ST. LOUIS, Feb. 4, 2020 /PRNewswire/ -- Centene Corporation
(NYSE: CNC) announced today its financial results for the fourth
quarter and year ended December 31, 2019, reporting diluted
earnings per share (EPS) of $0.49 and
$3.14, respectively, and Adjusted
Diluted EPS of $0.73 and $4.42, respectively.
2020 Outlook
The Company expects to provide consolidated 2020 annual
guidance, including WellCare Health Plans, Inc. (WellCare), on
Tuesday, March 3, 2020, with a
conference call at 8:30 AM (Eastern Time) on
Wednesday, March 4, 2020. The Company continues to expect
the WellCare acquisition to be no less than break even accretion
for the first full year after closing and mid-to-upper single digit
accretion in the second full year. Additionally, excluding the
effect of the WellCare acquisition, the Company's stand-alone 2020
guidance is unchanged from the guidance provided at our
December investor day.
In summary, the 2019 fourth quarter and full year results were
as follows:
2019
Results
|
|
|
Q4
|
|
Full
Year
|
|
Total revenues (in
millions)
|
$
|
18,863
|
|
|
$
|
74,639
|
|
|
Health benefits
ratio
|
88.4
|
%
|
|
87.3
|
%
|
|
SG&A expense
ratio
|
9.6
|
%
|
|
9.3
|
%
|
|
GAAP diluted
EPS
|
$
|
0.49
|
|
|
$
|
3.14
|
|
|
Adjusted Diluted EPS
(1)
|
$
|
0.73
|
|
|
$
|
4.42
|
|
|
Total cash flow (used
in) provided by operations (in millions)
|
$
|
(651)
|
|
|
$
|
1,483
|
|
|
|
|
|
|
|
(1) A full
reconciliation of Adjusted Diluted EPS is shown beginning on page
seven of this release.
|
|
"I am pleased with our performance in the fourth quarter and
full year 2019, resulting in 24% full year top and bottom line
growth. This caps off another successful year for Centene and
provides strong, positive momentum as we head into 2020. Having
recently closed our acquisition of WellCare, we look ahead to 2020
and beyond with great confidence in the opportunities that lie
ahead. Our company will have even greater scale and
diversification, serving 1 in every 15 Americans, maintaining our
leadership in government-sponsored healthcare. We are happy to
welcome our WellCare colleagues to Centene and look forward to
delivering on our strategy," said Michael
F. Neidorff, Centene's Chairman, President and Chief
Executive Officer.
On January 23, 2020, we acquired all of the issued and
outstanding shares of WellCare. The transaction is valued at
approximately $19.6 billion,
including the assumption of debt. The Centene and WellCare
combination creates a premier healthcare enterprise focused on
government-sponsored healthcare programs.
Fourth Quarter and Full Year Highlights
- December 31, 2019 managed care
membership of 15.2 million, an increase of 1.1 million members, or
8%, over December 31, 2018.
- Total revenues of $18.9 billion
for the fourth quarter of 2019, representing 14% growth compared to
the fourth quarter of 2018, and $74.6
billion for the full year 2019, representing 24% growth
year-over-year.
- Health benefits ratio (HBR) of 88.4% for the fourth quarter of
2019, compared to 86.8% in the fourth quarter of 2018, and 87.3%
for the full year 2019, compared to 85.9% for the full year
2018.
- Selling, general and administrative (SG&A) expense ratio of
9.6% for the fourth quarter of 2019, compared to 9.9% for the
fourth quarter of 2018. SG&A expense ratio of 9.3% for the full
year 2019, compared to 10.7% for the full year 2018.
- Adjusted SG&A expense ratio of 9.5% for the fourth quarter
of 2019, compared to 9.9% for the fourth quarter of 2018. Adjusted
SG&A expense ratio of 9.2% for the full year 2019, compared to
10.0% for the full year 2018.
- Diluted EPS for the fourth quarter of 2019 of $0.49, compared to $0.57 for the fourth quarter of 2018, a decrease
of 14%. Diluted EPS for the full year 2019 of $3.14, compared to $2.26 for the full year 2018, an increase of
39%.
- Adjusted Diluted EPS for the fourth quarter of 2019 of
$0.73, compared to $0.69 for the fourth quarter of 2018, an increase
of 6%. Adjusted Diluted EPS for the full year 2019 of $4.42, compared to $3.54 for the full year 2018, an increase of
25%.
- Operating cash flow of $(651)
million and $1.5 billion for
the fourth quarter and full year 2019, respectively, representing
1.1x net earnings for the full year 2019. Operating cash flow for
the fourth quarter of 2019 was negatively affected by the timing of
payments from several of our customers, including state directed
payments.
Other Events
- In January 2020, Centene acquired
all of the issued and outstanding shares of WellCare. The
transaction is valued at approximately $19.6
billion, including the assumption of $1.95 billion of outstanding debt. The WellCare
acquisition brings a high-quality Medicare platform and further
extends our robust Medicaid offerings. In connection with the
closing of the WellCare acquisition, Anthem, Inc. acquired
WellCare's Missouri Medicaid health plan, a WellCare
Missouri Medicare Advantage health plan, and
WellCare's Nebraska Medicaid health plan. CVS Health
Corporation acquired portions of Centene's Illinois Medicaid and
Medicare Advantage health plans. Centene also completed the
exchange of substantially all of WellCare's outstanding senior
notes of approximately $1.95 billion
aggregate principal amount of new notes issued by Centene and cash.
Finally, the Centene board welcomed WellCare board members
William Trubeck and James Dallas to Centene's board of
directors.
- In February 2020, Centene
announced the appointment of Chris
Koster to Senior Vice President, Secretary and General
Counsel, effective February 19, 2020.
Centene also announced the appointment of Keith Williamson, former Secretary and General
Counsel, to President of the Centene Charitable Foundation.
- In February 2020, Centene
announced the appointment of Jennifer
Gilligan to Senior Vice President, Investor Relations,
effective upon Edmund Kroll's
retirement in April 2020.
