PCIPWA Treasurer Report Feb 2014wship.org/PCIP-WA/Docs/PCIPWA Feb 2014 Financial... · 04/03/2014 1. 3. Administrative Expense Budget – February 2014 For February 2014, administrative

Pre-Existing Condition Insurance Plan – Washington State (PCIP-WA) February 2014 Financial Review

1. Financial Statements – February 2014

UBalance Sheet Cash on Hand at the end of February 2014 is $18 K. The entire $18 K is fully secured by FDIC insurance. Cash position is discussed further in the Budgeted Cash Flow section below. As of February 2014, the receivable for unbilled HHS reimbursements is $167 K. This amount represents an offset of liabilities, including IBNR, which will be invoiced and funded by HHS before the end of the program. The total IBNR of $158 K increased $55 K or 53.4% as compared to the prior month. This increase is seen entirely in the medical portion as the IBNR for pharmacy is now at zero. UIncome Statement In July 2013, the pool transitioned all membership to the federal PCIP program and began an eighteen month run-out. As a result, 2014 will not have any member months nor earned premium income and the 2014 expenses will be much lower than the prior year when the program still had active membership. As of the end of February 2014, the total incurred claim loss is $209 K which includes actual payments for medical run-out claim as well as the change in IBNR from the prior month. The February 2014 YTD administrative expenses are $58 K and the HHS Reimbursements are $267 K.

2. Budgeted Cash Flow – February 2014 The Budgeted Cash Flow document contains the budget (upper portion) as revised in February 2014 and the actual (lower portion) cash flow results year-to-date. The Program Summary (discussed below) is a dynamic report and therefore changes as better financial information is obtained. At the end of February 2014 the ending cash balance is $18 K. Total net cash receipts for February 2014 are $109 K or 59.2% favorable to budget primarily due to higher than anticipated reimbursements from HHS. Total February 2014 expenses are $125 K or 67.7% unfavorable to budget. Total medical claims expense is $156 K or 63.4% unfavorable to budget, and administrative variances discussed further below are $31 K or 32.7% favorable to budget.

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3. Administrative Expense Budget – February 2014 For February 2014, administrative expenses are $31 K or 32.7% favorable to budget (cash basis).

4. PCIP-WA Program Summary – February 2014 The program summary is a blended cash flow forecast tool that tracks the federally allotted funds throughout the life of the program. Actual claims, premiums and administrative expense data is input as incurred, while data for future months is based on the original budget. The summary shows the projected remaining balance at the end of each year as well as at the end of the program. The summary also compares the original budget figures to the blended forecast figures and calculates the blended administrative cost percentage (yearly and in total). PCIP-WA submitted a revised forecast in February 2014 and those re-forecasted figures were updated in the January 2014 packet. Actual results are illustrated through March 2014. As of July 2013, membership was transitioned to the federally ran PCIP pool and therefore PCIP-WA no longer has any active membership. In July 2013, PCIP-WA began to process run-out for claims incurred prior to July 1, 2013. As of March 2014, PCIP-WA has used up 3.7% of the current funding for 2014 and is projected to have enough funds to cover costs through the remainder of 2014. PCIP-WA and HHS will continue to monitor available funds and projections on a quarterly basis with new funds to be awarded as necessary. Administrative costs as a percent of total costs is 3.9% since inception of the program and, by the end of the program, that percentage is projected to be 4.3%.

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Total Enrollment : 02014 2013

Assets:

Cash 17,517$ -$ Premiums Receivable - 117,142 HHS Receivable - - Unbilled Payments from HHS 166,707 11,178,572 Prepaid Expense 12,650 15,350 Total Assets 196,874$ 11,311,064$

Liabilities and Unassigned Surplus:

Reserve for Unpaid Losses - Medical 158,000$ 8,814,000$ Reserve for Unpaid Losses - Pharmacy - 887,000 Accrued Loss Adjustment 4,100 253,000 Premiums Received in Advance - 812,563 Checks Written in Excess of Cash Balance (1) - 438,323 Due to WSHIP - - Abandoned Claim Reserve 13,669 4,440 Accrued Expenses 21,105 101,739

Total Liabilities 196,874$ 11,311,064$

Unassigned Surplus - -

Total Liabilities and Unassigned Surplus 196,874$ 11,311,064$

(1) Checks Written in Excess of Cash Balance are claim checks written prior to the receipt of HHS reimbursements. These checks are not distributed until the proper funding is received.

