Centene Corporation Reports 2020 Results
In summary, the 2020 fourth quarter and full year results were as follows:
2020 Results |
||||||||
Q4 |
Full Year |
|||||||
Total revenues (in millions) |
$ |
28,288 |
$ |
111,115 |
||||
Health benefits ratio |
88.4 |
% |
86.2 |
% |
||||
SG&A expense ratio |
10.3 |
% |
9.5 |
% |
||||
Adjusted SG&A expense ratio (1) |
9.7 |
% |
8.9 |
% |
||||
GAAP diluted (loss) earnings per share |
$ |
(0.02) |
$ |
3.12 |
||||
Adjusted diluted EPS (1) |
$ |
0.46 |
$ |
5.00 |
||||
Total cash flow provided by operations (in millions) |
$ |
2,981 |
$ |
5,503 |
||||
(1) A full reconciliation of the Adjusted SG&A expense ratio and Adjusted diluted EPS are shown on page seven of this release. |
"2020 was a year when
"Building on our leadership position in government-sponsored healthcare, we are focused on delivering the next phase of growth through product and geographic expansion, advancing our technology strategy and further integrating our diverse capabilities. We are pleased to have been selected for two statewide managed care contracts in
Fourth Quarter and Full Year Highlights
December 31, 2020 managed care membership of 25.5 million, an increase of 10.3 million members, or 67%, overDecember 31, 2019 .- Total revenues of
$28.3 billion for the fourth quarter of 2020, representing 50% growth compared to the fourth quarter of 2019, and$111.1 billion for the full year 2020, representing 49% growth year-over-year. - Health benefits ratio (HBR) of 88.4% for the fourth quarter of 2020, compared to 88.4% in the fourth quarter of 2019, and 86.2% for the full year 2020, compared to 87.3% for the full year 2019.
- Selling, general and administrative (SG&A) expense ratio of 10.3% for the fourth quarter of 2020, compared to 9.6% for the fourth quarter of 2019. SG&A expense ratio of 9.5% for the full year 2020, compared to 9.3% for the full year 2019.
- Adjusted SG&A expense ratio of 9.7% for the fourth quarter of 2020, compared to 9.5% for the fourth quarter of 2019. Adjusted SG&A expense ratio of 8.9% for the full year 2020, compared to 9.2% for the full year 2019.
- Diluted loss per share for the fourth quarter of 2020 of
$(0.02) , compared to diluted EPS of$0.49 for the fourth quarter of 2019. Diluted EPS for the full year 2020 of$3.12 , compared to$3.14 for the full year 2019. - Adjusted diluted EPS for the fourth quarter of 2020 of
$0.46 , compared to$0.73 for the fourth quarter of 2019. Adjusted diluted EPS for the full year 2020 of$5.00 , compared to$4.42 for the full year 2019. - Operating cash flow of
$3.0 billion and$5.5 billion for the fourth quarter and full year 2020, respectively, representing 3.1x net earnings for the full year 2020. Operating cash flow for the fourth quarter of 2020 benefited from payments received earlier than expected.
Other Events
- In
January 2021 ,Centene announced that itsOklahoma subsidiary,Oklahoma Complete Health , has been selected by theOklahoma Health Care Authority (OHCA) for statewide contracts to provide managed care for the SoonerSelect and, on a sole source basis, SoonerSelect Specialty Children's Plan (SCP) (foster care) programs. The state expects to commence the SoonerSelect and SoonerSelect SCP Programs onOctober 1, 2021 . - In
January 2021 ,Centene announced that it entered into a definitive merger agreement under which the Company will acquire Magellan Health for$95.00 per share in cash for a total enterprise value of$2.2 billion . The transaction is subject to clearance under the Hart-Scott Rodino Act, receipt of required state regulatory approvals, the approval of the definitive merger agreement by Magellan Health's stockholders and other customary closing conditions. The transaction is expected to close in the second half of 2021. - In
January 2021 ,Centene launched the Youth Impact Award for Vaping Prevention, a curriculum and contest for adolescents ages 14 through 19 to raise awareness about vaping, e-cigarette use, and encourage prevention. Winners will be announced in early summer of 2021. - In
December 2020 ,Centene acquired PANTHERx, one of the largest and fastest-growing specialty pharmacies inthe United States specializing in orphan drugs and treating rare diseases. - In
December 2020 ,Centene acquiredApixio Inc. , a healthcare analytics company offering Artificial Intelligence (AI) technology solutions, to continue to digitize the administration of healthcare and accelerate innovation and modernization across the enterprise.