- In February 2020, Centene began
operating in Illinois under the
first phase of an expanded contract for the Medicaid Managed Care
Program. The expanded contract includes children who are in need
through the Department of Children and Family Services/Youth Care
by the Illinois Department of Healthcare and Family Services and
Foster Care.
- In January 2020, Centene
announced its subsidiary Social Health Bridge has launched a new
community partnership with the NHP Foundation, and its affiliate,
Operation Pathways, to bring affordable housing to the local
Louisiana community. Launching in
New Orleans, Louisiana, on-site
staff will help residents access education health events,
preventative and social determinants of health screenings, and
community referral assistance on premise at the housing
community.
- In January 2020, Centene expanded
its offerings in the Health Insurance Marketplace in ten existing
markets: Arizona, Florida, Georgia, Kansas, North
Carolina, Ohio,
South Carolina, Tennessee, Texas and Washington.
- In January 2020, Centene began
operating under a one-year emergency contract extension in response
to protested contract awards. Louisiana's state procurement officer
overturned the Louisiana Department of Health's plan to award
Medicaid contracts to four health plans, excluding Centene's
Louisiana subsidiary. According to
the chief procurement officer, the state health department failed
to follow state law or its own evaluation and bid guidelines in its
award.
- In December 2019, Centene issued
approximately $1.0 billion of 4.75%
Senior Notes due 2025 (the "Additional 2025 Notes"), $2.5 billion of new 4.25% Senior Notes due 2027
(the "2027 Notes") and $3.5 billion
of new 4.625% Senior Notes due 2029 (the "2029 Notes"). Centene
used the net proceeds of the 2027 Notes and the 2029 Notes and a
portion of the Additional 2025 Notes to finance the cash
consideration payable in connection with the WellCare acquisition
and to pay related fees and expenses.
- In November 2019, Centene
announced its Texas subsidiary,
Superior HealthPlan, was awarded by the Texas Health and Human
Services Commission a contract to continue to provide healthcare
services to enrollees in the state's STAR+PLUS program. The
contract is expected to be effective on September 1, 2020, and will allow Superior
HealthPlan to offer coverage in two new service areas, for a total
of nine service areas.
- In October 2019, Centene
announced that retired United States Air Force General Lori J. Robinson was elected to serve on
Centene's Board of Directors as a Class I director. General
Robinson was appointed to the Nominating and Governance Committee
and the Government and Regulatory Affairs Committee.
Accreditations & Awards
- In January 2020, FORTUNE
magazine named Centene to its 2020 list of Blue Ribbon Companies
for appearing on at least four of the 10 most rigorous 2019 annual
rankings.
- In January 2020, FORTUNE
magazine named Centene to its 2020 list of the World's Most Admired
Companies.
- In December 2019, Centene's
Texas subsidiary, Superior
HealthPlan, earned Accreditation from the National Committee for
Quality Assurance (NCQA).
- In November 2019, several Centene
subsidiaries earned Accreditation from NCQA, including Cenpatico
Behavioral Health, Pennsylvania Health and Wellness, and Western
Sky Community Care.
Membership
The following table sets forth our membership by line of
business:
|
December 31,
|
|
2019
|
|
2018
|
Medicaid:
|
|
|
|
TANF, CHIP &
Foster Care
|
7,528,700
|
|
|
7,356,200
|
|
ABD &
LTSS
|
1,043,500
|
|
|
1,002,100
|
|
Behavioral
Health
|
66,500
|
|
|
36,500
|
|
Total
Medicaid
|
8,638,700
|
|
|
8,394,800
|
|
Commercial
|
2,331,100
|
|
|
1,978,000
|
|
Medicare
(1)
|
404,500
|
|
|
416,900
|
|
International
|
599,800
|
|
|
151,600
|
|
Correctional
|
180,000
|
|
|
151,300
|
|
Total at-risk
membership
|
12,154,100
|
|
|
11,092,600
|
|
TRICARE
eligibles
|
2,860,700
|
|
|
2,858,900
|
|
Non-risk
membership
|
227,000
|
|
|
219,700
|
|
Total
|
15,241,800
|
|
|
14,171,200
|
|
|
(1)
|
Membership includes
Medicare Advantage, Medicare Supplement, Special Needs Plans, and
Medicare-Medicaid Plans (MMP).
|
The following table sets forth additional membership statistics,
which are included in the membership information above:
|
December 31,
|
|
2019
|
|
2018
|
Dual-eligible
(2)
|
639,200
|
|
|
598,200
|
|
Health Insurance
Marketplace
|
1,805,200
|
|
|
1,459,100
|
|
Medicaid
Expansion
|
1,346,700
|
|
|
1,262,100
|
|
|
(2)
|
Membership includes
dual-eligible ABD & LTSS and dual-eligible Medicare membership
in the table above.
|
Revenues
The following table sets forth supplemental revenue information
($ in millions):
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2019
|
|
2018
|
|
%
Change
|
|
2019
|
|
2018
|
|
%
Change
|
Medicaid
|
$
|
12,818
|
|
|
$
|
11,394
|
|
|
12
|
%
|
|
$
|
50,404
|
|
|
$
|
39,427
|
|
|
28
|
%
|
Commercial
|
3,560
|
|
|
3,060
|
|
|
16
|
%
|
|
14,747
|
|
|
12,391
|
|
|
19
|
%
|
Medicare
(3)
|
1,398
|
|
|
1,365
|
|
|
2
|
%
|
|
5,675
|
|
|
5,093
|
|
|
11
|
%
|
Other
|
1,087
|
|
|
740
|
|
|
47
|
%
|
|
3,813
|
|
|
3,205
|
|
|
19
|
%
|
Total
Revenues
|
$
|
18,863
|
|
|
$
|
16,559
|
|
|
14
|
%
|
|
$
|
74,639
|
|
|
$
|
60,116
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Medicare includes
Medicare Advantage, Medicare Supplement, Special Needs Plans, and
MMP.
|
Statement of Operations: Three Months Ended December 31,
2019
- For the fourth quarter of 2019, total revenues increased 14% to
$18.9 billion from $16.6 billion in the comparable period in 2018.
