EX-99 3 dex99.htm PRESS RELEASE DATED FEB 4, 2003 PRESS RELEASE DATED FEB 4, 2003

 

EXHIBIT 99

 

For Further Information:

 

Investor Contact:

Gary Frazier/Deborah Abraham

 

(203) 459-7331/(203) 459-6674

 

Media Contact:

Maria Gordon-Shydlo

 

(203) 459-7674

 

 

FOR IMMEDIATE RELEASE

 

OXFORD HEALTH PLANS, INC.

ANNOUNCES FOURTH QUARTER AND FULL YEAR 2002 RESULTS

 

EARNINGS PER SHARE OF $0.84 FOR THE FOURTH QUARTER INCLUDING

$0.13 PER SHARE OF PREVIOUSLY ANNOUNCED CHARGES

 

TRUMBULL, CONNECTICUT, February 4, 2003 Oxford Health Plans, Inc. (NYSE: OHP) announced today net income of $0.84 per diluted common share for the quarter ended December 31, 2002, compared to $1.00 per share for the prior year quarter. Fourth quarter net income was $73.8 million in 2002 compared to $94.3 million in 2001. Full year net income was $222.0 million, or $2.45 per diluted share for 2002, compared to $322.4 million, or $3.21 per diluted share, in 2001. Fourth quarter run rate earnings were $0.97 per share in 2002 compared to $0.85 per share in 2001. Full year run rate earnings were $3.37 per share in 2002 compared to $2.97 per share in 2001. See Exhibit 1 to this release for a reconciliation of earnings reported under generally accepted accounting principles to run rate earnings for the fourth quarter and full year 2002 compared to the 2001 periods.

 

Revenue for the quarter was $1.29 billion compared to $1.12 billion in the prior year period. Fully insured commercial membership, excluding MedSpan, increased by over 4 thousand members during the fourth quarter. For the full year 2002, excluding MedSpan, Oxford’s fully insured commercial membership grew 5.4% over December 2001 levels. The medical loss ratio was 80.2% and 79.3% for the fourth quarter and full year 2002, respectively, compared to 77.8% and 78.9%% in the prior year periods. The run rate administrative loss ratio was 10.9% and 11.1% for the fourth quarter and full year 2002, respectively, compared to 11.1% and 11.1% in the prior year periods. These run rate administrative loss ratios do not include the impact of the net charge for estimated securities litigation settlement, charges for legal defense costs related to such litigation or the CSC contract termination and asset valuation charges reflected in Exhibit 1. Oxford’s CEO and President, Charles G. Berg, commented on the results, “Oxford’s strong financial results in the fourth quarter and 2002 were driven by our ongoing commitment to quality, affordability and administrative efficiency. We continue to deliver new products and benefit designs that meet the changing needs of our customers and members, while staying focused on managing health care costs. We are enthusiastic about our prospects for 2003.”

 

The Company reported $86.9 million in cash flow from operations for the quarter ended December 31, 2002, compared to $181.2 million in the prior year period. The decline for the quarter was primarily due to higher payments for income taxes and accelerated claims payments compared to the fourth quarter of 2001. Additionally, the fourth quarter of 2001 included $37 million in cash receipts related to a new pharmacy management contract. Full year 2002 operating cash flows were $344.5 million, essentially in line with the Company’s expectations. As of December 31, 2002, the Company held approximately $1.4 billion in cash and marketable securities, $124 million of which was available at the parent company. “During 2002, using cash generated from operations, we repurchased 6.8 million shares of common stock for $251.5 million, bringing our total repurchases to 19.8 million shares for $617.4 million since the inception of our share repurchase program in the third quarter of 2001. We believe that operating cash flows will continue to be strong in 2003,” said Kurt B. Thompson, Oxford’s Chief Financial Officer.

 

As previously announced, the Company will hold a conference call on Tuesday, February 4, 2003, at 9:00 am (Eastern Time) to review the results of the fourth quarter and full

 

1

 

year 2002 and discuss the outlook for 2003. The public is invited to listen to this conference call by dialing 1-888-677-8170 (using the password “Oxford”) at least 10 minutes prior to the start of the call. Individuals who dial in will be asked to identify themselves and their affiliations. Investors, analysts and the public are also invited to listen to the conference call over the Internet by visiting our website at www.oxfordhealth.com. To listen to this call live on the Internet, visit the investor page of Oxford’s Web site at least 20 minutes early (to download and install any necessary audio software).

