Humana 2012 Annual Report Download - page 74

The detail of total net receivables was as follows at December 31, 2012, 2011 and 2010:
Change
2012 2011 2010 2012 2011 2010
(in millions)
Medicare ....................................... $422 $ 336 $216 $ 86 $120 $(22)
Commercial and other ............................. 346 315 368 31 (53) 185
Military services ................................. 59 468 427 (409) 41 (26)
Allowance for doubtful accounts ..................... (94) (85) (52) (9) (33) (1)
Total net receivables ...................... $733 $1,034 $959 (301) 75 136
Reconciliation to cash flow statement:
Provision for doubtful accounts .................. 26 31 19
Receivables from acquisition ................... (51) 0 (109)
Change in receivables per cash flow statement resulting in
cash from operations ............................ $(326) $106 $ 46
Medicare receivables are impacted by revenue growth associated with growth in individual and group
Medicare membership and the timing of accruals and related collections associated with the CMS risk-
adjustment model.
Military services receivables at December 31, 2011 and December 31, 2010 primarily consisted of estimated
claims owed from the federal government for health care services provided to beneficiaries and underwriting fees
under our previous TRICARE South Region contract that expired on March 31, 2012. 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 $41 million increase in base receivables for 2011 as compared to
2010 and the $26 million decrease in base receivables for 2010 as compared to 2009. The $409 million decrease
in military services receivables from December 31, 2011 to December 31, 2012 primarily resulted from the
transition to our new TRICARE South Region contract which we account for similar to an administrative
services fee only agreement. As such, beginning April 1, 2012, payments of the federal government’s claims and
related reimbursements for the new TRICARE South Region contract are classified with receipts (withdrawals)
from contract deposits as a financing item in our consolidated statements of cash flows. Military services
receivables at December 31, 2012 primarily consist of administrative services only fees owed from the federal
government for administrative services provided under our new TRICARE South Region contract.
Commercial and other receivables for 2012, 2011, and 2010 include $166 million, $144 million, and $109
million, respectively, of patient services receivables acquired with the acquisition of Concentra in December
2010. In addition, the allowance for doubtful accounts increased $33 million from 2010 to 2011. The increase in
Concentra receivables in 2010 and the related allowance in 2011 result from the requirement to record acquired
balances at fair value at the acquisition date. Excluding the receivables acquired with Concentra, commercial and
other receivables reflect the timing of reimbursements from the Puerto Rico Health Insurance Administration for
our Medicaid business.
64