The increase over the prior year was primarily due to growth in the
Health Insurance Marketplace business, expansions and new programs
in many of our states in 2019, particularly Arkansas, Illinois, Iowa, New
Mexico and Pennsylvania,
and our recent acquisitions in Spain. These increases were partially offset
by the health insurer fee moratorium in 2019.
- HBR of 88.4% for the fourth quarter of 2019 represents an
increase from 86.8% in the comparable period in 2018. The year over
year increase was attributable to the Health Insurance Marketplace
business where margins have normalized, as expected, from favorable
performance in 2018. The increase was also due to the health
insurer fee moratorium and a moderate increase in flu related
costs. HBR for the fourth quarter was higher than our expectations
driven by higher than expected medical costs on our Marketplace
business and slightly higher than projected flu costs. Overall, the
Marketplace business performed well in 2019 with margins within our
stated 5% - 10% range.
- HBR increased sequentially from 88.2% in the third quarter of
2019. The increase was primarily attributable to normal seasonality
in the Health Insurance Marketplace business.
- The SG&A expense ratio was 9.6% for the fourth quarter of
2019, compared to 9.9% in the fourth quarter of 2018. The Adjusted
SG&A expense ratio was 9.5% for the fourth quarter of 2019,
compared to 9.9% in the fourth quarter of 2018. The SG&A and
Adjusted SG&A expense ratios both benefited from the leveraging
of expenses over higher revenues and lower variable compensation
costs in 2019. The decrease to the SG&A expense ratio was
partially offset by an increase in acquisition related expenses
over the fourth quarter of 2018.
- During the fourth quarter of 2019, Centene redeemed the
outstanding principal balance on its $1,400
million 5.625% Senior Notes due February 15, 2021, plus applicable premium for
early redemption and accrued and unpaid interest through the
redemption date. Centene recognized a pre-tax loss on
extinguishment of $30 million on the
redemption of the $1,400 million
5.625% Senior Notes, including the call premium, the write-off of
unamortized debt issuance costs and a loss on the termination of
the $600 million interest rate swap
agreement associated with the notes.
- The effective tax rate was 22.3% for the fourth quarter of
2019, compared to 32.5% in the fourth quarter of 2018. The decrease
in the effective tax rate was due to the impact of the health
insurer fee moratorium.
Statement of Operations: Year Ended December 31,
2019
- For the full year 2019, total revenues increased 24% to
$74.6 billion from $60.1 billion in the comparable period of 2018.
The increase over the prior year was primarily due to the
acquisition of Fidelis Care, growth
in the Health Insurance Marketplace business, and expansions and
new programs in many of our states in 2018 and 2019, particularly
Arkansas, Illinois, Iowa, New
Mexico and Pennsylvania.
These increases were partially offset by the health insurer fee
moratorium in 2019. Total revenues also increased due to at-risk,
state directed and pass through payments of approximately
$825 million from the State of California and pass through payments
of approximately $531 million from
the State of New York.
- HBR of 87.3% for the full year 2019 represents an increase from
85.9% in the comparable period in 2018. The HBR increase compared
to last year was driven by the Health Insurance Marketplace
business where margins have normalized, as expected, from the
favorable performance in 2018 and the health insurer fee
moratorium. Also, the 2018 HBR benefited from the recognition of
the IHSS program reconciliation.
- The SG&A expense ratio was 9.3% for the full year 2019,
compared to 10.7% for the full year 2018. The year-over-year
decrease was primarily due to $336
million of lower acquisition related expenses. The Adjusted
SG&A expense ratio was 9.2% for the full year 2019, compared to
10.0% for the full year 2018. The SG&A and Adjusted SG&A
expense ratios both decreased due to the acquisition of
Fidelis Care, which operates at a
lower SG&A expense ratio, the Veterans Affairs contract
expiration in 2018, and lower variable compensation costs in
2019.
- For the full year 2019, the effective tax rate was 26.5%,
consistent with our previous guidance.
Balance Sheet
At December 31, 2019, the Company had cash, investments and
restricted deposits of $21.4 billion,
including $7.2 billion held by
unregulated entities, reflecting the net proceeds from our
$7.0 billion senior note issuance in
advance of the closing of the WellCare acquisition. Medical claims
liabilities totaled $7.5 billion.
Total debt was $13.7 billion, which
includes $93 million of borrowings on
our $2.0 billion revolving credit
facility at quarter end. The debt to capitalization ratio was 51.7%
at December 31, 2019, excluding $194
million of non-recourse debt. Excluding non-recourse debt
and the senior notes issued to fund the WellCare acquisition in
advance of closing, our debt to capital was 34.3%.
A reconciliation of the Company's change in days in claims
payable from the immediately preceding quarter-end is presented
below:
Days in claims
payable, September 30, 2019
|
48
|
|
State directed
payments
|
(2)
|
|
Timing of claims
payments
|
(1)
|
|
Days in claims
payable, December 31, 2019
|
45
|
|
|
|
|
State directed payments that we receive at the end of each
quarter are recorded as a component of medical claims liability
until paid. We have received state directed payments at the
end of most quarters, which has increased our medical claims
liability and our days in claims payable. In the fourth
quarter of 2019, we did not have any material state directed
payments included in our medical claims liability, which decreased
our days in claims payable by two days.
Outlook
The Company expects to provide consolidated 2020 annual
guidance, including the WellCare acquisition, on Tuesday, March 3, 2020, with a conference call at
8:30 AM (Eastern Time) on Wednesday,
March 4, 2020. The Company continues to expect the WellCare
acquisition to be no less than break even accretion for the first
full year after closing and mid-to-upper single digit accretion in
the second full year. Additionally, excluding the effect of the
WellCare acquisition, the Company's stand-alone 2020 guidance is
unchanged from the guidance provided at our December investor
day.
