Centene Corporation Reports First Quarter 2020 Results
In summary, the 2020 first quarter and results were as follows:
Total revenues (in millions) |
$ |
26,025 |
|
Health benefits ratio |
88.0 |
% |
|
SG&A expense ratio |
9.9 |
% |
|
Adjusted SG&A expense ratio (1) |
8.6 |
% |
|
GAAP diluted EPS |
$ |
0.08 |
|
Adjusted Diluted EPS (1) |
$ |
0.86 |
|
Total cash flow used in operations (in millions) |
$ |
(240) |
|
(1) A full reconciliation of Adjusted SG&A expense ratio and Adjusted Diluted EPS are shown on page seven of this release. |
Both diluted EPS and Adjusted Diluted EPS have been negatively impacted by
"We all recognize the unprecedented nature of the COVID-19 pandemic and the significant impact from both a health and economic perspective. This is not a business as usual environment and economic recovery will be choppy. In this challenging landscape that we all face,
First Quarter Highlights
- On
January 23, 2020 ,Centene acquired all of the issued and outstanding shares ofWellCare Health Plans, Inc. (WellCare). The transaction is valued at approximately$19.6 billion , including the assumption of debt. TheCentene and WellCare combination creates a premier healthcare enterprise focused on government-sponsored healthcare programs. Our consolidated financial statements as of and for the three months endedMarch 31, 2020 reflect WellCare operations beginningJanuary 23, 2020 . March 31, 2020 managed care membership of 23.8 million, an increase of 9.0 million members, or 61%, overMarch 31, 2019 .- Total revenues of
$26.0 billion for the first quarter of 2020, representing 41% growth compared to the first quarter of 2019. - Health benefits ratio (HBR) of 88.0% for the first quarter of 2020, compared to 85.7% in the first quarter of 2019.
- Selling, general and administrative (SG&A) expense ratio of 9.9% for the first quarter of 2020, compared to 9.6% for the first quarter of 2019.
- Adjusted SG&A expense ratio of 8.6% for the first quarter of 2020, compared to 9.5% for the first quarter of 2019.
- Diluted EPS for the first quarter of 2020 of
$0.08 , compared to$1.24 for the first quarter of 2019, reflecting an increase of acquisition related expenses due to the closing of the WellCare acquisition. - Adjusted Diluted EPS for the first quarter of 2020 of
$0.86 , compared to$1.39 for the first quarter of 2019. Both diluted EPS and Adjusted Diluted EPS for the first quarter of 2020 have been negatively impacted by$0.05 due to lower investment income and incremental senior note interest expense. The$0.05 of lower investment and other income resulted from a sharp decrease in interest rates, which caused a fair value decrease to our exchange traded fund portfolio, as well as incremental interest expense associated with our decision to defer the redemption of the 2022 senior debt securities. - Share repurchases of 9 million shares of
Centene common stock for$500 million through the Company's stock repurchase program during the three months endedMarch 31, 2020 , using divestiture proceeds. - Operating cash flow of
$(240) million for the first quarter 2020. Operating cash flow was negatively affected by a delay in premium payments from the state ofNew York of approximately$700 million and growth in our Medicare Prescription Drug Plan (PDP) business, which used working capital.
Other Events
- In
April 2020 ,Centene's subsidiary, Centurion, was awarded a contract by theKansas Department of Administration to provide healthcare services in theDepartment of Corrections' facilities. The two-year contract is expected to commence onJuly 1, 2020 and includes two, two-year renewal options. - In
April 2020 , Centurion began providing medical services, behavioral healthcare, and substance abuse treatment within four prisons and six community corrections centers across the state ofDelaware . - In
February 2020 ,Centene issued$2.0 billion 3.375% Senior Notes due 2030. The Company used a portion of the net proceeds to redeem all of its outstanding$1.0 billion 6.125% Senior Notes due 2024, including the call premiums, accrued interest and costs and expenses related to the redemption and termination of the$1.0 billion interest rate swap associated with the notes. The Company also intended to use remaining proceeds to redeem its$1.0 billion 4.75% Senior Notes due 2022, and related interest and premiums. However, as a result of the spread of COVID-19 and the resulting disruption and volatility in the global capital markets, the Company has deferred the redemption of the 2022 notes at this time.
