After four long years of bleeding red ink, and a severe case of receivership that was treated by the Insurance Commissioner’s office, ailing KPS Health Plans moved off the critical list, showing it’s first profit since 1996 with the quarter that ended March 31.

KPS president Elizabeth Gilje prescribed just what the doctor ordered by announcing that the Bremerton-based insurer banked $140,000 on revenues of $18.7 million. “It’s a strong start,” stated a jubilant Gilje.

The company’s improved financial health is a direct result of Gilje’s total retooling of the company in conjunction with the Insurance Commissioner’s office which took over the 55 year old company after a Thurston County Superior Court judge ordered it into receivership late last year.

Gilje, who was hired by the Insurance Commissioner’s office to run KPS, credited the turnaround to making significant reductions in administrative expenses, better underwriting practices and controls and a determined refocusing of its business strategies. She also gave a pat on the back to the loyal employees of KPS who stuck with the company through the troubled times and a demoralizing series of layoffs. “It’s paid off,” she said. “We’re counting dollars now, not subscribers and providers.”

The firm’s strategy included retention of its strong network of physicians, coupled with rebuilding its business plan around its most profitable operations, jettisoning money losing plans and restructuring as a Stock Nonprofit Corporation.

The community demonstrated strong support of the company as KPS managed to hold on to 98 percent of its medical providers, and a large majority of its most profitable clients, local businesses, re-upped during the restructuring as well. Gilje stressed that the process isn’t yet complete, but is moving forward under a new KPS board and supervision by the receivership team.

She also announced that KPS has significantly reduced the backlog of reimbursements owed to contracted providers. This move brought the insurer into early compliance with new state “Prompt Payment” regulations that mandate quicker payments to providers than previously. The law takes effect July 1.

“KPS has been preparing for this regulation over the past several months. “Our provider community has been extremely supportive of KPS throughout its history, and more specifically over the past several months,” she stated. “We made a financial decision to clean out our claims backlog as thanks for their continued support. Since we had the ability to do so, we decided to proceed earlier than expected.”

In a related development, Gilje has also installed the third member of her new management team, David Peel, who for the past three years has served as Senior Vice President and Chief Financial Officer of First Choice Health Network Inc., the northwest’s largest PPO with 1.1 million members. Peel has been named as KPS’ new Vice President of Finance, and joins Gilje and Dr. George “Bill” Matheson who was named Medical Director earlier this year.

Peel brings more than 15 years of experience in health insurance, both in Washington and Arizona to the company.

At First Choice, he developed innovative benefit plans, rating models, provider contracts, and coordinated the insurer’s entry into the fully insured health plan business. He also led the company’s acquisition of Providence Preferred PPO and designed and instituted a health care plan for small, one and two person firms that was telemarketed by Costco.

In Arizona, he served as Chief Financial Officer of Premier Healthcare Arizona and as the company’s interim CEO.