-- 2023 Full Year Diluted EPS of
$4.95; Adjusted Diluted EPS of
$6.68 --
- 2023 adjusted diluted EPS of $6.68, up over 15% from $5.78 in 2022.
- 2023 health benefits ratio of 87.7%, consistent with
2022.
- Executed on capital deployment with $1.6 billion of share repurchases in
2023.
- Successful portfolio review execution, completing the final
two international divestitures in the past two months: Circle
Health and Operose Health.
- Increased 2024 premium and service revenues guidance by
$2.5 billion.
ST.
LOUIS, Feb. 6, 2024 /PRNewswire/ -- Centene
Corporation (NYSE: CNC) ("the Company") announced today its
financial results for the fourth quarter and year ended
December 31, 2023. In summary, the 2023 fourth quarter and
full year results were as follows:
2023 Results
|
|
|
Q4
|
|
Full
Year
|
Total revenues (in
millions)
|
$
39,460
|
|
$
153,999
|
|
Premium and service
revenues (in millions)
|
$
35,338
|
|
$
140,095
|
|
Health benefits
ratio
|
89.5 %
|
|
87.7 %
|
|
SG&A expense
ratio
|
9.9 %
|
|
9.0 %
|
|
Adjusted SG&A
expense ratio (1)
|
9.7 %
|
|
8.9 %
|
|
GAAP diluted
EPS
|
$
0.08
|
|
$
4.95
|
|
Adjusted diluted EPS
(1)
|
$
0.45
|
|
$
6.68
|
|
Total cash flow
provided by operations (in millions)
|
$
217
|
|
$
8,053
|
|
|
|
|
|
|
|
(1)
|
Represents a non-GAAP
financial measure. A full reconciliation of the adjusted diluted
earnings per share (EPS) and adjusted selling, general and
administrative (SG&A) expenses is shown in the Non-GAAP
Financial Presentation section of this release.
|
"Our fourth quarter and full year 2023 adjusted EPS results are
slightly ahead of previous guidance, providing our organization
with tangible, positive momentum as we enter 2024. Looking ahead,
we are excited by the opportunities we see within our core
businesses as we execute against our strategic plan, fortify our
foundational assets and drive cost savings. With increased focus
and reduced complexity, Centene is well positioned to continue
navigating the dynamic operating landscape while creating
shareholder value," said Chief Executive Officer of Centene,
Sarah M. London.
Other Events
- In January 2024 and December 2023, we completed the divestitures of
Circle Health Group (Circle Health) and Operose Health Group
(Operose Health), respectively.
- In January 2024, Centene's
New Hampshire subsidiary, NH
Healthy Families, was selected by the New Hampshire Department of
Health and Human Services to continue providing physical health,
behavioral health and pharmacy services for New Hampshire's Medicaid managed care program,
known as Medicaid Care Management (MCM). The contract is expected
to begin in September 2024 for a
five-year term.
- In January 2024, Centene
announced the appointment of Michael
Carson as President and Chief Executive Officer of its
Medicare business, Wellcare. Carson succeeds Richard Fisher, who was appointed Senior Vice
President of Financial Operations, reporting to Centene's Chief
Operating Officer, Susan Smith.
- In December 2023, Centene's
Arizona subsidiary, Arizona
Complete Health, the largest Medicaid health plan in Arizona, was selected by the Arizona Health
Care Cost Containment System – Arizona's single state Medicaid agency – to
provide managed care for the Arizona Long Term Care System (ALTCS).
The program supports nearly 26,000 Arizonans who are elderly and/or
have a physical disability (E/PD) with physical and behavioral
healthcare, as well as provides pharmacy benefits. The new
ALTCS-E/PD contract is anticipated to begin in October 2024, subject to the resolution of
third-party protests, and is a three-year term with four optional
one-year extensions, for a total of seven possible contract
years.
- In November 2023, Centene
announced the appointment of Susan
Smith as its Chief Operating Officer, effective January 1, 2024.
Awards & Community Engagement
- In January 2024, Fortune named
Centene to its 2024 list of World's Most Admired Companies. This
marks the sixth consecutive year Centene has been named to
Fortune's list, which includes the most respected and reputable
companies around the world, as ranked by peers within their
respective industries.
- In January 2024, Centene's
Georgia subsidiary, Peach State
Health Plan, and the Centene Foundation announced a $2.2 million funding commitment to Augusta University. The funding will
facilitate the expansion of the University's Medical College of Georgia 3+ Primary Care Pathway
Program, as well as support the launch of a new loan forgiveness
program for the university's Dental College of Georgia students who commit to five years of
practice in rural and underserved areas.
- In December 2023, Centene's Chief
Executive Officer, Sarah M. London,
was named one of Modern Healthcare's 100 Most Influential People of
2023. Now in its 22nd year, the list honors individuals
in healthcare for their leadership and impact on the industry.
- In November 2023, Centene's
subsidiary, Iowa Total Care, and the Centene Foundation, announced
a partnership with Central Iowa Shelter & Services to create an
on-the-ground Housing Command Center and a mobile application
designed to address certain challenges people and communities face
as a result of social determinants of health. The Centene
Foundation and Iowa Total Care are funding these initiatives and
will invest $2.55 million over the
course of two years.
