Corporate Research Group’s Weblog

So much excitement over a measly 1.6%.  Still, shares in health plans with heavy Medicare exposure are soaring today after Friday’s announcement by CMS that Medicare Advantage payment rates are expected to rise 0.7% in 2012 (1.6% after adjusting for quality bonuses).  For example, shares in Humana are up 5% in midday trading, while HealthSpring shares are up 3%.  The projected 2012 increase is way better than what was expected by Wall Street analysts.  Notes Christine Arnold of Cowen:

Friday’s announcement secures the payment outlook for 2012, in our view, which will enable companies to maintain and/or expand margins while maintaining and/or growing membership.

From the perspective of investors, that’s good and/or great news.

This entry was posted on Tuesday, February 22nd, 2011 at 1:53 pm and is filed under Managed Care. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.