America Service Group Inc. (ASGR, Financial) filed Quarterly Report for the period ended 2009-03-31.
America Service Group Inc. through its subsidiaries Prison Health Services Inc. EMSA Correctional Care Inc. EMSA Military Services Inc.Correctional Health Services Inc. and Secure Pharmacy Plus Inc. contracts to provide managed healthcare services including the distribution of pharmaceuticals to correctional facilities and militaryinstallations throughout the United States. America Service Group Inc. has a market cap of $133.2 million; its shares were traded at around $14.35 with a P/E ratio of 29.8 and P/S ratio of 0.3.
In addition, as discussed more fully in Part II Item 1. Legal Proceedings, at December 31, 2008, PHS had approximately $1.4 million of gross billed receivables due from a former client, Hillsborough County Sheriffs Office (HCSO), whose contract terminated prior to January 1, 2006. Approximately $0.7 million of these receivables related to billings for costs incurred by the Company for offsite medical services and pharmacy costs which were in excess of the Companys maximum exposure for such costs as set forth under the Companys contract that was in effect with HCSO. The remaining receivables represented interest accrued on the past due balances under the terms of the contract. At December 31, 2008, the Company had recorded reserves totaling approximately $0.7 million related to these receivables. During the first quarter of 2009, the Company and HCSO entered into a settlement agreement pursuant to which the net outstanding receivables were collected.
At March 31, 2009, the Companys reserves for both known and incurred but not reported claims totaled $23.7 million. Reserves for medical malpractice claims fluctuate because the number of claims and the severity of the underlying incidents change from one period to the next. Reserves for medical malpractice claims can also fluctuate as a result of court decisions or as new facts become available. Furthermore, payments with respect to previously estimated liabilities frequently differ from the estimated liability. Changes in estimates of losses resulting from such fluctuations and differences between managements established reserves and actual loss payments are recognized by an adjustment to the reserve for medical malpractice claims in the period in which the estimates are changed or payments are made. For the quarters ended March 31, 2009 and 2008, the Company recorded increases of approximately $2.4 million and $0.7 million, respectively, related to its prior year claims reserves as a result of adverse developments. The reserves can also be affected by changes in the financial health of the third-party insurance carriers used by the Company. If a third party insurance carrier fails to meet its contractual obligations under the agreement with the Company, the Company would then be responsible for such obligations. Such changes could have a material adverse effect on the Companys financial position and its results of operations in the period in which the changes occur.
At March 31, 2009, the Company has approximately $7.9 million in accrued liabilities for employee health and workers compensation claims. Approximately $6.6 million of this amount is related to workers compensation claims, of which approximately $3.3 million is included within the noncurrent portion of accrued expenses as it is not expected to be paid within a year. The Company is essentially self-insured for employee health and workers compensation claims subject to certain individual case stop loss levels. As such, its insurance expense is largely dependent on claims experience and the ability to control claims. The Company accrues the estimated liability for employee health insurance based on its history of claims experience and estimated time lag between the incident date and the date of actual claim payment. The Company accrues the estimated liability for workers compensation claims based on evaluations of the merits of the individual claims and analysis of claims history. An actuarial analysis is prepared at least annually as an additional tool to be considered by management in evaluating the adequacy of the Companys reserve for workers compensation claims. These estimates of self-funded insurance reserves could change in the future based on changes in the factors discussed above. Any adjustments resulting from such changes in estimates are reflected in current earnings.
Read the The complete ReportASGR is in the portfolios of Robert Bruce of Bruce & Co., Inc..
America Service Group Inc. through its subsidiaries Prison Health Services Inc. EMSA Correctional Care Inc. EMSA Military Services Inc.Correctional Health Services Inc. and Secure Pharmacy Plus Inc. contracts to provide managed healthcare services including the distribution of pharmaceuticals to correctional facilities and militaryinstallations throughout the United States. America Service Group Inc. has a market cap of $133.2 million; its shares were traded at around $14.35 with a P/E ratio of 29.8 and P/S ratio of 0.3.
