CNC - Earnings call transcript Q1 2021

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Operator

Good day, and welcome to the Centene Corporation First Quarter 2021 Earnings Conference Call. [Operator Instructions] After today's presentation, there'll be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Jennifer Gilligan, Senior Vice President of Finance and Investor Relations. Please go ahead, ma'am.

Jennifer Gilligan

Thank you, Rocco, and good morning, everyone. us first joining results XXXX for call. conference you on quarter our earnings Thank President Executive of and Schwaneke, Chairman, website also Neidorff, Michael Chief through accessed President this call, our Chief can host be Executive centene.com. Officer; and Financial will Officer Centene, at morning's which Vice Jeff and Act for make the the of Safe provision under Centene Any expectations, and purpose remarks may that prospects the plans Securities of Litigation Reform Private future about constitute XXXX. forward-looking statements Harbor materially differ as potential dated various factors, risks Centene's on may Actual our indicated statements, impacts including filings, Form filed those in XX, operation. other and results business including and those February forward-looking XX-Q from results and public a by discussed and with Form result important the the most described today, of of recent SEC the of XX-K uncertainties COVID-XX XXXX, those to respect developments its subsequent that cause estimates may anticipates change. to events Centene and

first reconciliation some forward-looking is may company XXXX do measures call the of most our While the to comparable press any measures will obligation also specifically certain so. at elect the to The refer update these future, we measures. disclaim non-GAAP the statements A can point to company's in found release, with GAAP which website the available be section. on directly under these quarter Investors in

like that, Chairman, would Investor Michael upcoming our held Additionally, CEO, Michael? I June turn over our XXXX. your Day to Neidorff. be please With for and calendars mark virtually on the President XX, to to call

Michael Neidorff

the earnings discuss are call. markets pandemic update call environment. performance, on and and thank our provide in our you an Thank ongoing positioned our joining today, products, first you, first review the for morning -- momentum sustain we and Jennifer. quarter quarter Centene's to how Today on I will Good

nationally, the we have out great yet as is not over. working made pandemic, progress our it While of have recently, we in way seen

revenue solid It a XXXX, a start was to strong off and are good earnings quarter. in with We growth.

in XX% Our represents the million teams quarter of to earnings XXXX. revenue Adjusted of $X.X suspended guidance. of the pleased several increase an compared the to well, quarter. trajectory representing share This an $X.XX our prior increase year an quarter ago tailwinds. updating per eligibility compared XX%. $XX.X of And of redeterminations. year of to membership are This first, $X.XX increase execute we quarter, continue Medicaid driven business. primarily today, compared our performance first is million end. quarter was amid by continued full Overall, These growth, we year to the generating diluted at and of our are the first $XX with include billion, Membership

X, a guidance August Our continuing anticipates renewed on XX the is time. the current that to fact days based suspension at least at

detail special I enrollment marketplace sequestration. the more Second, in will And period, third, discuss on shortly. the hold which Medicare the

date expenses Jeff to reflect results by normal provide recoupment decrease a will in offset additional on also premiums, which and shortly. Our detail stake of utilization, COVID-XX

first XXXX. landscape the on operating the together, quarter, the than lower tailwinds, continue with essence have positive. throughout factors facts to utilization. as year provide compared prior anticipate business. continued was When them saw will know normal we the in increase and utilization an to in today. for taken we believe quarter the impact you our Anticipated be possibly include, monitor we headwinds although we the updates tailwinds of of our past As will Consistent to marketplace quarters, lower and done we based remainder pandemic, with we I into non-COVID these the Overall,

see half to to continue quarter, come expect the historical of with profitable potential starting some and period, Other remains utilization pandemic through XXXX. in membership August the extension special the to into in the we a on year. our we beginning second business marketplace for the depends the of of potential probable second the continued averages of from the enrollment tailwinds end normalization possibly utilization of the beyond higher-than-anticipated trajectory redetermination for below the key in and and suspension year, in resulting While the growth include; uncertain, Medicaid during occur eligibility

As a continue potential headwind, rate to monitor state additional we adjustments.