 

Founded in 1984, Oxford Health Plans, Inc. provides health plans to employers and individuals primarily in New York, New Jersey and Connecticut, through its direct sales force, independent insurance agents and brokers. Oxford’s services include traditional health maintenance organizations, point-of-service plans, Medicare plans and third party administration of employer-funded benefits plans.

 

2

 

Cautionary Statement Regarding Forward-Looking Statements

 

Certain statements in this press release, including statements concerning the Company’s future prospects, future operating cash flows, future healthcare quality and premium affordability, future administrative efficiency, and other statements contained herein regarding matters that are not historical facts, are forward-looking statements as defined in the Securities Exchange Act of 1934; and because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to:

 

·   Changes in Federal or State regulation relating to health care and health benefit plans, including proposed patient protection legislation and mandated benefits.
·   The state of the economy.
·   Rising medical costs or higher utilization of medical services, including higher out-of-network utilization under point-of-service plans and new drugs and technologies.
·   Competitive pressure on the pricing of the Company’s products, including acceptance of premium rate increases by the Company’s commercial groups.
·   Higher than expected administrative costs in operating the Company’s business and the cost and impact on service of changing technologies.
·   The ability of the Company to maintain risk transfer, risk sharing, incentive and other provider arrangements and the resolution of existing and future disputes over the reconciliations and performance under such arrangements.
·   Any changes in the Company’s estimates of its medical costs and expected cost trends.
·   The impact of future developments in various litigation (including pending class and derivative actions filed against the Company and certain of its officers and directors, and other proceedings commenced against the Company and several employees by certain healthcare providers), class actions in Connecticut, New Jersey and New York and related litigation by the Connecticut Attorney General, regulatory proceedings and other governmental action (including the periodic examination, investigation and review of the Company by various Federal and State authorities).
·   The Company’s ability to renew existing members and attract new members.
·   The Company’s ability to develop processes and systems to support its operations and any future growth and administer new health care benefit designs.
·   Any future acts or threats of terrorism or war.
·   Those factors included in the discussion under the caption “Cautionary Statement Regarding Forward-Looking Statements” in Part I, Item 1, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and Part I, Item 2, of the Company’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2002, June 30, 2002 and September 30, 2002.

 

3

 

OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES

Consolidated Income Statements

For the Three and Twelve Months Ended December 31, 2002 and 2001

(In thousands, except per share, per member per month and membership highlights data)

 

    

Three Months Ended

December 31,

     

Twelve Months Ended

December 31,

  
    

2002

     

2001

     

2002

     

2001

  

Revenues:

                                    

Premiums earned

   

$

1,262,555

 

   

$

1,094,860

 

   

$

4,850,964

 

   

$

4,312,391

 

Third-party administration, net

   

 

4,568

 

   

 

3,910

 

   

 

17,744

 

   

 

13,791

 

Investment and other income, net

   

 

31,495

 

   

 

22,094

 

   

 

94,686

 

   

 

95,046

 

    
  
  
  

Total revenues

   

 

1,298,618

 

   

 

1,120,864

 

   

 

4,963,394

 

   

 

4,421,228

 

    
  
  
  

Expenses:

                                    

Health care services

   

 

1,013,101

 

   

 

852,153

 

   

 

3,848,803

 

   

 

3,401,331

 

Marketing, general and administrative

   

 

157,767

 

   

 

122,046

 

   

 

575,433

 

   

 

489,143

 

Litigation charge for estimated settlement, net

   

 

—  

 

   

 

—  

 

   

 

151,300

 

   

 

—  

 

Interest and other financing charges

   

 

2,388

 

   

 

3,484

 

   

 

11,041

 

   

 

19,003

 

    
  
  
  

Total expenses

   

 

1,173,256

 

   

 

977,683

 

   

 

4,586,577

 

   

 

3,909,477

 

    
  
  
  

Earnings before income taxes

   

 

125,362

 

   

 

143,181

 

   

 

376,817

 

   

 

511,751

 

Income tax expense

   

 

51,521

 

   

 

48,848

 

   

 

154,852

 

   

 

189,330

 

    
  
  
  

Net earnings

   

$

73,841

 

   

$

94,333

 

   

$

221,965

 

   

$

322,421

 

    
  
  
  

Earnings per common share—basic

   

$

0.86

 

   

$

1.04

 

   

$

2.55

 

   

$

3.35

 

    
  