PCIP-WA

Unaudited Balance Sheetas of February 28

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2014 2013

Total Member Months - 2,000

Premium Income Earned -$ 1,405,044$

Pharmacy Rebate Income - -

Incurred Claim Loss - Medical 208,981 5,884,817 Incurred Claim Loss - Pharmacy - 2,171,399 Total Incurred Claim Loss 208,981 8,056,216

Operating Expenses:

Administrative Expense 28,868$ 103,091$ Variable Administrative Expense 3 50,883 Salary and Benefit Expense 4,983 26,911 Contracted Outreach Fees - 4,145 Miscellaneous Expense 9,465 6,076 Professional Fee Expense 15,111 19,886 Start-Up Expenses - -

Total Operating Expenses 58,429$ 210,992$

Underwriting Gain (Loss) (267,410)$ (6,862,164)$

HHS Reimbursement 267,410 6,862,164 Investment Income - - Other Income - -

Changes in Unassigned Surplus -$ -$

Unaudited Statement of OperationsJanuary 1 to February 28

PCIP-WA

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PCIP‐WABudgeted Cashflow 2014

Budget - Updated Feb 2014 JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER FEB YTD TOTALEnrollment Count - - - - - - - - - - - - - -

Cash BalanceBEGINNING OF MONTH - - - - - - - - - - - -

Receipts Premium Receipts - - - - - - - - - - - - - - HHS Reimbursement 98,542 86,050 70,060 59,569 50,529 41,588 32,798 32,798 32,798 52,798 32,798 32,798 184,592 623,126 Pharmacy Rebate Income - - - - - - - - - - - - - - Claim Refunds Receipts - - - - - - - - - - - - - - Investment Income - - - - - - - - - - - - - - Abandoned Claims - - - - - - - - - - - - - - Other Income - - - - - - - - - - - - - - Total Receipts 98,542 86,050 70,060 59,569 50,529 41,588 32,798 32,798 32,798 52,798 32,798 32,798 184,592 623,126

Refunds Premium Refunds - - - - - - - - - - - - - - Total Refunds - - - - - - - - - - - - - -

Expenses Medical Claim Expense 49,144 40,952 32,762 24,571 16,381 8,190 - - - - - - 90,096 172,000 Pharmacy Claim Expense - - - - - - - - - - - - - - Administrative Expense 29,500 25,200 17,400 15,100 14,250 13,500 12,900 12,900 12,900 32,900 12,900 12,900 54,700 212,350 Variable Administrative Expense - - - - - - - - - - - - - - Salary and Benefits Expense 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 25,000 150,000 Contracted Outreach Fees - - - - - - - - - - - - - - Prescription Administrative Expense - - - - - - - - - - - - - - Miscellaneous Expense 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 4,462 26,772 Professional Fees 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 10,334 62,004 Total Expense 98,542 86,050 70,060 59,569 50,529 41,588 32,798 32,798 32,798 52,798 32,798 32,798 184,592 623,126

Cash Balance Month End -$ -$ -$ - -$ -$ -$ -$ -$ -$ -$ -$

Actual JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL YTDEnrollment Count - - -

Cash BalanceBEGINNING OF MONTH 33,233 17,048

Receipts Premium Receipts - - - HHS Reimbursement 136,882 134,905 271,788 Pharmacy Rebate Income - - - Claim Refunds Receipts 6,629 15,442 22,071 Investment Income - - - Abandoned Claims - - - Other Income - - - Total Receipts 143,511 150,348 - - - - - - - - - - 293,859