Accreditations & Awards
- In
February 2021 , FORTUNE magazine namedCentene to its 2021 list of the World's Most Admired Companies. - In
November 2020 ,Centene's subsidiary,Pennsylvania Health & Wellness , earned Accreditation from theNational Committee for Quality Assurance .
COVID-19 Pandemic
Beginning in
Membership
The following table sets forth our membership by line of business:
|
|||||
2020 |
2019 |
||||
Traditional Medicaid (1) |
12,055,400 |
7,573,600 |
|||
High Acuity Medicaid (2) |
1,554,700 |
1,110,000 |
|||
Total Medicaid |
13,610,100 |
8,683,600 |
|||
Commercial |
2,633,600 |
2,331,100 |
|||
Medicare (3) |
955,400 |
359,600 |
|||
Medicare PDP |
4,469,400 |
— |
|||
International |
597,700 |
599,800 |
|||
Correctional |
147,200 |
180,000 |
|||
Total at-risk membership |
22,413,400 |
12,154,100 |
|||
TRICARE eligibles |
2,877,900 |
2,860,700 |
|||
Non-risk membership |
231,600 |
227,000 |
|||
Total |
25,522,900 |
15,241,800 |
|||
(1) Membership includes TANF, Medicaid Expansion, CHIP, (2) Membership includes ABD, IDD, LTSS and MMP Duals (3) Membership includes Medicare Advantage and Medicare Supplement |
The following table sets forth additional membership statistics, which are included in the membership information above:
|
|||||
2020 |
2019 |
||||
Dual-eligible (4) |
1,066,800 |
639,200 |
|||
|
2,131,600 |
1,805,200 |
|||
Medicaid Expansion |
2,181,400 |
1,346,700 |
|||
(4) Membership that is eligible for both Medicaid and Medicare benefits |
Revenues
The following table sets forth supplemental revenue information ($ in millions):
Three Months Ended |
Year Ended |
||||||||||||||||||||
2020 |
2019 |
% Change |
2020 |
2019 |
% Change |
||||||||||||||||
Medicaid |
$ |
19,319 |
$ |
13,172 |
47 |
% |
$ |
74,785 |
$ |
51,831 |
44 |
% |
|||||||||
Commercial |
4,178 |
3,560 |
17 |
% |
17,071 |
14,747 |
16 |
% |
|||||||||||||
Medicare (3) |
3,084 |
1,044 |
195 |
% |
11,976 |
4,248 |
182 |
% |
|||||||||||||
Medicare PDP |
547 |
— |
n.m. |
2,403 |
— |
n.m. |
|||||||||||||||
Other |
1,160 |
1,087 |
7 |
% |
4,880 |
3,813 |
28 |
% |
|||||||||||||
Total Revenues |
$ |
28,288 |
$ |
18,863 |
50 |
% |
$ |
111,115 |
$ |
74,639 |
49 |
% |
|||||||||
n.m.: not meaningful |
Statement of Operations: Three Months Ended
- For the fourth quarter of 2020, total revenues increased 50% to
$28.3 billion from$18.9 billion in the comparable period of 2019. The increase over the prior year was due to the acquisition of WellCare and growth in the Medicaid andHealth Insurance Marketplace businesses, driven by expansions and new programs in many of our states. Additionally, the net effect of the pandemic increased our revenues due to the suspension of Medicaid eligibility redeterminations. The increase was partially offset by the divestiture of ourIllinois health plan. - HBR of 88.4% for the fourth quarter of 2020 was consistent with the comparable period in 2019. The fourth quarter 2020 HBR benefited from lower medical utilization trends due to the COVID-19 pandemic and the reinstatement of the health insurer fee. This was offset by higher testing and treatment costs associated with COVID-19, particularly in the
Health Insurance Marketplace business, and retroactive state premium rate adjustments and risk sharing mechanisms. - The SG&A expense ratio was 10.3% for the fourth quarter of 2020, compared to 9.6% in the fourth quarter of 2019. The increase was due to enhanced growth and profitability initiatives for our Medicare and
