Financial Statements For Ten Months Ended April 2014 (Unaudited)

Transcription

1 Financial Statements For Ten Months Ended April 2014 (Unaudited).

2 Table of Contents Description Page Financial Statement Comments 1-5 Balance Sheet 6 Income Statement for the Month and YTD period Ended April Administrative Expense Summary April Statement of Operations by Line of Business (Includes Allocated Expenses) 9 Statement of Cash Flows for the YTD period Ended April Enrollment by Line of Business 11 Tangible Net Equity Actual vs. Required 12 Enrollment by Network 13 Medi-Cal Enrollment Chart 14 Healthy Kids Enrollment Chart 15

3 Santa Clara Family Health Plan CFO Finance Report For the Month and Year to Date Ended April 30, 2014 Summary of Financial Results For the month of April 2014, SCFHP recorded an operating surplus of $1.1 million compared to a budgeted operating loss of $38 thousand, resulting in a favorable variance from budget of $1.2 million. For year to date April 2014, SCFHP recorded an operating surplus of $2.9 million compared to a budgeted operating loss of $515 thousand resulting in a favorable variance from budget of $3.5 million. The table below summarizes the components of the overall variance from budget. Note: For purposes of this report all budget amounts for fiscal year 2014 are per Revised Budget as presented at the Board Meeting on December 12, Summary Operating Results Actual vs. Revised Budget For the Current Month & Fiscal Year to Date April 2014 Favorable/ (Unfavorable) Current Month Year to Date Actual Revised Budget Variance $ Variance % Actual Revised Budget Variance $ Variance % $ 39,037,570 $ 31,970,240 $ 7,067, % Revenue $ 298,946,817 $ 280,709,256 $ 18,237, % 35,624,752 29,981,484 (5,643,268) -18.8% Medical Expense 278,255, ,642,236 (15,612,766) -5.9% 3,412,818 1,988,756 1,424,062 72% Gross Margin 20,691,816 18,067,020 2,624,796 15% 1,672,250 2,003, , % Administrative Expense 16,995,687 18,367,416 1,371, % 1,740,568 (14,914) 1,755, % Net Operating Income 3,696,128 (300,397) 3,996, % (602,961) (23,333) (579,628) -2484% Non-Operating Income/Exp (760,135) (215,062) (545,074) -253% $ 1,137,607 $ (38,248) $ 1,175, % Operating Surplus/ (Loss) $ 2,935,993 $ (515,458) 3,451, % 1

4 Revenue The Health Plan recorded net revenue of $39.0 million for the month of April 2014, compared to budgeted revenue of $31.9 million, resulting in a favorable variance from budget of $7.1 million, or 22.1%. For year to date April 2014, the Plan recorded net revenue of $298.9 million compared to budgeted revenue of $280.7 million, resulting in a favorable variance from budget of $18.2 million, or 6.5%. The primary reason for the positive variance in revenue is the rapid growth of the Medi-Cal Expansion membership and the higher than budgeted capitation rates for this population. A statistical and financial summary for all lines of business is included on page 9 of this report. Member months For the month of April 2014, overall member months were higher than budget by 12,421 members (+7.4%). For April 2014 year to date, overall member months were higher than budget by 20,936 members (+1.3%). In the ten months since the end of the prior fiscal year, 6/30/2013, membership in Medi-Cal increased by 16.9%. The increase in Medi-Cal includes 20,323 new Medi-Cal Expansion members added between January and April Membership in the Healthy Kids program declined by 6.4%, since 6/30/2013. Member months, and changes from prior year, are summarized on Page 11. The planned transition of the Medi-Cal Healthy Families Product occurred in three phases and was fully completed by January

