Massachusetts late last week declared Harvard Pilgrim Health Care, Brookline, Mass., to be financially solvent and in no further need of rehabilitation.
State Attorney General Thomas Reilly said the health plan's financial picture improved dramatically during the two months it was protected from creditors. Harvard Pilgrim now has $200 million in available cash and has paid another $200 million to creditors. The 1.2 million-enrollee not-for-profit plan was placed in receivership in January after losing $197 million in 1999.
Reilly said the business plans of Harvard Pilgrim's current management appear superior to rehabilitation proposals hospitals and insurance companies have submitted, and Harvard Pilgrim is projected to be profitable next year.
Part of the health plan's turnaround can be attributed to state-authorized accounting changes that raised the plan's net worth to $178 million from a negative $88 million.