Highlight of Business Operations:
Healthcare expenses include the compensation of physicians, nurses and other healthcare professionals including any related benefits and all other direct costs of providing and/or administering the managed care, including, the costs associated with services provided and/or administered by off-site medical providers, the costs of professional and general liability insurance and other self-funded insurance reserves discussed more fully below. Many of the Companys contracts require the Companys customers to reimburse the Company for all treatment costs or, in some cases, only treatment costs related to certain catastrophic events, and/or for specific disease diagnoses illnesses. Certain of the Companys contracts do not contain such limits. The Company attempts to compensate for the increased financial risk when pricing contracts that do not contain individual, catastrophic or specific disease diagnosis-related limits. However, the occurrence of severe individual cases, specific disease diagnoses illnesses or a catastrophic event in a facility governed by a contract without such limitations could render the contract unprofitable and could have a material adverse effect on the Companys operations. For certain of its contracts that do not contain catastrophic protection, the Company maintains stop loss insurance from an unaffiliated insurer with respect to, among other things, inpatient and outpatient hospital expenses (as defined in the policy) for amounts in excess of $375,000 per inmate up to an annual cap of $1.0 million per inmate. Amounts reimbursable per claim under the policy are further limited to the lessor of 60% of billed charges, the amount paid or the contracted amounts in situations where the Company has negotiated rates with the applicable providers.In addition, as discussed more fully in Part II Item 1. Legal Proceedings, at December 31, 2008, PHS had approximately $1.4 million of gross billed receivables due from a former client, Hillsborough County Sheriffs Office (HCSO), whose contract terminated prior to January 1, 2006. Approximately $0.7 million of these receivables related to billings for costs incurred by the Company for offsite medical services and pharmacy costs which were in excess of the Companys maximum exposure for such costs as set forth under the Companys contract that was in effect with HCSO. The remaining receivables represented interest accrued on the past due balances under the terms of the contract. At December 31, 2008, the Company had recorded reserves totaling approximately $0.7 million related to these receivables. During the first quarter of 2009, the Company and HCSO entered into a settlement agreement pursuant to which the net outstanding receivables were collected.
At March 31, 2009, the Companys reserves for both known and incurred but not reported claims totaled $23.7 million. Reserves for medical malpractice claims fluctuate because the number of claims and the severity of the underlying incidents change from one period to the next. Reserves for medical malpractice claims can also fluctuate as a result of court decisions or as new facts become available. Furthermore, payments with respect to previously estimated liabilities frequently differ from the estimated liability. Changes in estimates of losses resulting from such fluctuations and differences between managements established reserves and actual loss payments are recognized by an adjustment to the reserve for medical malpractice claims in the period in which the estimates are changed or payments are made. For the quarters ended March 31, 2009 and 2008, the Company recorded increases of approximately $2.4 million and $0.7 million, respectively, related to its prior year claims reserves as a result of adverse developments. The reserves can also be affected by changes in the financial health of the third-party insurance carriers used by the Company. If a third party insurance carrier fails to meet its contractual obligations under the agreement with the Company, the Company would then be responsible for such obligations. Such changes could have a material adverse effect on the Companys financial position and its results of operations in the period in which the changes occur.
At March 31, 2009, the Company has approximately $7.9 million in accrued liabilities for employee health and workers compensation claims. Approximately $6.6 million of this amount is related to workers compensation claims, of which approximately $3.3 million is included within the noncurrent portion of accrued expenses as it is not expected to be paid within a year. The Company is essentially self-insured for employee health and workers compensation claims subject to certain individual case stop loss levels. As such, its insurance expense is largely dependent on claims experience and the ability to control claims. The Company accrues the estimated liability for employee health insurance based on its history of claims experience and estimated time lag between the incident date and the date of actual claim payment. The Company accrues the estimated liability for workers compensation claims based on evaluations of the merits of the individual claims and analysis of claims history. An actuarial analysis is prepared at least annually as an additional tool to be considered by management in evaluating the adequacy of the Companys reserve for workers compensation claims. These estimates of self-funded insurance reserves could change in the future based on changes in the factors discussed above. Any adjustments resulting from such changes in estimates are reflected in current earnings.
Read the The complete ReportASGR is in the portfolios of Robert Bruce of Bruce & Co., Inc..
