Fallon Community Health Plan reports second quarter financials
Worcester, Mass., August 13, 2010—Fallon Community Health Plan (FCHP) today reported a net loss of $12.8 million on revenue of $283.8 million for the second quarter, ending June 30, 2010. The net loss includes investment income of $2.4 million and an operating loss of $15.2 million. For the same quarter last year, FCHP posted a net loss of $3.9 million on revenue of $278 million. Net income included investment income of $2.7 million and an operating loss of $6.6 million. Membership was 218,246 as of June 30, 2010, compared to 225,356 for the same quarter last year.
“Overall, our results for the second quarter were consistent with our expectations,” said Charles Goheen, FCHP Executive Vice President and Chief Financial Officer. “As anticipated, our financial performance was significantly impacted by the use of 2009 rates for the merged market.”
On August 6, 2010, an appeal panel reversed the Division of Insurance’s disapproval of FCHP’s 2010 rates for small businesses and individuals. The health plan is in the process of determining how final rates will be implemented. In its decision, the appeal panel cited FCHP’s successful cost-control efforts. Among them were that FCHP had made reasonable efforts to renegotiate with providers for reduced reimbursement rates.
Goheen said the health plan has assessed the impact of using 2009 rates and made the necessary adjustments to its business plans.
“These challenges have slowed down but not disrupted our plans or ability to achieve our business goals,” Goheen said. “As is always the case, we’re operating as efficiently as possible and closely managing our administrative expenses, keeping them below 10 percent. We also remain focused on working with members and their health care providers to find better ways of eliminating duplicative, unnecessary, or inappropriate care, while also supporting initiatives that improve the quality of care.”
Through its product portfolio, FCHP also provides cost-saving options to customers. Since 2002, FCHP has offered a high-performing, limited network product (FCHP Direct Care) priced approximately 10-13% below its full network product – a unique concept that was included in the state’s recently passed health care legislation. The providers in FCHP’s limited network have proven track records for innovation, quality and delivering more cost-effective care. The premium for this product is favorably impacted by the combined efficiency and effectiveness of the providers in the limited network.
For more information, contact:
Christine Cassidy
Senior Director of Corporate Communications
508-368-9502
christine.cassidy@fchp.org
About Fallon Community Health Plan
Founded in 1977, Fallon Community Health Plan is a nationally recognized, not-for-profit health care services organization. From traditional health insurance products available throughout Massachusetts for all populations, to innovative health care programs and services for seniors, FCHP supports the diverse and changing needs of all those it serves. FCHP has consistently ranked among the nation’s top health plans, and is the only health plan in Massachusetts to have been awarded “Excellent” accreditation by the National Committee for Quality Assurance for its HMO, Medicare Advantage and Medicaid products.