Conference Call
As previously announced, the Company will host a conference call
Tuesday, February 4, 2020, at
approximately 8:30 AM (Eastern Time)
to review the financial results for the fourth quarter and year
ended December 31, 2019. Michael Neidorff and
Jeffrey Schwaneke will host the
conference call.
Investors and other interested parties are invited to listen to
the conference call by dialing 1-877-883-0383 in the U.S. and
Canada; +1-412-902-6506 from
abroad, including the following Elite Entry Number: 6744563 to
expedite caller registration; or via a live, audio webcast on the
Company's website at www.centene.com, under the
Investors section.
A webcast replay will be available for on-demand listening
shortly after the completion of the call for the next twelve months
or until 11:59 PM (Eastern Time) on
Tuesday, February 9, 2021, at the aforementioned URL. In
addition, a digital audio playback will be available until
9:00 AM (Eastern Time) on Tuesday,
February 11, 2020, by dialing 1-877-344-7529 in the U.S. and
Canada, or +1-412-317-0088 from
abroad, and entering access code 10138090.
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in
this release as the Company believes that these figures are helpful
in allowing investors to more accurately assess the ongoing nature
of the Company's operations and measure the Company's performance
more consistently across periods. The Company uses the presented
non-GAAP financial measures internally to allow management to focus
on period-to-period changes in the Company's core business
operations. Therefore, the Company believes that this information
is meaningful in addition to the information contained in the GAAP
presentation of financial information. The presentation of this
additional non-GAAP financial information is not intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP
financial information that excludes amortization of acquired
intangible assets and acquisition related expenses, as well as
other items, allows investors to develop a more meaningful
understanding of the Company's performance over time. The tables
below provide reconciliations of non-GAAP items ($ in millions,
except per share data):
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net earnings
attributable to Centene
|
$
|
209
|
|
|
$
|
241
|
|
|
$
|
1,321
|
|
|
$
|
900
|
|
Amortization of
acquired intangible assets
|
64
|
|
|
62
|
|
|
258
|
|
|
211
|
|
Acquisition related
expenses
|
38
|
|
|
2
|
|
|
104
|
|
|
425
|
|
Other adjustments
(1)
|
30
|
|
|
—
|
|
|
301
|
|
|
30
|
|
Income tax effects of
adjustments (2)
|
(32)
|
|
|
(15)
|
|
|
(127)
|
|
|
(155)
|
|
Adjusted net
earnings
|
$
|
309
|
|
|
$
|
290
|
|
|
$
|
1,857
|
|
|
$
|
1,411
|
|
|
|
(1)
|
Other adjustments
include the non-cash goodwill and intangible asset impairment of
$271 million for the year ended December 31, 2019, debt
extinguishment costs of $30 million for the three months and year
ended December 31, 2019, and the impact of retroactive changes to
the California minimum MLR of $30 million for the year
ended December 31, 2018.
|
|
|
(2)
|
The income tax
effects of adjustments are based on the effective income tax rates
applicable to each adjustment.
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
GAAP diluted EPS
attributable to Centene
|
$
|
0.49
|
|
|
$
|
0.57
|
|
|
$
|
3.14
|
|
|
$
|
2.26
|
|
|
Amortization of
acquired intangible assets (1)
|
0.12
|
|
|
0.12
|
|
|
0.47
|
|
|
0.41
|
|
|
Acquisition related
expenses (2)
|
0.07
|
|
|
—
|
|
|
0.19
|
|
|
0.81
|
|
|
Other adjustments
(3)
|
0.05
|
|
|
—
|
|
|
0.62
|
|
|
0.06
|
|
|
Adjusted Diluted
EPS
|
$
|
0.73
|
|
|
$
|
0.69
|
|
|
$
|
4.42
|
|
|
$
|
3.54
|
|
|
|
|
(1)
|
The amortization of
acquired intangible assets per diluted share presented above is net
of an income tax benefit of $0.04 and $0.04 for the three months
ended December 31, 2019 and 2018, respectively, and $0.14 and
$0.12 for the year ended December 31, 2019 and 2018,
respectively.
|
|
|
(2)
|
The acquisition
related expenses per diluted share presented above are net of an
income tax benefit of $0.02 and $0.00 for the three months ended
December 31, 2019 and 2018, respectively, and $0.06 and $0.25
for the year ended December 31, 2019 and 2018, respectively.
Acquisition related expenses for 2019 include net carrying costs on
the $7.0 billion senior notes issued in preparation of the WellCare
acquisition of approximately $13 million, or $0.02 per diluted
share, net of an income tax benefit of approximately
$0.01.
|
|
|
(3)
|
The non-cash
impairment is net of an income tax benefit of $0.08 for the year
ended December 31, 2019. Debt extinguishment costs are net of
an estimated income tax benefit of $0.02 for the three months
and year ended December 31, 2019. The California Minimum MLR
adjustment is net of an income tax benefit of $0.02 for the
year ended December 31, 2018.
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP SG&A
expenses
|
$
|
1,733
|
|
|
$
|
1,556
|
|
|
$
|
6,533
|
|
|
$
|
6,043
|
|
Acquisition related
expenses
|
24
|
|
|
—
|
|
|
85
|
|
|
421
|
|
Adjusted SG&A
expenses
|
$
|
1,709
|
|
|
$
|
1,556
|
|
|
$
|
6,448
|
|
|
$
|
5,622
|
|
To provide clarity on the way management defines certain key
metrics and ratios, the Company is providing a description of how
the metric or ratio is calculated as follows:
- Health Benefits Ratio (HBR) (GAAP) = Medical costs
divided by premium revenues.
- SG&A Expense Ratio (GAAP) = Selling, general and
administrative expenses divided by premium and service
revenues.
- Adjusted SG&A Expenses (non-GAAP) = Selling, general
and administrative expenses, less acquisition related
expenses.
- Adjusted SG&A Expense Ratio (non-GAAP) = Adjusted
selling, general and administrative expenses divided by premium and
service revenues.
- Adjusted Net Earnings (non-GAAP) = Net earnings less
amortization of acquired intangible assets, less acquisition
related expenses, less the goodwill and intangible impairment, less
debt extinguishment costs, less the 2018 impact of retroactive
changes to the California minimum
MLR, net of the income tax effect of the adjustments.
- Adjusted Diluted EPS (non-GAAP) = Adjusted net earnings
divided by weighted average common shares outstanding on a fully
diluted basis.
- Debt to Capitalization Ratio (GAAP) = Total debt,
divided by total debt plus total stockholder's equity.
- Debt to Capitalization Ratio Excluding Non-Recourse Debt
(non-GAAP) = Total debt less non-recourse debt, divided by
total debt less non-recourse debt plus total stockholder's
equity.
- Average Medical Claims Expense (GAAP) = Medical costs
for the period, divided by number of days in such period. Average
Medical Claims Expense is most often calculated for the quarterly
reporting period.
- Days in Claims Payable (GAAP) = Medical claims
liabilities, divided by average medical claims expense. Days in
Claims Payable is most often calculated for the quarterly reporting
period.
In addition, the following terms referenced in this press
release and other Company filings are defined as follows:
- State Directed Payments: Payments directed by a
state that have minimal risk, but are administered as a premium
adjustment. These payments are recorded as premium revenue and
medical costs at close to a 100% HBR. The Company has little
visibility to the timing of these payments until they are paid
by a state.
- Pass Through Payments: Non-risk supplemental payments
from a state that the Company is required to pass through to
designated contracted providers. These payments are recorded as
premium tax revenue and premium tax expense.
About Centene Corporation
Centene Corporation, a Fortune 100 company, is a leading
multi-national healthcare enterprise that is committed to helping
people live healthier lives. The Company takes a local approach -
with local brands and local teams - to provide fully integrated,
high-quality, and cost-effective services to government-sponsored
and commercial healthcare programs, focusing on under-insured and
uninsured individuals. Centene offers affordable and high-quality
products to nearly 1 in 15 Americans across all 50 U.S. states,
including Medicaid and Medicare members (including the Medicare
Prescription Drug Plan) as well as individuals served by the Health
Insurance Marketplace and the TRICARE program. The Company also
serves several international markets. Centene emphasizes long-term
growth by prioritizing its people, systems and capabilities so that
it can better serve its members, providers, local communities and
government partners.
Centene uses its investor relations website to publish important
information about the company, including information that may be
deemed material to investors. Financial and other information about
Centene is routinely posted and is accessible on Centene's investor
relations website, http://www.centene.com/investors.
Forward-Looking Statements
All statements, other than statements of current or
historical fact, contained in this press release are
forward-looking statements. Without limiting the foregoing,
forward-looking statements often use words such as "believe,"
"anticipate," "plan," "expect," "estimate," "intend," "seek,"
"target," "goal," "may," "will," "would," "could," "should," "can,"
"continue" and other similar words or expressions (and the negative
thereof). Centene (the Company, our, or we) intends such
forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we are including this
statement for purposes of complying with these safe-harbor
provisions. In particular, these statements include, without
limitation, statements about our future operating or financial
performance, market opportunity, growth strategy, competition,
expected activities in completed and future acquisitions, including
statements about the impact of our recently completed acquisition
(the WellCare Acquisition) of WellCare Health Plans, Inc.
(WellCare), other recent and future acquisitions, investments and
the adequacy of our available cash resources. These
forward-looking statements reflect our current views with respect
to future events and are based on numerous assumptions and
assessments made by us in light of our experience and perception of
historical trends, current conditions, business strategies,
operating environments, future developments and other factors we
believe appropriate. By their nature, forward-looking statements
involve known and unknown risks and uncertainties and are subject
to change because they relate to events and depend on circumstances
that will occur in the future, including economic, regulatory,
competitive and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These statements are not
guarantees of future performance and are subject to risks,
uncertainties and assumptions. All forward-looking statements
included in this press release are based on information available
to us on the date hereof. Except as may be otherwise required by
law, we undertake no obligation to update or revise the
forward-looking statements included in this press release, whether
as a result of new information, future events or otherwise,
after the date hereof. You should not place undue reliance on
any forward-looking statements, as actual results may differ
materially from projections, estimates, or other forward-looking
statements due to a variety of important factors, variables and
events including but not limited to: uncertainty as to our expected
financial performance following completion of the WellCare
Acquisition; the possibility that the expected synergies and value
creation from the WellCare Acquisition will not be realized, or
will not be realized within the expected time period; the risk that
unexpected costs will be incurred in connection with the
integration of the WellCare Acquisition or that the integration of
WellCare will be more difficult or time consuming than expected;
unexpected costs, charges or expenses resulting from the WellCare
Acquisition; the inability to retain key personnel; disruption from
the completion of the WellCare Acquisition, including potential
adverse reactions or changes to business relationships with
customers, employees, suppliers or regulators, making it more
difficult to maintain business and operational relationships; the
risk that, following the WellCare Acquisition, we may not be able
to effectively manage our expanded operations; our ability to
accurately predict and effectively manage health benefits and other
operating expenses and reserves; competition; membership and
revenue declines or unexpected trends; changes in healthcare
practices, new technologies, and advances in medicine; increased
healthcare costs; changes in economic, political or market
conditions; changes in federal or state laws or regulations,
including changes with respect to income tax reform or government
healthcare programs as well as changes with respect to the Patient
Protection and Affordable Care Act and the Health Care and
Education Affordability Reconciliation Act, collectively referred
to as the Affordable Care Act (ACA) and any regulations enacted
thereunder that may result from changing political conditions or
judicial actions, including the ultimate outcome in "Texas v.
