Flint-based HealthPlus of Michigan, an HMO under state supervision since March for financial losses, expects to complete its turnaround next month when it closes the sale of its Medicaid plan to Troy-based Molina Healthcare of Michigan, according to Crain's Detroit Business.
Here are five things to know about the turnaround and sale.
1. HealthPlus expects to complete its turnaround Sept. 1, at which time Mike Genord, MD, currently CMO, will succeed interim CEO Nancy Jenkins. Ms. Jenkins, a HealthPlus employee for 32 years, took over the position for Bruce Hill, who resigned last October after five years as CEO.
2. The turnaround comes after HealthPlus lost $60 million in its Medicaid, Medicare Advantage and commercial HMO and PPO business over the past two years, according to the report, which cites state regulatory filings and interviews. Mr. Genord attributes the losses to a variety of actuarial miscalculations, higher than expected medical utilization and a number of new PPO clients, which led HealthPlus to underprice its various products over the past two years.
3. Incoming CEO Mr. Genord said he expects the commercial HMO and Medicare Advantage business to achieve a $20 million turnaround by the end of 2015, according to Crain's Detroit Business.
4. Mr. Smith predicted HealthPlus will break even this year with a risk-based capital ratio of 300 and "significant capital in the bank," according to the report.
5. By the end of this year, HealthPlus expects to have 70,000 members, 200 employees and generate $500 million in revenue, Mr. Genord said, according to Crain's Detroit Business. That compares to more than 221,000 covered lives, 500 employees and nearly $1 billion in revenue last year.
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