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Humana (HUM) Issues Statement on Prelim. FY14 Medicare Advantage Rate Plan

February 19, 2013 7:41 AM EST Send to a Friend
On Friday, February 15, 2013, after the stock market close, the Centers for Medicare and Medicaid Services (CMS) announced preliminary 2014 Medicare Advantage benchmark payment rates. CMS has invited public comment on these preliminary rates before releasing final rates on April 1, 2013.

In Humana’s (NYSE: HUM) earnings release call for the fourth quarter of 2012 held on February 4, 2013, management expressed confidence in the Company’s ability to grow both Medicare membership and earnings for 2014, based upon management’s stated expectation that the base Medicare Advantage payment rate would be flat to slightly down. The Company believes the preliminary base rates included in the CMS notice would result in a mid-single-digit decline in its benchmark payment rates (excluding the impact of the industry premium tax, county rebasing and risk factor recalibration – which are anticipated to be discussed in the final rate notice). Therefore, Humana is closely analyzing all operational avenues available to address those preliminary rates and the related impact upon the Company’s ability to grow both its Medicare membership and its earnings for 2014.

Humana is committed to providing quality care and service to its members through the Medicare Advantage program. The Company will be drawing upon its program expertise to comment on the impact of these preliminary rate changes upon beneficiaries as it provides comments to CMS.




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