Molina Healthcare reports $97M loss in third quarter

Molina Healthcare, which is in the midst of a restructuring effort after firing its two top executives, lost $97 million in the third quarter of 2017.

While that figure is considerably worse than the $42 million profit it reported in Q3 2016, it’s still an improvement over the second quarter of 2017, when Molina notched a $230 million loss.

“During the third quarter, we made significant progress on our restructuring efforts, bringing us one step closer to becoming a more consistent and profitable company,” Joseph White, the company’s chief financial officer and interim CEO, said in an earnings release.

Starting Monday, White will be succeeded by a new CEO, Joseph Zubretsky. Previously, the roles of CEO and CFO were filled by J. Mario Molina and John Molina—the sons of the company’s founder—until the board of directors fired them in May. That decision came after the company reported that it lost $110 million on its Affordable Care Act exchange business in 2016.

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Molina Healthcare has since been overhauling its business, an effort that has involved pulling out of some states’ individual marketplaces as well as conducting layoffs.

Molina said in its Q3 earnings report that the performance of its marketplace program improved, including a $30 million reduction to its premium deficiency reserve between June 30 and Sept. 30.

The insurer recorded $118 million of restructuring costs in the third quarter, which included termination benefits, write-offs of capitalized software due to the re-design of its core operating processes, restructuring of its direct delivery operations and consulting fees.

It also recorded $129 million in non-cash goodwill impairment losses for its Pathways behavioral health subsidiary and its Molina Medicaid Solutions segment, after determining that “neither business will provide future benefits relating to the integration of their operations with the health plans segment to the extent previously expected.”