5 Medical Expenses For the month of April 2014, medical expense was $35.6 million compared to budget of $30.0 million, resulting in an unfavorable budget variance of $5.6 million, or -18.8%. For year to date April 2014, medical expense was $278.3 million compared to budget of $262.6 million, resulting in an unfavorable budget variance of $15.6 million, or -5.9%. The increased medical expenses for the month, and year to date, is attributable to the Medi-Cal Expansion population that commenced in January of Over 90% of these members are delegated to the safety net and therefore they receive a substantial amount of the state capitation to care for these members. Administrative Expenses Overall administrative costs were under budget by $331 thousand (-16.5%) and $1.4 million (-7.5%), for the month and year to date April 2014, respectively. Two expense classifications account for a majority of the positive difference; Salaries/Benefits and Professional Fees are under budget because of the slower than anticipated ramp up costs for Cal MediConnect. Overall administrative expenses were 5.7% of revenues for year to date April

6 Balance Sheet (Page 6) Current assets at April 30, 2014 totaled $99.5 million compared to current liabilities of $64.5 million, yielding a current ratio (the ratio of current assets to current liabilities) of 1.5:1 as of April 30, Working capital increased by $2.9 million for ten months year-to-date ended April 30, Cash as of April 30, 2014, decreased by $23.4 million compared to the cash balance as of year-end June 30, Net receivables increased by $28.0 million during the same ten month period ended April 30, The Department of Health Care Services (DHCS) informed us in via e- mail that our April capitation payment would be delayed to late May due to system changes they are making. Liabilities increased by a net amount of $1.7 million during the ten months ended April As of fiscal year ending June 30, 2013, the Board Designated Reserve Healthy Kids totaled $1,489,090. In April 2014, the plan made a contribution in the amount of $594,837, thus reducing the reserve balance to $894,253 as of April 30, (See line items on the Balance Sheet on page 6, and the Income Statement on page 7.) Capital Expenses increased by $260 thousand for the ten months ended April 30,

7 Tangible Net Equity Tangible Net Equity (TNE) was $35.5 million at April 30, 2014, compared to the minimum TNE required by the Department of Managed Health Care (DMHC) of $9.0 million (as per quarterly filing at ). A chart showing TNE trends is shown on page 12 of this report. At the December 2011 Board of Director s meeting, a policy was adopted for targeting the organization s capital reserves to equal two months of Medi-Cal capitation revenue. As of April 30, 2014, the Plan s reserves are about $39.2 million below this reserves target (see calculation below). (Note: The monthly capitation amount for Medi-Cal increased by $11.2+ million per month from Dec 2013 to April 2014 due to an additional 23,300+ members in the Medi-Cal Expansion program.) Calculation of targeted reserves as of April 30, 2014 Estimate of two months capitation $73,831,400 (April-2014 Medi-Cal capitation of $36,915,700 X 2 = $73,831,400) Less: Unrestricted Net Equity per balance sheet (rounded) $34,675,900 Approximate reserves below target $39,155,500 5