United States of America"
regarding the constitutionality of the ACA; rate cuts or other
payment reductions or delays by governmental payors and other risks
and uncertainties affecting our government businesses; our ability
to adequately price products on the Health Insurance Marketplaces
and other commercial and Medicare products; tax matters; disasters
or major epidemics; the outcome of legal and regulatory
proceedings; changes in expected contract start dates; provider,
state, federal and other contract changes and timing of regulatory
approval of contracts; the expiration, suspension, or termination
of our contracts with federal or state governments (including but
not limited to Medicaid, Medicare, TRICARE or other customers); the
difficulty of predicting the timing or outcome of pending or future
litigation or government investigations; challenges to our contract
awards; cyber-attacks or other privacy or data security
incidents; the possibility that the expected synergies and value
creation from acquired businesses, including, without limitation,
the WellCare Acquisition, will not be realized, or will not be
realized within the expected time period; the exertion of
management's time and our resources, and other expenses incurred
and business changes required in connection with complying with the
undertakings in connection with any regulatory, governmental or
third party consents or approvals for acquisitions; disruption
caused by significant completed and pending acquisitions,
including, among others, the WellCare Acquisition, making it more
difficult to maintain business and operational relationships; the
risk that unexpected costs will be incurred in connection with the
completion and/or integration of acquisition transactions; changes
in expected closing dates, estimated purchase price and accretion
for acquisitions; the risk that acquired businesses, including
WellCare, will not be integrated successfully; the risk that we may
not be able to effectively manage our operations as they have
expanded as a result of the WellCare Acquisition; restrictions and
limitations in connection with our indebtedness; our ability to
maintain or achieve improvement in the Centers for Medicare and
Medicaid Services (CMS) Star ratings and maintain or achieve
improvement in other quality scores in each case that can impact
revenue and future growth; availability of debt and equity
financing, on terms that are favorable to us; inflation; foreign
currency fluctuations; and risks and uncertainties discussed in the
reports that Centene has filed with the Securities and Exchange
Commission. This list of important factors is not intended to be
exhaustive. We discuss certain of these matters more fully, as well
as certain other factors that may affect our business operations,
financial condition and results of operations, in our filings with
the Securities and Exchange Commission (SEC), including our annual
report on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K. Due to these important factors and risks, we
cannot give assurances with respect to our future performance,
including without limitation our ability to maintain adequate
premium levels or our ability to control our future medical and
selling, general and administrative costs.
CENTENE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In millions,
except shares in thousands and per share data in
dollars)
|
|
|
December 31,
2019
|
|
December 31,
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
12,123
|
|
|
$
|
5,342
|
|
Premium and trade
receivables
|
6,247
|
|
|
5,150
|
|
Short-term
investments
|
863
|
|
|
722
|
|
Other current
assets
|
1,090
|
|
|
784
|
|
Total current
assets
|
20,323
|
|
|
11,998
|
|
Long-term
investments
|
7,717
|
|
|
6,861
|
|
Restricted
deposits
|
658
|
|
|
555
|
|
Property, software
and equipment, net
|
2,121
|
|
|
1,706
|
|
Goodwill
|
6,863
|
|
|
7,015
|
|
Intangible assets,
net
|
2,063
|
|
|
2,239
|
|
Other long-term
assets
|
1,249
|
|
|
527
|
|
Total
assets
|
$
|
40,994
|
|
|
$
|
30,901
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Medical claims
liability
|
$
|
7,473
|
|
|
$
|
6,831
|
|
Accounts payable and
accrued expenses
|
4,164
|
|
|
4,051
|
|
Return of premium
payable
|
824
|
|
|
666
|
|
Unearned
revenue
|
383
|
|
|
385
|
|
Current portion of
long-term debt
|
88
|
|
|
38
|
|
Total current
liabilities
|
12,932
|
|
|
11,971
|
|
Long-term
debt
|
13,638
|
|
|
6,648
|
|
Other long-term
liabilities
|
1,732
|
|
|
1,259
|
|
Total
liabilities
|
28,302
|
|
|
19,878
|
|
Commitments and
contingencies
|
|
|
|
Redeemable
noncontrolling interests
|
33
|
|
|
10
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$.001 par value; authorized 10,000 shares; no shares issued or
outstanding at December 31, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
Common stock, $.001
par value; authorized 800,000 shares; 421,508 issued and 415,048
outstanding at December 31, 2019, and 417,695 issued and 412,478
outstanding at December 31, 2018
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
7,647
|
|
|
7,449
|
|
Accumulated other
comprehensive earnings (loss)
|
134
|
|
|
(56)
|
|
Retained
earnings
|
4,984
|
|
|
3,663
|
|
Treasury stock, at
cost (6,460 and 5,217 shares, respectively)
|
(214)
|
|
|
(139)
|
|
Total Centene
stockholders' equity
|
12,551
|
|
|
10,917
|
|
Noncontrolling
interest
|
108
|
|
|
96
|
|
Total stockholders'
equity
|
12,659
|
|
|
11,013
|
|
Total liabilities,
redeemable noncontrolling interests and stockholders'
equity
|
$
|
40,994
|
|
|
$
|
30,901
|
|
CENTENE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions,
except shares in thousands and per share data in
dollars)
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Premium
|
$
|
17,210
|
|
|
$
|
14,990
|
|
|
$
|
67,439
|
|
|
$
|
53,629
|
|
Service
|
802
|
|
|
659
|
|
|
2,925
|
|
|
2,806
|
|
Premium and service