For shortly. action seen a the actions. year. on the of actions And will But first revenue in that million currently quarter quarters. some are or anticipate of I adjustments planned provide have revenue XXXX, any additional we will additional this aware impact only $XXX Jeff one rate color state share of we not and we

To quarters in be believe balance our believe may fact, see favor. we as some -- reiterate, may them we these factors expire. In overall, we allowed to today,

XXXX, year. As drive with are we our to the pleased quarter the first our of through the guidance conclude and our growth strength significant updated we business ability reflects of

all independent business, diversified our and fluid, redeterminations we vigilant which pipeline. period, the our end We product an remain continue We our marketplace remain Medicaid of to on the go continue certain of to them We and the factors June strength also is we eligibility as in balance the XXXX. to positive, March. across year later unique successfully on The business recognize outlook prevalent on we of enrollment landscape. live that drivers, apparent year. today, Carolina prior In a portfolio. remains this North RFP our track of renewed active years, our XXXX. cannot contract in Oklahoma suspension at at both special in this And policy Day, Medicaid an participate Hawaii lot will a we with with update these including see provide throughout will Consistent the factors the is Investor be of

to consistent a composite with rate of our guidance. continue X.X%, we initial XXXX, expect adjustment For

marketplace Centene be our product. Medicare a in administration price-related with $X have continues I business, year, our product. bottom We quarter, In of the representing the in platform Our tax enrolled pleased not in we Medicare our boost clear our to and strength grew now by often is on and scale consistency a members credits over consistent leverage that with week, enrollment to in going to and advanced The ability federal and And provide networks on are effect million strength quality care XXX,XXX new the consumers growth. premium new narrow be an tends since to navigators growth encourage supportive we of believe year-over-year the to market announced of network in beginning results enhanced demonstrating the delivered business participate the just continued data the in first of billion prioritize utilization, over you will case national to last April forward. invest XX% by the the the loan. to see a And over of leader out-of-network CMS, to race $XX exchange. which Based additional for grow believe uncontrolled opportunity released experience enrollment. to The premium environment. we quality, took remind impact -- and that expensive. encourage X. demonstrate consistent coverage. to will our We further these strategy which operating

intend building this and we to consider around ahead, additional products Moving maintain strategy.

integrated meaningful in June. progress care Investors provide on providing unique details to strategy advance the to technology our technology making our you to front, On Day high-quality forward We for more look at we're our members. capabilities our

acquisition in the to state remain and We advance Magellan and Hart-Scott-Rodino the towards early obtaining The transaction to second XXXX. expired half approvals. of necessary completion continue Health working diligently track waiting in on close towards the period mid-March, the of we're the

on care are enthusiastic and planning we fully nurture efforts swing, to in behavioral Healthcare portfolio, nurture maintain remind which and us independent specialty enable customers. part a will of will will to about serve situation Ohio. to to the take across in our full special I a are you would care health. Enterprise and integrated to integration access allow I Magellan model to will -- moment physical Our like which third-party combination, the and be and that them comment expand

process, Ohio bidders, summary a still second XX according finished of by of Medicaid. where out active RFP are We Department the to we scoring released an

landscape, regulatory claims that been has maintain unfounded. the Centene clear be legal the we Regarding and to

For look committed court our we to you our transparency on issue information any and from this questions position direct state want links to quality to levels highest how We answering for serve to regarding our I the and remain partners. our to additional partners this about forward and governmental filings. our matter, website of

close, I like I'd Centene's distribution. in COVID-XX vaccine Before to role talk about

highest Over for list have to sensitive the provide the those and care and past COVID-XX management and data members culturally few months, individuals personalized identify at with worked outreach. teams our tirelessly

organization, thank created we experience of with have the in about focus strong to of with supportive through football This have and want innovative we recognize their as support the we partnered dedication. for vaccine and work the started is Gold I across had COVID happening a forward positive and closing, hall remainder Jackets momentum addition, to And vaccines. our the care. of look and fame, In transportation appointments. commitment carrying efficacy individuals expanding we with year increasing unwavering In and this on to XXXX employees whom we to the ongoing access environment type safety of an the to partnership, pro with of awareness Lyft PSA's

our seeing the to on you, and see the members care margins long-term of highest your at I'll the We all in and to event hand to Jeff. June now top cost. provide line albeit in our we forward to of virtually bottom Centene. growth drive enhance continued continue investor Thank to I XXth. over interest look lowest for opportunities at as you our call level

Jeff Schwaneke

morning, reported start and year. good what results we a good This Michael, quarter you, and the Thank was XXXX everyone. morning, to first