Accreditations
- In
March 2020 ,Centene's Iowa subsidiary, Iowa Total Care, earned Accreditation from theNational Committee for Quality Assurance (NCQA). - In
February 2020 ,Centene's subsidiary, Envolve People Care, earned Accreditation fromNCQA . - In
January 2020 ,Centene's subsidiary, Sunshine Health Plan, earned Accreditation fromNCQA .
COVID-19 Pandemic
In March and
Membership
The following table sets forth our membership by line of business:
|
|||||
2020 |
2019 |
||||
Medicaid: |
|||||
TANF, CHIP & |
10,259,700 |
7,491,100 |
|||
ABD & LTSS |
1,410,100 |
1,036,200 |
|||
|
158,000 |
56,000 |
|||
Total Medicaid |
11,827,800 |
8,583,300 |
|||
Medicare PDP |
4,416,500 |
— |
|||
Commercial |
2,728,200 |
2,472,700 |
|||
Medicare (1) |
976,700 |
393,900 |
|||
International |
599,900 |
151,600 |
|||
Correctional |
172,000 |
153,200 |
|||
Total at-risk membership |
20,721,100 |
11,754,700 |
|||
TRICARE eligibles |
2,864,800 |
2,855,800 |
|||
Non-risk membership |
216,200 |
211,900 |
|||
Total |
23,802,100 |
14,822,400 |
(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:
|
|||||
2020 |
2019 |
||||
Dual-eligible (2) |
879,000 |
625,600 |
|||
|
2,199,300 |
1,968,700 |
|||
Medicaid Expansion |
1,764,600 |
1,312,100 |
(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 for the three months ended
Three Months Ended |
||||||||||
2020 |
2019 |
% Change |
||||||||
Medicaid |
$ |
17,041 |
$ |
12,608 |
35 |
% |
||||
Commercial |
4,119 |
3,645 |
13 |
% |
||||||
Medicare (3) |
3,016 |
1,382 |
118 |
% |
||||||
Medicare PDP |
600 |
— |
n.m. |
|||||||
Other |
1,249 |
809 |
54 |
% |
||||||
Total Revenues |
$ |
26,025 |
$ |
18,444 |
41 |
% |
(3) Medicare includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and MMP. |
||||||||||
n.m.: not meaningful |
Statement of Operations: Three Months Ended
- For the first quarter of 2020, total revenues increased 41% to
$26.0 billion from$18.4 billion in the comparable period in 2019. The increase over the prior year was due to the acquisition of WellCare, growth in theHealth Insurance Marketplace business, expansions and new programs in many of our states throughout 2019 and 2020, particularlyIowa andPennsylvania , and the reinstatement of the health insurer fee in 2020, partially offset by the divestiture of ourIllinois health plan and the timing of pass through payments from the state ofNew York . - HBR of 88.0% for the first quarter of 2020 represents an increase from 85.7% in the comparable period in 2019. The year-over-year increase was attributable to the
Health Insurance Marketplace business where margins continue to normalize, as expected and consistent with the previous guidance shared. The increase also includes the acquisition of WellCare and new or expanded markets, which initially operate at a higher HBR. These increases were partially offset by the reinstatement of the health insurer fee. - The SG&A expense ratio was 9.9% for the first quarter of 2020, compared to 9.6% in the first quarter of 2019. The increase to the SG&A expense ratio was driven by higher acquisition related expenses due to the closing of the WellCare acquisition, partially offset by the addition of the WellCare business, which operates at a lower SG&A ratio.
- The Adjusted SG&A expense ratio was 8.6% for the first quarter of 2020, compared to 9.5% in the first quarter of 2019. The Adjusted SG&A expense ratio benefited from the addition of the WellCare business, which operates at a lower SG&A ratio, and the leveraging of expenses over higher revenues.
- During the first quarter of 2020, the Company recorded
$72 million of non-cash impairment of its third-party care management software business. - During the first quarter of 2020, the Company recognized a
$93 million gain in investment and other income related to the divestiture of certain products of the Company'sIllinois health plan as part of the previously announced divestiture agreements associated with the WellCare Acquisition. - During the first quarter of 2020, the Company issued
$2.0 billion 3.375% Senior Notes due 2030 (the 2030 Notes). The Company used a portion of the net proceeds from the 2030 Notes to redeem all of its outstanding$1.0 billion 6.125% Senior Notes due 2024. The Company recognized a pre-tax loss on extinguishment of approximately$44 million , including the call premium, the write-off of unamortized debt issuance costs, and a loss on the termination of the$1.0 billion interest rate swap associated with the notes. - The effective tax rate was 64.9% for the first quarter of 2020, compared to 24.2% in the first quarter of 2019. The increase in the effective tax rate was driven by the reinstatement of the health insurer fee in 2020, the non-deductibility of certain acquisition related expenses, and the tax impact associated with the
Illinois divestiture. For the first quarter of 2020, our effective tax rate on adjusted earnings was 24.8%.
