About Centene

Centene Corporation (Centene) operates as a provider of government-sponsored healthcare. The company provides access to quality healthcare for nearly 1 in 15 individuals nationwide through government-sponsored programs, including Medicaid, Medicare and the Health Insurance Marketplace. The company’s focus is on improving health and health care for low-income, complex populations. Centene provides access to high-quality healthcare, programs and a wide range of health solutions that help families and individuals get well, stay well and be well. The company’s uniquely local approach – with local brands and local teams who live in, care about and directly influence the communities they serve – is a key differentiator in the company’s ability to provide access to quality care to the company’s members. Centene treats the whole person, an approach that is delivered locally but backed by the scale of Centene's expertise, data and resources. Through this approach and the company’s commitment to sustainable partnerships, the company works with local community organizations to realize the company’s intention of transforming the health of the communities the company serves, one person at a time. The company is focused on making strategic decisions and investments to create additional value in the short-term and to seek opportunities that position the organization for long-term strength, profitability, growth and innovation. In addition to creating shareholder value, the company is modernizing and improving how the company works in order to propel its organization to new levels of success and elevate the member and provider experiences. The majority of the company’s revenues come from government subsidized healthcare programs, including Medicaid, Medicare, TRICARE, CHIP, LTSS, ABD, Foster Care and Health Insurance Marketplace premiums. During 2023, the company operated in four segments: Medicaid, Medicare, Commercial and Other. Medicaid - Includes the Temporary Assistance for Needy Families (TANF) program; Medicaid Expansion programs; the Aged, Blind or Disabled (ABD) program; the Children's Health Insurance Program (CHIP); Long-Term Services and Supports (LTSS); Foster Care; Medicare-Medicaid Plans (MMP), which cover beneficiaries who are dually eligible for Medicaid and Medicare; and other state-based programs. Medicare - Includes Medicare Advantage, Medicare Supplement, Dual Eligible Special Needs Plans (D-SNPs) and Medicare Prescription Drug Plans (PDP), also known as Medicare Part D. Commercial - Includes the Health Insurance Marketplace product along with individual, small group and large group commercial health insurance products. Other - Includes the company’s pharmacy operations, Envolve Benefit Options' vision and dental services, clinical healthcare, behavioral health, international operations and corporate management companies, among others. The company’s international businesses, Operose Health Group (Operose Health) and Circle Health Group (Circle Health), were divested in December 2023 and January 2024, respectively. Industry and Operations The company provides a full spectrum of managed healthcare products and services, primarily through Medicaid, Medicare and commercial products. Medicaid Medicaid is the largest publicly funded program in the United States and provides health insurance to low-income families and individuals with disabilities. Medicaid is funded jointly by federal and state governments, with the majority of funding provided by the federal government and administered by the states. Each state establishes its own eligibility standards, benefit packages, payment rates and program administration within federal standards. As a result, there are 56 Medicaid programs - one for each U.S. state, each U.S. territory and the District of Columbia. Eligibility is based on a combination of household income and assets, often determined by an income level relative to the federal poverty level. Many states have selected Medicaid managed care as a means of delivering quality healthcare and controlling costs. Medicaid helps meet the needs of various populations through the following products and programs: The Temporary Assistance for Needy Families (TANF) program covers low-income families with children. Medicaid Expansion covers all individuals under age 65 with incomes up to 138% of the federal poverty level, subject to each states' election. The federal government pays 90% of the costs for Medicaid Expansion coverage for these beneficiaries. The Aged, Blind or Disabled (ABD) program covers low-income individuals with chronic physical disabilities or behavioral health impairments. ABD beneficiaries represent a growing portion of all Medicaid recipients and typically utilize more services as a result of their more complicated health status. The Children's Health Insurance Program (CHIP) helps to expand coverage primarily to children whose families earn too much to qualify for Medicaid, yet not enough to afford private health insurance. Historically, children have represented the largest Medicaid eligible population. Costs are primarily composed of pediatrics and family care, which tend to be more predictable than those associated with other healthcare issues predominantly affecting the adult population. Long-Term Services and Supports (LTSS) is a Medicaid product that covers Institutional/Residential Care (Nursing and Intermediate Care Facilities) and Home and Community Based Services (HCBS) for beneficiaries requiring assistance with their activities of daily living. The largest groups receiving LTSS, by spending, are older individuals and individuals with physical disabilities, followed by individuals with intellectual and developmental disabilities, those with serious mental illness and/or serious emotional disturbance and other populations. States are increasingly turning to managed care as a solution to provide coordinated, holistic care to their LTSS beneficiaries. The majority of children in foster care qualify for Medicaid. The federal government has enacted legislation establishing requirements for state child welfare agencies related to the health and well-being of children in foster care, including the provision of grants and technical assistance to enable states to meet these needs and make explicit connections with Medicaid. In addition, under the ACA, former