First XXXX, $X.XX, the billion, quarter of were to share was increase $X.XX compared first last of XX% diluted quarter adjusted compared year. $XX to an and earnings per revenues

of year comments to result strong to we share $X.XX guidance of EPS XXXX guidance a per performance, quarter I our will a related further financial adjusted to provide shortly. range full As the $X.XX. $X.XX increased updated by our first

additional in revenues first contribution and a decrease actions WellCare and Redeterminations, and state repeal quarter provide marketplace $X ongoing of by health let quarter. of partially over risk-sharing due grew quarter an from the by membership, the Total of Medicaid rate suspension fee billion offset First, the in first the XXXX me XXXX. of overall Eligibility to full insurer the for details

less million previously of result X% significant quarter added up decline a two in members. in gains enrollment special in than have a Our year March increased was pandemic to expected the membership Medicaid XXXX, the the Total membership million membership a as achieved compared we period. of of Since to the total during quarter, began ago. marketplace XX.X

the with compared in medical from utilization COVID benefited This due was in partially HBR the HBR COVID-related and The state traditional XXXX. lower of mechanisms costs the in to XX.X% associated to and costs, lower marketplace quarter risk-sharing first quarter, trends and first higher flu. XX% business. Our overall the utilization was by offset pandemic COVID

ratio in flow premium state selling, the acquisitions. ongoing of of fourth in compared leveraging recent was last $XXX and operations X.X% year from year, The a the general expense to expense eligibility operating fiscal to their due cash higher first in York benefited was the of in end of XXXX. by payments in the X.X% million this quarter. from delay collected April. adjusted Our quarter of year administrative the was ratio first The due quarter the Cash revenues by for SG&A which the to and expenses redeterminations adjusted the and flow X.X% suspension Medicaid primarily quarter provided New driven over lower of was million $XX

which a at We million debt end, continue $XXX of million of position credit borrowings includes quarter our balance end in unregulated strong of at sheet to revolving was maintain our billion, $XXX $XX.X quarter facility. liquidity on cash

compared in ratio debt-to-capital Our non-recourse quarter debt, excluding was of to our the fourth XX.X%, XXXX. XX%

with end, ratio our point March our quarter represents XX basis which of XX% was netting debt-to-capital a when cash XXXX. unregulated decrease since at Our debt

at claim days Our and of XXXX. totaled medical in billion the compared medical days XX XX of end fourth pharmacy by was payments. liability quarter payable, timing impacted represents $XX.X to claims quarter the DCP claims and in

toward with closure and our communicated previously the We accretion excellent are of making comfortable we targets. remain progress Magellan,

items last in visibility into the months, XXXX. and include and X. gained delay California Medicare of win membership guidance. out in the updated business the and go-live Over to of a important factors billion. $X with the new and redeterminations The the we factors New eligibility July updated assumed at August revenue XXXX period, pharmacy specifically X, midpoint number Oklahoma year-end ongoing several state York financial and Medicaid delay included total those have membership of October date our fee These in increased These expected $XXX.X million X, increase be rate carve and in pharmacy changes The until suspension the out an the delay carve through range through expectations increased billion by of sequestration enrollment of schedule gains within the special a risk-sharing marketplace for our mechanisms. through year guidance have $XXX.X

by fee mechanisms growth, increased items, guidance risk-sharing a schedule, the points the due Medicare mix HBR XX Our carry to Medicaid at of HBR. the and higher such which as state midpoint all increased basis

all Taken an with call. fourth effect provided neutral has on we together, the to dynamics tailwinds our the consistent quarter and headwinds overall this and earnings, earnings are

for increased $X.XX, diluted EPS midpoint reflecting Additionally, have adjusted the performance. strong year quarter as by I our highlighted first guidance full the earlier, at our we

to We expect XX% of demonstrates the momentum Medicare value the in these some for organization growth Let Medicare provides XXXX. growth in me of, WellCare strong as off positive we This highlight acquisition, for enrollment on some of formulate exceed to Advantage build bids more items. our Advantage details now the XXXX.

mentioned, previous Michael estimates. enrollment XXXX are our than expectations As better marketplace for

enrollment in this with consumers. eligible more the strong our commitment special to leadership reach This period many demonstrates product. provides an organizational to As opportunity growth Centene

for continue Centene. as to view opportunity a We marketplace growth long-term

are In We rate retroactive state XXXX, have and increased At increase any guidance for to previous corridors reflects million quarter, and our mechanisms implemented this corridor the in risk-sharing increased full we not the of payback new rates mitigation our by April a our the our XXXX. estimate York risk last of $XX estimate risk enacted for New performance to the retroactive year. of programs or year aware $XXX state X, that million. first time, from

to continue we noted, utilization. Michael As monitor

and During the historical quarter, than be the baseline first peaked lower the decreased that and throughout XXXX. overall and of saw admissions in to quarter COVID also we quarter. January costs slightly below utilization fourth continues inpatient the

utilization. higher COVID to traditional pattern The XXXX, guidance below continuing by including impact the trajectory will treatment of of of diverging a remains pandemic see levels of trend COVID year. offset lower are utilization, The utilization utilization. reflects to and the be and the of during vaccination non-COVID partially costs and the testing the of that baseline half historical continue costs expected COVID impacted We duration typical the updated intensity to by rates. financial and the normalized to end first

with have close our may we believe the concludes operational shareholder for and seasonality executing membership needs. We for risk-sharing COVID of reiterating and are XXXX. sheet Finally, for of enhanced as monitor not Medicaid additional remainder the our and driven credits. a continue strategic any you by line expectations medical of They first uncertainty to are additional beyond additional August Michael focused remainder associated our the liquidity I'll our both traditional business, the operator, factors for the strategic to by some utilization the rate guidance questions. our approximately tax confidence our the committed discussed, with in advanced to for in our and ample We today. meet factors be the updated that state The we That Xst, include actions half now on remain Redeterminations earnings gains in of strength in above potential balance tailwind strong, potential to premium of these the and company plans remarks, year. the my the additional remains against value. believe SEP extended The year. and the open net and XX% delivering marketplace represent we to our remains unchanged

Operator

Thank you.

from first ahead. question Research. comes go question-and-answer We will Nephron the session. Raskin with Please [Operator Instructions] begin Today's Josh now

Josh Raskin

Good Thanks. morning.

Michael Neidorff

Good morning.

Josh Raskin

to still a good I'm on I'm to a Michael. Wednesday, think Investor -- Friday. not still I morning, trying trying an process Day

sequentially. like is to So year the Medicare I'm of was XX% up know XX%. quarter. of a were MA little the It off. for question But XX% that closer some My sounds lives real outlook in anniversarying WellCare. the revenues I

up previous So that's expectations. from

this revenues geographies much competitors do break of you And organic will growth you success of and fee-for-service? in how of terms sense where can that Maybe quarter? So was what a year? products from out seeing the revenue that in are or

Michael Neidorff

I start various successfully. they very There's no And one the WellCare markets. area -- said, that in markets went think across that is new we on. -- we had build when this We've competencies contributing. I'll very could our off. felt some Yes, growth into deal, We been have balanced we as the we market we as expanding into

Centene We as also presence national have total a a Corporation.

take just there's one the out all it -- There's balanced been so across it you just But some basically. fee-for-service. we -- elements organically contributing some another. It some is and building from just grow. no And than it's obviously, more the of we've from competition -- very potential is

Josh Raskin

been XX% know you guys are improvement. just as I we follow-up, not And here is in looking of a a and competitive et has XXXX looking you and and an another the Should better forward well? stars improvement terms necessarily about here? think cetera, just of for big do positioning for focus, going But as positioning growth like better results, sort feel margin,

Michael Neidorff

Yes.

going the well, all, I a number growth. first on growth until But -- I I'm think significant like of June. put

know think it. I people

basis or we'll we points working to achieve know, that. you takes as back. And -- programs. it's were one a that. within against very two-year Relative the -- aggressive year, we have be it stars look last at They X to we a So stars, time look being few and

but X.X continue can front, not -- the people, and believe, we'll to Medicare we beyond. make just Stars, it. on So tell And we progress on the stars it's X we

stars, so reaching speak. So for to we're the

that it's way, balanced Josh. in so, very And

Josh Raskin

Perfect. Thanks.

Operator

from of today ahead. comes with our Please America. Kevin Fischbeck question And go Bank next

Kevin Fischbeck

Thanks. Great.

much thinking a be think should guidance and to as how how the see about to about we good base. wanted Just being

First, next through happening guess, how the that to do of thinking waiting but MLR those might like on future wouldn't contract, similar or type And is revenue to question, the that MLR. I future even sounds for I the year, be about items is that or most sounds Is year. guidance like guide about a of period, maybe you're two one-time you in other growth. Oklahoma whether are the sequestration we're expect nature. the It necessarily baseline year, some of maybe its redeterminations It we guess, enrollment things, most fair? special for in but flow things just this dynamics? but we think on be the wouldn't

Michael Neidorff

Kevin, being on And I you -- the redetermination continue start. -- I'll which our practice, time, at give that more a the particularly balance We interest in the These report that's quarter Day, are of throughout conservative. is we'll days federal XX Yes. Investor top And line. a in think as the years. guidance unusual June we'll year, the does will reasonably but of it. government at the our

the there. leader upside So strong are see position demonstrated where we it it. growth. balance that in to had, and year, quarter, we've we're very are being cautious going the this the through that this a And we're growth continue the we as there. field in of with some Marketplace, we see And we've past to continue that

tax relates could marketplace, the cost they allowances important, cause. pick what's coverage who they once Medicaid with that that to without structure the If redetermination. lose because do drop do up off the can as is maybe the the it such again redetermination, any think I people also

see hearing. And the now we're somewhere bird to a I'm going so, hearing in background. I I'm think, --

Kevin Fischbeck

Yes.

Michael Neidorff

very now a and do and about We're continue. as in of to talked think, is essence mean hope The various it play, balance I and we something we governmental insight see XXXX. we will policies we've that So, have said, the I approaches. And we working what is in more think, between unfolds, situation, But them growth well going for than both past. with into as to policies this now fluid to and as the positive. sides, work I June, year do have it and as will

Kevin Fischbeck

follow-up quick a there. just Maybe

visibility mentioned expire. some corridor When rate get on You that? may would that you

Michael Neidorff

Pardon me.

Just to talked have just about be what in states been seem of the adding to terms talking -- stabilizing. things is about we have attitude them -- not the

are you positive are. I'm ones this give I'm is which And past so what had trying only sign. a We of seeing. And specific quarter, not because to where and very sense a adjustment we're we today one which it's saying, we who

So as once give again, I'm together. we to you just some trying insight see it

Kevin Fischbeck

Thanks. great. right, All

Operator

question Research. next Justin today our go Lake Please with And ahead. from comes Wolfe

Justin Lake

good couple of on the morning. questions Thanks, quarter. A

wondering look higher then about and you out strong I to kind could little the last First had the relative the on XX:XX] talked year. [Inaudible a bit if of was impact quarter the you parse pretty that marketplace that then pressure. of for on can you're what more you end kind any margins Thanks. this of any there, the terms seeing us cost and business, of year geographies kind there where cost color give given up in

Jeff Schwaneke

Justin. Sure, Yes.

seen As quarter track for with you in we've to We're at of have we very around prior this roughly past, X% medical range our we look account year that view, the what obviously it's quarter. the consistency. from to for but WellCare of cost. acquisition looking development, In consistent obviously

say, long think number a nothing from practice a unusual over which of would perspective, is I I consistent years. we've the development our had on front, So

cost on specifically inpatient just in January little non-inpatient a on the and a what authorizations our compared side, business expectations. marketplace see little the On bit we was just really then did higher to COVID higher

for So really higher I year. the a what would say modeled change QX. doesn't versus profile had margin just we tad the in it than

Michael Neidorff

There a XX:XX]. could [Inaudbile have

Jeff Schwaneke

right. That's

The the of our thing membership. we're other is tracking acuity

members SCP as the obviously well. and So,

doesn't that to all the factor out the competition QX. that's going your end the risk to relative of data into and calculation really come until and adjustment So on that's

come that. to more on So

Justin Lake

the thanks for color. Great,

Operator

go Credit ahead. from at And next comes Suisse. today question our A.J. Rice Please

A.J. Rice

narrow Michael's everybody. Thanks, the in about the the network marketplace, I'm exchanges in competition. hi comments public interested just

the years. there I think big been few when you guys last leader a obviously

I to competitors who a approach product, maybe wondering some I'm relative One some commercial approach sounds out guys and was think of the less to other the came area. with the it what's of like are about membership the membership. limited even and in now you prepared with more leapfrogging happening do traditional network driven and because lot are Is that not is view to prone it choose? of point, at know Is there's how in people a involved? there by driving on it's strategy other a it's pick choose the exchanges that switch. networks to a in membership premiums are subsidies. things But that are more results mainly your if people factors driving this

Michael Neidorff

what's the I important did membership. year some see think we last of end is pricing significant causes that in the

that's and business network broader said this our had do and we to [Inaudible race going ask that the to that. not and they We narrow As a I'm maintain XX:XX] bottom networks, to because oversee [Inaudible XX:XX] we to will who but join opted

Jeff Schwaneke

we During strong period, are networks. focus is seeing personal this [Inaudible and really what not XX:XX] on a provider networks narrow

to same really have going now for our have a enrollment to have special a Yes, is growth. growth. today the period leading be but we customer a day, at see tax focus enhanced what on the left XXXX that X really this they're fueling credits supportive everywhere to our is you and administration, the commitment days. really in were and on in of service commitment really true XXXX, at strong end our to strong provider the commitment distribution network strategy. also the implied from When April that's We you here people customer time, that's in This and us XXX a a finding

A.J. Rice

The all health if would mean to Maybe XX-day Okay, to you extended get right, that Jeff. emergency thanks. that what were for year-end, just public guys?