Health Insurance Marketplace businesses and higher acquisition and integration related expenses primarily due to the WellCare acquisition, partially offset by the leveraging of expenses over higher revenues as a result of the WellCare acquisition. The cost associated with the enhanced growth and profitability initiatives reflect the investment of the ACA risk corridor benefit realized in the third quarter of 2020. - The Adjusted SG&A expense ratio was 9.7% for the fourth quarter of 2020, compared to 9.5% in the fourth quarter of 2019. The increase was due to enhanced growth and profitability initiatives for our Medicare and
Health Insurance Marketplace businesses, partially offset by the leveraging of expenses over higher revenues as a result of the WellCare acquisition. - The effective tax rate was (74.3)% for the fourth quarter of 2020, compared to 22.3% in the fourth quarter of 2019. The effective tax rate for the fourth quarter of 2020 reflects our pre-tax loss and the non-deductibility of the health insurer fee. The effective tax rate for the fourth quarter of 2019 reflects the health insurer fee moratorium. For the fourth quarter of 2020, our effective tax rate on adjusted earnings was 10.0%.
Statement of Operations: Year Ended
- For the full year 2020, total revenues increased 49% to
$111.1 billion from$74.6 billion in the comparable period of 2019. The increase over the prior year was primarily due to the acquisition of WellCare, growth in the Medicaid andHealth Insurance Marketplace businesses, and the reinstatement of the health insurer fee in 2020. Additionally, the net effect of the pandemic increased our revenues due to the suspension of Medicaid eligibility redeterminations. The increase was partially offset by the divestiture of ourIllinois health plan. - HBR of 86.2% for the full year 2020 represents a decrease from 87.3% in the comparable period in 2019. The HBR decrease compared to last year was driven by lower medical utilization trends due to the COVID-19 pandemic, the ACA risk corridor receivable settlement and the reinstatement of the health insurer fee. The decrease was partially offset by performance in the
Health Insurance Marketplace business, the implementation of retroactive state premium rate adjustments and risk sharing mechanisms, and higher testing and treatment costs associated with COVID-19. - The SG&A expense ratio was 9.5% for the full year 2020, compared to 9.3% for the full year 2019. The 2020 SG&A expense ratio increased due to higher acquisition and integration related expenses primarily due to the WellCare acquisition, the
$275 million charitable contribution to our foundation and enhanced growth and profitability initiatives for our Medicare andHealth Insurance Marketplace businesses (both as a result of the one-time ACA risk corridor settlement). These items were partially offset by leveraging of expenses over higher revenues as a result of the WellCare acquisition. - The Adjusted SG&A expense ratio was 8.9% for the full year 2020, compared to 9.2% for the full year 2019. The Adjusted SG&A expense ratio benefited from leveraging of expenses over higher revenues as a result of the WellCare acquisition, partially offset by the
$275 million charitable contribution to our foundation and enhanced growth and profitability initiatives for our Medicare andHealth Insurance Marketplace businesses. - The effective tax rate was 35.3% for 2020, compared to 26.5% for 2019. The effective tax rate for 2020 reflects the reinstatement of the health insurer fee, partially offset by a favorable tax settlement. The effective tax rate for the full year of 2019 reflects the non-deductibility of a portion of our non-cash goodwill and intangible impairment, offset by the health insurer fee moratorium. For 2020, our effective tax rate on adjusted earnings was 30.1%.