foster care children are eligible for Medicaid until the age of 26, provided that they turned 18 while in foster care and were enrolled in Medicaid at that time. A portion of Medicaid beneficiaries are dual-eligible, low-income seniors and people with disabilities who are enrolled in both Medicaid and Medicare. According to the CMS, there were approximately 12.4 million dual-eligible enrollees in 2022. These members may receive assistance from Medicaid for benefits, such as nursing home care, HCBS and/or assistance with Medicare premiums and cost-sharing depending on their income level. Dual-eligibles use more services due to their tendency to have more chronic health issues. The company serves dual-eligibles primarily through its ABD, LTSS, Medicare-Medicaid Plan (MMP) and Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) lines of business. The company is the largest Medicaid health insurer in the country, serving more than 14 million Medicaid recipients in 30 states as of December 31, 2023. The company’s Medicaid contracts with each of the states of New York, Florida and California accounted for approximately 10% or more of the company’s consolidated Medicaid premium revenues individually in the year ended December 31, 2023. Medicare Medicare is the federal health insurance program for people ages 65 and over, which was expanded to cover people under 65 with certain disabilities and people with end-stage renal disease requiring dialysis or kidney transplant. Medicare consists of four parts, labeled A through D. Part A provides hospitalization benefits financed largely through Social Security taxes and requires beneficiaries to pay out-of-pocket deductibles and coinsurance. Part B provides benefits for medically necessary services and supplies, including outpatient care, physician services and home health care. Parts A and B are referred to as Original Medicare. As an alternative to Original Medicare, beneficiaries may elect to receive their Medicare benefits through Part C, also known as Medicare Advantage. Under Medicare Advantage, MCOs contract with CMS to provide services directly to Medicare beneficiaries, as well as through employer and union groups. MCOs typically receive fixed monthly premium per member from CMS that varies based upon the county in which the member resides, demographic factors of the member, such as age, gender and institutionalized status and the health status of the member. Any benefits that are not covered by Medicare may result in an additional monthly premium charged to the enrollee or through portions of payments received from CMS that may be allocated to these benefits, according to CMS regulations and guidance. As the company’s Medicare Advantage members reach their deductibles and out-of-pocket maximums, the company’s medical costs rise, creating seasonality in the business with a higher percentage of earnings in the first half of the year. As of December 31, 2023, the company served 1.3 million Medicare Advantage members across 36 states, primarily under the brand name Wellcare, with the highest concentration of lower-income, complex members compared to the company’s competitors. Revenues from CMS are significant to the segment. Medicare Prescription Drug Plan Medicare prescription drug coverage, or Medicare Part D, is a voluntary benefit for Medicare beneficiaries. The Medicare Part D prescription drug benefit is supported by risk sharing with the federal government through risk corridors designed to limit the losses and gains of the participating drug plans and by providing reinsurance for catastrophic drug costs. The government subsidy is based on the national weighted average monthly bid for this coverage, adjusted for risk factor payments. Additional subsidies are provided for dually eligible beneficiaries and specified low-income beneficiaries. MCOs contract with CMS to serve as plan sponsors offering stand-alone Medicare Part D PDPs to Medicare-eligible beneficiaries. PDPs offer national in-network prescription drug coverage, including a preferred pharmacy network, subject to limitations in certain circumstances. Unless CMS is notified of non-renewal and the non-renewal is effectuated by not filing a bid on the first Monday in June, Medicare Advantage and PDP contracts with CMS are renewed for successive one-year terms each September. Should CMS decide not to renew a contract, CMS must notify MCOs on or before August 1, and the plan would be terminated effective December 31 of that year. The company offers stand-alone PDPs in 50 states and the District of Columbia, serving 4.6 million members as of December 31, 2023. Commercial The ACA created the Health Insurance Marketplace, which is a key component of the ACA and provides an opportunity for individuals and families to obtain health insurance. States have the option of operating their own Marketplace or partnering with the federal government. States choosing neither option default to the federally-facilitated Marketplace. Access to the federally-facilitated Marketplace is limited to the U.S. citizens and legal immigrants. Premium subsidies are provided to individuals and families without access to other coverage and with incomes above 100% of the federal poverty level to make coverage more affordable. Consumers who qualify for subsidies may choose how much of the tax credit to apply to their premiums each month, up to the maximum amount for which they are eligible. The amount of subsidy an enrollee may receive depends on household income and the cost of the second lowest cost silver plan available to enrollees in their local area. Temporary enhanced subsidies were made available by the American Rescue Plan Act (ARPA), which were further extended through 2025 pursuant to the Inflation Reduction Act. The company is the largest Marketplace carrier, serving 3.9 million members across 28 states as of December 31, 2023, under the brand name Ambetter Health. Revenues from CMS are significant to the segment. The company also offers commercial health insurance products to individuals through large and small employer groups. The company offers plans with differing benefit designs and varying levels of co-payments at different premium rates. These plans are offered generally through contracts with participating network physicians, hospitals and other providers. Coverage typically is subject to copays