Jeff Schwaneke

the flavor give I'll on little you membership. a

in since we extended, our think X.X if million of million peak to we million X.X the think the at X.X got up tap would expect July. end that roughly I members that can go pandemic And we before began the roughly year. to membership so

A.J. Rice

right, thanks All a Okay. lot.

Michael Neidorff

means we last plus lost it what significantly. to last that the in What date, to grow continuing of really year, we we is quarter see improved have

A.J. Rice

Thanks.

Operator

BMO Matt Borsch question with next today from And Capital our comes Markets.

Matt Borsch

Yes, the Maybe your Medicare to margin you asking good come just shown in and context that in growth I'm that Okay. some at the you're the morning. of you've hi, expense but what ask of of talk that could there I maybe of question, the about terms seeing profitability has planned. in Advantage. was wondering if impressive

Michael Neidorff

assure a not margins Well, be think by we we with I Matt, I clear-cut gotten view product by a everything will to profit do specific have to and expanding driven and that you line. have want we approach.

Jeff Schwaneke

this of Jeff. Obviously, the it's Matt, cut. Michael Yes, fee is mentioned, things. as couple Well, Medicare A had we year. schedule unique

that's in future then for XX:XX] room lot of not and on a obviously we have based So helping expansion the margin years [Inaudible performance.

task So as I which better and on. isolation, this at cut say, from of that primarily year going you opportunities would then focused the in obviously I important look forward, expansion we're eliminating think margin performing on Starz, is one

Matt Borsch

had on into beginning maybe later redeterminations. changed get the of question December year all If back that, versus Investor discussed in Day. different whether thinking ask Medicaid XXXX, of it's has at in the I terms If this we the thinking could or we I'm the impact a your what

Michael Neidorff

that our into believe we're say Day, important comment to to view better though that we talk position coverage, have position that it's where that come in the if redetermination mean of I is [Inaudible going lose a think that. Medicaid marketplace, June the about people in Investor when XX:XX] will they will a Marketplace. be our to of we I there we I did that's flip

that of network that a are incentive nature good the costs would and the be it's and subsidized. So things same

So a I that it's matter think of grows. where membership that

Operator

Fidel go ahead. Stephens. today with from And Please comes our next Scott question

Scott Fidel

good thanks, morning. Hi,

in for learning us that? previously York in know updates, budget? more the developments on for have where York got The was the well, York being budget as the a but clarity you an place interested as you, just of so, put on the just would in been update after all, been first was lot the in I have well. bill there interested quality question if retroactive any just just corridor, things it's at because one know just rates any what then, also called New and updated assumed New New are I about there -- X% you the be if passed, dynamic I And payments out -- a obviously risk there the you're you that broadly If which on know a if trending

Jeff Schwaneke

Jeff. is this Scott, Yes.

as it's early don't late we've are in think tenancy they these when move game, in a tell. We to necessarily I just the have past. finalized, -- too to the things seen

say for it's perspective, just And we have early what going comfortable, land, this year. I the but tell to in to would too we're with it's numbers so, my from obviously, where

Scott Fidel

And question. you then, guidance have to of a state I and announced on things. the of PBM the review looking date saw just acquisition, your revenue were at sort view start conducting be I medical the on contract. a updated carve-out Okay. just of know the that the around Magellan the some follow-up going had that they

And Just of the the State has is interested been you've would ongoing? that any be far any concluded Thanks. gotten has Magellan changes part there so or requiring the from visibility as now on still review if at this point, and acquisition? state, feedback that that

Michael Neidorff

comment a Jen, that? would make you on

Jennifer Gilligan

the avoidance closely working kicked a Yes, next but conflict to conflict hoping program progressing have the or the is [XX:XX] month would [XX:XX]. yet Department that still on within process, is a happy plan and with we're resolution plan leadership brands so, but sense California's off, don't from clarity the very We on to. of be the that department of FCS Magellan well. in have when

Scott Fidel

Okay.

of stated, that's do an estimate you the sort updated just point. have guidance So that revenue in this at that

Okay, thanks.

Operator

go Morgan ahead. And Stanley. comes with Ricky from today our Please next Goldwasser question

Ricky Goldwasser

hi, A acuity on good Yes, utilization the the level. morning. and question

population that's a impacting seeing below acuity So that versus saying in terms towards you as because well, acuity but Michael, are little the you're the back, relates an tracking I about it's to what's of you you of do per maybe And What are in color closely. core of then, you're utilization seeing calculation the think that's baseline, mix you when bit you core trending can market? the said levels utilization is sort MA trends how that to more of utilization Medicaid coming more seeing assume on think And ex-COVID? we now date us you're market? on sort the give

Michael Neidorff

I that's Jeff, some tell in when think some don't that in Jeff why increase in comment marketplace Medicaid. the you numbers? incremental utilization the saw offset just we

Jeff Schwaneke

into acuity but the we utilization front, a not packed lot our on in of the a haven't piece Yes, expectations. I'm outside really change of that, so that seen I heard question, final the sure

we commented this we business, based enrollment, think was our adjustment on we down take just year. go that's to change Marketplace Specifically, our knew will the that why going the substantially payable risk open and acuity

So I far, seen base acuity our in would than haven't any say expected. we what we've other membership change

if of answers second what that hope I And part question. part? your that So it the was doesn't,

Ricky Goldwasser

Yes.

acuity point, your change your versus to in no expectation. So

to no understand what And So by change, I'm to part for add the population in is second the trying did was acuity? higher versus the under-utilization, assuming that, year-end, you guidance or embedded Medicare how said unchanged Medicaid? then are you into look acuity question of

Jeff Schwaneke

two expect in Yes, our year. that have what the for the normal right. members utilization end would go is, we of you historical said guidance, to baseline stay we we I we And the half is our of the What the projected acuity first trending we've the have, to remarks, below and know say towards prepared by things. if

an Medicare, from helps. age that those say, perspective. hope yes, members difference is a there And of would behavior I demographics I in the different are Medicaid marketplace between, So and extremely

utilization we different our guidance. obviously are patterns. But there So that into incorporate

Operator

Next ahead. from comes go Bernstein. question with today Wilkes Please Lance

Lance Wilkes

Yes, at do major talk outlook do you and was growth long-term your or marketplace the your come Thanks. care? to much point? at I in value of those about you interested longer how in growth look think particular, term and Could strategic good how And Medicaid beyond areas Care Enterprise, little you're this Medicare, priorities Health a morning. like bit you going from based

Michael Neidorff

I appreciate question. the

where think growth the from We as growth, it's is see think which and I a into in in June, engine, a company. on be well demonstrated Medicaid. will we growth we about as growth marketplace all us. We've continue plus for that growth balanced engine lines, to talked product coming being sense still detail as much growth of Medicare. very XXXX will some ourselves a We give see our practice. get more you We

government have be believes in We people should a place that now insured. that

work. we so, will And

we the all improving come June. give products and quality. But growing that we in if across responsibly we margins with reasonable, up numbers our for expanding you Now, containing are us with you see will and costs growing and

of not products for to on, we're balance So that new about that talk we trying strike I'm a confidentiality working and that going to reasons. we're it's a couple have

Lance Wilkes

of are two, doing enterprise maybe to on delivery material And healthcare places with clarify prospects one, over that, just like the value-based you're years? three or some to how the that Florida things in next growth the care and they

Michael Neidorff

the place think of Day that what quality Well, and have technology demand can things products do the talk going growth you're to that for light. at and drive it's utilizing it drive will provider to growth, will some going those long-term as for our hear in I Investor for about about we June now and put to systems see because and recipients the

Lance Wilkes

other just are to plans? it. care with of business the enablement think those Magellan be kind put in supporting And you to business, of mainly line standalone drivers are health the technology, do Got managed those or like clear,

Michael Neidorff

to No, this reduce costs. I what in is drive going improvement with and systems the think quality it's

So quality, standpoint, costs. to you reduce higher have significantly quality improved performance, it's our but going

Operator

go Robert ahead. Sachs. Please from next And comes our question of Goldman Jones today

Robert Jones

marketplace. the the wanted the about A.J's go for Michael, competitive to Great, just thanks questions. back Actually landscape, to question in

those been, with obviously, during strategy? of how mentioned there. period, aggressive the this are change more just if within last maybe few kind or players it a And seeing competitive from I times, competitors a behavior saw end a or is was continue behaviors I two, to widespread you you've has broadly? of pricing year the you more think, You've or contained wondering state curious that, it some of of really some seen special more enrollment any pricing that

Michael Neidorff

we on how will ourselves think and focus we I So do things.

