Question-and-Answer Session
Operator
Thank you. We will now begin the question-and-answer session. (Operator Instructions). Joshua Raskin from Lehman Brothers, your line is open.
Joshua Raskin - Lehman Brothers
Hi. Thanks. Just a couple of quick clarifications. Point one, Mark, I think you said the guidance is unchanged for 2008, but that includes the transition charge in the first quarter. You threw out two segment profit numbers; I just want to see what was the overall impact to segment profit?
Mark Demilio
Hi, Josh. The charge is going to be $4.7 million in the first quarter, but the effect on our guidance that we had previously provided, given the total impact of this transition, given Steve's new role is going to be approximately $2.9 million for the year.
Joshua Raskin - Lehman Brothers
Okay. So simplistically core operations are $2.9 million better, everything else is the same, right?
Rene Lerer
Well, we gave a range of segment profit guidance were same. We're still within that range.
Joshua Raskin - Lehman Brothers
Okay. That's fair enough. Second is just the RBM, if I look at the revenues, they were down sequentially, which is little bit surprising to me and if I calculate sort of a PMPM, it's down a little over 10%. So I'm just curios, even adjusting for the modest contract changes et cetera. what was the reason for the revenue decline?
Rene Lerer
The primary reason, Josh, was the revenue adjustment that we had made, that half of which was tied to the prior quarter. So the $1.3 million that we referred to of revenue adjustment, there was also a similar adjustment in the fourth quarter. So there's approximately $2.5 million related to the catch up of recording that risk share arrangement that I spoke of earlier.
Joshua Raskin - Lehman Brothers
I guess looking at it just saying down $3 million sequentially, it was because was 3Q was $1.5 million high and 4Q was $1.5 million low, is that right?
Rene Lerer
Yes. Actually, yes. $1.3 million to $1.5 million, yes. That's right.
Joshua Raskin - Lehman Brothers
But that's on a higher membership base, so I'm just curious what was going on a sort of a yield perspective?
Rene Lerer
There really wasn't a higher membership base between third quarter and fourth quarter. A very slight addition of some small market in CIGNA, but primarily as of July 1, we had the majority of the CIGNA business in place and we had all of the Empire risk business in place. So there wasn't that much membership change between quarters.
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