Centene CEO offers look at progress around Medicaid redeterminations

The recently-restarted Medicaid redeterminations have been a key policy concern for payers, and during the company's earnings call Tuesday Centene executives offered a peek behind the curtain at how the process is going in its early days.

While the feds allow states to begin the eligibility determinations on April 1, CEO Sarah London said most of the states that contract with Centene chose a start date between May and July, though a few states did elect to begin the process on its first day.

Centene has, for its part, been focused on outreach to members who may be at risk of losing coverage. London said that members have been receptive to this,with low opt-out rates for text alerts and "higher engagement than normal" in call campaigns.

"Our focus from the beginning has been maximizing coverage continuity," London said.

London added that Centene has leaned on its broker network to assist with transitioning members to individual market coverage, offering them a "warm handoff" as they switch between the programs.

In addition to the Medicaid redeterminations, London took time on the call to reflect on her first year as CEO of Centene and the progress that the company has made on its multi-year value creation plan. London was a key figure in launching that initiative prior to taking the CEO role.

Thanks to the initial work completed under the value creation plan, London said the leadership team is "confident in our long-term growth algorithm."

"After 13 months in this role, I'm even more convinced about our ability to deliver more value to shareholders," London said.

Centene Corporation posted $1.1 billion in profit for the first quarter of 2023, up from $849 million in earnings in the prior year quarter.

The company's revenue was also up year-over-year, reaching $38.9 billion compared to $37.2 billion in the first quarter of 2022. The numbers fall short of Wall Street analysts' expectations on profit but exceed their predictions on revenue, according to analysts at Zacks Investment Research.

With the earnings miss, Centene lowered its guidance for the year to at least $6.40 in earnings per share. London said in the earnings release that the updated outlook "incorporates thoughtful recalibration" around key trends for the year, including Medicaid redeterminations, 2024 Medicare bids and investments.

"Centene's first quarter results were strong, reflective of continued positive momentum operationally and the beginning of another year of disciplined execution against our strategic framework," London said.

Centene's membership as of March 31 was up to nearly 28.5 million compared to 26.3 million in March of 2022. That includes growth of more than 1 million members in its individual market plans as well as growth in Medicaid, according to the earnings report.

In the quarter, the insurer made progress toward one of its key goals, its value creation plan, by inking the divestiture of Magellan Rx. It also made several leadership changes, including two C-suite hires and a board refresh.

In addition, to the $6.40 in earnings per share, Centene expects to bring in between $144.5 billion and $146.5 billion in revenue for the year.