8 Santa Clara County Health Authority Balance Sheet 4/30/2014 3/31/2014 2/28/2014 6/30/2013 Assets Current Assets Cash and Marketable Securities $ 38,516,831 $ 109,944,992 $ 70,790,882 $ 61,888,777 Premiums Receivable 60,085,610 18,478,603 50,099,320 32,121,807 Due from Santa Clara Family Health Foundation - net 2,752 5,504 2, ,279 Prepaid Expenses and Other Current Assets 894, , , ,488 Total Current Assets 99,499, ,353, ,878,071 94,857,352 Long Term Assets Equipment 7,005,559 7,005,559 6,995,376 6,745,116 Less: Accumulated Depreciation (6,499,689) (6,472,668) (6,445,647) (6,237,519) Total Long Term Assets 505, , , ,596 Total Assets $ 100,005,843 $ 129,886,182 $ 122,427,800 $ 95,364,948 Liabilitities and Net Assets Liabilities Trade Payables $ 2,312,646 $ 20,806,006 $ 20,603,142 $ 1,641,280 Employee Benefits 920, , , ,300 Retirement Obligation per GASB , , ,032 - Due to (from) Santa Clara County Valley Health Plan 3,895, ,484 1,447,278 1,108,409 Advance Premium - Healthy Kids 70,082 67,587 66,262 62,652 Deferred Rent 163, , ,631 - Liability for ACA ,771,166 27,751,935 26,006,211 - Payable to Hospitals (SB 208) ,272,387 Payable to Hospitals (AB 85) 454,521 1,147, ,019 - Due to DHCS 4,787,615 21,610,479 18,498,374 8,848,121 Medical Cost Reserves 21,767,323 21,787,697 20,360,094 23,096,637 Total Liabilities 64,518,689 95,536,635 88,768,148 62,813,787 Net Assets / Reserves Invested in Capital Assets 505, , , ,596 Restricted under Knox-Keene agreement 305, , , ,350 Board Designated Reserve - Healthy Kids 894,253 1,489,090 1,489,090 1,489,090 Unrestricted Net Equity 30,845,688 30,223,830 30,206,992 21,906,540 Current YTD Income (Loss) 2,935,993 1,798,386 1,108,492 8,342,585 Net Assets / Reserves 35,487,154 34,349,547 33,659,653 32,551,161 Total Liabilities and Net Assets $ 100,005,843 $ 129,886,182 $ 122,427,800 $ 95,364,948 Solvency Ratios: Working Capital 34,981,284 33,816,656 33,109,924 32,043,565 Working Capital ratio Average Days Cash on Hand

9 Santa Clara County Health Authority Income Statement for the Month Ending April 30, 2014 For the Month of April 2014 For Ten Months Ending of April 2014 Actual % of Revenue Revised Budget % of Revenue Variance Actual % of Revenue Revised Budget % of Revenue Variance REVENUES MEDI-CAL $ 38,167, % $ 31,275, % $ 6,892,029 $ 291,831, % $ 273,276, % $ 18,554,211 HEALTHY FAMILIES - 0.0% - 0.0% - 14, % 13, % 68 HEALTHY KIDS 720, % 505, % 215,079 4,828, % 4,886, % (58,119) AGNEWS 156, % 190, % (33,929) 1,548, % 1,752, % (204,373) HEALTHY WORKERS (5,850) 0.0% - 0.0% (5,850) 724, % 778, % (54,226) TOTAL REVENUE 39,037, % 31,970, % 7,067, ,946, % 280,709, % 18,237,562 MEDICAL EXPENSES MEDI-CAL 35,139, % 29,440, % (5,699,024) 272,276, % 256,383, % (15,893,128) HEALTHY FAMILIES (40) 0.0% - 0.0% 40 (10,500) 0.0% 11, % 22,180 HEALTHY KIDS 412, % 454, % 41,886 4,243, % 4,423, % 179,955 AGNEWS 72, % 86, % 14, , % 1,020, % 67,127 HEALTHY WORKERS % - 0.0% (371) 792, % 803, % 11,100 TOTAL MEDICAL EXPENSES 35,624, % 29,981, % (5,643,268) 278,255, % 262,642, % (15,612,766) MEDICAL OPERATING MARGIN 3,412, % 1,988, % 1,424,062 20,691, % 18,067, % 2,624,796 ADMINISTRATIVE EXPENSES SALARIES AND BENEFITS 1,136, % 1,237, % 101,095 11,164, % 11,476, % 312,596 RENTS AND UTILITIES 98, % 103, % 5,549 1,042, % 1,032, % (10,378) PRINTING AND ADVERTISING 8, % 13, % 5, , % 151, % 33,639 INFORMATION SYSTEMS 59, % 71, % 11, , % 781, % (29,392) PROF FEES / CONSULTING / TEMP STAFFING 210, % 378, % 168,602 2,235, % 3,107, % 872,675 DEPRECIATION / INSURANCE / EQUIPMENT 60, % 80, % 19, , % 727, % 103,727 OFFICE SUPPLIES / POSTAGE / TELEPHONE 23, % 42, % 19, , % 415, % (24,137) MEETINGS / TRAVEL / DUES 60, % 60, % , % 569, % 65,497 OTHER 15, % 14, % (945) 57, % 104, % 47,502 TOTAL ADMINISTRATIVE EXPENSES 1,672, % 2,003, % 331,420 16,995, % 18,367, % 1,371,729 OPERATING SURPLUS (LOSS) 1,740, % (14,914) 0.0% 1,755,482 3,696, % (300,397) -0.1% 3,996,525 CONTRIBUTION EXPENSE (594,837) 0.0% - 0.0% (594,837) (594,837) 0.0% - 0.0% (594,837) GASB 45-POST EMPLOYMENT BENEFITS EXPENSE (37,629) -0.1% (33,333) -0.1% (4,296) (376,290) -0.1% (350,517) -0.1% (25,773) INTEREST & OTHER INCOME 29, % 10, % 19, , % 135, % 75,536 NET INCOME (LOSS) FINAL $ 1,137, % $ (38,248) -0.1% $ 1,175,854 $ 2,935, % $ (515,458) -0.2% $ 3,451,451 7

