PacifiCare Stock Surges on Medicare News

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Stock of PacifiCare Health Systems Inc. advanced Monday on news that the company will be reimbursed more than expected next year for Californians on its Medicare plan.

The stock rose $2.56 a share Monday, closing at $84.625 on the Nasdaq market.

Though increases in Medicare reimbursements to California health maintenance organizations in general have lagged the national average in recent years, PacifiCare’s rate will be up 6.3% next year, compared with the national average of 5.9%.

David Erickson, a spokesman for the Cypress-based health maintenance company, said the hike in California was “pleasantly surprising.” However, he noted that most of the increase will be passed along to medical groups that provide care.


The company’s California plan accounts for about 70% of its total Medicare revenue, he said. In addition, he said, the plan is expected to generate about $1.9 billion of a total $4.5 billion in revenue from all sources during the company’s fiscal year ending this month.