It's not just Humana (-9.6%) suffering from prospective declines in reimbursement rates for Medicare Advantage plans in 2014, with UnitedHealth (UNH) -5.2%, Cigna (CI) -5.5%, Aetna (AET) -3.5% and Universal America (UAM) -8.95%.
More on Coventry Health Care (CVH) Q4: net profit +39% to $119.3M. Operating expenses +9.6% despite the medical-loss ratio falling to 82.7% from 84.4% in Q3, and membership declining to 5.36M from 5.37M. Aetna (AET) investors are likely to take an interest, given that the company is buying Coventry for $5.7B.
More on Aetna (AET) Q4: net profit -49% to $190.1M, partly because of $120M in litigation expenses and other one-time items. Medical benefit ratio rises to 84.1% from 80.7%, membership +64K to 18.2M. Affirms guidance for FY EPS of at least $5.40. Names Shawn Guertin as CFO to replace Joseph Zubretsky, who will head a new unit called National Businesses. Guertin was CFO at Coventry Healthcare, which Aetna is buying.
Aetna (AET +0.5%) agrees to sell its Medicaid business Missouri Care to WellCare Health Plans (WCG -0.3%) as part of Aetna's $5.6B acquisition of Coventry Health Care (CVH +0.1%). A combination of Aetna's and Coventry's Medicaid plans in Missouri would exceed permissible membership thresholds under the state's contracts. Financial terms weren't disclosed. (PR)
At $28K a vial, Questcor's (QCOR) Acthar has propelled shares to huge gains. QCOR bought the drug for $100K in 2001, planning to produce it only to treat infantile spasms. But thanks to aggressive marketing, it's now being prescribed for MS, arthritis, and kidney disease. Aetna's (AET) decision to limit off-label treatments has hit shares, but it's not clear any viable alternatives are on the horizon. (NYT)
Aetna (AET), which is holding its investor day, joins United Health and Cigna in providing 2013 guidance that's below consensus. Aetna forecasts EPS of at least $5.40 vs consensus of $5.52 and revenue growth of 9% to $38.6B vs $38.91B. Predicts that commercial-medical costs will rise 6.5%, the same as this year. BMO analyst Dave Shove says the outlook reflects "management’s cautious stance on guiding high." Shares +4.2%.
Aetna (AET +2.4%) settles for $120M (subject to judge's approval) a class action suit relating to payments of claims to Aetna members who were served by non-contracted health-care providers. In other news, the stock is upgraded to Overweight with $52 price target by JPMorgan.
Aetna's (AET) cancer-management program, which it's carrying out with the U.S. Oncology Network and a McKesson (MCK) unit, had a positive impact on patients and helped to cut costs. The scheme cut ER visits 39.8%, hospital admissions 16.5% and the number of hospital days 35.9%. The scheme led to 12% cost savings among lung, breast and colorectal cancers alone. (PR)
More on Questcor (QCOR -6.4%): Aetna's (AET +0.3%) latest bulletin shows no change from its position first taken in September on Acthar. The insurer is still limiting reimbursement of the drug only for the treatment of infantile spasms. AET asserts that the drug's other approved uses are medically unnecessary or unproven.
Aetna Inc. is a health care benefit company, which offers traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans.