CENTENE SUBSIDIARY SUNFLOWER HEALTH PLAN SELECTED FOR KANSAS MEDICAID AWARD

Rhea-AI Summary

Centene announced that its subsidiary, Sunflower Health Plan, has been selected by the Kansas Department of Administration to continue providing managed healthcare services through KanCare, Kansas' Medicaid and CHIP program. The new three-year contract begins January 1, 2025, with potential for two additional 12-month extensions. Sunflower currently serves over 141,000 Kansans, including 7,900 LTSS members. This award places Sunflower among three Medicaid managed care organizations chosen. Centene affiliates service over 13 million Medicaid members across 31 states, making it a leader in Medicaid, CHIP, and LTSS programs.

Positive

• Sunflower Health Plan selected to continue providing services through KanCare.
• New three-year contract starts January 1, 2025, with two potential 12-month extensions.
• Sunflower currently serves over 141,000 Kansans, including 7,900 LTSS members.
• Centene affiliates service more than 13 million Medicaid members across 31 states.
• Centene has the largest managed LTSS footprint nationwide, with over 169,000 managed LTSS members in 12 states.

Negative

• The contract is subject to renewal decisions based on performance and state assessments.
• Potential uncertainties in future Medicaid funding could impact the contract’s financial stability.

Insights

Financial Analyst

Centene's subsidiary Sunflower Health Plan securing a renewal of its contract with Kansas' Medicaid program represents a significant business development. $141,000+ Kansans rely on Sunflower's healthcare services and retaining this customer base ensures continued revenue flow. The potential for two additional 12-month renewals further strengthens Centene's market position and revenue stability in Kansas.

Financially, this contract renewal should provide steady cash flow and reduce revenue volatility. With healthcare being a high priority and Medicaid funding generally secure, this contract should anchor a portion of Centene's revenue, which might appeal to risk-averse investors. Furthermore, it demonstrates Centene's ability to maintain strong relationships with government bodies, a critical success factor in the healthcare industry.

However, investors should consider the competitive landscape, as Sunflower is one of three organizations selected. Any changes in state policies or funding could impact profitability. Nonetheless, Centene's extensive footprint and experience in the Medicaid market provide a competitive edge.

Overall, this news indicates a stable revenue outlook for Centene in the coming years, reinforcing its position in the Medicaid space.

Healthcare Market Analyst

The renewal of this contract underscores Centene's ability to deliver integrated, whole-person care, which aligns with the evolving trends in the healthcare sector towards more holistic and coordinated care models. This approach not only supports patient outcomes but also appeals to state governments seeking efficient and effective healthcare solutions.

Market-wise, securing this contract highlights Centene's strong operational capabilities and its ability to meet the stringent requirements of state health programs. Investors can take this as an indicator of Centene's competitive strength and market resilience. In the broader context, such contracts are important as they provide a steady stream of revenue and solidify the company's market presence.

While the financial stability provided by this contract is a positive, it's also important for investors to note the potential administrative burden and costs of managing such a comprehensive program. Effective management and efficiency will be key in maintaining profitability from this contract.

This development will likely enhance Centene's reputation and could lead to further opportunities in other states, showcasing its capability and reliability as a healthcare provider.

ST. LOUIS, May 14, 2024 /PRNewswire/ -- Centene Corporation (NYSE: CNC), a leading healthcare enterprise committed to helping people live healthier lives, announced today that the Kansas Department of Administration has selected its Kansas-based subsidiary, Sunflower Health Plan (Sunflower) to continue providing managed health care services through KanCare, the State of Kansas' Medicaid and Children's Health Insurance Program (CHIP). The new three-year contract is expected to take effect on January 1, 2025, with the option to renew for up to two, 12-month extensions.

Sunflower currently serves more than 141,000 Kansans statewide, including more than 7,900 Long-Term Services and Supports (LTSS) members. Through its unique coordinated care model, Sunflower supports health equity and facilitates person-centered care, access to services and providers and improved outcomes for members and communities across the state. With this award, Sunflower is one of three Medicaid managed care organizations selected to provide services through KanCare. 

"We are honored to continue our more than a decade-long history of serving people who depend on Medicaid in Kansas," said Centene Chief Executive Officer (CEO), Sarah M. London. "Looking ahead, we are thrilled to deliver on the State's renewed focus on integrated, whole-person care and innovative strategies to best support members and providers. We look forward to continuing our strong partnership with the state and contributing further to the health and wellness of KanCare members."

Centene is a national leader in the provision of programs and related services under Medicaid, CHIP and other government-funded programs. Its affiliates service more than 13 million Medicaid members across 31 states and comprise the largest managed LTSS footprint nationwide, with more than 169,000 managed LTSS members in 12 states and 26,500 members with intellectual and developmental disabilities. 

"We are grateful for the privilege to continue partnering with the State of Kansas to further reduce healthcare disparities and improve health outcomes through holistic and integrated care," said Sunflower Plan President and CEO, Michael Stephens. "Aligning with the state's collaborative vision for the next iteration of KanCare, Sunflower is prepared and enthusiastic to play a vital role in contributing to the health, wellness and independence of individuals with long-term and special needs."   

