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UnitedHealth Group’s operating earnings rise 15% in Q1: 6 things to know
Minnetonka, Minn.-based UnitedHealth Group saw revenue and earnings from operations increase in the first quarter of fiscal year 2017 despite its widespread withdrawal from the ACA individual marketplace this year.
Here are six highlights from the payer’s financials for the quarter ended March 31.
1. UnitedHealth reported first quarter revenues of $48.7 billion, reflecting a 9.4 percent year-over-year increase.
2. The payer’s consolidated first quarter revenues were reduced by $1.6 billion due to its large-scale exit from 34 of the ACA individual markets it participated in 2016 and the 2017 health insurance tax deferral.
3. UnitedHealth recorded a 15 percent year-over-year increase of earnings from operations, from $2.96 billion in the first quarter of FY 2016 to $3.4 billion in the first quarter of FY 2017.
4. UnitedHealthcare, the health insurance arm of UnitedHealth, recorded $40.1 billion in revenues for the first quarter, up 11.8 percent from the first quarter of FY 2016. Its membership grew by 730,000 policyholders during the same period. The health insurer also saw its first quarter earnings from operations increase 15 percent year-over-year to $2.1 billion. UnitedHealthcare attributed the growth to increased operating margins.
5. UnitedHealth’s health services platform Optum saw earnings from operations increase 15.6 percent year-over-year to $1.3 billion on revenue of $21.2 billion. Of Optum’s three segments, its advisory consulting arm OptumInsight reported the largest revenue growth at 10.6 percent year-over-year due to increases in revenue management, business process and technology services.
6. UnitedHealth Group raised its full-year 2017 financial outlook and now expects about $200 billion in revenue and adjusted net earnings of $9.65 to $9.85 per share.
Hospitals increasingly employing pre-payment strategies to avoid bad debt
The increase in prevalence of high-deductible health plans under the ACA has led to more unpaid hospital bills among the insured population. To combat mounting bad debt, many hospitals have begun experimenting with pre-payment strategies, many of which require patient payment before scheduled care, according to Reuters.
In 2015 U.S. hospitals faced nearly $36 billion in uncompensated care, with much of that coming from unpaid patient bills.
Hospitals are addressing this in a variety of ways. Henry County Health Center in Mt. Pleasant, Iowa, sends patients cost estimates along with pre-surgery medical advice and information.
“Most patients are appreciative that we’re telling them up front,” said David Muhs, CFO of HCHC, according to the report. The hospital even provides a discount to patients for early payment. While the cost estimates help prevent surprisingly high medical bills after medical procedures, they also lead some patients to skip or delay care. Others elect to use no interest loans available through the hospital, Mr. Muhs told Reuters.
After Winston-Salem, N.C.-based Novant Health began offering no-interest loans its patient default rate dropped from 32 percent to 12 percent, according to the report.
The trend of pre-payment strategies is expected to continue this year amid increasing bad debt, according to the report. According to government data cited by Reuters, the average deductible in 2017 for the least expensive of ACA marketplace plans is $6,000 for an individual, up 18 percent from 2014. A Kaiser Family Foundation poll found that 45 percent of Americans would have difficulty paying an unplanned $500 medical bill.
14 things to know about medical coding
http://www.beckershospitalreview.com/finance/14-things-to-know-about-medical-coding.html
Medical coders play a crucial role in the revenue cycle process, as they help ensure health systems, hospitals and physicians are properly reimbursed for the services they provide.
Here are 14 things to know about medical coding.
9 healthcare bankruptcies so far in 2017
http://www.beckershospitalreview.com/finance/8-healthcare-bankruptcies-so-far-in-2017-041917.html
From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals and other healthcare organizations to file for bankruptcy.
Here are nine healthcare organizations that have filed for bankruptcy since Jan. 1, beginning with the most recent.
Medical Loss Ratio: Updates and Impact
http://bhmpc.com/2017/04/medical-loss-ratio-updates-impact/
Healthcare spending is on the rise. The federal government has begun several initiatives to control costs, increase efficiency, and increase quality. Revisiting one of the Affordable Care Act’s (ACA) metrics, Medical Loss Ratio.
As we all know, healthcare costs are skyrocketing. The US government is trying to look at healthcare spending from all angles in an effort to control costs while increasing quality. It has become a balancing act. The evolution of the American Health Care Act (AHCA) leaves open the possibilities of re-imagining a number of provisions of the ACA increasing the effectiveness of reducing costs and increasing quality. One provisios of particular interest is the Medical Loss Ratio which was supposedly designed to add efficiency, reduce waste, and control administrative costs for a currently broken healthcare system.
Medical Loss Ratio (MLR) Rule
MLR existed long before ACA; was used to evaluate performance of managed care companies. ACA created a federal standard and modified the calculation.
The Affordable Care Act requires health insurance companies to disclose how much they spend on health care and how much they spend on administrative costs, such as salaries and marketing. If an insurance company spends less than 80% (85% in the large group market) of premium on medical care and efforts to improve the quality of care, they must refund the portion of premium that exceeded this limit. This rule is commonly known as the 80/20 rule or the Medical Loss Ratio (MLR) rule.
Modern Healthcare reports, House conservatives and outside experts doubt HHS Secretary Tom Price has legal authority to substantially revise the Affordable Care Act’s key insurance market regulations and other provisions by issuing new rules and guidance. Price could also withdraw the rule released last year that overhauled regulation of Medicaid managed care programs. If Price tries to rescind that rule, network adequacy provisions, a medical loss ratio mandate for managed care plans, and managed long-term services and supports policies would all be eliminated.
Forbes reports this week, “The Trump administration can start by modifying Obamacare’s “medical loss ratio” rules, which dictate how insurers must spend the money they collect in premiums. If or when the MLR requirement ends, maybe the MLR’s impact and importance remains a visible measuring stick of performance.
CNBC used MLR in this story, yesterday. “UnitedHealthcare reported medical care ratio, or the amount it spends on medical claims compared with the insurance premiums that it brings in, of 82.4 percent, an increase of 70 basis point. “We see a positive set up for peers based on a read through of the company’s better-than-expected medical loss ratio and strong Medicaid performance,” Piper Jaffray analyst Sarah James said.”
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