ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The following table presents the components of the change in medical claims liabilities for the years ended December 31, 2012, 2011 and 2010, respectively (dollars in thousands).



	2012			2011			2010
Medical liabilities, beginning of year	$	1,308,507		$	1,237,690		$	1,605,407
Acquisitions ⁽¹⁾	50,261			—			71,548
Reported Medical Costs
Current year	10,984,974			9,163,009			8,507,460
Prior year development	(131,200		)	(121,607		)	(241,513		)
Total reported medical costs	10,853,774			9,041,402			8,265,947
Claim Payments
Payments for current year	9,721,411			7,953,744			7,491,891
Payments for prior year	1,070,398			989,783			1,185,476
Total claim payments	10,791,809			8,943,527			8,677,367
Change in Part D Related Subsidy Liabilities	(1,819		)	(27,058		)	(27,845		)
Medical liabilities, end of year	$	1,418,914		$	1,308,507		$	1,237,690
Supplemental Information:
Prior year development ⁽²⁾	1.5		%	1.5		%	2.2		%
Current year paid percent ⁽³⁾	88.5		%	86.8		%	88.1		%


⁽¹⁾	Acquisition balances represent medical liabilities of the acquired company as of the applicable acquisition date.


⁽²⁾	Prior year reported medical costs in the current year as a percentage of prior year reported medical costs.


⁽³⁾	Current year claim payments as a percentage of current year reported medical costs.

CMS receivables and payables

The table below summarizes the CMS receivables and payables, for all contract years, at December 31, 2012 and 2011, respectively (in thousands).



	December 31, 2012			December 31, 2011
Total Medicare Part D CMS Receivables, net	$	381,006		$	299,837
Total Medicare Part D CMS Payables, net	$	(3,091	)	$	(3,619	)

- Definition

Tabular disclosure of the activity in the reserve for settling insured claims and expenses incurred in the claims settlement process for the period. The estimated liability includes the amount of money that will be required for future payments of (a) claims that have been reported to the insurer, (b) claims related to insured events that have occurred but that have not been reported to the insurer as of the date the liability is estimated, and (c) claim adjustment expenses. Claim adjustment expenses include costs incurred in the claim settlement process such as legal fees; outside adjuster fees; and costs to record, process, and adjust claims.

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