EX-99.1 2 dex991.htm COPY OF PRESENTATION ENTITLED "CLAIMS LIABILITIES" Copy of presentation entitled "Claims Liabilities"
Claims Liabilities:
Change in Estimates for Q1 2006
July 25, 2006
Exhibit 99.1

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Common Themes Across Markets
•
Increased physician costs.
•
Changes in member demographics.
•
Injectible drug compounds avoided prior authorization
requirements when dosed in physician offices.
•
Underestimation of inpatient bed day costs due primarily
to deteriorating conditions of complex cases.
2

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Indiana
$   3,690
Total
There is a significant increase in injectibles due to Synagis and Somatropin
(growth hormone).  Additionally, home infusion increased with new members
receiving hemophilia blood factors.
1,066
Other
This increase is driven by an increase in labor/false labor.
100
Emergency
Department
The per member per month (PMPM) costs for professional services associated
with
primary
care
physicians
who
have
been
recently
added
to
the
network are
significantly
higher.
A
comparison
of
all
professional
services
shows
an increase
in PMPM costs for all regions: 19% in Central; 11% in North and 21% in South.
Unit
cost
comparisons
also
show
increases
in
all
regions:
16%
in
Central,
9% in
North and 14% in South.
1,285
Professional
Physician
Increase
in
observation
days,
and
an
increase
in
tonsillectomies
and other
seasonal ENT procedures.
391
Hospital Outpatient
$636 relates to increased admissions and inpatient days; $212 relates to
increased cost per day.
$     848
Hospital Inpatient
Comments
Amount
(in 000s)
3

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Texas
$   2,234
Total
Overall, Texas has seen an increase in the newborn and pregnant women aid categories, offset by a decline in the
SCHIP category.  As a result, deliveries and delivery related costs have increased.
Two catastrophic newborns significantly increased home health costs.
495
Other
121
Emergency Department
The increase in professional services is significantly attributable to an
increase
in
the
number
of
pregnancies/deliveries.
Additionally,
Synagis
utilization increased approximately 40%, of which 62% of all utilization
is being supplied in the physician office.
1,378
Professional Physician
This increase is attributable to utilization in the aggregate.  Specifically,
there is a significant increase in imaging, operating room and anesthesia
costs.
488
Hospital Outpatient
Favorable development
$    (248)
Hospital Inpatient
Comments
Amount
(in 000s)
4

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Process Improvements
In order to improve the medical claims liability estimatation process, we have or
are in the process of implementing the following:
1.
Retraining of nurses on bed day estimation process and system reporting.
2.
Mandating daily rounds by staff nurses at significant hospitals.
3.
Increased scrutiny of estimated remaining inpatient days required for
complex cases by Medical Management and finance personnel.
4.
Requiring all new hospital contracts to be evaluated prior to approval by the
Health Economics Unit and Health Plan Controllers.
5.
Preparation of provider rate summaries by health plan that identify changes
in contracted rates for all providers.
6.
Face-to-face meetings between Health Plan Controllers, Plan Finance
Directors, Medical Management and Contracting to ensure most current
information is used to evaluate unit cost estimates.
7.
Staff enhancements.
8.
Enhanced monthly review of member demographics by health plan.
5