- In October 2023, Centene was
named to the 2023 Fortune Best Workplaces for Women list, ranking
67 out of 100 companies in the Large Company category. This marks
the first time Centene has appeared on the annual list, which
recognizes companies that demonstrate high employee-ranked scores
in trust, fairness and pride among women employees.
Membership
The following table sets forth membership by line of
business:
|
December
31,
|
|
2023
|
|
2022
|
Traditional Medicaid
(1)
|
12,754,000
|
|
14,264,800
|
High Acuity Medicaid
(2)
|
1,718,000
|
|
1,710,000
|
Total Medicaid
(4)
|
14,472,000
|
|
15,974,800
|
Commercial
Marketplace
|
3,900,100
|
|
2,076,100
|
Commercial
Group
|
427,500
|
|
441,100
|
Total
Commercial
|
4,327,600
|
|
2,517,200
|
Medicare (3)
(4)
|
1,284,200
|
|
1,511,100
|
Medicare PDP
|
4,617,800
|
|
4,226,000
|
Total at-risk
membership
|
24,701,600
|
|
24,229,100
|
TRICARE
eligibles
|
2,773,200
|
|
2,832,300
|
Total
|
27,474,800
|
|
27,061,400
|
|
|
|
|
|
(1)
|
Membership includes
Temporary Assistance for Needy Families (TANF), Medicaid Expansion,
Children's Health Insurance Program (CHIP), Foster Care and
Behavioral Health.
|
(2)
|
Membership includes
Aged, Blind, or Disabled (ABD), Intellectual and Developmental
Disabilities (IDD), Long-Term Services and Supports (LTSS) and
Medicare-Medicaid Plans (MMP) Duals.
|
(3)
|
Membership includes
Medicare Advantage and Medicare Supplement.
|
(4)
|
Medicaid and Medicare
membership includes 1,276,700 and 1,291,300 Dual Eligible Special
Needs Plans (D-SNPs) beneficiaries for the periods ending December
31, 2023, and December 31, 2022, respectively.
|
Premium and Service Revenues
The following table sets forth supplemental revenue information
($ in millions):
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Medicaid
|
$ 21,114
|
|
$ 21,321
|
|
(1) %
|
|
$ 86,855
|
|
$ 84,083
|
|
3 %
|
Commercial
|
7,406
|
|
4,401
|
|
68 %
|
|
24,845
|
|
17,380
|
|
43 %
|
Medicare
(1)
|
5,290
|
|
5,449
|
|
(3) %
|
|
22,261
|
|
22,484
|
|
(1) %
|
Other
|
1,528
|
|
2,382
|
|
(36) %
|
|
6,134
|
|
11,532
|
|
(47) %
|
Total premium and
service revenues
|
$ 35,338
|
|
$ 33,553
|
|
5 %
|
|
$
140,095
|
|
$
135,479
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Medicare includes
Medicare Advantage, Medicare Supplement, D-SNPs and Medicare
Prescription Drug Plan (PDP).
|
Statement of Operations: Three Months Ended December 31, 2023
- For the fourth quarter of 2023, premium and service revenues
increased 5% to $35.3 billion from
$33.6 billion in the comparable
period of 2022. The increase was driven by membership growth in the
Marketplace business due to strong product positioning as well as
overall market growth, partially offset by recent divestitures in
the Other segment and lower Medicaid membership due to
redeterminations.
- Health benefits ratio (HBR) of 89.5% for the fourth quarter of
2023 represents an increase from 88.7% in the comparable period in
2022. The increase is primarily driven by the $250 million premium deficiency reserve recorded
in connection with the 2024 Medicare Advantage business.
- The SG&A expense ratio was 9.9% for the fourth quarter of
2023, compared to 9.5% in the fourth quarter of 2022. The adjusted
SG&A expense ratio was 9.7% for the fourth quarter of 2023,
compared to 9.3% in the fourth quarter of 2022. The increases were
driven by growth in the Marketplace business, which operates at a
meaningfully higher SG&A ratio as compared to Medicaid, along
with Medicare distribution costs. The increases were partially
offset by ongoing SG&A reduction initiatives and continued
leveraging of expenses over higher revenues. The SG&A expense
ratio in the fourth quarter of 2023 was also impacted by severance
costs due to a restructuring partially offset by lower acquisition
and divestiture related costs.
- The effective tax rate was (61.9)% for the fourth quarter of
2023, compared to 644.4% in the fourth quarter of 2022. The
effective tax rate for the fourth quarter of 2023 reflects lower
state taxes and tax effects of divestitures. The effective tax rate
for the fourth quarter of 2022 reflects the tax effects of
previously pending and completed divestitures, including the
Magellan Rx divestiture gain, and impairments, including the
non-deductible impairment of our Health Net Federal Services
business. For the fourth quarter of 2023, our effective tax rate on
adjusted earnings was 30.6%, compared to 23.6% in the fourth
quarter of 2022.
- Cash flow provided by operations for the fourth quarter of 2023
was $217 million, primarily driven by
net earnings, partially offset by decreased unearned revenue driven
by the early receipt of payments from CMS in the third quarter
pertaining to the fourth quarter.
Statement of Operations: Year Ended December 31, 2023
- For the full year 2023, premium and service revenues increased
3% to $140.1 billion from
$135.5 billion in the comparable
period of 2022 driven by 88% membership growth in the Marketplace
business as a result of strong product positioning as well as
overall market growth and Medicaid rate increases and organic
growth. The increases were partially offset by divestitures,
Medicaid membership redeterminations and pharmacy carve outs in
early 2023.
