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. 04/03/2014 1
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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 $31 K or 32.7% favorable to budget (cash basis).
4. PCIP-WA Program Summary – February 2014 The program summary is a blended cash flow forecast tool that tracks the federally allotted funds throughout the life of the program. Actual claims, premiums and administrative expense data is input as incurred, while data for future months is based on the original budget. The summary shows the projected remaining balance at the end of each year as well as at the end of the program. The summary also compares the original budget figures to the blended forecast figures and calculates the blended administrative cost percentage (yearly and in total). PCIP-WA submitted a revised forecast in February 2014 and those re-forecasted figures were updated in the January 2014 packet. Actual results are illustrated through March 2014. As of July 2013, membership was transitioned to the federally ran PCIP pool and therefore PCIP-WA no longer has any active membership. In July 2013, PCIP-WA began to process run-out for claims incurred prior to July 1, 2013. As of March 2014, PCIP-WA has used up 3.7% of the current funding for 2014 and is projected to have enough funds to cover costs through the remainder of 2014. PCIP-WA and HHS will continue to monitor available funds and projections on a quarterly basis with new funds to be awarded as necessary. Administrative costs as a percent of total costs is 3.9% since inception of the program and, by the end of the program, that percentage is projected to be 4.3%.
Reserve for Unpaid Losses - Medical 158,000$ 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
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 - - - - - - - - - - - - - -
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
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.
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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Pre‐existing Condition Insurance Pool ‐ PCIP‐WAProgram Expense and Funding Summary(Highlighted cells represent actual data)
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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Pre‐existing Condition Insurance Pool ‐ PCIP‐WAProgram Expense and Funding Summary(Highlighted cells represent actual data)
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
2014 Funding Balance
% of 2014 Funding Balance Used
Total Program Balance
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
2014 Admin % of Total Costs 53.9%
This amount includes excess funds carried forward from 2013 in the amount of $9,670,784.