Balance Sheet
At
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, |
45 |
||
Timing of claims payments |
2 |
||
Days in claims payable, |
47 |
||
(1) A pro-forma adjustment has been made to medical costs to include a full quarter of WellCare medical costs. Using actual medical costs, days in claims payable was 51. |
Outlook
The Company's annual guidance for 2020 is as follows:
Full Year 2020 |
|||||||||
Low |
High |
||||||||
Total revenues (in billions) |
$ |
110.0 |
$ |
112.4 |
|||||
GAAP diluted EPS |
$ |
2.89 |
$ |
3.03 |
|||||
Adjusted Diluted EPS (1) |
$ |
4.56 |
$ |
4.76 |
|||||
Diluted shares outstanding (in millions) |
577.3 |
580.3 |
|||||||
(1) |
Adjusted Diluted EPS excludes estimated amortization of acquired intangible assets of |
A rollforward of total revenues and Adjusted Diluted EPS from our previous guidance to our current guidance is shown in the tables below (total revenues in billions):
Total Revenues |
|||
Previous guidance range |
|
||
Pass through and non-economic environment revenue growth |
|
||
Current economic environment revenue growth |
|
||
Revised guidance range |
|
||
Adjusted Diluted EPS |
|||
Previous guidance range |
|
||
Revenue growth |
+ |
||
Avoided / delayed costs |
+ |
||
State program changes |
+ / ( - ) |
||
COVID-19 costs |
( - ) |
||
Risk adjustment initiatives |
( - ) |
||
Delay in WellCare synergies |
( - ) |
||
Lower investment income and higher interest expense |
(0.17) |
||
Revised guidance range |
|
||
Conference Call
As previously announced, the Company will host a conference call
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the
A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until
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 |
|||||||
2020 |
2019 |
||||||
GAAP net earnings attributable to |
$ |
46 |
$ |
522 |
|||
Amortization of acquired intangible assets |
166 |
65 |
|||||
Acquisition related expenses |
313 |
18 |
|||||
Other adjustments (1) |
23 |
— |
|||||
Income tax effects of adjustments (2) |
(72) |
(20) |
|||||
Adjusted net earnings |
$ |
476 |
$ |
585 |
(1) |
Other adjustments include the following adjustments for the three months ended |
(2) |
The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. |
Three Months Ended |
Annual Guidance |
||||||||
2020 |
2019 |
||||||||
GAAP diluted EPS attributable to |
$ |
0.08 |
$ |
1.24 |
|
||||
Amortization of acquired intangible assets (3) |
0.23 |
0.12 |
|
||||||
Acquisition related expenses (4) |
0.49 |
0.03 |
|
||||||
Other adjustments (5) |
0.06 |
— |
|
||||||
Adjusted Diluted EPS |
$ |
0.86 |
$ |
1.39 |
|
(3) |
The amortization of acquired intangible assets per diluted share presented above is net of an income tax benefit of |
|
(4) |
The acquisition related expenses per diluted share presented above are net of an income tax benefit of |
|
(5) |
Other adjustments include the following items: |
|
(1) |
gain related to the divestiture of certain products of the Company's |
|
(2) |
non-cash impairment of our third party-care management software system of |
|
(3) |
debt extinguishment costs of |
Three Months Ended |
|||||||
2020 |
2019 |
||||||
GAAP SG&A expenses |
$ |
2,384 |
$ |
1,609 |
|||
Acquisition related expenses |
295 |
17 |
|||||
Adjusted SG&A expenses |
$ |
2,089 |
$ |
1,592 |
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, 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.
- 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
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).
