Fallon Health reports $43M operating loss
Photo | Grant Welker
Fallon Health's Worcester headquarters
Worcester insurer Fallon Health had a $43-million operating loss for fiscal 2019, of which more than half of the loss came in the fourth quarter of the year.
Fallon, which announced its earnings Friday, reported full-year revenue of $1.7 billion, up 6% from the prior year.
Fallon struggled financially over a year in which the company attributed losses to the state's accountable care organization system for MassHealth patients, which covers Medicaid and Medicare. It was a sharp turnaround a year after the insurer reported the highest membership and revenue numbers in its four-decade history.
Fallon CFO Todd Bailey called the 2019 losses directly related to the ACO program.
“We continue to work closely with our ACO provider partners and the state, who are all committed to making this innovative model of care and coverage a success," Bailey said in a statement. "We are encouraged by the meaningful steps being taken to address the significant headwinds within this important program.”
Membership was also down a year after a sharp gain in the number of people enrolled in Fallon's health plans. Membership hit 262,493 for the year, a year-to-year loss of 3%.
Investment income made up for a fraction of Fallon's losses, totaling $26.8 million for the year.
Fourth-quarter revenue was $426 million, with an operating loss of $25.5 million.
The state's largest health insurer, Boston-based Blue Cross Blue Shield of Massachusetts, also reported earnings Friday. The company said it had an operating loss of $32 million for the year and 2.9 million members.
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