May 15, 2018

Fallon, Tufts report losses; BCBS, Harvard Pilgrim gain

Photo/Grant Welker
Fallon Health's Worcester headquarters. The insurer began operating as part of an accountable care organization in the first quarter, when it ran a $4.4-million net loss.

Fallon Health lost $4.4 million in the first quarter of the year, while Tufts Health Plan lost nearly $27 million as both Massachusetts insurers began operating as part of accountable care organizations, in which providers statewide began treating MassHealth patients.

Blue Cross Blue Shield reported a $57.5 million net profit, and and Harvard Pilgrim Health Care squeaked out a $100,000 net gain, the insurance plans announced Tuesday.

Each insurer cited high Affordable Care Act taxes and fees in the quarter but most did not disclose the amounts.

Worcester-based Fallon said its participation in so-called ACOs helped increase membership by more than 21 percent, to an all-time high of 270,000. Fallon is involved in three Massachusetts care organizations: with Reliant Medical Group, Berkshire Health Systems/Community Health Programs and Wellforce, the parent company of Lowell General Hospital and Tufts Medical Center.

Fallon said it had a net loss of $4.4 million on revenue of $354 million, for a 1.2-percent margin loss.

Watertown-based Tufts Health Plan did not say how much its membership changed as a result of its partnership in four ACOs but said it stood at more than 1.1 million at the end of the first quarter. Umesh Kurpad, Tufts' chief financial officer, called the launch of the ACOs a significant undertaking but that the transition went smoothly.

Tufts said it had a $26.9-million net loss on $1.3 billion in revenue, for a 2.1-percent loss.

Blue Cross Blue Shield, which had a 2.9-percent net profit on revenue of $2 billion, has 2.8 million members in Massachusetts. It and Harvard Pilgrim Health Care are not involved in any of the accountable care organizations.

Harvard Pilgrim Health Care, which has more than 1.2 million members, tallied a $100,000 net gain on $791 million in revenue. Its Affordable Care Act tax liability in the quarter was $36.6 million, it said.

The ACOs, which started operating in January, are networks of physicians, hospitals and other health care providers who treat MassHealth patients. More than 900,000 MassHealth members, who are Medicaid and the Children's Health Insurance Program recipients, were expected to participate at the roll-out of the program, with 4,500 primary care providers giving care.

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