10 Current Month Administrative Expense Actual vs. Budget For the Current Month & Fiscal Year to Date - April 2014 Favorable/(Unfavorable) Year to Date Actual Revised Budget Variance $ Variance % Actual Revised Budget Variance $ Variance % $ 1,136,276 $ 1,237,371 $ 101, % Personnel $ 11,164,400 $ 11,476,996 $ 312, % 535, , , % Non-Personnel 5,831,287 6,890,420 $ 1,059, % 1,672,250 2,003, , % Total Administrative Expense 16,995,687 18,367,416 1,371, % 8

11 Santa Clara County Health Authority STATEMENT OF OPERATIONS BY LINE OF BUSINESS (INCLUDING ALLOCATED EXPENSES) TEN MONTHS ENDED April 30, 2014 Medi-Cal Healthy Families Healthy Kids Agnews Healthy Workers Grand Total P&L (ALLOCATED BASIS) REVENUE $291,831,184 $14,061 $4,828,694 $1,548, ,495 $298,946,817 MEDICAL EXPENSES 272,276,422 (10,500) 4,243, , ,290 $278,255,002 MLR 93.3% -74.7% 87.9% 61.6% 109.4% 93.1% GROSS MARGIN 19,554,762 24, , ,847 (67,795) $20,691,816 ADMINISTRATIVE EXPENSES 16,384,892 2, ,377 12,547 35,646 $16,995,687 (indirect costs subject to % MM allocation) ` OPERATING INCOME/(LOSS) 3,169,870 22,335 25, ,300 (103,441) 3,696,128 OTHER INCOME/EXPENSE (732,817) (100) (25,063) (561) (1,594) (760,135) (% of mm Allocation) NET INCOME/ (LOSS) $2,437,053 $22,236 $0 $581,739 ($105,035) $2,935,993 PMPM ALLOCATED P&L: REVENUE $ $66.33 $90.47 $1, $ $ MEDICAL EXPENSES (49.53) GROSS MARGIN (19.97) ADMINISTRATIVE EXPENSS OPERATING INCOME/(LOSS) (30.47) 2.28 OTHER INCOME / (EXPENSE) (0.47) (0.47) (0.47) (0.47) (0.47) (0.47) NET INCOME / (LOSS) $1.56 $ $0.00 $ ($30.94) $1.81 ALLOCATION BASIS: MEMBER MONTHS - Month and YTD 1,560, ,372 1,195 3,395 1,618,721 % of Member Months 96.41% 0.01% 3.30% 0.07% 0.21% % 9

