8-KMaterial Agreements

CENTENE CORP 8-K Report, Material Agreement (Jun 19, 2013)

Filed June 19, 2013For Securities:CNC

Summary

Centene Corporation (CNC), through its subsidiary Bankers Reserve Life Insurance Company of Wisconsin, Inc. d.b.a. Superior HealthPlan Network, has entered into a material definitive agreement with the Texas Health and Human Services Commission. This agreement, specifically Amendment E (Version 2.5) to the Uniform Managed Care Contract, brings about a notable increase in capitation rates for its Texas Medicaid business. The amendment primarily impacts the Medicaid Rural Service Area business with an approximate 2.9% composite net capitation rate increase, alongside a nominal increase for other business segments within Texas. This rate adjustment is retroactive, covering the period from September 1, 2012, through August 31, 2013, and will be recognized financially during June through August 2013.

Key Highlights

  • 1Centene's Texas subsidiary has executed an amendment to its Uniform Managed Care Contract with the Texas Health and Human Services Commission.
  • 2The amendment introduces a composite net capitation rate increase of approximately 2.9% for the Medicaid Rural Service Area business in Texas.
  • 3A nominal increase in capitation rates is also applied to the remainder of Centene's business in Texas.
  • 4The rate increase is effective retroactively for the period of September 1, 2012, through August 31, 2013.
  • 5The financial impact of this rate increase will be recorded between June and August 2013.
  • 6This agreement is considered a material definitive agreement, indicating its significance to the company's operations and financial performance.

Frequently Asked Questions

The primary impact for investors is the confirmation of increased revenue through a capitation rate increase for Centene's Medicaid business in Texas. This adjustment is retroactive, suggesting a positive financial reconciliation for a prior period and impacting current reporting.

A 2.9% increase in capitation rates for the Medicaid Rural Service Area business, along with nominal increases elsewhere in Texas, is expected to positively affect Centene's revenue and profitability from its Texas operations. The exact financial impact will depend on the volume of business within these areas.

The financial benefits from the increased capitation rates will be recorded during the period of June through August 2013, despite the retroactive nature of the amendment covering September 1, 2012, through August 31, 2013.

No, this specific amendment, Amendment E (Version 2.5), pertains exclusively to Centene's managed care contract with the Texas Health and Human Services Commission and its operations within Texas.