Balance Sheet
At
Outlook
The Company's annual guidance for 2021 has been adjusted to include PANTHERx, which was acquired in
Full Year 2021 |
|||||||||
Low |
High |
||||||||
Total revenues (in billions) |
$ |
116.1 |
$ |
118.1 |
|||||
GAAP diluted EPS |
$ |
3.69 |
$ |
3.91 |
|||||
Adjusted diluted EPS (1) |
$ |
5.00 |
$ |
5.30 |
|||||
HBR |
86.6 |
% |
87.2 |
% |
|||||
SG&A expense ratio |
8.6 |
% |
9.1 |
% |
|||||
Adjusted SG&A expense ratio (2) |
8.3 |
% |
8.8 |
% |
|||||
Effective tax rate |
24.7 |
% |
26.7 |
% |
|||||
Diluted shares outstanding (in millions) |
590.1 |
593.1 |
|||||||
(1) A full reconciliation of Adjusted diluted EPS is shown on page seven of this release. |
|||||||||
(2) Adjusted SG&A expense ratio excludes acquisition related expenses of |
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 |
Year Ended |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
GAAP net (loss) earnings attributable to |
$ |
(12) |
$ |
209 |
$ |
1,808 |
$ |
1,321 |
|||||||
Amortization of acquired intangible assets |
192 |
64 |
719 |
258 |
|||||||||||
Acquisition related expenses |
156 |
38 |
602 |
104 |
|||||||||||
Other adjustments (1) |
17 |
30 |
29 |
301 |
|||||||||||
Income tax effects of adjustments (2) |
(84) |
(32) |
(262) |
(127) |
|||||||||||
Adjusted net earnings |
$ |
269 |
$ |
309 |
$ |
2,896 |
$ |
1,857 |
|||||||
(1) Other adjustments include the following items: |
|||||||||||||||
(2) The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. |
Three Months Ended |
Year Ended |
Annual Guidance |
|||||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||||||
GAAP diluted (loss) earnings per |
$ |
(0.02) |
$ |
0.49 |
$ |
3.12 |
$ |
3.14 |
|
||||||||||
Amortization of acquired |
0.25 |
0.12 |
0.95 |
0.47 |
|
||||||||||||||
Acquisition related expenses (4) |
0.21 |
0.07 |
0.86 |
0.19 |
|
||||||||||||||
Other adjustments (5) |
0.02 |
0.05 |
0.07 |
0.62 |
|
||||||||||||||
Adjusted diluted EPS |
$ |
0.46 |
$ |
0.73 |
$ |
5.00 |
$ |
4.42 |
|
||||||||||
(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: |
Three Months Ended |
Year Ended |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
GAAP SG&A expenses |
$ |
2,721 |
$ |
1,733 |
$ |
9,867 |
$ |
6,533 |
|||||||
Acquisition related expenses |
154 |
24 |
580 |
85 |
|||||||||||
Adjusted SG&A expenses |
$ |
2,567 |
$ |
1,709 |
$ |
9,287 |
$ |
6,448 |
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 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 |
(Unaudited) |
||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
10,800 |
$ |
12,123 |
|||
Premium and trade receivables |
9,696 |
6,247 |
|||||
Short-term investments |
1,580 |
863 |
|||||
Other current assets |
1,317 |
1,090 |
|||||
Total current assets |
23,393 |
20,323 |
|||||
Long-term investments |
12,853 |
7,717 |
|||||
Restricted deposits |
1,060 |
658 |
|||||
Property, software and equipment, net |
2,774 |
2,121 |
|||||
|
18,652 |
6,863 |
|||||
Intangible assets, net |
8,388 |
2,063 |
|||||
Other long-term assets |
1,599 |
1,249 |
|||||
Total assets |
$ |
68,719 |
$ |
40,994 |
|||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND |
|||||||
Current liabilities: |
|||||||
Medical claims liability |
$ |
12,438 |
$ |
7,473 |
|||
Accounts payable and accrued expenses |
7,069 |
4,164 |
|||||
Return of premium payable |
1,458 |
824 |
|||||
Unearned revenue |
523 |
383 |
|||||
Current portion of long-term debt |
97 |
88 |
|||||
Total current liabilities |
21,585 |
12,932 |
|||||
Long-term debt |
16,682 |
13,638 |
|||||
Deferred tax liability |
