Specialist
Former director at Centene Corp
Agenda
- Centene's (NYSE: CNC) Q3 2023 earnings release highlights and takeaways
- Medicaid redeterminations and ability to recoup losses in ACA (Affordable Care Act) exchanges
- Cost reduction strategy to target USD 700m in rationalisations by end of 2024
- CMS (Centers for Medicare & Medicaid Services) star rating quality enhancement efforts
- Inorganic growth strategy and ability to be competitive in upcoming state Medicaid RFP (request for proposal) contracts
Questions
1.
What were your major reactions and takeaways from Centene's Q3 2023 earnings release on 24 October 2023?
2.
How are you viewing the progress of Centene's turnaround plan that is centred on value creation with the goal of margin expansion via ACA [Affordable Care Act] marketplace enrolment gains, Medicaid contract wins and reduced operating costs? Where is the company at in terms of execution at this point?
3.
Considering your earnings call takeaways, could you expound on the factors that you would attribute to the sequentially flat QoQ MLR [medical loss ratio] that Medicaid posted in Q3 2023? How durable is that momentum based on the secular backdrop? You were a bit surprised about the industrywide performance of Medicaid.
4.
Centene is around 40% through Medicaid redeterminations with one million members having been disenrolled, tracking in line with the expectations thus far. The company maintained expectations that it will disenrol 2.3 million of the 3.6 million Medicaid members added since the start of the pandemic, and previously estimated USD 10bn of run-rate revenue reduction from redeterminations. What is your perspective on the potential impact of redeterminations to the patient mix when all is said and done?
5.
Do the increased premiums from the higher acuity members offset the higher MLR on those populations? For clarification, would Centene prefer to have higher acuity members?
6.
You mentioned the migration of the Medicaid members off the rolls and onto the ACA exchanges. It seems as though that is progressing nicely for Centene, but how many of those members from Medicaid do you believe can ultimately be recaptured in the ACA exchanges? What is the net offset in terms of the cUSD 7bn premium erosion from the redeterminations. Could you elaborate on how the profitability will differ on those same members on the exchanges vs Medicaid?
7.
You mentioned that the high acuity members are staying on Medicaid. What signals might clue us into the acuity profile of any more patients coming off the Medicaid rolls? Essentially, if the higher patients are staying on, do you think that any further adjustments or reshuffling would come out of the higher acuity bucket? We are c40% of the way through Medicaid redetermination. What signals might clue us into the acuity mix of the remaining 50-60% or so yet to come off the Medicaid rolls?
8.
What factors decide who wins and loses new RFPs [requests for proposal] up for renewal? How are these weighed relatively? What is Centene's pitch to state entities on why the company should be awarded new contracts?
9.
Could you discuss the initiative Centene is pursuing to raise its CMS [Centers for Medicare & Medicaid Services] Medicare Advantage plan star ratings? What is the company doing to increase the quality of its plans and execute on some of the health equity initiatives you outlined? You mentioned it had been an early adopter of population health management. What does that look like at a local level? Feel free to discuss Medicaid quality initiatives as well, if you're more familiar.
10.
Within the conversation on population health management and an emphasis on quality and patient outcomes, what has been Centene's appetite for value-based arrangements within the Medicaid sphere? Who is the company partnering with on these initiatives and what do those contracts look like?
11.
Could you outline Centene's risk adjustment strategy to administer accurate coding on patients once the company enters a new market? How is it leveraging telemedicine to code members more efficiently? Where has that virtual care outreach been most effective?
12.
Is Centene better-situated to win new contracts in certain US states and RFPs? Where might the company be more vulnerable, and why?
13.
Looking at the value-creation plan, how does Centene get to the USD 700m or 14% of operating income in cost reductions by the end of 2024? Where do you see cost-rationalisation opportunities for the company, and how realistic is that metric?
14.
What kind of tailwind do you see from the Supreme Court's ruling on the legality of the ACA for Centene? How might this eliminate an overhang and drive states to expedite Medicaid expansion?
15.
Is there anything else that might be especially important to highlight related to Centene?