[Tables Follow]
CENTENE CORPORATION AND SUBSIDIARIES |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(In millions, except shares in thousands and per share data in dollars) |
|||||||
|
|
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
9,308 |
$ |
12,123 |
|||
Premium and trade receivables |
11,304 |
6,247 |
|||||
Short-term investments |
1,386 |
863 |
|||||
Other current assets |
2,698 |
1,090 |
|||||
Total current assets |
24,696 |
20,323 |
|||||
Long-term investments |
10,521 |
7,717 |
|||||
Restricted deposits |
1,014 |
658 |
|||||
Property, software and equipment, net |
2,439 |
2,121 |
|||||
|
17,417 |
6,863 |
|||||
Intangible assets, net |
8,898 |
2,063 |
|||||
Other long-term assets |
1,446 |
1,249 |
|||||
Total assets |
$ |
66,431 |
$ |
40,994 |
|||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Medical claims liability |
$ |
11,413 |
$ |
7,473 |
|||
Accounts payable and accrued expenses |
8,531 |
4,164 |
|||||
Return of premium payable |
1,052 |
824 |
|||||
Unearned revenue |
526 |
383 |
|||||
Current portion of long-term debt |
129 |
88 |
|||||
Total current liabilities |
21,651 |
12,932 |
|||||
Long-term debt |
17,150 |
13,638 |
|||||
Other long-term liabilities |
3,938 |
1,732 |
|||||
Total liabilities |
42,739 |
28,302 |
|||||
Commitments and contingencies |
|||||||
Redeemable noncontrolling interests |
36 |
33 |
|||||
Stockholders' equity: |
|||||||
Preferred stock, |
— |
— |
|||||
Common stock, |
— |
— |
|||||
Additional paid-in capital |
19,279 |
7,647 |
|||||
Accumulated other comprehensive earnings (loss) |
(5) |
134 |
|||||
Retained earnings |
5,030 |
4,984 |
|||||
|
(755) |
(214) |
|||||
Total |
23,549 |
12,551 |
|||||
Noncontrolling interest |
107 |
108 |
|||||
Total stockholders' equity |
23,656 |
12,659 |
|||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
66,431 |
$ |
40,994 |
CENTENE CORPORATION AND SUBSIDIARIES |
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(In millions, except shares in thousands and per share data in dollars) |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
2020 |
2019 |
||||||
Revenues: |
|||||||
Premium |
$ |
23,214 |
$ |
16,203 |
|||
Service |
958 |
635 |
|||||
Premium and service revenues |
24,172 |
16,838 |
|||||
Premium tax and health insurer fee |
1,853 |
1,606 |
|||||
Total revenues |
26,025 |
18,444 |
|||||
Expenses: |
|||||||
Medical costs |
20,420 |
13,882 |
|||||
Cost of services |
825 |
544 |
|||||
Selling, general and administrative expenses |
2,384 |
1,609 |
|||||
Amortization of acquired intangible assets |
166 |
65 |
|||||
Premium tax expense |
1,625 |
1,659 |
|||||
Health insurer fee expense |
345 |
— |
|||||
Impairment |
72 |
— |
|||||
Total operating expenses |
25,837 |
17,759 |
|||||
Earnings from operations |
188 |
685 |
|||||
Other income (expense): |
|||||||
Investment and other income |
167 |
99 |
|||||
Debt extinguishment costs |
(44) |
— |
|||||
Interest expense |
(180) |
(99) |
|||||
Earnings from operations, before income tax expense |
131 |
685 |
|||||
Income tax expense |
85 |
166 |
|||||
Net earnings |
46 |
519 |
|||||
Loss attributable to noncontrolling interests |
— |
3 |
|||||
Net earnings attributable to |
$ |
46 |
$ |
522 |
|||
Net earnings per common share attributable to |
|||||||
Basic earnings per common share |
$ |
0.08 |
$ |
1.26 |
|||
Diluted earnings per common share |
$ |
0.08 |
$ |
1.24 |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
544,436 |
412,924 |
|||||
Diluted |
552,062 |
419,752 |
CENTENE CORPORATION AND SUBSIDIARIES |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In millions, unaudited) |
|||||||
Three Months Ended |
|||||||
2020 |
2019 |
||||||
Cash flows from operating activities: |
|||||||
Net earnings |
$ |
46 |
$ |
519 |
|||
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||||||
Depreciation and amortization |
288 |
155 |
|||||
Stock compensation expense |
117 |
38 |
|||||
Impairment |
72 |
— |
|||||
Loss on debt extinguishment |
44 |
— |
|||||
Deferred income taxes |
112 |
23 |
|||||
Gain on divestiture |