1,534 |
189 |
|||||
Other long-term liabilities |
2,956 |
1,543 |
|||||
Total liabilities |
42,757 |
28,302 |
|||||
Commitments and contingencies |
|||||||
Redeemable noncontrolling interests |
77 |
33 |
|||||
Stockholders' equity: |
|||||||
Preferred stock, |
— |
— |
|||||
Common stock, |
1 |
— |
|||||
Additional paid-in capital |
19,459 |
7,647 |
|||||
Accumulated other comprehensive earnings |
337 |
134 |
|||||
Retained earnings |
6,792 |
4,984 |
|||||
|
(816) |
(214) |
|||||
Total |
25,773 |
12,551 |
|||||
Noncontrolling interest |
112 |
108 |
|||||
Total stockholders' equity |
25,885 |
12,659 |
|||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
68,719 |
$ |
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 |
Year Ended |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Revenues: |
|||||||||||||||
Premium |
$ |
25,559 |
$ |
17,210 |
$ |
100,055 |
$ |
67,439 |
|||||||
Service |
886 |
802 |
3,745 |
2,925 |
|||||||||||
Premium and service revenues |
26,445 |
18,012 |
103,800 |
70,364 |
|||||||||||
Premium tax and health insurer fee |
1,843 |
851 |
7,315 |
4,275 |
|||||||||||
Total revenues |
28,288 |
18,863 |
111,115 |
74,639 |
|||||||||||
Expenses: |
|||||||||||||||
Medical costs |
22,605 |
15,220 |
86,264 |
58,862 |
|||||||||||
Cost of services |
784 |
687 |
3,303 |
2,465 |
|||||||||||
Selling, general and administrative expenses |
2,721 |
1,733 |
9,867 |
6,533 |
|||||||||||
Amortization of acquired intangible assets |
192 |
64 |
719 |
258 |
|||||||||||
Premium tax expense |
1,595 |
882 |
6,332 |
4,469 |
|||||||||||
Health insurer fee expense |
376 |
— |
1,476 |
— |
|||||||||||
Impairment |
— |
— |
72 |
271 |
|||||||||||
Total operating expenses |
28,273 |
18,586 |
108,033 |
72,858 |
|||||||||||
Earnings from operations |
15 |
277 |
3,082 |
1,781 |
|||||||||||
Other income (expense): |
|||||||||||||||
Investment and other income |
105 |
126 |
480 |
443 |
|||||||||||
Debt extinguishment costs |
(17) |
(30) |
(61) |
(30) |
|||||||||||
Interest expense |
(177) |
(113) |
(728) |
(412) |
|||||||||||
Earnings (loss) before income tax expense |
(74) |
260 |
2,773 |
1,782 |
|||||||||||
Income tax expense (benefit) |
(55) |
58 |
979 |
473 |
|||||||||||
Net earnings (loss) |
(19) |
202 |
1,794 |
1,309 |
|||||||||||
Loss attributable to noncontrolling interests |
7 |
7 |
14 |
12 |
|||||||||||
Net earnings (loss) attributable to |
$ |
(12) |
$ |
209 |
$ |
1,808 |
$ |
1,321 |
|||||||
Net earnings per common share attributable to |
|||||||||||||||
Basic earnings (loss) per common share |
$ |
(0.02) |
$ |
0.50 |
$ |
3.17 |
$ |
3.19 |
|||||||
Diluted earnings (loss) per common share |
$ |
(0.02) |
$ |
0.49 |
$ |
3.12 |
$ |
3.14 |
|||||||
Weighted average number of common shares outstanding: |
|||||||||||||||
Basic |
580,129 |
414,044 |
570,722 |
413,487 |
|||||||||||
Diluted |
580,129 |
422,262 |
579,135 |
420,409 |
CENTENE CORPORATION AND SUBSIDIARIES |
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In millions, unaudited) |
|||||||
Year Ended |
|||||||
2020 |
2019 |
||||||
Cash flows from operating activities: |
|||||||
Net earnings |
$ |
1,794 |
$ |
1,309 |
|||
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||||||
Depreciation and amortization |
1,259 |
643 |
|||||
Stock compensation expense |
281 |
177 |
|||||
Impairment |
72 |
271 |
|||||
Loss on debt extinguishment |
57 |
30 |
|||||
Deferred income taxes |
(51) |
55 |
|||||
Gain on divestiture |
(104) |
— |
|||||
Changes in assets and liabilities |
|||||||
Premium and trade receivables |
