United Health, HCA post stronger num­bers

Modern Healthcare - - NEWS - By Bob Her­man and John N. Frank

The na­tion’s largest in­surer and the largest hos­pi­tal chain are prov­ing that the ma­jor play­ers on both sides of the in­surer-provider di­vide can find ways to thrive in an era when over­all health­care spend­ing re­mains in check.

Prof­its at in­surer United Health Group ex­ceeded Wall Street’s es­ti­mates in the third quar­ter largely be­cause of lower-than-ex­pected med­i­cal costs. “Med­i­cal uti­liza­tion re­mained re­strained,” the Min­netonka, Minn.-based company noted in its earn­ings re­lease.

The company posted more than $1.6 bil­lion in profit on almost $32.8 bil­lion of rev­enue in the quar­ter, com­pared with $1.57 bil­lion in profit on $30.6 bil­lion of rev­enue in the third quar­ter of 2013.

Nashville-based HCA Hold­ings, mean­while, fore­cast it will re­port ris­ing sales and prof­its at its 165-hos­pi­tal chain be­cause same-fa­cil­ity ad­mis­sions rose 2.8% in the quar­ter com­pared with the same quar­ter in 2013. The company’s be­fore-tax in­come rose to $929 mil­lion on $9.2 bil­lion in rev­enue in the third quar­ter from $701 mil­lion in pre-tax earn­ings on $8.5 bil­lion in rev­enue a year ago.

But there was at least one fac­tor hik­ing HCA earn­ings that won’t be repli­ca­ble, which sug­gests the over­all pic­ture may not be as rosy as its stel­lar num­bers would in­di­cate. HCA re­vealed it will record roughly $94 mil­lion in Medi­care rev­enue as an es­ti­mated set­tle­ment amount for claims pre­vi­ously de­nied by re­cov­ery au­dit con­trac­tors work­ing for the CMS.

The CMS has been of­fer­ing providers with back­logged claim ap­peals a set­tle­ment of­fer worth roughly 68% of their claim amounts, which ap­par­ently HCA plans to ac­cept.

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