Fallon Health reports second quarter financial results
Worcester, Mass., August 14, 2015―Fallon Health today reported a net loss of $2.5 million on revenue of $321 million on a GAAP basis for the second quarter that ended June 30, 2015. The net loss includes investment and other income of $2.5 million and an operating loss of $5.0 million. For the same quarter last year, Fallon posted net income of $2.3 million on revenue of $312 million. Net income included investment and other income of $3.2 million and an operating loss of $0.9 million. Membership was 221,588 as of June 30, 2015, compared with 227,930 ending June 30, 2014.
“Our results reflect the continuing challenges in the evolving health care environment. Health plans continue to absorb ever-increasing expenses related to high-cost specialty drugs as well as the rapidly rising costs of generic and brand-name prescription drugs,” said R. Scott Walker, Executive Vice President and Chief Financial Officer at Fallon Health. “Heightened regulatory pressures from national and state reform, decreasing rate reimbursements for certain government programs, and the state’s risk adjustment model, mandated by the Affordable Care Act, also impact results.”
In addition, the second quarter results reflect one-time costs associated with Fallon’s recent decision to exit the One Care demonstration program as of September 30, 2015.
In the second quarter, Fallon continued to see growth in its subsidized product, Community Care, as more subsidy-eligible individuals enrolled though the Massachusetts Health Connector. “Fallon is a strong, mission-focused organization with a dedicated, engaged and resilient workforce,” said Walker. “We’ll continue building on our strengths, which includes providing members with cost-effective, high-quality products and services.”
Fallon, consistently rated in the top 10 percent of all plans for its Medicare, Medicaid and commercial products by the National Committee for Quality Assurance (NCQA)*, recently celebrated several anniversaries and milestones in its caring for vulnerable populations:
- Fallon recently joined in celebrating the 50th anniversary of Medicare and Medicaid, both of which Fallon has been committed to throughout its history. In 1979, Fallon received the first state contract to cover Medicaid recipients. In 1980, Fallon was one of the first HMOs in the nation to receive a Medicare contract.
- Fallon is celebrating its 20th anniversary as both an insurer and a provider of care through its Program of All-inclusive Care for the Elderly (PACE). This program, branded Summit ElderCare®, helps frail elders remain living independently at home by providing complete medical, home and social support in one convenient setting. Fallon currently operates five Summit ElderCare locations throughout Massachusetts. The Centers for Medicare & Medicaid Services (CMS) recently touted PACE as the future of health care.
- Fallon’s NaviCare® program, a Medicare Advantage Special Needs Plan and Senior Care Options program (SCO), offers enhanced benefits and coordinated, integrated care for low-income seniors with complex needs. Fallon recently expanded its NaviCare provider network in western Massachusetts to include five Baystate Health hospitals and more than 200 medical practices in the Pioneer Valley. According to a recent report by Health Management Associates (HMA), the kind of integrated care provided by Massachusetts SCOs have shown to reduce or avoid hospitalizations, decrease duplicative care and improve medication adherence. The report states that SCOs have saved MassHealth approximately $65.9 million annually in avoided nursing home costs and that the state could avoid another $45.1 million in nursing home costs each year if the remaining qualifying fee-for-service populations were enrolled in a SCO plan.
*NCQA is a private, non-profit organization dedicated to improving health care quality.NCQA accredits and certifies a wide range of health care organizations. It also recognizes clinicians and practices in key areas of performance. NCQA’s Web site (www.ncqa.org) contains information to help consumers, employers and others make more informed health care choices.
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Founded in 1977, Fallon Health is a leading health care services organization that supports the diverse and changing needs of those we serve. In addition to offering innovative health insurance solutions and a variety of Medicaid and Medicare products, we excel in creating unique health care programs and services that provide coordinated, integrated care for seniors and individuals with complex health needs. Fallon 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.