- HBR of 87.7% for the full year 2023 was flat compared to 87.7%
in 2022. The 2023 HBR was positively impacted by growth in the
Marketplace business, which runs at a lower HBR, and strong
performance from pricing discipline and execution, offset by the
$250 million premium deficiency
reserve recorded in connection with the 2024 Medicare Advantage
business.
- The SG&A expense ratio was 9.0% for the full year 2023,
compared to 8.6% for the full year 2022. The adjusted SG&A
expense ratio was 8.9% for the full year 2023, compared to 8.4% for
the full year 2022. The increases were driven by growth in the
Marketplace business, which operates at a meaningfully higher
SG&A ratio as compared to Medicaid, along with Medicare
distribution costs. The increases were partially offset by ongoing
SG&A reduction initiatives and continued leveraging of expenses
over higher revenues.
- The effective tax rate was 25.0% for 2023, compared to 38.7%
for 2022. The effective tax rate for 2023 reflects the tax effects
of the distribution of long-term stock awards to the estate of the
Company's former CEO, divestiture gains and losses, lower state
taxes and the pending divestiture of Circle Health. The 2022
effective tax rate reflects the tax effects of previously pending
and completed divestitures, including the Magellan Rx divestiture
gain, and impairments, including the non-deductible impairment of
our Health Net Federal Services business. For the full year 2023,
our effective tax rate on adjusted earnings was 24.9%, compared to
25.8% in 2022.
- Cash flow provided by operations for the full year 2023 was
$8.1 billion, or 3.0 times net
earnings and 2.2 times adjusted net earnings.
Balance Sheet
At December 31, 2023, the Company had cash, investments and
restricted deposits of $37.3 billion
and maintained $200 million of cash
and cash equivalents in its unregulated entities. Medical claims
liabilities totaled $18.0 billion.
The Company's days in claims payable was 54 days, which is an
increase of one day as compared to the third quarter of 2023, and
flat as compared to the fourth quarter of 2022. Total debt was
$17.8 billion, which included
$150 million of borrowings on the
$2.0 billion Revolving Credit
Facility at year end.
During the fourth quarter of 2023, the Company repurchased
397 thousand shares for $27
million. In total, the Company repurchased 22.9 million
shares for $1.6 billion through the
stock repurchase program for the full year 2023. As of
February 6, 2024, $5.2 billion
remains available under the Company's stock repurchase program.
Outlook
The Company is increasing its 2024 premium and service revenues
guidance range by $2.5 billion to a
range of $134.5 billion to
$137.5 billion to reflect additional
Commercial premium revenue from a stronger than expected
Marketplace open enrollment. The Company reiterates its 2024
adjusted diluted EPS guidance floor of greater than $6.70.
Conference Call
As previously announced, the Company will host a conference call
Tuesday, February 6, 2024, at 8:30 a.m.
ET to review the financial results for the fourth quarter
and year ended December 31, 2023.
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: 3061147 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 following the completion of the call for the next 12 months
or until 11:59 p.m. ET on Tuesday, February
4, 2025, at the aforementioned URL. In addition, a digital
audio playback will be available until 9 a.m. ET on Tuesday, February 13, 2024, by dialing
1-877-344-7529 in the U.S., 1-855-669-9658 in Canada, or +1-412-317-0088 from abroad, and
entering access code 7739225.
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 in evaluating the
Company's performance and for planning purposes, by allowing
management to focus on period-to-period changes in the Company's
core business operations, and in determining employee incentive
compensation. Therefore, the Company believes that this information
is meaningful in addition to the information contained in the GAAP
presentation of financial information. The Company strongly
encourages investors to review its consolidated financial
statements and publicly filed reports in their entirety and
cautions investors that the non-GAAP financial measures used by the
Company may differ from similar measures used by other companies,
even when similar terms are used to identify such measures. The
presentation of non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
The Company is unable to provide a reconciliation of its 2024
adjusted diluted EPS target to the corresponding GAAP measure
without unreasonable effort due to the difficulty of predicting the
timing and amounts of various items within a reasonable range. As
such, this has been excluded from the reconciliation below.
The Company believes the presentation of non-GAAP financial
measures that excludes amortization of acquired intangible assets,
acquisition and divestiture related expenses, as well as other
items, allows investors to develop a more meaningful understanding
of the Company's core 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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP net earnings
(loss) attributable to Centene
|
$
45
|
|
$
(213)
|
|
$
2,702
|
|
$
1,202
|
Amortization of
acquired intangible assets
|
176
|
|
208
|
|
718
|
|
817
|
Acquisition and
divestiture related expenses
|
18
|
|
64
|
|
70
|
|
213
|
Other adjustments
(1)
|
119
|
|
315
|
|
464
|
|
1,540
|
Income tax effects of
adjustments (2)
|
(118)
|
|
111
|
|
(308)
|
|
(410)
|
Adjusted net
earnings
|
$
240
|
|
$
485
|
|
$
3,646
|
|
$
3,362
|
|
|
|
|
(1)
|
Other adjustments
include the following pre-tax items:
|
|
|
|
2023:
|
|
|
|
|
(a)
|
for the three months
ended December 31, 2023: severance costs due to a restructuring of
$57 million, Circle Health impairment of $41 million, real estate
impairments of $13 million, a reduction to the previously reported
gain on the sale of Magellan Rx of $12 million, gain on the sale of
Apixio of $2 million and gain on the divestiture of Operose Health
of $2 million;
|
|
|
|
|
|
|
(b)
|
for the twelve months
ended December 31, 2023: Circle Health impairment of $292 million,
Operose Health impairment of $140 million, real estate impairments
of $105 million, gain on the sale of Apixio of $93 million,
severance costs due to a restructuring of $79 million, gain on the
sale of Magellan Specialty Health of $79 million, a reduction to
the previously reported gain on the sale of Magellan Rx of $22
million, gain on the previously reported divestiture of Centurion
of $15 million and an additional loss on the divestiture of our
Spanish and Central European businesses of $13 million.