(52) |
(1,076) |
|||||
Other assets |
(30) |
(234) |
|||||
Medical claims liabilities |
1,117 |
578 |
|||||
Unearned revenue |
(528) |
(9) |
|||||
Accounts payable and accrued expenses |
585 |
(421) |
|||||
Other long-term liabilities |
1,078 |
185 |
|||||
Other operating activities, net |
25 |
(25) |
|||||
Net cash provided by operating activities |
5,503 |
1,483 |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(869) |
(730) |
|||||
Purchases of investments |
(7,402) |
(2,575) |
|||||
Sales and maturities of investments |
4,921 |
1,809 |
|||||
Acquisitions, net of cash acquired |
(4,049) |
(36) |
|||||
Divestiture proceeds, net of divested cash |
466 |
— |
|||||
Other investing activities, net |
(22) |
— |
|||||
Net cash used in investing activities |
(6,955) |
(1,532) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from long-term debt |
5,107 |
24,721 |
|||||
Payments of long-term debt |
(4,067) |
(17,803) |
|||||
Common stock repurchases |
(626) |
(75) |
|||||
Payments for debt extinguishment |
(81) |
(23) |
|||||
Debt issuance costs |
(120) |
(25) |
|||||
Other financing activities, net |
47 |
37 |
|||||
Net cash provided by financing activities |
260 |
6,832 |
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
18 |
(2) |
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash and cash |
(1,174) |
6,781 |
|||||
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 |
$ |
10,957 |
$ |
12,131 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Interest paid |
$ |
725 |
$ |
374 |
|||
Income taxes paid |
$ |
1,191 |
$ |
612 |
|||
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 |
|||||||
2020 |
2019 |
||||||
Cash and cash equivalents |
$ |
10,800 |
$ |
12,123 |
|||
Restricted cash and cash equivalents, included in restricted deposits |
157 |
8 |
|||||
Total cash, cash equivalents, and restricted cash and cash equivalents |
$ |
10,957 |
$ |
12,131 |
|
|||||||||||||||||||
SUPPLEMENTAL FINANCIAL DATA |
|||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
|||||||||||||||
2020 |
2020 |
2020 |
2020 |
2019 |
|||||||||||||||
Traditional Medicaid (1) |
12,055,400 |
11,662,100 |
11,124,800 |
10,397,900 |
7,573,600 |
||||||||||||||
High Acuity Medicaid (2) |
1,554,700 |
1,521,700 |
1,498,900 |
1,488,200 |
1,110,000 |
||||||||||||||
Total Medicaid |
13,610,100 |
13,183,800 |
12,623,700 |
11,886,100 |
8,683,600 |
||||||||||||||
Commercial |
2,633,600 |
2,719,500 |
2,763,300 |
2,728,200 |
2,331,100 |
||||||||||||||
Medicare (3) |
955,400 |
953,800 |
936,500 |
918,400 |
359,600 |
||||||||||||||
Medicare PDP |
4,469,400 |
4,436,400 |
4,443,100 |
4,416,500 |
— |
||||||||||||||
International |
597,700 |
599,900 |
600,400 |
599,900 |
599,800 |
||||||||||||||
Correctional |
147,200 |
167,200 |
166,000 |
172,000 |
180,000 |
||||||||||||||
Total at-risk membership |
22,413,400 |
22,060,600 |
21,533,000 |
20,721,100 |
12,154,100 |
||||||||||||||
TRICARE eligibles |
2,877,900 |
2,877,900 |
2,864,700 |
2,864,800 |
2,860,700 |
||||||||||||||
Non-risk membership |
231,600 |
227,200 |
223,300 |
216,200 |
227,000 |
||||||||||||||
Total |
25,522,900 |
25,165,700 |
24,621,000 |
23,802,100 |
15,241,800 |
||||||||||||||
(1) Membership includes TANF, Medicaid Expansion, CHIP, (2) Membership includes ABD, IDD, LTSS and MMP Duals (3) Membership includes Medicare Advantage and Medicare Supplement |
|||||||||||||||||||
NUMBER OF EMPLOYEES |
71,300 |
71,100 |
71,800 |
69,700 |
56,600 |
||||||||||||||
DAYS IN CLAIMS PAYABLE (4) |
51 |
52 |
51 |
51 |
45 |
||||||||||||||