Refunds Premium Refunds - - - Total Refunds - - - - - - - - - - - - -

Expenses Medical Claim Expense 131,360 114,593 245,952 Pharmacy Claim Expense - - - Administrative Expense 15,450 14,842 30,292 Variable Administrative Expense - - - Salary and Benefits Expense 4,390 11,706 16,096 Contracted Outreach Fees - - - Prescription Administrative Expense - 3 3 Miscellaneous Expense 7,429 2,035 9,464 Professional Fees 1,067 6,700 7,767 Total Expense 159,696 149,879 - - - - - - - - - - 309,575

Cash Balance 17,048 17,517 - - - - - - - - - - Checks written in excess of Cash Balance

Inc(Dec) in Abandoned Property Reserve - - - - - - - - - - - - Available Cash Balance 17,048 17,517 - - - - - - - - - -

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PCIP‐WABudgeted Cashflow 2014

Variance to Original BudgetFavorable/(Unfavorable) JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL YTD

Enrollment Count - - -

Receipts Premium Receipts - - - HHS Reimbursement 38,340 48,855 87,196 Pharmacy Rebate Income - - - Claim Refunds Receipts 6,629 15,442 22,071 Investment Income - - - Abandoned Claims - - - Other Income - - - Total Receipts 44,969 64,298 109,267

Refunds Premium Refunds - - - Total Refunds - - -

Expenses Medical Claim Expense (82,216) (73,641) (155,856) Pharmacy Claim Expense - - - Administrative Expense 14,050 10,358 24,408 Variable Administrative Expense - - - Salary and Benefits Expense 8,110 794 8,904 Contracted Outreach Fees - - - Prescription Administrative Expense - (3) (3) Miscellaneous Expense (5,198) 196 (5,002) Professional Fees 4,100 (1,533) 2,567 Total Expense (61,154) (63,829) (124,983)

Inc(Dec) in Abandoned Property Reserve - - Cash Balance 17,048 17,517 Checks written in excess of Cash Balance (17,048) (17,517) Available Cash Balance - -

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PCIP-WA2014 Administrative Expense

Budget Variance Analysis

Budget - Updated Feb 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Membership (1) - - - - - - - - - - - - -

Administrative Expense (2) 29,500 25,200 17,400 15,100 14,250 13,500 12,900 12,900 12,900 32,900 12,900 12,900 212,350

Variable Administrative Expense (3) - - - - - - - - - - - - -

Salary and Benefits Expense (4) 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 150,000

Contracted Outreach Fees (5) - - - - - - - - - - - - -

RX Benefit Management Fees (6) - - - - - - - - - - - - -

Miscellaneous Expense (7) 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 2,231 26,772

Professional Fees (8) 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 5,167 62,004

Start Up Costs (9) - - - - - - - - - - - - -

Total Budget Operating Expenses 49,398 45,098 37,298 34,998 34,148 33,398 32,798 32,798 32,798 52,798 32,798 32,798 451,126

Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Total

Membership (1) - - -

Administrative Expense (2) 15,450 14,842 30,292

Variable Administrative Expense (3) - - -

Salary and Benefits Expense (4) 4,390 11,706 16,096

Contracted Outreach Fees (5) - - -

RX Benefit Management Fees (6) - 3 3

Miscellaneous Expense (7) 7,429 2,035 9,464

Professional Fees (8) 1,067 6,700 7,767

Start Up Costs (9) - -

Total Actual Operating Expenses 28,336 35,286 - - - - - - - - - - 63,623

Variance Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Total

Membership (1) - - -

Administrative Expense (2) 14,050 10,358 24,408

Variable Administrative Expense (3) - - -

Salary and Benefits Expense (4) 8,110 794 8,904

Contracted Outreach Fees (5) - - -

RX Benefit Management Fees (6) - (3) (3)

Miscellaneous Expense (7) (5,198) 196 (5,002)

Professional Fees (8) 4,100 (1,533) 2,567

Start Up Costs (9) - - -

Total Variance Expenses 21,062 9,812 30,873

Notes:

(1) New enrollment has been suspended as PCIP-WA is in runout.