|
|
|
|
|
|
2022:
|
|
|
|
|
(a)
|
for the three months
ended December 31, 2022: impairments of assets associated with the
divestitures of our Centurion and HealthSmart businesses of $293
million, Magellan Rx divestiture gain of $269 million, Health Net
Federal Services asset impairment of $233 million, real estate
impairments of $61 million, gain on debt extinguishment related to
the repurchases of senior notes of $4 million and costs related to
the pharmacy benefits management (PBM) legal settlement of $1
million;
|
|
|
|
|
|
|
(b)
|
for the twelve months
ended December 31, 2022: real estate impairments of $1,642 million,
gain on the sale of PANTHERx Rare (PANTHERx) of $490 million,
impairments of assets associated with the divestitures of our
Spanish and Central European, Centurion and HealthSmart businesses
of $458 million, Magellan Rx divestiture gain of $269 million,
Health Net Federal Services asset impairment of $233 million, gain
on debt extinguishment of $27 million, increase to the previously
reported gain on the divestiture of U.S. Medical Management
(USMM) due to the finalization of working capital adjustments
of $13 million and costs related to the PBM legal settlement of $6
million.
|
|
|
|
|
(2)
|
The income tax effects
of adjustments are based on the effective income tax rates
applicable to each adjustment. In addition, the three and
twelve months ended December 31, 2023 include tax expense of $9
million and $3 million, respectively, related to tax adjustments on
previously reported divestitures. The year ended December 31, 2023
also includes a one-time income tax benefit of $69 million
resulting from the distribution of long-term stock awards to the
estate of the Company's former CEO. The three and twelve months
ended December 31, 2022, include a tax expense of $3 million
and a tax benefit of $15 million, respectively, related to the
previously reported impairment of our equity method investment in
RxAdvance. The three and twelve months ended December 31, 2022 also
include tax expense of $107 million related to the Magellan
Specialty Health divestiture.
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP diluted earnings
(loss) per share attributable to Centene
|
$
0.08
|
|
$
(0.38)
|
|
$
4.95
|
|
$
2.07
|
Amortization of
acquired intangible assets
|
0.33
|
|
0.37
|
|
1.32
|
|
1.40
|
Acquisition and
divestiture related expenses
|
0.03
|
|
0.11
|
|
0.13
|
|
0.36
|
Other adjustments
(3)
|
0.22
|
|
0.56
|
|
0.85
|
|
2.65
|
Income tax effects of
adjustments (4)
|
(0.21)
|
|
0.20
|
|
(0.57)
|
|
(0.70)
|
Adjusted diluted
EPS
|
$
0.45
|
|
$
0.86
|
|
$
6.68
|
|
$
5.78
|
|
|
|
|
(3)
|
Other adjustments
include the following pre-tax items:
|
|
|
|
2023:
|
|
|
|
|
(a)
|
for the three months
ended December 31, 2023: severance costs due to a restructuring of
$0.11 ($0.08 after-tax), Circle Health impairment of $0.08 ($(0.02)
after-tax), real estate impairments of $0.02 ($0.02 after-tax), a
reduction to the previously reported gain on the sale of Magellan
Rx of $0.02 ($0.02 after-tax), gain on the sale of Apixio of $0.01
($0.01 after-tax), and gain on the divestiture of Operose Health of
$0.00 ($0.01 after-tax);
|
|
|
|
|
|
|
(b)
|
for the twelve months
ended December 31, 2023: Circle Health impairment of $0.53 ($0.47
after-tax), Operose Health impairment of $0.26 ($0.24 after-tax),
real estate impairments of $0.19 ($0.16 after-tax), gain on the
sale of Apixio of $0.17 ($0.12 after-tax), severance costs due to a
restructuring of $0.15 ($0.11 after-tax), gain on the sale of
Magellan Specialty Health of $0.14 ($0.11 after-tax), a reduction
to the previously reported gain on the sale of Magellan Rx of $0.04
($0.02 after-tax), gain on the previously reported divestiture of
Centurion of $0.03 ($0.02 after-tax) and an additional loss on the
divestiture of our Spanish and Central European businesses of $0.02
($0.01 after-tax).