and can be subject to deductibles and coinsurance. Other The company’s Other segment includes: Specialty Pharmacy. AcariaHealth offers comprehensive specialized pharmacy benefit and care management services for complex diseases by enhancing the patient care offering through collaboration with providers and the capture of relevant data to measure patient outcomes. Behavioral Health. Magellan Health, Inc. (Magellan) supports innovative ways of accessing better health through technology, while remaining focused on the critical personal relationships that are necessary to achieve a healthy, vibrant life. Magellan's customers include health plans and other MCOs, employers, labor unions, various military and state and federal governmental agencies and third-party administrators. Vision and Dental Services. Envolve Benefit Options coordinates benefits beyond traditional medical benefits to offer fully integrated vision and dental health services. The company’s vision benefit program administers routine and medical surgical eye care benefits through a contracted national network of eye care providers. Through the dental benefit, the company is dedicated to improving oral health through a contracted network of dental healthcare providers. Clinical Healthcare. Community Medical Group (CMG) provides clinical healthcare, encompassing primary care, access to certain specialty services and a suite of social and other support services. CMG operates in Florida through an at-risk primary care provider model, focusing on clinical and social care for at-risk beneficiaries. Additionally, Denova Collaborative Health provides outpatient primary care and behavioral healthcare services. Federal Services. Health Net Federal Services has a Managed Support Contract in the West Region for the Department of Defense (DoD) TRICARE program. The company provides administrative services to Military Health System eligible beneficiaries, which include eligible active duty service members and their families, retired service members and their families, survivors of retired service members and qualified former spouses. The company’s contract for health care delivery services concludes at the end of 2024. Corporate Management Company. Each of the company’s health plans contracts with the company’s wholly-owned corporate management company to provide certain functions required to manage the health plan, including but not limited to, salaries and wages for personnel, rent, utilities, population health management, provider contracting, compliance, member services, claims processing, information technology, cash management, finance and accounting and other services. International Operations. Circle Health is one of the U.K.'s largest independent hospital operators. Operose Health represents one of the largest provider networks in the U.K. and delivers medical and community-based services in the primary care sector of the National Health Service, which is the publicly funded, national healthcare system for England. The company’s international businesses, Operose Health and Circle Health, were divested in December 2023 and January 2024, respectively. Providers For each of the company’s service areas, the company establishes a provider network consisting of primary and specialty care physicians, hospitals, behavioral health practitioners and ancillary providers. The company’s network of primary care physicians is a critical component of care delivery, cost optimization and the attraction and retention of new members. Primary care physicians include family and general practitioners, pediatricians, internal medicine physicians, obstetricians and gynecologists. Specialty care physicians provide medical care to members generally upon referral by primary care physicians. Specialty care physicians include a wide array of provider types, including but not limited to, orthopedic surgeons, cardiologists and otolaryngologists. The company also contracta with providers on a negotiated fee arrangement for physical therapy, home healthcare, diagnostic laboratory tests, x-ray examinations, transportation, ambulance services and durable medical equipment. The company’s health plans facilitate access to healthcare services for its members primarily through contracts with the company’s providers. The company’s contracts with primary and specialty care physicians and hospitals are usually for a term of one to three years and renew automatically for successive one-year terms, but generally are subject to termination by either party upon prior written notice. In the absence of a contract, the company typically pays providers at applicable state or federal reimbursement levels and guidelines, depending on the product (for example Medicaid or Medicare). The company pays providers under a variety of methods, including fee-for-service, capitation arrangements and value-based arrangements. Under the company’s fee-for-service contracts with providers, the company pays a negotiated fee for covered services, this may include a case rate or fee-for service. This model is characterized as having no financial risk for the provider. Under the company’s capitated contracts, providers can be paid a set amount for their services as outlined in their respective provider agreements usually on a per member per month basis and sometimes includes different rates depending on the age of the population. Under value-based arrangements, providers can be paid under either a capitated or fee-for-service model. The arrangement, however, contains provisions for additional payments to the providers or reimbursement from the providers based on their performance in cost and quality measures. The company is committed to value-based contracting, up and downside risk, assigning members to the highest quality providers and capitation. This is done in complete partnership with the company’s providers to increase quality outcomes and overall member satisfaction. The company anticipates its membership in up and downside risk arrangements will continue to grow. The continuum of value-based contracting includes the following models: pay-for-performance, shared savings, shared risk and full risk. The company often starts its provider relationships in a pay-for-performance model, in which providers are reimbursed for the fair market value of services provided. Providers benefit from this model as