  
  

Earnings per common share—diluted

   

$

0.84

 

   

$

1.00

 

   

$

2.45

 

   

$

3.21

 

    
  
  
  

Weighted-average common shares—basic

   

 

85,393

 

   

 

90,508

 

   

 

87,145

 

   

 

96,269

 

Dilutive effect of stock options

   

 

2,359

 

   

 

3,715

 

   

 

3,599

 

   

 

4,274

 

    
  
  
  

Weighted-average common shares—diluted

   

 

87,752

 

   

 

94,223

 

   

 

90,744

 

   

 

100,543

 

    
  
  
  

Selected Information

Medical loss ratio

   

 

80.2

%

   

 

77.8

%

   

 

79.3

%

   

 

78.9

%

Administrative loss ratio, excluding litigation settlement charge

   

 

12.5

%

   

 

11.1

%

   

 

11.8

%

   

 

11.3

%

Earnings before income taxes, financing charges, depreciation and amortization ("EBITDA")

   

$

133,656

 

   

$

152,568

 

   

$

409,680

 

   

$

550,531

 

PMPM premium revenue

   

$

271.16

 

   

$

252.03

 

   

$

265.10

 

   

$

247.80

 

PMPM medical expense

   

$

217.59

 

   

$

196.16

 

   

$

210.33

 

   

$

195.45

 

Fully insured member months

   

 

4,656.1

 

   

 

4,344.2

 

   

 

18,298.8

 

   

 

17,402.4

 

 

    

As of December 31,

Membership Highlights

   

2002

   

2001

POS, PPO and Other Plans

   

1,252,900

   

1,154,100

HMO

   

226,600

   

218,200

    
  

Total Fully Insured Commercial

   

1,479,500

   

1,372,300

Medicare

   

70,100

   

77,800

Third-party Administration

   

51,900

   

60,000

    
  

Total Membership

   

1,601,500

   

1,510,100

    
  

 

4

 

 

OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

As of December 31, 2002 and December 31, 2001

(In thousands, except share data)

 

Assets

 

    

Dec. 31,

     

Dec. 31,

  
    

2002

     

2001

  

Current assets:

                  

Cash and cash equivalents

   

$

 321,627

 

   

$

 345,530

 

Investments—available-for-sale, at market value

   

 

1,102,664

 

   

 

961,652

 

Premiums receivable, net

   

 

29,803

 

   

 

37,127

 

Other receivables

   

 

43,919

 

   

 

24,678

 

Prepaid expenses and other current assets

   

 

10,214

 

   

 

3,450

 

Deferred income taxes

   

 

111,652

 

   

 

83,416

 

    
  

Total current assets

   

 

1,619,879

 

   

 

1,455,853

 

Property and equipment, net

   

 

34,445

 

   

 

35,084

 

Deferred income taxes

   

 

9,173

 

   

 

8,348

 

Restricted cash and investments

   

 

56,421

 

   

 

58,813

 

Goodwill and other intangible assets, net

   

 

24,691

 

   

 

3,302

 

Other noncurrent assets

   

 

8,907

 

   

 

15,325

 

    
  

Total assets

   

$

 1,753,516

 

   

$

 1,576,725

 

    
  

Liabilities and Shareholders' Equity

Current liabilities:

                  

Medical costs payable

   

$

618,618

 

   

$

595,064

 

Current portion of long term debt

   

 

30,625

 

   

 

26,250

 

Trade accounts payable and accrued expenses

   

 

135,124

 

   

 

116,601

 

Reserve for litigation settlement

   

 

161,300

 

   

 

—  

 

Unearned revenue

   

 

201,045

 

   

 

201,225

 

Income taxes payable

   

 

2,418

 

   

 

47,789

 

Current portion of capital lease obligations

   

 

5,470

 

   

 

—  

 

    
  

Total current liabilities

   

 

1,154,600

 

   

 

986,929

 

Obligation under capital lease

   

 

5,749

 

   

 

—  

 

Long-term debt

   

 

96,250

 

   

 

126,876

 

Shareholders' equity:

                  

Preferred stock, $.01 par value, authorized 2,000,000 shares

   

 

—  

 

   

 

—  

 

Common stock, $.01 par value, authorized 400,000,000 shares; issued and outstanding 105,075,889 shares in 2002 and 100,353,007 shares in 2001

   

 

1,051

 

   

 

1,004

 

Additional paid-in capital

   

 

709,258

 

