Pharmacy News Article

Oct. 31VIRGINIA BEACH Amerigroup Corp., which warned earlier this week that its third-quarter earnings were reduced by a spike in flu-related medical costs, reported Friday that its net income for the recent quarter fell 41 percent.

The Virginia Beach-based health insurer said it earned $22.55 million for the July-through-September period, compared with $37.93 million in the year-earlier quarter. Diluted earnings per share fell to 43 cents from 71 cents.

Amerigroup blamed part of the falloff in earnings to a continued increase in its outpatient medical costs from emergency-room visits, ambulatory surgery and physician services. The company, which concentrates on managed care for beneficiaries of Medicaid and other government-funded health care programs, called attention to these higher-than-expected outpatient costs in September.

Its health benefits ratio, the percent of premium revenue that goes to benefits, jumped to 87.5 percent for the latest quarter from 82 percent in comparable period last year.

Revenues for the quarter climbed 19 percent to $1.3 billion because of higher premiums. The number of individuals covered by Amerigroup health plans at the end of September totaled almost 1.78 million, an increase of 64,000 from one year earlier. The company, which does business in Virginia and 10 other states, picked up 56,000 members earlier this year when it expanded to Nevada.

Amerigroup announced its third-quarter results before the stock market opened. Its shares fell 69 cents in heavy trading to close at $22.05.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com

To see more of the The Virginian-Pilot, or to subscribe to the newspaper, go to http://www.pilotonline.com.

Copyright (c) 2009, The Virginian-Pilot, Norfolk, Va.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.