|
|
|
|
|
|
2022:
|
|
|
|
|
(a)
|
for the three months
ended December 31, 2022: impairments of assets associated with the
divestitures of our Centurion and HealthSmart businesses of $0.52
($0.37 after-tax), Magellan Rx divestiture gain of $0.47 ($0.17
after-tax), Health Net Federal Services asset impairment of $0.41
($0.40 after-tax), real estate impairments of $0.11 ($0.09
after-tax) and gain on debt extinguishment related to the
repurchases of senior notes of $0.01 ($0.01 after-tax);
|
|
|
|
|
|
|
(b)
|
for the twelve months
ended December 31, 2022: real estate impairments of $2.82 ($2.08
after-tax), gain on the sale of PANTHERx of $0.84 ($0.65
after-tax), impairments of assets associated with the divestitures
of our Spanish and Central European, Centurion and HealthSmart
businesses of $0.78 ($0.60 after-tax), Magellan Rx divestiture gain
of $0.46 ($0.17 after-tax), Health Net Federal Services asset
impairment of $0.40 ($0.39 after-tax), gain on debt extinguishment
of $0.04 ($0.03 after-tax), increase to the previously reported
gain on the divestiture of USMM due to the finalization of working
capital adjustments of $0.02 ($0.02 after-tax) and costs related to
the PBM legal settlement of $0.01 ($0.00 after-tax).
|
|
|
|
|
(4)
|
The income tax effects
of adjustments are based on the effective income tax rates
applicable to each adjustment. In addition, the three and twelve
months ended December 31, 2023 include tax expense of $0.02 and
$0.01, respectively, related to tax adjustments on previously
reported divestitures. The year ended December 31, 2023 also
includes a one-time income tax benefit of $0.13 resulting from the
distribution of long-term stock awards to the estate of the
Company's former CEO. The three and twelve months ended December
31, 2022, include tax expense of $0.01 and a tax benefit of $0.03,
respectively, related to the previously reported impairment of our
equity method investment in RxAdvance. The three and twelve months
ended December 31, 2022, also include tax expense of $0.19 and
$0.18, respectively, related to the Magellan Specialty Health
divestiture.
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP selling, general
and administrative expenses
|
$
3,488
|
|
$
3,198
|
|
$
12,563
|
|
$
11,589
|
Less:
|
|
|
|
|
|
|
|
Acquisition and
divestiture related expenses
|
17
|
|
53
|
|
69
|
|
202
|
Restructuring
costs
|
57
|
|
—
|
|
79
|
|
—
|
Costs related to the
PBM legal settlement
|
—
|
|
1
|
|
—
|
|
6
|
Real estate
optimization
|
1
|
|
8
|
|
8
|
|
15
|
Adjusted selling,
general and administrative expenses
|
$
3,413
|
|
$
3,136
|
|
$
12,407
|
|
$
11,366
|
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 Expense Ratio (non-GAAP) = Adjusted
selling, general and administrative expenses divided by premium and
service revenues.
- Adjusted Effective Tax Rate (non-GAAP) = GAAP income tax
expense (benefit) excluding the income tax effects of adjustments
to net earnings divided by adjusted earnings (loss) before income
tax expense.
- Adjusted Net Earnings (non-GAAP) = Net earnings less
amortization of acquired intangible assets, less acquisition and
divestiture related expenses, as well as adjustments for other
items, 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.
- 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 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. In many instances, 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 500 company, is a leading 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 individuals across the nation, including
Medicaid and Medicare members (including Medicare Prescription Drug
Plans) as well as individuals and families served by
the Health Insurance Marketplace and the TRICARE program. The
Company also contracts with other healthcare and commercial
organizations to provide a variety of specialty services focused on
treating the whole person. Centene focuses on long-term
growth and value creation as well as the development of 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, https://investors.centene.com.
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 "guidance,"
"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 Corporation and its
subsidiaries (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, competition, expected activities
in connection with completed and future acquisitions and
dispositions, our 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: our ability to design and
price products that are competitive and/or actuarially sound
including but not limited to any impacts resulting from Medicaid
redeterminations; 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; our ability to
accurately predict and effectively manage health benefits and other
operating expenses and reserves, including fluctuations in medical
utilization rates; competition, including for providers, broker
distribution networks, contract reprocurements and organic growth;
our ability to adequately anticipate demand and provide for
operational resources to maintain service level requirements; our
ability to manage our information systems effectively; disruption,
unexpected costs, or similar risks from business transactions,
including acquisitions, divestitures, and changes in our
relationships with third parties; impairments to real estate,
investments, goodwill, and intangible assets; changes in senior
management, loss of one or more key personnel or an inability to
attract, hire, integrate and retain skilled personnel; membership
and revenue declines or unexpected trends; rate cuts or other
payment reductions or delays by governmental payors and other risks
and uncertainties affecting our government businesses; changes in
healthcare practices, new technologies, and advances in medicine;
increased healthcare costs; inflation and interest rates; the
effect of social, economic, and political conditions and
geopolitical events, including as a result of changes in U.S.