12 Santa Clara Family Health Plan Statement of Cash Flows For Ten Months Ended April 30, 2014 Cash flows from operating activities Premiums received $ 269,643,421 Medical expenses paid $ (276,797,484) Administrative expenses paid $ (16,168,431) Net cash from operating activities $ (23,322,494) Cash flows from capital and related financing activities Purchases of capital assets $ (260,443) Cash flows from investing activities Interest income and other income, net $ 210,992 Net (Decrease) increase in cash and cash equivalents $ (23,371,946) Cash and cash equivalents, beginning of year $ 61,888,777 Cash and cash equivalents at April 30, 2014 $ 38,516,831 Reconciliation of operating income to net cash from operating activities Operating income (loss) $ 2,725,001 Adjustments to reconcile operating income to net cash from operating activities Depreciation $ 262,169 Changes in operating assets and liabilities Premiums receivable $ (27,963,803) Due from Santa Clara Family Health Foundation $ 316,527 Prepaids and other assets $ (367,291) Accounts payable and accrued liabilities $ 1,172,702 Capitation payable $ 2,786,832 Employee benefit liabilities $ 135,966 Advance premium - Healthy Kids $ 7,430 Reserve for Rate Reductions $ (1,068,713) Incurred but not reported claims payable and risk share payments payable $ (1,329,314) Total adjustments $ (26,047,496) Net cash from operating activities $ (23,322,494) 10

13 Santa Clara Family Health Plan Enrollment Summary Actual For the Month of April 2014 YTD Ten Months Ending April 2014 Revised Budget % Variance Actual Revised Budget % Variance Prior Year Actual % Change FY14 vs FY13 Medi-Cal 173, , % 1,560,547 1,536, % 1,254, % Healthy Families % % 103,160 ( 99.79%) Healthy Kids 5,209 5,500 ( 5.29%) 53,372 54,636 ( 2.31%) 57,971 ( 7.93%) Agnews ( 7.94%) 1,195 1,243 ( 3.86%) 1,272 ( 6.05%) Healthy Workers % 3,395 3,510 ( 3.28%) 5,529 ( 38.60%) Total 179, , % 1,618,721 1,596, % 1,422, % 11

14 Santa Clara County Health Authority Tangible Net Equity - Actual vs. Required As of Period Ended: 12/31/2009 6/30/ /31/2010 6/30/ /31/2011 6/30/ /31/2012 6/30/ /31/2013 3/31/2014 4/30/2014 Actual Net Assets / Reserves 13,501,652 25,103,011 28,445,504 36,093,769 36,803,460 24,208,576 23,776,902 32,551,161 32,878,950 34,349,547 35,487,154 Required Reserve per DMHC 7,737,000 6,388,000 5,591,000 4,996,000 5,558,000 5,901,000 6,525,000 7,778,000 8,330,000 9,039,000 9,039, % of Required Reserve 15,474,000 12,776,000 11,182,000 9,992,000 11,116,000 11,802,000 13,050,000 15,556,000 16,660,000 18,078,000 18,078,000 TNE Actual vs. Required 40,000,000 35,000,000 Reserve Amount 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Period Ended Actual Net Assets / Reserves Required Reserve per DMHC 200% Required Reserve 12

15 Santa Clara County Health Authority Enrollment Summary by Network April 2014 Medi-Cal Healthy Families Healthy Kids AG Healthy Workers Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Direct Contract Physicians 10,507 6% 0 0% 161 3% % 0 0% 10,784 6% SCVHHS, Safety Net Clinics, FQHC Clinics, 90,957 52% 0 0% 3,588 69% 0 0% 0 0% 94,545 53% Palo Alto Medical Foundation 3,957 2% 0 0% 53 1% 0 0% 0 0% 4,010 2% Physicians Medical Group 37,080 21% 0 0% 1,230 24% 0 0% 0 0% 38,310 21% Premier Care 12,034 7% 0 0% 177 3% 0 0% 0 0% 12,211 7% Kaiser 19,454 11% 0 0% 0 0% 0 0% 0 0% 19,454 11% Total 173, % 0 0% 5, % % 0 0% 179, % , , ,315 Net % Change from Beginning of FY 16.87% % -6.40% -7.94% % 15.45% 13

