Increases in claims for outpatient doctor visits, claims for skilled nursing facility care and Medicare supplement policy lapse rates cut third-quarter profits at Universal American Financial Corp.[@@]
Universal American, Rye Brook, N.Y., is reporting $15 million in net income for the third quarter on $237 million in revenue, compared with $19 million in net income on $204 million in revenue for the third quarter of 2004.
Revenue at CHCS Services, a closely watched unit that sells support services to long term care insurers and other companies that serve older consumers, increased 4%, to $15 million.
Profits at a unit that sells Medicare supplement insurance and other senior health products fell to $5.6 million, from $8.3 million, because of the increases in outpatient doctor visit and skilled nursing care claims.
But another contributing factor was the departure of 3 sales managers. The managers caused a spike in Universal American’s Medicare supplement lapse rates by placing their business elsewhere, the company says.
“Universal American believes that these sales managers violated their contractual obligations and is pursuing legal remedies,” Universal American says in a discussion of its earnings.