presidential administrations or Congress; changes in 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 ACA) and any regulations enacted thereunder; uncertainty
concerning government shutdowns, debt ceilings or funding; tax
matters; disasters, climate-related incidents, acts of war or
aggression or major epidemics; changes in expected contract start
dates; changes in provider, broker, vendor, state, federal,
foreign, and other contracts and delays in the timing of regulatory
approval of contracts, including due to protests; the expiration,
suspension, or termination of our contracts with federal or state
governments (including, but not limited to, Medicaid, Medicare or
other customers); the difficulty of predicting the timing or
outcome of legal or regulatory audits, investigations, proceedings
or matters, including, but not limited to, our ability to resolve
claims and/or allegations made by states with regard to past
practices, including at Centene Pharmacy Services (formerly Envolve
Pharmacy Solutions, Inc. (Envolve)), as our pharmacy benefits
manager (PBM) subsidiary, within the reserve estimate we previously
reported and on other acceptable terms, or at all, or whether
additional claims, reviews or investigations will be brought by
states, the federal government or shareholder litigants, or
government investigations; challenges to our contract awards;
cyber-attacks or other data security incidents; the exertion of
management's time and our resources, and other expenses incurred
and business changes required in connection with complying with the
terms of our contracts and the undertakings in connection with any
regulatory, governmental, or third party consents or approvals for
acquisitions or dispositions; any changes in expected closing
dates, estimated purchase price, or accretion for acquisitions or
dispositions; losses in our investment portfolio; restrictions and
limitations in connection with our indebtedness; a downgrade of our
corporate family rating, issuer rating or credit rating of our
indebtedness; the availability of debt and equity financing on
terms that are favorable to us and risks and uncertainties
discussed in the reports that Centene has filed with the Securities
and Exchange Commission (SEC). 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 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. The guidance in this
press release is only effective as of the date given, February 6, 2024, and will not be updated or
affirmed unless and until we publicly announce updated or affirmed
guidance.
CENTENE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In millions, except
shares in thousands and per share data in dollars)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
17,193
|
|
$
12,074
|
Premium and trade
receivables
|
15,532
|
|
13,272
|
Short-term
investments
|
2,459
|
|
2,321
|
Other current
assets
|
5,572
|
|
2,461
|
Total current
assets
|
40,756
|
|
30,128
|
Long-term
investments
|
16,286
|
|
14,684
|
Restricted
deposits
|
1,386
|
|
1,217
|
Property, software and
equipment, net
|
2,019
|
|
2,432
|
Goodwill
|
17,558
|
|
18,812
|
Intangible assets,
net
|
6,101
|
|
6,911
|
Other long-term
assets
|
535
|
|
2,686
|
Total
assets
|
$
84,641
|
|
$
76,870
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Medical claims
liability
|
$
18,000
|
|
$
16,745
|
Accounts payable and
accrued expenses
|
16,420
|
|
9,525
|
Return of premium
payable
|
1,462
|
|
1,634
|
Unearned
revenue
|
715
|
|
478
|
Current portion of
long-term debt
|
119
|
|
82
|
Total current
liabilities
|
36,716
|
|
28,464
|
Long-term
debt
|
17,710
|
|
17,938
|
Deferred tax
liability
|
641
|
|
615
|
Other long-term
liabilities
|
3,618
|
|
5,616
|
Total
liabilities
|
58,685
|
|
52,633
|
Commitments and
contingencies
|
|
|
|
Redeemable
noncontrolling interests
|
19
|
|
56
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.001 par value; authorized 10,000 shares; no shares issued
or
outstanding at
December 31, 2023 and December 31, 2022
|
—
|
|
—
|
Common stock, $0.001
par value; authorized 800,000 shares; 615,291 issued and
534,484
outstanding at December 31, 2023, and 607,847 issued and
550,754
outstanding at
December 31, 2022
|
1
|
|
1
|
Additional paid-in
capital
|
20,304
|
|
20,060
|
Accumulated other
comprehensive (loss)
|
(652)
|
|
(1,132)
|
Retained
earnings
|
12,043
|
|
9,341
|
Treasury stock, at
cost (80,807 and 57,093 shares, respectively)
|
(5,856)
|
|
(4,213)
|
Total Centene
stockholders' equity
|
25,840
|
|
24,057
|
Nonredeemable
noncontrolling interest
|
97
|
|
124
|
Total stockholders'
equity
|
25,937
|
|
24,181
|
Total liabilities,
redeemable noncontrolling interests and stockholders'
equity
|
$
84,641
|
|
$
76,870
|
CENTENE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except
shares in thousands and per share data in dollars)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Premium
|
$
34,232
|
|
$
31,884
|
|
$ 135,636
|
|
$
127,131
|
Service
|
1,106
|
|
1,669
|
|
4,459
|
|
8,348
|
Premium and service
revenues
|
35,338
|
|
33,553
|
|
140,095
|
|
135,479
|
Premium tax
|
4,122
|
|
2,008
|
|
13,904
|
|
9,068
|
Total
revenues
|
39,460
|
|
35,561
|
|
153,999
|
|
144,547
|
Expenses:
|
|
|
|
|
|
|
|
Medical
costs
|
30,634
|
|
28,268
|
|
118,894
|
|
111,529
|
Cost of
services
|
961
|
|
1,374
|
|
3,564
|
|
7,032
|
Selling, general and
administrative expenses
|
3,488
|
|
3,198
|
|
12,563
|
|
11,589
|
Depreciation
expense
|
139
|
|
144
|
|
575
|
|
614
|
Amortization of