(93) |
— |
|||||
Other adjustments, net |
24 |
(11) |
|||||
Changes in assets and liabilities |
|||||||
Premium and trade receivables |
(2,182) |
(662) |
|||||
Other assets |
97 |
20 |
|||||
Medical claims liabilities |
252 |
548 |
|||||
Unearned revenue |
(88) |
(22) |
|||||
Accounts payable and accrued expenses |
704 |
357 |
|||||
Other long-term liabilities |
361 |
347 |
|||||
Other operating activities, net |
6 |
4 |
|||||
Net cash (used in) provided by operating activities |
(240) |
1,316 |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(177) |
(176) |
|||||
Purchases of investments |
(1,400) |
(580) |
|||||
Sales and maturities of investments |
902 |
383 |
|||||
Acquisitions, net of cash acquired |
(3,048) |
— |
|||||
Divestiture proceeds, net of divested cash |
456 |
— |
|||||
Other investing activities, net |
(5) |
— |
|||||
Net cash used in investing activities |
(3,272) |
(373) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from long-term debt |
2,542 |
1,018 |
|||||
Payments of long-term debt |
(1,039) |
(927) |
|||||
Common stock repurchases |
(558) |
(35) |
|||||
Payments for debt extinguishment |
(21) |
— |
|||||
Debt issuance costs |
(92) |
— |
|||||
Other financing activities, net |
7 |
2 |
|||||
Net cash provided by financing activities |
839 |
58 |
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
(1) |
— |
|||||
Net increase (decrease) |
(2,674) |
1,001 |
|||||
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period |
12,131 |
5,350 |
|||||
Cash, cash equivalents, and restricted cash and cash equivalents, end of period |
$ |
9,457 |
$ |
6,351 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Interest paid |
$ |
104 |
$ |
87 |
|||
Income taxes paid |
$ |
3 |
$ |
6 |
|||
Equity issued in connection with acquisitions |
$ |
11,526 |
$ |
— |
|||
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: |
|||||||
|
|||||||
2020 |
2019 |
||||||
Cash and cash equivalents |
$ |
9,308 |
$ |
6,345 |
|||
Restricted cash and cash equivalents, included in restricted deposits |
149 |
6 |
|||||
Total cash, cash equivalents, and restricted cash and cash equivalents |
$ |
9,457 |
$ |
6,351 |
|
|||||||||||||||||||
SUPPLEMENTAL FINANCIAL DATA |
|||||||||||||||||||
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
|||||||||||||||
2020 |
2019 |
2019 |
2019 |
2019 |
|||||||||||||||
MANAGED CARE MEMBERSHIP BY LINE OF BUSINESS |
|||||||||||||||||||
Medicaid: |
|||||||||||||||||||
TANF, CHIP & |
10,259,700 |
7,528,700 |
7,623,400 |
7,388,700 |
7,491,100 |
||||||||||||||
ABD & LTSS |
1,410,100 |
1,043,500 |
1,045,700 |
997,900 |
1,036,200 |
||||||||||||||
|
158,000 |
66,500 |
73,300 |
68,800 |
56,000 |
||||||||||||||
Total Medicaid |
11,827,800 |
8,638,700 |
8,742,400 |
8,455,400 |
8,583,300 |
||||||||||||||
Medicare PDP |
4,416,500 |
— |
— |
— |
— |
||||||||||||||
Commercial |
2,728,200 |
2,331,100 |
2,388,500 |
2,449,400 |
2,472,700 |
||||||||||||||
Medicare (1) |
976,700 |
404,500 |
404,500 |
398,500 |
393,900 |
||||||||||||||
International |
599,900 |
599,800 |
462,400 |
463,100 |
151,600 |
||||||||||||||
Correctional |
172,000 |
180,000 |
187,200 |
153,900 |
153,200 |
||||||||||||||
Total at-risk membership |
20,721,100 |
12,154,100 |
12,185,000 |
11,920,300 |
11,754,700 |
||||||||||||||
TRICARE eligibles |
2,864,800 |
2,860,700 |
2,860,700 |
2,855,800 |
2,855,800 |
||||||||||||||
Non-risk membership |
216,200 |
227,000 |
227,800 |
228,100 |
211,900 |
||||||||||||||
Total |
23,802,100 |
15,241,800 |
15,273,500 |
15,004,200 |
14,822,400 |
||||||||||||||
(1) Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and MMP. |
|||||||||||||||||||
NUMBER OF EMPLOYEES |
69,700 |
56,600 |
53,600 |
52,000 |
48,100 |
||||||||||||||
DAYS IN CLAIMS PAYABLE (2) |
51 |
45 |
48 |
47 |
48 |
||||||||||||||
(2) Days in Claims Payable is a calculation of Medical Claims Liabilities at the end of the period divided by average claims expense per calendar day for such period. On a pro-forma basis, DCP for Q1 2020 is 47, reflecting adjusted medical costs to include a full quarter of WellCare operations. |
