Puerto Rican managed care company Triple-S Management Corporation announced Thursday consolidated revenues of $744.7 million and a net loss of $1.9 million, or $(0.08) per diluted share, versus net income of $4.2 million, or $0.16 per diluted share a year ago.
The adjusted net loss for the quarter was $6.3 million, or $(0.26) per diluted share, versus adjusted net income of $9.2 million, or $0.36 per diluted share, for the same year-ago period.
Highlights for the quarter reflect: Consolidated operating revenues of $738.6 million, a 3.4 percent decrease from last year, reflecting lower premiums in the managed care segment; Consolidated operating loss of $14 million; Consolidated loss ratio was 87.2 percent; and Medical loss ratio (MLR) of 90.5 percent.
“This quarter’s financial results clearly fall short of expectations. Our performance largely reflects higher-than-anticipated trends in certain medical costs and continued prior-period unfavorable reserve developments related to the claims processing issues we described last quarter,” said Roberto García-Rodríguez, president of Triple-S Management .
“We now have a better understanding of their root causes and have enhanced our reporting capabilities. Going forward, we expect the reserve estimates to be more accurate, allowing us to improve the predictability of our earnings,” he said.
García-Rodríguez added the company remains focused on building long-term value for shareholders through a strategic transformation, “and are taking concrete action to strengthen our core business.”
The company, he said, was pleased with the recently announced four-star rating of its Medicare Advantage HMO contract (H5774) for payment year 2018, which is a direct result of the investments it have made in employees, provider network, and technology to improve beneficiaries’ quality of care.
Also, effective Oct. 1, Triple-S Management transferred its U.S. Virgin Islands business to a third party, eliminating annual losses in excess of $3 million.
“Finally, we have decided to freeze our defined benefit pension plan effective the first quarter of 2017, which will align the company with current market practices and generate average annual savings of approximately $6 million,” he said.
“Against the backdrop of a challenging economic environment and a rapidly evolving healthcare landscape, these efforts reflect key foundational investments, important operational improvements, and our management team’s strategic focus,” García-Rodríguez said.
The report showed that consolidated premiums for the third quarter were $721.2 million, down 3.4 percent from last year. The decrease was principally due to lower premiums in the Managed Care business, reflecting a decline in fully-insured membership across all sectors, offset by premium rate increases in the commercial business, higher life insurance premiums and the partial release of the return premium accrual to the government of Puerto Rico recognized during prior quarters.
For the nine months ended Sept. 30, 2016, consolidated operating revenues increased 6.3 percent year-over-year, to $2.2 billion, the company said.