On May 5th, WellCare announced that it entered into a Deferred Prosecution Agreement with the United States Attorney’s Office for the Middle District of Florida and the Florida Attorney General’s Office.
WellCare announced on May 18th, it had resolved its informal investigation conducted by the Securities and Exchange Commission in regards to the company’s periodic filings.
The uncertainty of value associated with disease management programs, coupled with the economic recession has caused many employers to cut funding to these programs. As noted in the Wall Street Journal, revenues are down for certain disease management companies after experiencing years of growth.
WellCare announced on May 20th that it will reorganize the company and intends to cut its staff of 4,100 by 360 employees or 9%.
Announced on May 1st, Triple-S Salud, a subsidiary of Triple-S, has entered into a definitive agreement with La Cruz Azul de Puerto Rico to acquire certain managed care assets for approximately $10.5 million.
On average, health plan stock prices grew 8.5% for the month due, we believe, to improving investor sentiment. Eleven of the fourteen of the health plans had increases in stock prices. Valuation indicators grew for the month of May.
Four of the fourteen publicly-traded health plans announced earnings last month. AMERIGROUP’s net income fell 5.0%, mainly attributable to a 51.8% decline in non-operating earnings. Health Net’s operating income grew 710.4% as the company’s health benefit ratio improved 1.1 percentage points. Triple-S Management’s total ASO membership grew 132.6% as a result of the health plan signing the Metro-North Contract in November 2008. WellCare’s operating income declined 24.6% to $18.0 million, as net income decreased 43.5%.
Blue Cross Blue Shield of North Carolina (BCBSNC) appointed Alan Hughes as Chief Information Officer and Vice President of information services. Blue Cross Blue Shield of North Carolina (BCBSNC) named Gerald Petkau as Chief Financial Officer. CIGNA Corporation named Annmarie Hagan as Executive Vice President and Chief Financial Officer.
BLUES, our bi-annual review of the financial performance of Blue Cross Blue Shield Plans. The deteriorating economy has hurt the performance of Blues as operating and non-operating earnings fell in 2008. Slightly higher health benefit ratios were evident with administrative expense to premium ratios remaining constant.
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