   

 

605,661

 

Retained earnings

   

 

437,130

 

   

 

215,165

 

Accumulated other comprehensive income

   

 

25,038

 

   

 

7,587

 

Treasury stock, at cost

   

 

(675,560

)

   

 

(366,497

)

    
  

Total shareholders' equity

   

 

496,917

 

   

 

462,920

 

    
  

Total liabilities and shareholders' equity

   

$

 1,753,516

 

   

$

 1,576,725

 

    
  

 

5

 

OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Three and Twelve Months Ended December 31, 2002 and 2001

(In thousands)

 

    

Three Months Ended

     

Twelve Months Ended

  
    

December 31,

     

December 31,

  
    

2002

     

2001

     

2002

     

2001

  

Cash flows from operating activities:

                                    

Net income

   

$

73,841

 

   

$

 94,333

 

   

$

 221,965

 

   

$

 322,421

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

                                    

Depreciation and amortization

   

 

6,184

 

   

 

6,210

 

   

 

22,928

 

   

 

21,417

 

Noncash income

   

 

(4,708

)

   

 

—  

 

   

 

(17,519

)

   

 

—  

 

Litigation and other noncash charges

   

 

—  

 

   

 

—  

 

   

 

177,832

 

   

 

—  

 

Deferred income taxes

   

 

15,428

 

   

 

(16,926

)

   

 

(36,432

)

   

 

66,127

 

Realized gain on sale of investments

   

 

(12,802

)

   

 

(3,785

)

   

 

(26,883

)

   

 

(20,787

)

Changes in assets and liabilities (net of balances acquired):

                                    

Premiums receivable

   

 

14,798

 

   

 

38,325

 

   

 

11,039

 

   

 

19,567

 

Other receivables

   

 

(4,368

)

   

 

(2,306

)

   

 

(9,241

)

   

 

56,316

 

Prepaid expenses and other current assets

   

 

2,384

 

   

 

1,852

 

   

 

(4,416

)

   

 

1,684

 

Medical costs payable

   

 

(28,801

)

   

 

(7,960

)

   

 

323

 

   

 

(17,866

)

Trade accounts payable and accrued expenses

   

 

18,464

 

   

 

(3,166

)

   

 

232

 

   

 

2,295

 

Unearned revenue

   

 

60,939

 

   

 

74,670

 

   

 

14,836

 

   

 

112,926

 

Income taxes payable

   

 

(54,512

)

   

 

(535

)

   

 

(7,090

)

   

 

47,789

 

Other, net

   

 

10

 

   

 

443

 

   

 

(3,105

)

   

 

1,920

 

    
  
  
  

Net cash provided by operating activities

   

 

86,857

 

   

 

181,155

 

   

 

344,469

 

   

 

613,809

 

    
  
  
  

Cash flows from investing activities:

                                    

Capital expenditures

   

 

(3,570

)

   

 

(8,039

)

   

 

(18,981

)

   

 

(21,386

)

Purchases of investments

   

 

(283,182

)

   

 

(156,313

)

   

 

(1,460,763

)

   

 

(1,193,074

)

Sales and maturities of investments

   

 

385,731

 

   

 

160,991

 

   

 

1,386,443

 

   

 

1,130,811

 

Acquisitions, net of cash acquired

   

 

—  

 

   

 

—  

 

   

 

(1,288

)

   

 

(19,483

)

Other, net

   

 

(75

)

   

 

359

 

   

 

(75

)

   

 

798

 

    
  
  
  

Net cash provided (used) by investing activities

   

 

98,904

 

   

 

(3,002

)

   

 

(94,664

)

   

 

(102,334

)

    
  
  
  

Cash flows from financing activities:

                                    

Proceeds from exercise of stock options

   

 

2,193

 

   

 

3,255

 

   

 

31,545

 

   

 

29,494

 

Redemption of notes payable

   

 

(6,563

)

   

 

(5,468

)

   

 

(27,136

)

   

 

(21,874

)

Payments under capital leases

   

 

(1,325

)

   

 

(137

)

   

 

(2,552

)

   

 

(5,700

)

Payment of withholding tax on option exercises

   

 

—  

 

   

 

—  

 

   

 

(24,056

)

   

 

—  

 

Purchase of treasury shares

   

 

(132,126

)

   

 

(132,916

)

   

 

(251,509

)

   

 

(366,497

)

    
  
  
  

Net cash used by financing activities

   

