Universal American Corp. Q1 2009 Earnings Call Transcript

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2009-05-04 10:01:13.0

Tags: Network, Goldman Sachs & Co., Call Transcript, Earnings, Universal American Corp., Networking, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Daryn Miller of Goldman Sachs.

Daryn Miller - Goldman Sachs

Can you guys split apart what your MCR was in private fee-for-service versus your HMO products or the network products?

Richard Barasch

We're aggregating our MA from this point forward.

Daryn Miller - Goldman Sachs

Can you give us an indication of what your PPO network build-out spend was in the quarter?

Richard Barasch

It's in between $5 million and $6 million.

Bob Waegelein

Right, as we prepared the bidding. Then it will slow down in the summertime and pick up again in the latter half of the year.

Richard Barasch

I think we said that there's approximately $20 million of spend in our numbers.

Daryn Miller - Goldman Sachs

Richard, can you walk us through how you guys would think about a competitive bidding process in MA?

Richard Barasch

It's a great question, and I think the risk of answering this fully is that I think people have other things to do today. It's very complex and a lot of details have not been made public. So I think it's a little bit early to speculate on how it might work. I think there's an overall notion that since Part D has worked so well, that some of the same principles of the Part D bidding process should apply to MA.

Daryn Miller - Goldman Sachs

The MA MCR came in better than expected. Was there any specific components of the medical cost budget there that were driving that?

Richard Barasch

Our revenue is coming in a little bit better than expected and claims are a little bit better as well.

Daryn Miller - Goldman Sachs

Anything in particular on the claims side?

Richard Barasch

No.

Bob Waegelein

No.

Operator

Your next question comes from the line of Tom Carroll of Stifel Nicolaus.

Tom Carroll - Stifel Nicolaus

First, administratively, could you spike out for us perhaps the positive development in the quarter as well as the revenue true-up related to 2008 on a pre-tax basis?

Secondly, what has hindered your Medicare Advantage sales this year as you look at your products versus perhaps your competitors'? I guess, what is it about your products relative to the competition that's really reduced the outlook in the growth for '09?

Richard Barasch

We would have liked to have seen more private fee-for-service membership, but candidly we didn't miss by that much. I think what's more to the point is the growth of our network-based products, which we continue to do quite well. We're 15% ahead of last year.

 

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