OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has removed from under review with developing implications and affirmed the financial strength rating (FSR) of B+ (Good) and issuer credit ratings (ICR) of “bbb-” of MVP Health Plan, Inc. and MVP Health Services Corp.
Additionally, A.M. Best has removed from under review with developing implications and affirmed the FSR of B (Fair) and ICRs of “bb” of MVP Health Insurance Company and MVP Health Insurance Company of New Hampshire, Inc. (Bedford, NH). All companies are downstream subsidiaries of their ultimate parent, MVP Health Care, Inc. (MVP) and are domiciled in Schenectady, NY, unless otherwise specified. The outlook assigned to all the above ratings is stable.
The ratings were placed under review in May 2013, following the announcement that MVP was acquiring Hudson Health Plan (HHP), a Tarrytown, NY-based Medicaid managed care organization. The transaction closed on August 31, 2013 and positions MVP to successfully participate in the state health exchanges, scheduled to begin on October 1, 2013.
The rating affirmations reflect the organization’s favorable consolidated capitalization, conservative investment portfolio as well as its sound business profile and strong brand name recognition in the New York State region.
A.M. Best remains concerned about the deterioration in MVP’s operating results as of mid-2013. Additionally, the ratings factor in the group’s geographic and government programs concentration, as well as the potential impact of further reimbursement rate cuts on its earnings. A.M. Best also will continue to assess the ultimate impact of the acquisition of HHP on the organization’s overall capitalization and earnings trends through discussions with management regarding its operational and strategic plans.
A.M. Best believes MVP and its subsidiaries are well positioned at their current rating levels. Future negative rating actions could occur if MVP experiences material changes in its government funding, which results in an adverse impact on its operating performance and/or a significant decline in its risk-adjusted capitalization.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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