 

(137,821

)

   

 

(135,266

)

   

 

(273,708

)

   

 

(364,577

)

    
  
  
  

Net increase (decrease) in cash and cash equivalents

   

 

47,940

 

   

 

42,887

 

   

 

(23,903

)

   

 

146,898

 

Cash and cash equivalents at beginning of period

   

 

273,687

 

   

 

302,643

 

   

 

345,530

 

   

 

198,632

 

    
  
  
  

Cash and cash equivalents at end of period

   

$

    321,627

 

   

$

    345,530

 

   

$

    321,627

 

   

$

    345,530

 

    
  
  
  

 

6

 

Exhibit 1

OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES

Supplemental Schedule Reconciling GAAP Earnings to Run Rate Earnings

For the Three Months and Twelve Months Ended December 31, 2002 and 2001

(In thousands, except per share data)

(Unaudited)

 

    

Three Months Ended

     

Twelve Months Ended

  
    

December 31,

     

December 31,

  

Diluted Earnings Per Share

   

2002

     

2001

     

2002

     

2001

  

Diluted earnings per common share—GAAP

   

$

0.84

 

   

$

1.00

 

   

$

2.45

 

   

$

3.21

 

Diluted earnings per share effect of run rate adjustments

                                    

Litigation charge for estimated settlements, net

   

 

—  

 

   

 

—  

 

   

 

0.98

 

   

 

—  

 

Reserves for legal defense costs

   

 

0.13

 

   

 

—  

 

   

 

0.13

 

   

 

0.06

 

MedUnite investment impairment charge

   

 

—  

 

   

 

—  

 

   

 

0.07

 

   

 

—  

 

CSC contract termination and asset valuation charges

   

 

—  

 

   

 

—  

 

   

 

0.10

 

   

 

—  

 

Changes in estimates of prior period medical cost reserves

   

 

—  

 

   

 

—  

 

   

 

(0.22

)

   

 

(0.05

)

Changes in estimates of NY stabilization pool reserves/receivables

   

 

—  

 

   

 

(0.04

)

   

 

(0.14

)

   

 

(0.04

)

Changes in estimates of income tax valuation reserves

   

 

—  

 

   

 

(0.11

)

   

 

—  

 

   

 

(0.21

)

    
  
  
  

Diluted earnings per common share—Run Rate

   

$

0.97

 

   

$

0.85

 

   

$

3.37

 

   

$

2.97

 

    
  
  
  

Diluted common shares

   

 

87,752

 

   

 

94,223

 

   

 

90,744

 

   

 

100,543

 

    
  
  
  
    

Three Months Ended

     

Twelve Months Ended

  
    

December 31,

     

December 31,

  

Net Earnings

   

2002

     

2001

     

2002

     

2001

  

Net earnings—GAAP

   

$

73,841

 

   

$

94,333

 

   

$

221,965

 

   

$

322,421

 

After-tax effect of run rate adjustments

                                    

Litigation charge for estimated settlements, net

   

 

—  

 

   

 

—  

 

   

 

89,116

 

   

 

—  

 

Reserves for legal defense costs

   

 

11,780

 

   

 

—  

 

   

 

11,780

 

   

 

5,890

 

MedUnite investment impairment charge

   

 

—  

 

   

 

—  

 

   

 

6,479

 

   

 

—  

 

CSC contract termination and asset valuation charges

   

 

—  

 

   

 

—  

 

   

 

9,130

 

   

 

—  

 

Changes in estimates of prior period medical cost reserves

   

 

(217

)

   

 

—  

 

   

 

(19,605

)

   

 

(4,948

)

Changes in estimates of NY stabilization pool reserves/receivables

   

 

—  

 

   

 

(3,887

)

   

 

(12,958

)

   

 

(3,887

)

Changes in estimates of income tax valuation reserves

   

 

—  

 

   

 

(10,000

)

   

 

—  

 

   

 

(21,000

)

    
  
  
  

Net earnings—Run Rate

   

$

    85,404

 

   

$

    80,446

 

   

$

    305,907

 

   

$

    298,476

 

    
  
  
  

 

Note:  This supplemental table has been represented to provide additional financial information to readers of our consolidated financial statements in an effort to help explain the differences between our consolidated financial statements reported on a basis consistent with generally accepted accounting principles (“GAAP”) and the run rate financial performance for the respective historical periods. The adjustments detailed in this schedule represent the current period impact of changes in the Company’s estimates of prior period medical cost reserves, litigation charges and other items that management believes may help readers of our financial statements interpret our financial performance.

