventive screenings by physicians rose while utilization of emergency room and hospital visits declined.
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MEDICARE PPO LIVES CLIMB 62.6%
Medicare Advantage PPO enrollment jumped 62.6% to 716,906 as of Jan. 1, 2008, compared to 440,949 as of Jan. 1, 2007, according to an MHMR tally of figures from the Centers for Medicare & Medicaid Services.
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NY AG ISSUES NEW SUBPOENAS TO TOP MCOs
New York State Attorney General Mario Cuomo has issued a new round of subpoenas to leading managed care organizations—including Aetna, Cigna, UnitedHealth, WellPoint—as part of an investigation into whether health plans avoid paying a fair share of member out-of-network medical expenses by fraudulently manipulating physician reimbursement rates (MHMR, Feb. 15).
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