revenues
|
18,012
|
|
|
15,649
|
|
|
70,364
|
|
|
56,435
|
|
Premium tax and
health insurer fee
|
851
|
|
|
910
|
|
|
4,275
|
|
|
3,681
|
|
Total
revenues
|
18,863
|
|
|
16,559
|
|
|
74,639
|
|
|
60,116
|
|
Expenses:
|
|
|
|
|
|
|
|
Medical
costs
|
15,220
|
|
|
13,012
|
|
|
58,862
|
|
|
46,057
|
|
Cost of
services
|
687
|
|
|
563
|
|
|
2,465
|
|
|
2,386
|
|
Selling, general and
administrative expenses
|
1,733
|
|
|
1,556
|
|
|
6,533
|
|
|
6,043
|
|
Amortization of
acquired intangible assets
|
64
|
|
|
62
|
|
|
258
|
|
|
211
|
|
Premium tax
expense
|
882
|
|
|
801
|
|
|
4,469
|
|
|
3,252
|
|
Health insurer fee
expense
|
—
|
|
|
177
|
|
|
—
|
|
|
709
|
|
Goodwill and
intangible impairment
|
—
|
|
|
—
|
|
|
271
|
|
|
—
|
|
Total operating
expenses
|
18,586
|
|
|
16,171
|
|
|
72,858
|
|
|
58,658
|
|
Earnings from
operations
|
277
|
|
|
388
|
|
|
1,781
|
|
|
1,458
|
|
Other income (expense):
|
|
|
|
|
|
|
|
Investment and other
income
|
126
|
|
|
67
|
|
|
443
|
|
|
253
|
|
Debt extinguishment
costs
|
(30)
|
|
|
—
|
|
|
(30)
|
|
|
—
|
|
Interest
expense
|
(113)
|
|
|
(98)
|
|
|
(412)
|
|
|
(343)
|
|
Earnings from
operations, before income tax expense
|
260
|
|
|
357
|
|
|
1,782
|
|
|
1,368
|
|
Income tax
expense
|
58
|
|
|
116
|
|
|
473
|
|
|
474
|
|
Net
earnings
|
202
|
|
|
241
|
|
|
1,309
|
|
|
894
|
|
Loss attributable to noncontrolling
interests
|
7
|
|
|
—
|
|
|
12
|
|
|
6
|
|
Net earnings attributable to Centene
Corporation
|
$
|
209
|
|
|
$
|
241
|
|
|
$
|
1,321
|
|
|
$
|
900
|
|
|
|
|
|
|
|
|
|
Net earnings per common share attributable to Centene
Corporation:
|
Basic earnings per
common share
|
$
|
0.50
|
|
|
$
|
0.59
|
|
|
$
|
3.19
|
|
|
$
|
2.31
|
|
Diluted earnings per
common share
|
$
|
0.49
|
|
|
$
|
0.57
|
|
|
$
|
3.14
|
|
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
414,044
|
|
|
411,068
|
|
|
413,487
|
|
|
390,248
|
|
Diluted
|
422,262
|
|
|
420,246
|
|
|
420,409
|
|
|
398,506
|
|
CENTENE
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions,
unaudited)
|
|
|
Year Ended December 31,
|
|
|
2019
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net
earnings
|
$
|
1,309
|
|
|
$
|
894
|
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
|
Depreciation and
amortization
|
643
|
|
|
495
|
|
|
Stock compensation
expense
|
177
|
|
|
145
|
|
|
Goodwill and
intangible impairment
|
271
|
|
|
—
|
|
|
Loss on debt
extinguishment
|
30
|
|
|
—
|
|
|
Deferred income
taxes
|
55
|
|
|
(129)
|
|
|
Changes in assets and
liabilities
|
|
|
|
|
Premium and trade
receivables
|
(1,076)
|
|
|
(1,173)
|
|
|
Other
assets
|
(234)
|
|
|
(38)
|
|
|
Medical claims
liabilities
|
578
|
|
|
1,325
|
|
|
Unearned
revenue
|
(9)
|
|
|
(52)
|
|
|
Accounts payable and
accrued expenses
|
(421)
|
|
|
(533)
|
|
|
Other long-term
liabilities
|
185
|
|
|
258
|
|
|
Other operating
activities, net
|
(25)
|
|
|
42
|
|
|
Net cash provided by
operating activities
|
1,483
|
|
|
1,234
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(730)
|
|
|
(675)
|
|
|
Purchases of
investments
|
(2,575)
|
|
|
(3,846)
|
|
|
Sales and maturities
of investments
|
1,809
|
|
|
1,991
|
|
|
Acquisitions, net of
cash acquired
|
(36)
|
|
|
(2,055)
|
|
|
Net cash used in
investing activities
|
(1,532)
|
|
|
(4,585)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from the
issuance of common stock
|
—
|
|
|
2,779
|
|
|
Proceeds from
long-term debt
|
24,721
|
|
|
6,077
|
|
|
Payments of long-term
debt
|
(17,803)
|
|
|
(4,083)
|
|
|
Common stock
repurchases
|
(75)
|
|
|
(71)
|
|
|
Purchase of
noncontrolling interest
|
—
|
|
|
(74)
|
|
|
Contribution from
noncontrolling interest
|
21
|
|
|
—
|
|
|
Payments for debt
extinguishment
|
(23)
|
|
|
—
|
|
|
Debt issuance
costs
|
(25)
|
|
|
(25)
|
|
|
Other financing
activities, net
|
16
|
|
|
9
|
|
|
Net cash provided by
financing activities
|
6,832
|
|
|
4,612
|
|
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
(2)
|
|
|
—
|
|
|
Net increase in cash,
cash equivalents, and restricted cash and equivalents
|
6,781
|
|
|
1,261
|
|
|
Cash, cash
equivalents, and restricted cash and cash equivalents,
beginning of period
|
5,350
|
|
|
4,089
|
|
|
Cash, cash
equivalents, and restricted cash and cash equivalents, end of
period
|
$
|
12,131
|
|
|
$
|
5,350
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
Interest
paid
|
$
|
301
|
|
|
$
|
323
|
|
|
Income taxes
paid
|
$
|
612
|
|
|
$
|
448
|
|
|
Equity issued in
connection with acquisitions
|
$
|
—
|
|
|
$
|
507
|
|
|
CENTENE
CORPORATION
SUPPLEMENTAL
FINANCIAL DATA
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2018
|
|
MANAGED CARE MEMBERSHIP BY LINE OF
BUSINESS
|
Medicaid:
|
|
|
|
|
|
|
|
|
|
TANF, CHIP &
Foster Care
|
7,528,700
|
|
|
7,623,400
|
|
|
7,388,700
|
|
|
7,491,100
|
|
|
7,356,200
|
|
ABD &
LTSS
|
1,043,500
|
|
|
1,045,700
|
|
|
997,900
|
|
|
1,036,200
|
|
|
1,002,100
|
|
Behavioral
Health
|
66,500
|
|
|
73,300
|
|
|
68,800
|
|
|
56,000
|
|
|
36,500
|
|
Total
Medicaid
|
8,638,700
|
|
|
8,742,400
|
|
|
8,455,400
|
|
|
8,583,300
|
|
|
8,394,800
|
|
Commercial
|
2,331,100
|
|
|
2,388,500
|
|
|
2,449,400
|
|
|
2,472,700
|
|
|
1,978,000
|
|
Medicare
(1)
|
404,500
|
|
|
404,500
|
|
|
398,500
|
|
|
393,900
|
|
|
416,900
|
|
International
|
599,800
|
|
|
462,400
|
|
|
463,100
|
|
|
151,600
|
|
|
151,600
|
|
Correctional
|
180,000
|
|
|
187,200
|
|
|
153,900
|
|
|
153,200
|
|
|
151,300
|
|
Total at-risk
membership
|
12,154,100
|
|
|
12,185,000
|
|
|
11,920,300
|
|
|
11,754,700
|
|
|
11,092,600
|
|
TRICARE
eligibles
|
2,860,700
|
|
|
2,860,700
|
|
|
2,855,800
|
|
|
2,855,800
|
|
|
2,858,900
|
|
Non-risk
membership
|
227,000
|
|
|
227,800
|
|
|
228,100
|
|
|
211,900
|
|
|
219,700
|
|
Total
|
15,241,800
|
|
|
15,273,500
|
|
|
15,004,200
|
|
|
14,822,400
|
|
|
14,171,200
|
|
|
|
|
|
|
|
|
|
|
|
(1) Membership
includes Medicare Advantage, Medicare Supplement, Special Needs
Plans, and MMP.
