8-KMaterial Agreements

CENTENE CORP 8-K Report, Material Agreement (Nov 21, 2007)

Filed November 21, 2007For Securities:CNC

Summary

Centene Corporation, through its subsidiary Peach State Health Plan, Inc., announced a significant amendment to its contract with the Georgia Department of Community Health (DCH) on November 16, 2007. This amendment, effective retroactively from July 1, 2007, revises the capitation rates for healthcare services provided to Medicaid and SCHIP recipients in Georgia. Investors should note that the company anticipates these revised rates will lead to an approximately 3.8% increase in effective yield, starting from October 1, 2007. The contract extension and revised rates are positive developments, indicating continued business with a key state partner. The agreement is now eligible for four additional one-year renewal periods, suggesting potential stability in this revenue stream. However, investors should also be aware that the DCH retains the right to terminate the contract under specific conditions outlined within the agreement.

Key Highlights

  • 1Centene's subsidiary, Peach State Health Plan, Inc., amended its contract with the Georgia Department of Community Health (DCH).
  • 2The amendment revises capitation rates for Medicaid and SCHIP recipients in Georgia.
  • 3The revised rates are expected to increase the effective yield by approximately 3.8%, effective October 1, 2007.
  • 4The amendment is effective retroactively from July 1, 2007.
  • 5The contract is now eligible for four additional one-year renewal periods.
  • 6The DCH has termination rights as specified in the contract.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report a material definitive agreement: an amendment to the contract between Centene's subsidiary, Peach State Health Plan, Inc., and the Georgia Department of Community Health (DCH) concerning the provision of healthcare services to Medicaid and SCHIP recipients.

The amended contract is expected to positively impact Centene's financial performance by increasing the effective yield by approximately 3.8%, starting from October 1, 2007, due to revised capitation rates.

The amended contract is effective from July 1, 2007, through June 30, 2008, and is eligible for four additional one-year renewal periods, providing potential for continued business.

Yes, the agreement may be terminated by the Georgia Department of Community Health under terms specified in the contract. This introduces a degree of uncertainty regarding the long-term stability of this specific revenue stream.