Humana 2015 Annual Report Download - page 76

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The detail of total net receivables was as follows at December 31, 2015, 2014 and 2013:
Change
2015 2014 2013 2015 2014 2013
(in millions)
Medicare $ 765 $ 664 $ 576 $ 101 $ 88 $ 154
Commercial and other 420 381 219 39 162 59
Military services 77 106 87 (29)19 28
Allowance for doubtful accounts (101) (98) (71)(3)(27)(24)
Total net receivables $ 1,161 $ 1,053 $ 811 108 242 217
Reconciliation to cash flow
statement:
Provision for doubtful accounts 61 32 37
Change in receivables acquired,
held-for-sale, or disposed
from sale of business 11 (10)(3)
Change in receivables per cash flow
statement resulting in cash from
operations $ 180 $ 264 $ 251
As disclosed previously, on June 1, 2015, we completed the sale of our wholly owned subsidiary Concentra. Net
receivables associated with Concentra were classified as held-for-sale at December 31, 2014 and December 31, 2013
and excluded from the table above for comparative purposes.
Medicare receivables are impacted by revenue growth associated with growth in individual and group Medicare
membership and the timing of accruals and related collections associated with the CMS risk-adjustment model.
The increases in commercial and other receivables in each of 2015, 2014, and 2013 primarily are due to growth
in the business. Excluding the effect of classifying Concentra receivables as held-for-sale at December 31, 2014, the
increase in commercial and other receivables from 2013 to 2014 is primarily due to the commercial risk adjustment
provision of the Health Care Reform Law which became effective in 2014.
Military services receivables at December 31, 2015, 2014, and 2013 primarily consist of administrative services
only fees owed from the federal government for administrative services provided under our current TRICARE South
Region contract.
Many provisions of the Health Care Reform Law became effective in 2014, including the commercial risk
adjustment, risk corridor, and reinsurance provisions as well as the non-deductible health insurance industry fee. As
discussed previously, the timing of payments and receipts associated with these provisions impact our operating cash
flows as we build receivables for each coverage year that are expected to be collected in subsequent coverage years.
The net receivable balance associated with the 3Rs was approximately $982 million at December 31, 2015 and $679
million at December 31, 2014, including certain amounts recorded in receivables as noted above. In 2015, we paid the
federal government $867 million for the annual health insurance industry fee compared to our payment of $562 million
in 2014.
In addition to the timing of payments of benefits expense, receipts for premiums and services revenues, and amounts
due under the risk limiting and health insurance industry fee provisions of the Health Care Reform Law, other items
impacting operating cash flows primarily resulted from the timing of working capital related to the growth in our
pharmacy and payments for the Medicare Part D risk corridor provisions of our contracts with CMS.