acquired intangible assets
|
176
|
|
208
|
|
718
|
|
817
|
Premium tax
expense
|
4,205
|
|
2,072
|
|
14,226
|
|
9,330
|
Impairment
|
51
|
|
579
|
|
529
|
|
2,318
|
Total operating
expenses
|
39,654
|
|
35,843
|
|
151,069
|
|
143,229
|
Earnings (loss)
from operations
|
(194)
|
|
(282)
|
|
2,930
|
|
1,318
|
Other income
(expense):
|
|
|
|
|
|
|
|
Investment and other
income
|
401
|
|
493
|
|
1,393
|
|
1,279
|
Debt
extinguishment
|
—
|
|
4
|
|
—
|
|
30
|
Interest
expense
|
(183)
|
|
(174)
|
|
(725)
|
|
(665)
|
Earnings before
income tax
|
24
|
|
41
|
|
3,598
|
|
1,962
|
Income tax (benefit)
expense
|
(15)
|
|
260
|
|
899
|
|
760
|
Net earnings
(loss)
|
39
|
|
(219)
|
|
2,699
|
|
1,202
|
Loss attributable to
noncontrolling interests
|
6
|
|
6
|
|
3
|
|
—
|
Net earnings (loss)
attributable to Centene Corporation
|
$
45
|
|
$
(213)
|
|
$
2,702
|
|
$
1,202
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per common share attributable to Centene
Corporation:
|
|
|
|
|
Basic earnings (loss)
per common share
|
$
0.08
|
|
$
(0.38)
|
|
$
4.97
|
|
$
2.09
|
Diluted earnings
(loss) per common share
|
$
0.08
|
|
$
(0.38)
|
|
$
4.95
|
|
$
2.07
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
Basic
|
534,254
|
|
559,934
|
|
543,319
|
|
575,191
|
Diluted
|
537,614
|
|
559,934
|
|
545,704
|
|
582,040
|
CENTENE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
millions)
|
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net earnings
|
$
2,699
|
|
$
1,202
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
Depreciation and
amortization
|
1,293
|
|
1,430
|
Stock compensation
expense
|
216
|
|
234
|
Impairment
|
529
|
|
2,318
|
(Gain) loss on debt
extinguishment
|
—
|
|
(25)
|
(Gain) on
acquisition
|
—
|
|
(2)
|
Deferred income
taxes
|
(78)
|
|
(631)
|
(Gain) loss on
divestitures, net
|
(152)
|
|
(772)
|
Loss on disposal of
equipment
|
—
|
|
221
|
Other adjustments,
net
|
172
|
|
(31)
|
Changes in assets and
liabilities
|
|
|
|
Premium and
trade receivables
|
(2,380)
|
|
(1,627)
|
Other
assets
|
5
|
|
128
|
Medical claims
liabilities
|
1,261
|
|
2,397
|
Unearned
revenue
|
238
|
|
31
|
Accounts
payable and accrued expenses
|
3,398
|
|
421
|
Other long-term
liabilities
|
856
|
|
842
|
Other operating
activities, net
|
(4)
|
|
125
|
Net cash provided by
operating activities
|
8,053
|
|
6,261
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(799)
|
|
(1,004)
|
Purchases of
investments
|
(6,622)
|
|
(6,736)
|
Sales and maturities of
investments
|
5,523
|
|
3,802
|
Acquisitions, net of
cash acquired
|
—
|
|
(1,460)
|
Divestiture proceeds,
net of divested cash
|
707
|
|
2,477
|
Net cash (used in)
investing activities
|
(1,191)
|
|
(2,921)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from long-term
debt
|
2,335
|
|
360
|
Payments and
repurchases of long-term debt
|
(2,316)
|
|
(1,490)
|
Common stock
repurchases
|
(1,633)
|
|
(3,096)
|
Proceeds from common
stock issuances
|
44
|
|
70
|
Payments for debt
extinguishment
|
—
|
|
(14)
|
Purchase of
noncontrolling interest
|
(88)
|
|
—
|
Other financing
activities, net
|
—
|
|
(27)
|
Net cash (used in)
financing activities
|
(1,658)
|
|
(4,197)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(32)
|
|
(11)
|
Net increase
(decrease) in cash, cash equivalents and restricted cash and cash
equivalents
|
5,172
|
|
(868)
|
Cash and cash
equivalents reclassified from (to) held for sale
|
(50)
|
|
(16)
|
Cash, cash
equivalents and restricted cash and cash equivalents, beginning
of period
|
12,330
|
|
13,214
|
Cash, cash
equivalents and restricted cash and cash equivalents, end of
period
|
$
17,452
|
|
$
12,330
|
Supplemental
disclosures of cash flow information:
|
|
|
|
Interest
paid
|
$
688
|
|
$
657
|
Income taxes
paid
|
$
883
|
|
$
1,222
|
Equity issued in
connection with acquisitions
|
$
—
|
|
$
60
|
|
|
|
|
The following table
provides a reconciliation of cash, cash equivalents and restricted
cash and cash equivalents reported
within
the Consolidated
Balance Sheets to the totals above:
|
|
December
31,
|
|
2023
|
|
2022
|
Cash and cash
equivalents
|
$
17,193
|
|
$
12,074
|
Restricted cash and
cash equivalents, included in restricted deposits
|
259
|
|
256
|
Total cash, cash
equivalents and restricted cash and cash equivalents
|
$
17,452
|
|
$
12,330
|
CENTENE
CORPORATION
SUPPLEMENTAL
FINANCIAL DATA
|
|
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
MEMBERSHIP
|
|
|
|
|
|
|
|
|
|
Traditional Medicaid
(1)
|
12,754,000
|
|
13,470,900
|
|
14,260,400
|
|
14,521,100
|
|
14,264,800
|
High Acuity Medicaid
(2)
|
1,718,000
|
|
1,769,600
|
|
1,799,200
|
|
1,801,200
|
|
1,710,000
|
Total Medicaid
(4)
|
14,472,000
|
|
15,240,500
|
|
16,059,600
|
|
16,322,300
|
|
15,974,800
|
Commercial
Marketplace
|
3,900,100
|
|
3,681,600
|
|
3,295,200
|
|
3,093,600
|
|
2,076,100
|
Commercial
Group
|
427,500
|
|
424,200
|
|
435,000
|
|
437,200
|
|
441,100
|
Total
Commercial
|
4,327,600
|
|
4,105,800
|
|
3,730,200
|
|
3,530,800
|
|
2,517,200
|
Medicare (3)
(4)
|
1,284,200
|
|
1,310,600
|
|
1,329,000
|
|
1,343,800
|
|
1,511,100
|
Medicare PDP
|
4,617,800
|
|
4,539,800
|
|
4,493,700
|
|
4,459,300
|
|
4,226,000
|
Total at-risk
membership
|
24,701,600
|
|
25,196,700
|
|
25,612,500
|
|
25,656,200
|
|
24,229,100
|
TRICARE
eligibles
|
2,773,200
|
|
2,773,200
|
|
2,799,300
|
|
2,799,300
|
|
2,832,300
|
Total
|
27,474,800
|
|
27,969,900
|
|
28,411,800
|
|
28,455,500
|
|
27,061,400
|
|
|
|
|
|
|
|
|
|
|
|
(1) Membership includes TANF, Medicaid Expansion, CHIP,
Foster Care and Behavioral Health.
