Centene Provides Analysis of Fourth Quarter Results
February 08 2008 - 6:31PM
Business Wire
Centene Corporation (NYSE: CNC) today provided analysis of its
fourth quarter results previously announced on February 8, 2008.
Under its contract with the State of Georgia, Centene and the State
negotiate and reset premium rates annually. For the state fiscal
year starting July 1, 2007, this process resulted in the State of
Georgia sending an amendment to Centene on November 5, 2007, which
contained the new rates. As part of this amendment, the State of
Georgia also awarded new services and retroactively recalculated
certain rate cells for duplicate member issues. Centene executed
this amendment and returned the contract to the State of Georgia on
November 16, 2007. The amendment provided that the changes were
effective as of July 1, 2007. The State of Georgia returned its
executed version of the amendment in January 2008. Centene�s
guidance range for the fourth quarter was predicated on the
inclusion of revenue relating to rate increases, new services and
other contract changes, for the period from July 1, 2007 to
December 31, 2007, in its fourth quarter results. The revenue
relating to these changes totaled approximately $20.8 million,
divided approximately equally between services provided in the
third and fourth quarters. The total amount of $20.8 million
equates to approximately $0.28 per diluted share and now will be
recognized in the first quarter of 2008. Of the $20.8 million,
approximately $7.3 million related to the new services and other
contract changes. The revenue related to these items was not
considered a rate increase by the State of Georgia nor was it part
of the 3.8% effective yield increase announced by Centene. However,
because these items are included in the contract amendment, the
associated revenue also had to be recognized in the first quarter
of 2008 rather than in 2007. The remaining approximate $13.5
million of the $20.8 million revenue impact discussed above yields
the 3.8% increase. About Centene Corporation Centene Corporation is
a leading multi-line healthcare enterprise that provides programs
and related services to individuals receiving benefits under
Medicaid, including the State Children�s Health Insurance Program
(SCHIP) and Supplemental Security Income (SSI). The Company
operates health plans in Arizona, Georgia, Indiana, New Jersey,
Ohio, South Carolina, Texas and Wisconsin. In addition, the Company
contracts with other healthcare and commercial organizations to
provide specialty services including behavioral health, life and
health management, long-term care, managed vision, nurse triage,
pharmacy benefits management and treatment compliance. Information
regarding Centene is available via the Internet at www.centene.com.
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