Tufts Health Plan Announces First Quarter 2020 Financial Results
Tufts Health Plan today reported an adjusted net loss of $36.7 million for the first quarter ended March 31, 2020
Watertown, MA – Tufts Health Plan today reported an adjusted net loss of $36.7 million for the first quarter ended March 31, 2020. Adjusted net income includes an operating loss of $43.9 million and investment income of $7.2 million, excluding mark-to-market investment gains and losses on equity securities, with premiums and fees of $1.47 billion. Membership was 1.14 million at the end of the first quarter. Unrealized gain and (loss) on equity securities for the quarter ended March 31, 2020 was ($124.3) million.
“The world is confronting an unprecedented global pandemic and with it comes significant effects on our members, providers on the front lines, our employer clients and the community,” said Tom Croswell, president and CEO. “We continue to look for all the ways we can support our stakeholders during these uncertain times. Like the rest of the health care community, we are planning for what the future looks like, to be ready when non-coronavirus visits to providers begin to increase, and if there is another surge of the virus later this year. We are not operating in a ‘business as usual’ environment and it will be some time before we are.”
Continued Croswell: “Visits to hospital emergency rooms for non-coronavirus illnesses have decreased precipitously for emergent situations such as heart attacks and strokes. We urge our members to take care of themselves, to take their prescriptions regularly, and to heed the advice of front-line providers: If you are experiencing a health emergency, don’t be afraid to go to the emergency room. Hospitals have put in place stringent procedures to ensure that patients showing any coronavirus symptoms are triaged and treated separately from other patients.”
Tufts Health Plan continues to mobilize around the coronavirus issue, an overview of which follows below.
These financial results compare to a year ago when Tufts Health Plan reported an adjusted net income of $30.3 million for the first quarter, which comprised an operating income of $20.9 million and investment income of $9.4 million, excluding mark-to-market investment gains and losses on equity securities, with premiums and fees of $1.34 billion. Membership was 1.16 million at the end of the first quarter 2019.
“Our first-quarter earnings were challenging, with rising medical costs across virtually all our businesses and continued revenue pressure in MassHealth. In addition, we did not see a material slowdown in claims volume in the first quarter from the deferral of electives procedures,” said Umesh Kurpad, chief financial officer. “Looking ahead, we have an unprecedented combination of pandemic-related higher medical costs facing us, coupled with depressed investment returns from a difficult economic environment. We expect higher pandemic-related medical costs to mount this year for a variety of issues: First, as many people defer their care, they will get sicker. Second, we don’t know the long-term chronic effects of the disease, but data is beginning to emerge that suggests recovery is slow. And last, without a vaccine, the infection will continue to spread.”
Continued Kurpad: “We are working with all our stakeholders to thoughtfully balance their current pressures while making sure we are ready for what the future holds.”
During the unprecedented ongoing coronavirus pandemic, Tufts Health Plan continues to support its members, front-line providers, employer clients, community and employees.
- Waiving treatment, testing and counseling costs for members fighting the coronavirus, including co-pays, deductibles and co-insurance.
- Waiving out-of-pocket costs for telehealth visits, including telephone consultations.
- Members can see out-of-network providers in the event they cannot easily find an in-network provider to provide timely services for treatment of the coronavirus.
- Early refills of drug prescriptions prior to the expiration date so members can have a supply on hand.
- Working with providers to address their concerns about payments and advocating for federal funding for providers in need.
- Putting in place administrative flexibilities such as waiving prior authorizations and pre-certification for emergent diagnoses and treatments related to the coronavirus.
- Relaxing timing requirements for claims submission and appeals for our provider groups in recognition of reduced provider office staff.
- Compensating providers at 100 percent of the in-office rate for telehealth.
- Hosting weekly webinars to answer questions and concerns in real time.
- Helping employers keep their employees covered, including those furloughed or temporarily laid off, by extending coverage.
- Extending premium payment periods for employers who need a bit more time to make payment.
- Advocating for direct premium assistance for employers so they can afford to continue to provide employer-sponsored coverage.
- Committing $1 million through Tufts Health Plan Foundation to support those affected by the coronavirus outbreak in Massachusetts, Rhode Island, New Hampshire and Connecticut. This funding supports organizations providing meals and other services to older people and those who are at risk, responds to inequities in housing and basic human needs, and bolsters collaborative regional responses. The Foundation is also providing current grantees flexibility to redeploy existing funds to address emerging community needs.
- Providing nonprofits in the region with much-needed supplies including diapers, hand sanitizer packs, personal protective equipment, grocery gift cards and meals.
- Matching employee donations to local nonprofits two-to-one. In total, $190,000 has been donated through the match program.
- Establishing an Employee Relief Fund to support employees who have been affected by the coronavirus pandemic and are experiencing financial hardship, such as the loss of a job by someone in their household.
- Increasing pay of essential employees who are needed onsite.