Summary
Centene Corporation (CNC) has filed an 8-K report detailing the non-renewal of a material contract for its wholly-owned subsidiary, FirstGuard Health Plan Kansas, Inc. This contract, scheduled to terminate on December 31, 2006, represented a significant portion of Centene's revenue, contributing $183 million in 2005 and $111 million in the first six months of 2006, serving approximately 117,100 members as of June 30, 2006. The company believes it responded adequately to the state's request for proposal and intends to file an appeal to challenge the decision.
Key Highlights
- 1Centene's Kansas health plan subsidiary, FirstGuard Kansas, will have its contract terminated as it will not be renewed.
- 2The contract termination is effective December 31, 2006.
- 3FirstGuard Kansas generated $183 million in revenue in 2005.
- 4For the first six months of 2006, FirstGuard Kansas contributed $111 million to revenue.
- 5As of June 30, 2006, FirstGuard Kansas had 117,100 members.
- 6Centene plans to appeal the Kansas Health Policy Authority's decision.
- 7The company has issued press releases on August 25 and August 28, 2006, regarding this notification, which are included as exhibits.
Frequently Asked Questions
The main event is the notification that Centene's subsidiary, FirstGuard Health Plan Kansas, Inc., will not have its contract renewed by the Kansas Health Policy Authority, leading to its termination on December 31, 2006.
The Kansas contract was substantial, accounting for $183 million in revenue in 2005 and $111 million in the first half of 2006. It also served approximately 117,100 members as of June 30, 2006.
Centene Corporation intends to file an appeal with the State of Kansas within the required 14-day notice period, believing they were responsive to the state's request for proposal.
More detailed information, including press releases issued on August 25 and August 28, 2006, concerning this matter are included as exhibits (Exhibit 99.1 and 99.2) to this 8-K filing.