About Centene Corporation
Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach – with local brands and local teams – to provide fully integrated, high-quality and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to nearly 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace and the TRICARE program. The Company also contracts with other healthcare and commercial organizations to provide a variety of specialty services focused on treating the whole person. Centene focuses on long-term growth and value creation as well as the development of its people, systems and capabilities so that it can better serve its members, providers, local communities and government partners.    

Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene's investor relations website, http://investors.centene.com/. 

About Sunflower Health Plan
Sunflower Health Plan ("Sunflower") is a managed care organization established to deliver quality healthcare in the state of Kansas through local, regional and community-based resources, and a wholly owned subsidiary of the Centene Corporation (NYSE: CNC). Sunflower is committed to improving the health of its beneficiaries through focused, compassionate, and coordinated care in an approach based on the core belief that quality healthcare is best delivered locally. For more information, please visit www.sunflowerhealthplan.com.

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). Centene Corporation and its subsidiaries (Centene, the Company, our or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about expected contract start dates and terms, our future operating or financial performance, market opportunity, competition, expected activities in connection with completed and future acquisitions and dispositions, our investments and the adequacy of our available cash resources. These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions. All forward-looking statements included in this press release are based on information available to us on the date hereof. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this press release, whether as a result of new information, future events, or otherwise, after the date hereof. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables and events including, but not limited to: our ability to design and price products that are competitive and/or actuarially sound including but not limited to any impacts resulting from Medicaid redeterminations; our ability to maintain or achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that can impact revenue and future growth; our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical utilization rates; competition, including for providers, broker distribution networks, contract reprocurements and organic growth; our ability to adequately anticipate demand and provide for operational resources to maintain service level requirements; our ability to manage our information systems effectively; disruption, unexpected costs, or similar risks from business transactions, including acquisitions, divestitures, and changes in our relationships with third parties; impairments to real estate, investments, goodwill, and intangible assets; changes in senior management, loss of one or more key personnel or an inability to attract, hire, integrate and retain skilled personnel; membership and revenue declines or unexpected trends; rate cuts or other payment reductions or delays by governmental payors and other risks and uncertainties affecting our government businesses; changes in healthcare practices, new technologies, and advances in medicine; increased healthcare costs; inflation and interest rates; the effect of social, economic, and political conditions and geopolitical events, including as a result of changes in U.S. presidential administrations or Congress; changes in market conditions; changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively referred to as the ACA) and any regulations enacted thereunder; uncertainty concerning government shutdowns, debt ceilings or funding; tax matters; disasters, climate-related incidents, acts of war or aggression or major epidemics; changes in expected contract start dates; changes in provider, broker, vendor, state, federal, foreign, and other contracts and delays in the timing of regulatory approval of contracts, including due to protests; the expiration, suspension, or termination of our contracts with federal or state governments (including, but not limited to, Medicaid, Medicare or other customers); the difficulty of predicting the timing or outcome of legal or regulatory audits, investigations, proceedings or matters, including, but not limited to, our ability to resolve claims and/or allegations made by states with regard to past practices on acceptable terms, or at all, or whether additional claims, reviews or investigations will be brought by states, the federal government or shareholder litigants, or government investigations; challenges to our contract awards; cyber-attacks or other data security incidents; the exertion of management's time and our resources, and other expenses incurred and business changes required in connection with complying with the terms of our contracts and the undertakings in connection with any regulatory, governmental, or third party consents or approvals for acquisitions or dispositions; any changes in expected closing dates, estimated purchase price, or accretion for acquisitions or dispositions; losses in our investment portfolio; restrictions and limitations in connection with our indebtedness; a downgrade of our corporate family rating, issuer rating or credit rating of our indebtedness; the availability of debt and equity financing on terms that are favorable to us and risks and uncertainties discussed in the reports that Centene has filed with the Securities and Exchange Commission (SEC). This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect our business operations, financial condition, and results of operations, in our filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, we cannot give assurances with respect to our future performance, including without limitation our ability to maintain adequate premium levels or our ability to control our future medical and selling, general and administrative costs.

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SOURCE CENTENE CORPORATION

FAQ

What is the new contract awarded to Centene's Sunflower Health Plan?

Sunflower Health Plan has been selected to continue providing managed healthcare services through KanCare, starting January 1, 2025.

When does the new KanCare contract for Sunflower Health Plan start?

The new contract will take effect on January 1, 2025.

How long is the new KanCare contract for Sunflower Health Plan?

The initial contract is for three years, with the option for two additional 12-month extensions.

How many Kansans does Sunflower Health Plan currently serve?

Sunflower Health Plan currently serves more than 141,000 Kansans.

What is the significance of the new KanCare contract for Centene's Sunflower Health Plan?

The contract allows Sunflower Health Plan to continue and expand its services, supporting over 141,000 Kansans, including 7,900 LTSS members.