it gives complete transparency and clarity on actions that earn incentives. The company then transitions to a risk-sharing model, in which providers are reimbursed based on the total cost of care. As the company advances along this continuum, it strengthens the company’s partnerships with its providers, enabling the delivery of high-quality care. The company works with physicians to help them operate efficiently by providing actionable financial and utilization information, physician and patient educational programs and disease and population health management programs. The company’s programs are also designed to help physicians coordinate care rendered by other providers. The company’s local and collaborative approach with physicians and other providers gives the company a competitive advantage in entering new markets. The company’s contracted physicians serve on local committees that assist the company in implementing preventive care programs, optimizing costs and improving the overall quality of care delivered to the company’s members, while also simplifying the administrative burdens on the company’s providers. This approach has enabled the company to strengthen its provider networks through improved physician recruitment and retention which, in turn, has helped to increase the company’s membership base. The following are among the services the company provides to support physicians: Provider Engagement Performance Tools and Processes can lead to measurable improvements in quality and health outcomes, healthcare costs and member satisfaction. High-quality provider support and service levels are important as the company’s key customers are increasingly using performance-based measures to select and pay health plans. The company has a suite of network performance tools for use by physicians and other providers which monitor the outcomes and care gaps of their individual patient panels. The company meets with the providers to review their performance issues and recommend strategies for improvements in their patient panel outcomes. The company’s tools also allow the physician and others to see where they stand within their value-based contract. The company’s Integrated Care Model is member-centric and managed by one care manager assigned to a member who looks at the care for the member in a holistic manner. This single care manager will coordinate all care for that member, including behavioral health, medical health and home-based primary care in accordance with an individualized, integrated care plan. This care manager also coordinates meetings with the member's integrated care team to assess and alter the care plan as needed. This results in better clinical outcomes and improved member satisfaction. The Provider Portal delivers claims and eligibility information, prior authorization submissions and status, member panels, care gaps, patient analytics and provider analytics to contracted providers to drive provider engagement and improve patient outcomes. Data and reporting are delivered via a secure, user-friendly web-based provider portal. This is provided through the company’s suite of technology platforms. The company’s contracted physicians also benefit from several of the services offered to the company’s members and population health management programs, which assist physicians in managing their patients with chronic diseases. Regulation The company’s pharmacies must also register with the U.S. Drug Enforcement Administration and individual state-controlled substance authorities to dispense controlled substances. Comprehensive legislation, specifically Title XVIII of the Social Security Act, governs the company’s Medicare program. In addition, the company’s Medicare contracts are subject to regulation by CMS. In addition, as a result of the company’s international operations, the company is subject to the U.S. Foreign Corrupt Practices Act (FCPA) and similar worldwide anti-corruption laws, including the U.K. Bribery Act of 2010, which generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. In addition, several of the company’s Medicaid contracts require the company to maintain Medicare Advantage D-SNPs, which are regulated by CMS and the state Medicaid agency, for dual-eligible individuals within the state. The company provides Medicare Advantage, PDPs, D-SNPs and MMPs which are provided under contracts with CMS and subject to federal regulation regarding the award, administration and performance of such contracts. As of December 31, 2023, the company operated in 28 states under federally-facilitated Marketplace contracts with CMS and state-based exchanges. The company’s government contracts include government-sponsored managed care and administrative services contracts through the TRICARE program and certain other healthcare-related government contracts. The company is subject to various international, federal, state and local laws and rules regarding the use, security and disclosure of protected health information, personal information and other categories of confidential or legally protected data that the company’s businesses handle. Such laws and rules include, without limitation, HIPAA, the Federal Trade Commission Act, the Gramm-Leach-Bliley Financial Modernization Act of 1999 (Gramm-Leach-Bliley Act), the General Data Protection Regulation (GDPR) and state privacy and security laws such as the California Confidentiality of Medical Information Act and the California Online Privacy Protection Act. Privacy and security laws and regulations often change due to new or amended legislation, regulations or administrative interpretation. A variety of state and federal regulators enforce these laws, including but not limited to the U.S. Department of Health and Human Services (HHS), the Federal Trade Commission, state attorneys general and other state regulators. In addition, the company processes and maintains personal card data, particularly in connection with the company’s Marketplace business. As a result, the company must maintain compliance with the Payment Card Industry Data Security Standard, which is a multifaceted security standard intended to optimize the security of credit, debit and cash card transactions and protect cardholders against misuse of their personal information. History Centene Corporation was founded in 1984. The company was incorporated in Delaware in 2001.