|
(2) Membership includes ABD, IDD, LTSS and MMP
Duals.
|
(3) Membership includes Medicare Advantage and Medicare
Supplement.
|
(4) Medicaid and Medicare membership includes 1,276,700,
1,311,500, 1,329,100, 1,323,000, and 1,291,300 D-SNPs beneficiaries
for the periods ending
December 31, 2023, September 30, 2023, June 30, 2023, March 31,
2023, and December 31, 2022, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF EMPLOYEES (5)
|
67,700
|
|
67,800
|
|
68,300
|
|
67,200
|
|
74,300
|
|
|
|
|
|
|
|
|
|
|
|
(5) Circle Health, divested in January 2024, had
approximately 8,300 employees at December 31, 2023.
|
|
|
DAYS IN CLAIMS PAYABLE
|
54
|
|
53
|
|
52
|
|
54
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in
millions)
|
Regulated
|
$
36,314
|
|
$
35,988
|
|
$
35,799
|
|
$
34,103
|
|
$
28,926
|
Unregulated
|
1,010
|
|
1,020
|
|
1,046
|
|
1,031
|
|
1,370
|
Total
|
$
37,324
|
|
$
37,008
|
|
$
36,845
|
|
$
35,134
|
|
$
30,296
|
|
|
|
|
|
|
|
|
|
|
|
DEBT TO CAPITALIZATION
|
40.7 %
|
|
41.5 %
|
|
41.1 %
|
|
42.1 %
|
|
42.7 %
|
OPERATING
RATIOS
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
HBR
|
89.5 %
|
|
88.7 %
|
|
87.7 %
|
|
87.7 %
|
SG&A expense
ratio
|
9.9 %
|
|
9.5 %
|
|
9.0 %
|
|
8.6 %
|
Adjusted SG&A
expense ratio
|
9.7 %
|
|
9.3 %
|
|
8.9 %
|
|
8.4 %
|
HBR BY
PRODUCT
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Medicaid
|
90.6 %
|
|
90.0 %
|
|
90.0 %
|
|
89.6 %
|
Commercial
|
82.1 %
|
|
83.6 %
|
|
79.8 %
|
|
81.1 %
|
Medicare
(6)
|
95.3 %
|
|
87.5 %
|
|
87.1 %
|
|
86.2 %
|
|
|
|
|
|
|
|
|
|
(6)
|
Medicare includes
Medicare Advantage, Medicare Supplement, D-SNPs and Medicare
PDP.
|
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as
follows (in millions):
Balance, January 1,
2023
|
|
$
16,745
|
Less: Reinsurance
recoverables
|
|
26
|
Balance, January 1,
2023, net
|
|
16,719
|
Incurred related
to:
|
|
|
Current
period
|
|
120,680
|
Prior
periods
|
|
(2,036)
|
Total
incurred
|
|
118,644
|
Paid related
to:
|
|
|
Current
period
|
|
104,725
|
Prior
periods
|
|
12,937
|
Total paid
|
|
117,662
|
Plus: Premium
deficiency reserve
|
|
250
|
Balance,
December 31, 2023, net
|
|
17,951
|
Plus: Reinsurance
recoverables
|
|
49
|
Balance,
December 31, 2023
|
|
$
18,000
|
Centene's claims reserving process utilizes a consistent
actuarial methodology to estimate Centene's ultimate liability. Any
reduction in the "Incurred related to: Prior periods" amount may be
offset as Centene actuarially determines the "Incurred related to:
Current period." Centene believes it has consistently applied its
claims reserving methodology. Additionally, approximately
$382 million was recorded as a
reduction to premium revenues resulting from development within
"Incurred related to: Prior periods" due to minimum HBR and
other return of premium programs.
The amount of the "Incurred related to: Prior periods" 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, 2022, and prior.
View original
content:https://www.prnewswire.com/news-releases/centene-corporation-reports-2023-results-302053986.html
SOURCE Centene Corporation