16 180, , , ,000 Medi-Cal Enrollment Medi-Cal Budget SCFHP Medi-Cal Enrollment as of April 2014 Actual FY 2013 to FY 2014 (thru Apr-14) 140, , , ,000 Budget FY 2013 to Revised Budget FY 2014 (thru Apr-14) 100,000 90,000 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 14

17 SCFHP Healthy Kids Enrollment as of April 2014 Healthy Kids Enrollment Healthy Kids Budget Enrollment 10,000 9,000 8,000 7,000 HK Budget FY 2013 to FY 2014 (thru April-14) 6,000 5,000 4,000 3,000 Healthy Kids Actual (thru April-14) 2,000 1,000 0 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 15

18 April 2014 Financial Summary Executive Committee Meeting June 12, 2014

19 Consolidated Performance April 2014 and Year to Date Month of April FYTD thru April Revenue $39.0 million * $298.9 million * Medical Costs $35.6 million $278.3 million Medical Loss Ratio * 91.3% 93.1% Administrative Costs $1.7million (4.3%) $17.0 million (5.7%) Other Income/ Expense ($602,961) ($760,135) Net Surplus (Loss) $1,137,607 $2,935,993 Cash on Hand (40 days) $38.5 million Receivables Current Liabilities Tangible Net Equity $60.1 million $64.5 million $35.5 million Pct. Of Min. Requirement 394% * Revenue reflects a 3% increase based on Capitation rates received from DHCS effective October 1st, Rates increase do not include ACA 1202 PCP increase. Other Expense includes a contribution of $594,837 from the Board Designated Reserve Fund for Healthy Kids premiums.

20 Enrollment Summary April and YTD Santa Clara Family Health Plan Enrollment Summary For the Month of April 2014 YTD Ten Months Ending April 2014 Actual Revised Budget % Variance Actual Revised Budget % Variance Prior Year Actual % Change FY14 vs FY13 Medi-Cal 173, , % 1,560,547 1,536, % 1,254, % Healthy Families % % 103,160 ( 99.79%) Healthy Kids 5,209 5,500 ( 5.29%) 53,372 54,636 ( 2.31%) 57,971 ( 7.93%) Agnews ( 7.94%) 1,195 1,243 ( 3.86%) 1,272 ( 6.05%) Healthy Workers % 3,395 3,510 ( 3.28%) 5,529 ( 38.60%) Total 179, , % 1,618,721 1,596, % 1,422, %

21 Enrollment by Network - YTD Santa Clara County Health Authority Enrollment Summary by Network April 2014 Medi-Cal Healthy Families Healthy Kids AG Healthy Workers Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Enrollment % of Total Direct Contract Physicians 10,507 6% 0 0% 161 3% % 0 0% 10,784 6% SCVHHS, Safety Net Clinics, FQHC 90,957 52% 0 0% 3,588 69% 0 0% 0 0% 94,545 53% Palo Alto Medical Foundation 3,957 2% 0 0% 53 1% 0 0% 0 0% 4,010 2% Physicians Medical Group 37,080 21% 0 0% 1,230 24% 0 0% 0 0% 38,310 21% Premier Care 12,034 7% 0 0% 177 3% 0 0% 0 0% 12,211 7% Kaiser 19,454 11% 0 0% 0 0% 0 0% 0 0% 19,454 11% Total 173, % 0 0% 5, % % 0 0% 179, % , , ,315 Net % Change from Beginning of FY 16.87% % -6.40% -7.94% % 15.45% Membership has increased 15.45% since the beginning of the Fiscal Year, primarily as a result of the Medi-Cal Expansion population which started January 1, 2014.

22 Tangible Net Equity at April 30, 2014 TNE is $35.5 million or 3.94 times the minimum TNE required by the Department of Managed Health Care (DMHC). The Plans reserves are roughly $39.2m below the reserves targeted by the Authority Board of two months capitation revenue.

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