As we race that's my said to and at bottom, sustained the time, it we're something and not to we in not going we're that do opinion. to couldn't going know join be the

our what we've is maintain network. So we done

that They service new about, price will have in that are of off table subsidies and that's at my as where return incremental seeing talked membership. us, people we're look really necessary. the to opinion, in the membership growth Brent of the have the the taken [XX:XX] what We the quality well as

some I consumer to to your on in packaged can time price. focus you trying goods. clear was which and earlier the so, ways, in that's hope we in in in And a on marketplace, know only go try the really leader what against we a category, is you how I it, grow [XX:XX] were When to way long and to come is think continue

a out And people that positioning in COVID land price of so, I the had a membership [XX:XX] environment we we think strategic it. everything as come

we've it in be year, recouped growth. some, think first giving in I demonstrated quarter June, we'll and As this shows we've then guidance we the lost all and you of continued and

Lance Wilkes

maybe you front-half updated cadence earnings Got being you the it. XX%. quick out Jeff, as now, just Day, That's you're got as for as earnings Any Analyst a the year? far seeing quarter under know of about And weighted, I belt play how one the bit follow-up, more the little like talked thoughts, one maybe helpful. at

Jeff Schwaneke

gives yes, half year. why and be utilization I in that earnings think just would have, front where more would kind of again, in you you the we the of assumptions to, direct you there I think if half percent Yes, a XX% is the that front the reason about

Operator

our question Please ahead. George from today with Deutsche next Hill go And Bank. comes

George Hill

quick of redeterminations, smatterings prior wondering be, good this you're you be it as the it's I a various barriers thanks to And Jeff, follow questions. just raising morning, it but releases, to of too that population? would continued that seeing of taking or Yes, I'm we've can initiatives the use in kind and like up and the of to as is on see increased seen tell? states. step about continue might of utilization that access one, early impact and relates we to press having Medicaid suspension coming uptake simple if seeing managed off the and out talk for the vaccine know a you're then, my

Jeff Schwaneke

first of some trying are one your get the So risk, the part of population mentioned those vaccine the vaccination and for stratify initiatives take-up we're had on to our at was membership where what them. trying Michael most to obviously that that rate, to

alternative we've had the the could that of some potential challenges from on side think members vaccinations sites. data I is get

the that ecosystem. to that I and can, our last best within are that's obviously not to second we get trying And high-risk catch question get again, part? we members vaccinated. our didn't So as But tracking data

George Hill

if prior utilization, with we're agencies grew data the care that. and expect a to so on smattering just seeing wondering release press reinstituting not all of if state impact to delivery authorizations meaningful distribution will access, agency it? seeing this, you lists, reinstituting it edits, wanting see step like starting raise be flow of commentary Any Yes, re-subscribe I'm state to just Medicaid barriers any around to you're it

Jeff Schwaneke

we in that's haven't we'll watch. point something anything this be if early, time, to it's continuing obviously say seen -- I'd and seen I'm that at not aware we've

Michael Neidorff

for is Well, reasons, in others our thing Service that that wearing goal way I vaccine, historic from really and people about a vaccine. not has people the the it's want say sports to hesitant, various thing the [XX:XX] jackets to add mask. well-respected Costas been that and our be the areas. doing help may one are take focus population with Bob Public We in to okay back to other a and having announcer had whole

what's doing to for is important but focus on and it children, of loved trying matter this encouraging, we're incentive. is family. And it for spouses, respected, the just And what of a themselves, parents, it's So an for really ones. that encouraging. their other not doing really they're providing they're getting are They're members people their doing

time, with lot work a to in responsible we're of demonstrate government So that's we being that officials energy and why and area. that spent try

Operator

this over and you, our management final turn the the Thank remarks. conference to like back gentlemen, session. ladies to I'd team question-and-answer for any concludes

Michael Neidorff

have we'll positive thank impact have We continue earlier. the as the to Day said Investor believe and we momentum the we to in quarter you forward marketplace. look the I in I second

Thank So stay safe everybody. you.

Operator

Sir, call. thank We this all attending for today's conference presentation. Thank concludes today's you you

wonderful day. You and may lines your now a disconnect have

Centene (CNC) 27 Apr 212021 Q1 Earnings call transcript