(2) Administrative Expense reflects fixed contractual TPA fees as well as contractual and performance bonuses per member for TPA, Utilization Management fees and Network services.

(3) Variable Administrative Expense includes Case Management & Care Coaching, special mailings, and misc. system programming.

(4) Salary and Benefits Expense reflect the combined amounts of the Executive Director, Deputy Executive Director, Executive Assistant and Program Coordinator.

PCIP-WA reimburses WSHIP for 25% of salary and benefit costs and these figures reflect those reimbursements.

(5) Contracted Outreach Fees is the outreach expenses billed from the Washington Office of Insurance Commissioner.

(6) Prescription Administrative Expense is the administrative fees charged by the PBM.

(7) Miscellaneous expense includes Board expenses, conference travel, insurance, agent commissions, phone/internet charges, and office expenses.

PCIP-WA reimburses WSHIP for 25% of miscellaneous costs and these figures reflect those reimbursements.

(8) Professional fees include legal fees, auditing fees, actuarial fees, and consulting.

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Projected Member Months

Member Months

Budget Variance

Claims less Refunds Claims PMPM Net Premiums

Net Drawdown for Claims

Admin Costs Less Interest

Income Calculated Drawdowns

2010 Funding Balance

% of 2010 Funding Balance Used

Total Program Balance

1,275,913 Federal Allotment 87,574,275 2010

September 26 27 3.8% 17,580 651 35,960 ‐ 200,848 200,848 1,075,065 15.7% 87,373,427 October 50 51 2.0% 286,018 5,608 27,473 240,165 34,312 274,477 800,588 37.3% 87,098,950 November 85 85 0.0% 260,978 3,070 66,296 194,682 91,691 286,373 514,215 59.7% 86,812,577 December 137 142 3.6% 441,240 3,107 121,782 319,458 77,647 397,105 117,110 90.8% 86,415,472

2010 Totals 298 305 1,005,816 3,298 251,511 754,305 404,498 1,158,803

2010 Admin % of Total Costs 28.7%

Net Drawdown for Claims in October 2010 is reduced by $18,380 of excess premiums from September 2010.

"Total Program Balance" column is populated with the most current contract amount. (June 2013)

Pre‐existing Condition Insurance Pool ‐ PCIP‐WAProgram Expense and Funding Summary(Highlighted cells represent actual data)

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Member Months

Budget Variance








29,218,573 Carry forward 86,415,472 2011

January 179 181 1.1% 531,845 2,938 138,257 393,588 70,282 463,870 28,754,703 1.6% 85,951,602 February 224 226 0.9% 632,702 2,800 164,753 467,949 66,521 534,470 28,220,233 3.4% 85,417,132 March 301 304 1.0% 1,461,569 4,808 302,714 1,158,855 120,912 1,279,767 26,940,466 7.8% 84,137,365 April 336 341 1.5% 1,341,681 3,935 185,556 1,156,125 79,114 1,235,239 25,705,227 12.0% 82,902,126 May 406 410 1.0% 1,217,756 2,970 197,713 1,020,043 89,865 1,109,908 24,595,319 15.8% 81,792,218 June 442 446 0.9% 1,795,218 4,025 495,411 1,299,807 81,719 1,381,526 23,213,793 20.6% 80,410,692 July 487 496 1.8% 1,216,882 2,453 201,438 1,015,444 36,539 1,051,983 22,161,810 24.2% 79,358,709 August 525 531 1.1% 1,730,552 3,259 202,019 1,528,533 144,275 1,672,808 20,489,002 29.9% 77,685,901 September 576 586 1.7% 1,552,438 2,649 247,316 1,305,122 61,438 1,366,560 19,122,442 34.6% 76,319,341 October 621 625 0.6% 2,287,994 3,661 653,699 1,634,295 108,656 1,742,951 17,379,491 40.5% 74,576,390 November 652 659 1.1% 2,203,600 3,344 217,938 1,985,661 65,031 2,050,692 15,328,798 47.5% 72,525,697 December 690 708 2.6% 2,105,353 2,974 806,471 1,298,882 88,898 1,387,780 13,941,019 52.3% 71,137,917

