Centene CEO says insurer's Medicaid redeterminations 'consistent' with forecasts

Preview

来源: FierceHealthcare

Centene raised growth expectations and offered perspective on Medicaid redeterminations during its second-quarter earnings call.

Centene executives report that Medicaid redeterminations are progressing as expected even as the payer lost nearly 263,000 Medicaid members in the second quarter amid ongoing eligibility checks.

After tracking member data against state and sub-populations, CEO Sarah London and CFO Drew Asher said during a Friday morning call with investors that redeterminations are on track with previous forecasts.

“We are excited to leverage our positive momentum as we work to support our state partners throughout the duration of redeterminations, maintain our leadership position in the marketplace and strategically realign our Medicare Advantage business, building momentum around stars and positioning our products for long-term growth and profitability,” London said during the company's second-quarter earnings call.

While overall membership dropped slightly from last quarter—mainly due to 262,700 fewer Medicaid enrollees—membership has increased 7% from last year.

“Early results are playing out well compared to our assumptions, and states understand that in order to have actuarial soundness acuity adjustments are necessary,” Asher said.

During the pandemic, Centene’s Medicaid enrollment grew by 3.6 million members, with the company expecting 2.3 to 2.4 million members to be rolled off. That will account for $9.5 billion to $10 billion in cumulative revenue.

Centene posted total revenue of $37.6 billion in the second quarter, up year over year by 5%, while premium and service revenues accounted for $34.8 billion. Total Medicaid revenues have increased 10% year over year. The company beat Wall Street expectations on both earnings and revenue as it reported a profit of $1.1 billion for the quarter, up from a net loss of $172 million a year ago.

It is expected Medicare revenue in 2024 will decrease due to poor star quality ratings in the 2023 rating year that was published by the Centers for Medicare & Medicaid Services (CMS) in October 2022, according to a Securities and Exchange Commission 10-Q filing.

“The decrease in Star quality ratings is driven by the expiration of certain disaster relief provisions as well as deterioration in select metrics,” the filing reads. “Over the past year, our leadership team launched a multi-year plan to build and improve quality across the enterprise with a strong focus on enhanced patient experience and access to care.”

On the earnings call, London told investors Centene is expecting overall contract progression, but several contracts are “close to the bubble” so the company could end the cycle with no four-star contracts.

“While this is disappointing, we do expect to see meaningful movement in our three- and three-and-a-half star plans in October, and roughly two-thirds of our members are in plans showing year-over-year improvement,” she said.

Centene set a revised goal of reaching 85% of members in three-and-a-half-star plans by October 2025, reflecting a larger strategic shift from the company.

Raised growth expectations

The company adjusted its full-year EPS guidance by $0.05 to at least $6.45 in earnings per share, Asher said during the call. Adjusted diluted EPS of $2.10 was 18% higher than this time period last year. London said she feels confident Centene will achieve greater than $6.60 of adjusted EPS per share in 2024.

“That $6.60 has an embedded forecast ballpark at 80 cent loss (for) Medicare Advantage,” said Asher. “In other words, if we were merely breakeven in Medicare Advantage in 2024, that $6.60 would be approximately $7.40.”

Centene will also increase its guidance range for premium and services revenues by $1.8 billion, now projecting $147.3 billion to $149.3 billion in revenue by year’s end. Asher also noted that double-digit outpatient growth was achieved.

There are now 68,300 employees at Centene, a large decrease from the second quarter in 2022 when the company had 82,400 employees. However, London said there are 24,000 new physicians across the Medicare network year-to-date.

In June, Centene completed the $91 million sale of artificial intelligence platfrom Apixio for an after-tax price of $63 million. Centene will continue to own a minority stake and long-term contract in Apixio.

The company was also selected by the Oklahoma Health Care Authority for statewide contracts to provide managed care for healthcare system SoonerSelect over a one-year term beginning in April. There are five, one-year renewal options.

“We couldn't be more pleased with the performance of the Oklahoma RFP for both broad Medicaid and foster care, and we look forward to the state of North Carolina implementing Medicaid expansion,” said Asher.

Another contract was entered in July to provide healthcare coverage to the aged, blind or disabled population (ABD) through the company’s Texas subsidiary, Superior HealthPlan. That contract will begin in September 2024 for six years with a maximum of three additional two-year extensions.

This year, Centene “streamlined call center management” and launched a “cloud-based, next-gen clinical population health platform," the 10-Q filing said. The company has experienced a 27% decrease in year-over-year call volume.

更多内容，请访问原始网站

文中所述内容并不反映新药情报库及其所属公司任何意见及观点，如有版权侵扰或错误之处，请及时联系我们，我们会在24小时内配合处理。