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF EMPLOYEES
|
56,600
|
|
|
53,600
|
|
|
52,000
|
|
|
48,100
|
|
|
47,300
|
|
|
|
|
|
|
|
|
|
|
|
DAYS IN CLAIMS PAYABLE
|
45
|
|
|
48
|
|
|
47
|
|
|
48
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in
millions)
|
Regulated
|
$
|
14,204
|
|
|
$
|
14,734
|
|
|
$
|
15,101
|
|
|
$
|
14,303
|
|
|
$
|
13,002
|
|
Unregulated
(2)
|
7,157
|
|
|
855
|
|
|
801
|
|
|
507
|
|
|
478
|
|
Total
|
$
|
21,361
|
|
|
$
|
15,589
|
|
|
$
|
15,902
|
|
|
$
|
14,810
|
|
|
$
|
13,480
|
|
|
|
|
|
|
|
|
|
|
|
DEBT TO CAPITALIZATION
|
52.0
|
%
|
|
36.2
|
%
|
|
36.8
|
%
|
|
36.9
|
%
|
|
37.8
|
%
|
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT
(3)
|
51.7
|
%
|
|
35.6
|
%
|
|
36.3
|
%
|
|
36.5
|
%
|
|
37.4
|
%
|
|
|
(2)
|
Unregulated cash,
investments and restricted deposits for the fourth quarter of 2019
include the net proceeds from our $7.0 billion senior note issuance
in advance of the closing of the WellCare acquisition.
|
|
|
(3)
|
Excluding
non-recourse debt and the senior debt issued to fund the WellCare
acquisition in advance of closing, our debt to capital was 34.3%.
The non-recourse debt represents the Company's mortgage note
payable ($54 million at December 31, 2019) and construction loan
payable ($140 million at December 31, 2019). The WellCare related
senior notes represent $6,921 million of long-term debt as of
December 31, 2019.
|
OPERATING RATIOS
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
HBR
|
88.4
|
%
|
|
86.8
|
%
|
|
87.3
|
%
|
|
85.9
|
%
|
SG&A expense
ratio
|
9.6
|
%
|
|
9.9
|
%
|
|
9.3
|
%
|
|
10.7
|
%
|
Adjusted SG&A
expense ratio
|
9.5
|
%
|
|
9.9
|
%
|
|
9.2
|
%
|
|
10.0
|
%
|
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as
follows (in millions):
Balance, December 31, 2018
|
|
$
|
6,831
|
|
Less: reinsurance
recoverable
|
|
27
|
|
Balance, December 31,
2018, net
|
|
6,804
|
|
Acquisitions and
purchase accounting adjustments
|
|
59
|
|
Incurred related
to:
|
|
|
Current
period
|
|
59,539
|
|
Prior
period
|
|
(677)
|
|
Total
incurred
|
|
58,862
|
|
Paid related
to:
|
|
|
Current
period
|
|
52,453
|
|
Prior
period
|
|
5,819
|
|
Total paid
|
|
58,272
|
|
Balance, December 31,
2019, net
|
|
7,453
|
|
Plus: reinsurance
recoverable
|
|
20
|
|
Balance, December 31, 2019
|
|
$
|
7,473
|
|
|
|
|
Centene's claims reserving process utilizes a consistent
actuarial methodology to estimate Centene's ultimate liability. Any
reduction in the "Incurred related to: Prior period" amount may be
offset as Centene actuarially determines "Incurred related to:
Current period." As such, only in the absence of a consistent
reserving methodology would favorable development of prior period
claims liability estimates reduce medical costs. Centene believes
it has consistently applied its claims reserving methodology.
Additionally, approximately $49
million was recorded as a decrease to premium revenues
resulting from development within "Incurred related to: Prior
period" due to minimum HBR and other return of premium
programs.
The amount of the "Incurred related to: Prior period" above
represents favorable development and includes the effects of
reserving under moderately adverse conditions, new markets where we
use a conservative approach in setting reserves during the initial
periods of operations, receipts from other third party payors
related to coordination of benefits and lower medical utilization
and cost trends for dates of service December 31, 2018, and
prior.
View original
content:http://www.prnewswire.com/news-releases/centene-corporation-reports-2019-results-300998127.html
SOURCE Centene Corporation