boaml 2011 health care conference may 11, 2011 bill lucia, ceo walter hosp, cfo contact: christine...
TRANSCRIPT
BOAML 2011 Health Care ConferenceMay 11, 2011
Bill Lucia, CEOWalter Hosp, CFO
Contact:Christine Saenz
What We Do
We provide cost containment services for healthcare payors.
We help ensure that claims are paid by the responsible party (Coordination of Benefits), and accurately (Program Integrity).
As a result, our clients spend more of their healthcare dollars on the people entitled to them.
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Who We Serve
Federal Programs– Centers for Medicare & Medicaid Services– Veterans Administration– Department of Defense
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State Programs– Medicaid agencies– CHIPs (Children’s Health Insurance Programs)– Child Support agencies– State Employee Benefit Plans
Commercial Programs– Medicaid Managed Care Organizations (MCOs)– Medicare Advantage– Employers
COMMERCIAL
$864 billion161 million lives
Source: CMS, Updated NHE Projections 2009-2019, September 2010; VA.gov; Congressional Budget Office, Oct. 2010
MEDICARE
$548 billion 48 million lives
MEDICAID
$466 billion 62 million lives
MILITARY
$105 billion 15 million lives
UNINSURED52 million lives
Coordination of Benefits
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How We Grow
Capture more lives
Ride the Medicaid growth wave
Add new products, enter new markets
Upsell to existing customers
Capture More Medicaid Lives
Sources: HMS; 2009 CMS Office of the Actuary; Updated NHE Projections September 2010
2005 2006 2007 2008 2009 2010 2019E0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000 TOTAL
HMS
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Ride the Medicaid Growth Wave
Actual Projected
1995-2008 data, 2008 CMS Office of the Actuary2009-2019, CMS, Updated NHE Projections, September 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20190
100
200
300
400
500
600
700
800
900
1000
Historical and Projected Medicaid Expenditures
Fiscal Year
$ b
illio
ns
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ManagedCare
Add New Services, Enter New Markets
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Premiumassistance
Market
Service
Real-timeCOB
Pharmacyaudits
Clinicalreview
Hospitalaudits
CHIPEnrollment
integrityCMS
Long-termcare audits
Behavioralhealthaudits
Dependenteligibilityaudits
MedicareAdvantage
Employers
Medicare
Program Integritylaunched
2005 2006 2007 2008 2009 2010 & Beyond
Hea
lthca
re r
efor
mpr
oduc
ts
COORDINATION OF BENEFITS
RACservices
Prepaymentaudit
solutions
Employerplan claim
audits
Upsell to Existing Customers
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Claim Typ
esA
udit
Type
s
Markets
AFFORDABLE CARE ACT
COMMERCIAL
$864 billion161 million lives
Source: CMS, Updated NHE Projections 2009-2019, September 2010; VA.gov; Congressional Budget Office, Oct. 2010
MEDICARE
$548 billion 48 million lives
MEDICAID
$466 billion 62 million lives
MILITARY
$105 billion 15 million lives
UNINSURED52 million lives
Healthcare Financing Today
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COMMERCIAL
$1,241 billion
165 million lives
Source: CMS, Updated NHE Projections 2009-2019, September 2010; VA.gov; Congressional Budget Office, Oct. 2010
MEDICARE
$891 billion 61 million lives
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UNINSURED
24 million livesMEDICAID
$896 billion 82 million lives
Healthcare Financing 2019
MILITARY
$155 billion
Early adoption of reform
Managed care expansion
Program compliance
ACA Activity 2011-2014
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Early Adoption of Reform
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Medicaid expansion
Exchange activity
Managed Care Expansion
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Exchanges
Employers– Plan audits
– Claim audits
– Third-level appeals
Managed care program integrity
Federal focus on fraud, waste, and abuse
Medicaid RAC
Program Compliance
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Medicaid RAC
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INVESTMENT CONSIDERATIONS
Revenue Diversity and Growth
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$ M
illio
ns
2007 2008 2009 2010 2011G0
50
100
150
200
250
300
350
400
Coordination of Benefits (COB) Program Integrity (PI)
2007 2008 2009 2010 2011G0
50
100
150
200
250
300
350
400
Other Employer State Medicaid MCO Federal
$ M
illio
ns
Key Financial IndicatorsRolling Four Quarters
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Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
130
180
230
280
330
Revenue (in $ millions)
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
25
35
45
55
65
75
Operating Profit (in $ millions)
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
35455565758595
105
EBITDA (in $millions)
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
0.5
0.7
0.9
1.1
1.3
1.5
1.7
Earnings per Share
Why HMSY?
Proprietary, high growth core business with significant barriers to entry
Rapidly growing, early stage program integrity business
Market leadership in Medicaid RAC
ACA is a growth accelerator
Multiple new growth opportunities
Strong financial position
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Safe Harbor StatementCertain statements in this presentation constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Such statements give our expectations or forecasts of future events; they do not relate strictly to historical or current facts. Forward-looking statements can be identified by words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes,” “will,” “target,” “seeks,” “forecast” and similar expressions. In particular, these include statements relating to future actions, business plans, objects and prospects, and future operating or financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the development by competitors of new or superior services or products or the entry into the market of new competitors; all the risks inherent in the development, introduction, and implementation of new products and services; the loss of a major customer, customer dissatisfaction or early termination of customer contracts triggering significant costs or liabilities; variations in our results of operations; negative results of government reviews, audits or investigations to verify our compliance with contracts and applicable laws and regulations; changing conditions in the healthcare environment, particularly as they relate to current healthcare reform initiatives; government regulatory, political and budgetary pressures that could affect the procurement practices and operations of healthcare organizations, reducing the demand for our services; and, our failure to comply with laws and regulations governing health data or to protect such data from theft and misuse. A further description of risks, uncertainties, and other matters can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, a copy of which may be obtained from the Company’s website at www.hms.com under the “Investor Relations” tab. Any forward-looking statements made by us in this Presentation speak only as of the date of this Presentation. Factors or events that could cause actual results to differ may emerge from time to time and it is not possible for us to predict all of them. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
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