 

7

 

Exhibit 2

OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES

Changes in Medical Costs Payable

For the Years Ended December 31, 2002 and 2001

(In millions)

 

Year Ended December 31, 2002:

          

Amounts Relating to Claims

Incurred During

  
    

Total

     

2002

       

2001 and Prior

  

Balance as of December 31, 2001

   

$

595.1

 

   

$

—  

 

     

$

595.1

 

Medical payables acquired

   

 

25.7

 

   

 

—  

 

     

 

25.7

 

Components of health care services expense:

                             

Estimated costs incurred

   

 

3,904.1

 

   

 

3,904.1

 

     

 

—  

 

Estimate changes (1)

   

 

(55.3

)

   

 

—  

 

     

 

(55.3

)

    
  
    

Health care services expense

   

 

3,848.8

 

   

 

3,904.1

 

     

 

(55.3

)

Payments for health care services

   

 

(3,851.0

)

   

 

(3,347.1

)

     

 

(503.9

)

    
  
    

Balance as of December 31, 2002

   

$

618.6

 

   

$

557.0

 

     

$

61.6

 

    
  
    

Year Ended December 31, 2001:

          

Amounts Relating to Claims

Incurred During

  
    

Total

     

2001

       

2000 and Prior

  

Balance as of December 31, 2000

   

$

612.9

 

   

$

—  

 

     

$

612.9

 

Components of health care services expense:

                             

Estimated costs incurred

   

 

3,416.3

 

   

 

3,416.3

 

     

 

—  

 

Estimate changes

   

 

(15.0

)

   

 

—  

 

     

 

(15.0

)

    
  
    

Health care services expense

   

 

3,401.3

 

   

 

3,416.3

 

     

 

(15.0

)

Payments for health care services

   

 

(3,419.1

)

   

 

(2,911.3

)

     

 

(507.8

)

    
  
    

Balance as of December 31, 2001

   

$

595.1

 

   

$

505.0

 

     

$

90.1

 

    
  
    

 

Notes:

 

(1)   Includes approximately $22 million of estimate changes in New York market stabilization pool reserves and stop-loss pool recoveries for New York mandated products.

 

8

 

Exhibit 3

OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES

COMPONENTS OF MEDICAL COSTS PAYABLE

As of December 31, 2002 and 2001

(In millions)

 

         

Amounts Relating to Claims

Incurred During

As of December 31, 2002

   

Total

   

2002

     

2001 and Prior

IBNR and medical claims reserves

   

$

555.7

   

$

521.8

     

$

33.9

Pharmacy PBM payable

   

 

26.7

   

 

26.7

     

 

—  

Stabilization and stop-loss pools, BDCC and GME reserves, net

   

 

13.9

   

 

8.5

     

 

5.4

Other reserves

   

 

22.3

   

 

—  

     

 

22.3

    
  
    
    

$

618.6

   

$

557.0

     

$

61.6

    
  
    
         

Amounts Relating to Claims

Incurred During

As of December 31, 2001

   

Total

   

2001

     

2000 and Prior

IBNR and medical claims reserves

   

$

517.9

   

$

472.5

     

$

45.4

Pharmacy PBM payable

   

 

19.9

   

 

19.9

     

 

—  

Stabilization and stop-loss pools, BDCC and GME reserves, net

   

 

26.4

   

 

3.4

     

 

23.0

Other reserves

   

 

30.9

   

 

9.2

     

 

21.7

    
  
    
    

$

595.1

   

$

505.0

     

$

90.1

    
  
    

 

Descriptions of Major Types of Reserves and Accruals in Medical Costs Payable

 

IBNR and medical claims reserves

Represents estimates of liabilities for incurred but unreported medical claims including in-house inventories, adjudicated but not yet paid claims, net liabilities under risk sharing arrangements and reserves for previously denied claims.

 

Pharmacy PBM payable

Represents the bi-weekly amounts due to the Company's pharmacy benefit manager based on submissions of pharmacy claims.

 

Stabilization and stop-loss pools, BDCC and GME reserves, net

Represents estimated net liabilities related to various state programs including New York market stabilization and stop-loss pools, bad debt and charity care and graduate medical education surcharges.

 

Other reserves

Represents estimated liabilities for certain former medical contracts that are in various stages of resolution.

 

9