2011 Totals 5,439 5,513 18,077,590 3,279 3,813,285 14,264,304 1,013,249 15,277,554


Includes $29,101,463 available for 2011 plus $117,110 carryover from 2010.(Note: Even though the August 2011 reforecast reduced the 2011 contract amount, HHS had put $29,101,463 on the PMS based on the June 2011 reforecast.That amount remained on PMS and any excess will carry forward to 2012.

"Total Program Balance" column is populated with the most current projections which were submitted to HHS for approvalin May 2013.

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Member Months

Budget Variance








75,137,918 Carry forward 71,137,917 2012

January 675 688 1.9% 1,878,781 2,731 376,866 1,501,914 88,360 1,590,274 73,547,644 2.2% 69,547,643 February 717 725 1.1% 1,985,778 2,739 236,966 1,748,812 79,859 1,828,671 71,718,973 4.6% 67,718,972 March 761 765 0.5% 2,457,915 3,213 951,800 1,506,114 107,412 1,613,527 70,105,446 6.8% 66,105,445 April 766 782 2.1% 3,270,512 4,182 321,274 2,949,238 94,225 3,043,463 67,061,983 11.0% 63,061,982 May 797 805 1.0% 4,250,759 5,280 298,455 3,952,304 76,697 4,029,001 63,032,982 16.5% 59,032,981 June 837 842 0.6% 2,782,652 3,305 1,046,198 1,736,454 78,658 1,815,112 61,217,870 18.9% 57,217,869 July 859 867 0.9% 3,329,890 3,841 368,041 2,961,850 91,791 3,053,640 58,164,230 23.1% 54,164,229 August 876 872 ‐0.5% 3,327,890 3,816 297,264 3,030,626 80,460 3,111,087 55,053,143 27.3% 51,053,142 September 918 926 0.9% 3,509,876 3,790 1,073,773 2,436,103 79,824 2,515,928 52,537,216 30.7% 48,537,215 October 943 947 0.4% 3,547,164 3,746 485,780 3,061,383 106,114 3,167,497 49,369,719 35.0% 45,369,718 November 957 960 0.3% 4,502,069 4,690 376,635 4,125,433 103,258 4,228,691 45,141,028 40.8% 41,141,027 December 1,005 1,013 0.8% 4,814,638 4,753 1,338,133 3,476,505 116,060 3,592,564 41,548,464 45.7% 37,548,462

2012 Totals 10,111 10,192 39,657,925 3,891 7,171,188 32,486,737 1,102,717 33,589,454


"Total Program Balance" column is populated with the most current projections which were submitted to HHS for approvalin February 2013.

Includes $61,196,899 available for 2012 plus $13,941,019 carryover from 2011.

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Member Months

Budget Variance








37,548,462 Carry forward 37,548,462 2013

January 976 966 ‐1.0% 4,978,987 5,154 583,374 4,395,612 86,015 4,481,627 33,066,835 11.9% 33,066,835 February 1,035 1,034 ‐0.1% 3,463,230 3,349 309,563 3,153,666 113,540 3,267,206 29,799,629 20.6% 29,799,629 March 1,106 1,106 0.0% 3,899,721 3,526 655,342 3,244,379 116,467 3,360,846 26,438,782 29.6% 26,438,783 April 1,058 1,106 4.5% 4,052,480 3,664 1,455,523 2,596,957 152,471 2,749,428 23,689,354 36.9% 23,689,354 May 1,013 1,074 6.0% 5,511,610 5,132 298,712 5,212,899 93,230 5,306,129 18,383,225 51.0% 18,383,225 June 969 1,044 7.7% 4,320,882 4,139 183,255 4,137,626 108,034 4,245,660 14,137,565 62.3% 14,137,565 July 2,398,790 2,646 2,396,144 123,831 2,519,975 11,617,590 69.1% 11,617,590 August 474,361 (1,726) 476,087 95,392 571,479 11,046,110 70.6% 11,046,111 September 381,522 ‐ 381,522 56,014 437,536 10,608,574 71.7% 10,608,574 October 607,057 ‐ 607,057 37,336 644,393 9,964,181 73.5% 9,964,181 November 182,563 (9,747) 192,310 40,478 232,788 9,731,393 74.1% 9,731,393 December 8,640 ‐ 8,640 51,969 60,609 9,670,784 74.2% 9,670,785