|||||||||||||||||||
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) |
|||||||||||||||||||
Regulated |
$ |
19,358 |
$ |
14,204 |
$ |
14,734 |
$ |
15,101 |
$ |
14,303 |
|||||||||
Unregulated |
2,871 |
7,157 |
855 |
801 |
507 |
||||||||||||||
Total |
$ |
22,229 |
$ |
21,361 |
$ |
15,589 |
$ |
15,902 |
$ |
14,810 |
|||||||||
DEBT TO CAPITALIZATION |
42.2 |
% |
52.0 |
% |
36.2 |
% |
36.8 |
% |
36.9 |
% |
|||||||||
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT (3) |
41.9 |
% |
51.7 |
% |
35.6 |
% |
36.3 |
% |
36.5 |
% |
|||||||||
(3) The non-recourse debt represents the Company's mortgage note payable ( |
OPERATING RATIOS
Three Months Ended |
|||||
2020 |
2019 |
||||
HBR |
88.0 |
% |
85.7 |
% |
|
SG&A expense ratio |
9.9 |
% |
9.6 |
% |
|
Adjusted SG&A expense ratio |
8.6 |
% |
9.5 |
% |
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as follows (in millions):
Balance, |
$ |
7,381 |
||
Less: reinsurance recoverable |
20 |
|||
Balance, |
7,361 |
|||
Acquisitions and divestitures |
3,659 |
|||
Incurred related to: |
||||
Current period |
65,970 |
|||
Prior period |
(570) |
|||
Total incurred |
65,400 |
|||
Paid related to: |
||||
Current period |
58,652 |
|||
Prior period |
6,376 |
|||
Total paid |
65,028 |
|||
Balance, |
11,392 |
|||
Plus: reinsurance recoverable |
21 |
|||
Balance, |
$ |
11,413 |
||
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
Our Response to COVID-19
Demonstrating our commitment to our members and the communities we serve, employees, and providers and government partners.
Members and Communities |
Waiving COVID-19 related prior authorizations and member cost sharing for related screening, testing and treatment for all Medicare, Medicaid and Marketplace members |
Delivering 50,000 gift cards, with |
Donating 1 million meals a month for 12 months to feed our neighbors in communities all over the country |
Providing grants to Area Agencies on Aging to enable grocery and meal deliveries for members with disabilities who are unable to access nutritious food |
Matching funds in partnership with workforce development boards and other safety net organizations to prepare them for a career in healthcare to support the direct care workforce and newly unemployed individuals |
Employees |
10 additional working days of paid leave to support employees |
Waiving prior authorizations and employee cost sharing for COVID-19 related screening, testing and treatment |
Encouraging employees to work from home, with approximately 90% working remotely |
Providing essential workers with a one-time payment of |
Scheduling essential workers to preserve social distancing, and enhancing health and safety protocols such as daily cleaning and disinfecting for essential workers |
Establishing a Medical Reserve Leave policy to support clinical staff paid leave and benefits for up to three months of volunteer COVID pandemic service |
Hiring continues across the country to fill nearly 2,000 open positions |
|
Expediting the rollout of FirstNet that will streamline access to affordable, high-speed wireless broadband services for primary care providers in rural and underserved communities |
Dedicating funds to the |
Expediting the distribution of approximately 2 million pieces of PPE including safety goggles, facemasks, hand sanitizers and disaster kits |
Extending grants to providers to assist with the upfront investment costs of new devices and equipment |
Developing a new Provider Accessibility Initiative (PAI) COVID-19 Web Series to provide timely recommendations on how providers and organizations can deliver disability-competent care during the pandemic and beyond |
View original content:http://www.prnewswire.com/news-releases/centene-corporation-reports-first-quarter-2020-results-301048011.html
SOURCE
Investor Relations Inquiries, Jennifer Gilligan, Senior Vice President, Finance & Investor Relations, (212) 549-1306, Media Inquiries, Marcela Manjarrez-Hawn, Senior Vice President and Chief Communications Officer, (314) 445-0790