(4) On a pro-forma basis, DCP for Q1 2020 was 47, reflecting adjusted medical costs to include a full quarter of WellCare operations. |
|||||||||||||||||||
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) |
|||||||||||||||||||
Regulated |
$ |
24,361 |
$ |
22,623 |
$ |
23,655 |
$ |
19,358 |
$ |
14,204 |
|||||||||
Unregulated |
1,932 |
1,986 |
1,982 |
2,871 |
7,157 |
||||||||||||||
Total |
$ |
26,293 |
$ |
24,609 |
$ |
25,637 |
$ |
22,229 |
$ |
21,361 |
|||||||||
DEBT TO CAPITALIZATION |
39.3 |
% |
39.4 |
% |
40.0 |
% |
42.2 |
% |
52.0 |
% |
|||||||||
DEBT TO CAPITALIZATION EXCLUDING |
39.0 |
% |
39.1 |
% |
39.7 |
% |
41.9 |
% |
51.7 |
% |
|||||||||
(5) Excluding non-recourse debt of |
OPERATING RATIOS |
|||||||||||
Three Months Ended |
Year Ended |
||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||
HBR |
88.4 |
% |
88.4 |
% |
86.2 |
% |
87.3 |
% |
|||
SG&A expense ratio |
10.3 |
% |
9.6 |
% |
9.5 |
% |
9.3 |
% |
|||
Adjusted SG&A expense ratio |
9.7 |
% |
9.5 |
% |
8.9 |
% |
9.2 |
% |
MEDICAL CLAIMS LIABILITY |
||||||||
The changes in medical claims liability are summarized as follows (in millions): |
||||||||
Balance, |
$ |
7,473 |
||||||
Less: Reinsurance recoverable |
20 |
|||||||
Balance, |
7,453 |
|||||||
Acquisitions and divestitures |
3,856 |
|||||||
Incurred related to: |
||||||||
Current period |
86,765 |
|||||||
Prior period |
(501) |
|||||||
Total incurred |
86,264 |
|||||||
Paid related to: |
||||||||
Current period |
78,838 |
|||||||
Prior period |
6,320 |
|||||||
Total paid |
85,158 |
|||||||
Balance, |
12,415 |
|||||||
Plus: Reinsurance recoverable |
23 |
|||||||
Balance, |
$ |
12,438 |
||||||
|
||||||||
The amount of the "Incurred related to: Prior period" above represents favorable development and includes the effects of reserving |
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 healthcare and educational items including diapers, over-the-counter medicines, cleaning supplies and books. |
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. |
Investment in new technology and supplies to improve access to quality healthcare for the incarcerated population, including expanding PPE supplies in prisons and expanding the partnership with the |
Creation of |
Waiving all cost sharing for in-network primary care, behavioral health and telehealth costs for Medicare Advantage members starting in May of 2020. In addition, offering our Community Connections Help Line, available to anyone in need of help beyond medical care, as well as expanded benefits including extended meal program benefits, over-the-counter (OTC) allowances, and annual wellness visit incentives to help members in need of extra support. |
Formed partnership with the |
Expanded partnership with |
Partnered with |
Employees |
Providing 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 in appreciation and recognition of their willingness to serve in their important office roles. |
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. |
|
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 which will be used to purchase equipment and provide training and technical assistance to FQHCs. |
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. |
In partnership with Quest Diagnostics, distributing 25,000 COVID test kits each week to FQHCs in ten states or districts across the country. |
Investments in |
Donated |
View original content:http://www.prnewswire.com/news-releases/centene-corporation-reports-2020-results-301224417.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