2013 Totals 6,157 6,330 30,279,842 4,143 3,476,942 26,802,900 1,074,778 27,877,678


This amount includes excess funds carried forward from 2012 in the amount of $41,548,464 minus $4,000,000of funds which were deobligated in June of 2013.

"Total Program Balance" column is populated with the most current projections which were submitted to HHS for approvalin May 2013.

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Member Months

Budget Variance








9,670,784 Carry forward 9,670,785 2014

January 124,731 ‐ 124,731 28,336 153,067 9,517,717 1.6% 9,517,718 February 99,150 ‐ 99,150 35,286 134,437 9,383,281 3.0% 9,383,281 March 34,669 ‐ 34,669 34,697 69,366 9,313,914 3.7% 9,313,915 April 74,571 ‐ 74,571 36,486 111,057 9,202,857 4.8% 9,202,857 May 36,381 ‐ 36,381 36,486 72,867 9,129,990 5.6% 9,129,990 June 12,378 ‐ 12,378 36,486 48,864 9,081,125 6.1% 9,081,126 July ‐ ‐ ‐ 36,486 36,486 9,044,639 6.5% 9,044,640 August ‐ ‐ ‐ 36,486 36,486 9,008,153 6.9% 9,008,154 September ‐ ‐ ‐ 36,486 36,486 8,971,667 7.2% 8,971,668 October ‐ ‐ ‐ 56,486 56,486 8,915,181 7.8% 8,915,182 November ‐ ‐ ‐ 36,486 36,486 8,878,695 8.2% 8,878,696 December ‐ ‐ ‐ 36,486 36,486 8,842,209 8.6% 8,842,210

2014 Totals 381,881 ‐ 381,881 446,694 828,575


This amount includes excess funds carried forward from 2013 in the amount of $9,670,784.

Actual Member Months Claims Net Premiums



Income 2010 Totals 305 1,005,816 251,511 754,305 404,498 2011 Totals 5,513 18,077,590 3,813,285 14,264,304 1,013,249 2012 Totals 10,192 39,657,925 7,171,188 32,486,737 1,102,716 2013 Totals 6,330 30,279,842 3,476,942 26,802,900 1,074,778 2014 Totals ‐ 258,551 ‐ 258,551 98,320

Inception to Date 22,340 89,021,172 14,712,926 74,308,246 3,595,241

ITD Admin % of Total Costs 3.9%

Claims less Refunds Net Premiums



Income 1,005,816 251,511 754,305 404,498 18,077,590 3,813,285 14,264,304 1,013,249 39,657,925 7,171,188 32,486,737 1,102,717 30,279,842 3,476,942 26,802,900 1,074,778

381,881 ‐ 381,881 446,694 89,403,053 14,712,926 74,690,127 4,041,936

Admin % of Total Costs 4.3%

Inception to Date

Summary

Blended Summary (Includes Actual data with Forecasted Amounts)

2010 Totals2011 Totals2012 Totals2013 Totals2014 Totals

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Documents

PCIPWA Treasurer Report Feb 2014wship.org/PCIP-WA/Docs/PCIPWA Feb 2014 Financial... · 04/03/2014 1. 3. Administrative Expense Budget – February 2014 For February 2014, administrative