Humana 2009 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2009 Humana annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

The detail of total net receivables was as follows at December 31, 2009, 2008 and 2007:
2009 2008 2007
Change
2009 2008
(in thousands)
Military services:
Base receivable ........................ $451,248 $436,009 $404,570 $15,239 $ 31,439
Change orders ......................... 2,024 6,190 5,168 (4,166) 1,022
Military services subtotal ............ 453,272 442,199 409,738 11,073 32,461
Medicare ................................. 238,056 232,608 137,345 5,448 95,263
Commercial and other ...................... 183,124 164,035 126,718 19,089 37,317
Allowance for doubtful accounts .............. (50,832) (49,160) (68,260) (1,672) 19,100
Total net receivables ................ $823,620 $789,682 $605,541 33,938 184,141
Reconciliation to cash flow statement:
Provision for doubtful accounts ........... 19,054 5,398
Receivables from acquisition ............. 6,974 (36,646)
Change in receivables per cash flow statement
resulting in cash from operations ............ $59,966 $152,893
Military services base receivables consist of estimated claims owed from the federal government for health
care services provided to beneficiaries and underwriting fees. The claim reimbursement component of military
services base receivables is generally collected over a three to four month period. The timing of claim
reimbursements resulted in the $15.2 million and $31.4 million increase in base receivables for 2009 as
compared to 2008 and 2008 as compared to 2007, respectively, and the $47.9 million decrease in base
receivables for 2007 as compared to 2006.
Medicare receivables increased $5.4 million in 2009 as compared to 2008 and $95.3 million for 2008 as
compared to 2007, and decreased $6.5 million for 2007 as compared to 2006. Medicare receivables are impacted
by the timing of accruals and related collections associated with the CMS risk-adjustment model.
The detail of benefits payable was as follows at December 31, 2009, 2008 and 2007:
2009 2008 2007
Change
2009 2008
(in thousands)
IBNR(1) ............................ $1,902,700 $1,851,047 $1,695,088 $51,653 $155,959
Military services benefits payable(2) ...... 279,195 306,797 341,372 (27,602) (34,575)
Reported claims in process(3) ........... 357,718 486,514 253,054 (128,796) 233,460
Other benefits payable(4) ............... 682,961 561,221 407,319 121,740 153,902
Total benefits payable ................. $3,222,574 $3,205,579 $2,696,833 16,995 508,746
Reconciliation to cash flow statement:
Benefits payable from acquisition ........ — (96,021)
Change in benefits payable in cash flow
statement resulting in cash from
operations ......................... $16,995 $412,725
(1) IBNR represents an estimate of benefits payable for claims incurred but not reported (IBNR) at the balance
sheet date. The level of IBNR is primarily impacted by membership levels, medical claim trends and the
receipt cycle time, which represents the length of time between when a claim is initially incurred and when
the claim form is received (i.e. a shorter time span results in a lower IBNR).
48