Centene's Strategy: Overcoming Medicaid Enrollment Challenges

Current State of Medicaid Enrollment

Medicaid enrollment remains stable with ongoing contract extensions in Mississippi and positive state discussions. Despite timing mismatches in health status and rate updates, companies like Centene and Humana are optimistic about Medicaid performance and future adjustments. Historical data shows significant member additions since the pandemic.

"Mississippi Procurement—Medicaid. In the first quarter of 2024, Mississippi Division of Medicaid signaled its intention to further extend the existing contracts for at least part of the state fiscal year that will begin on July 1, 2024." --- (MOH, sec filing, 2024/Q1)

"And this idea that as we head towards 2,030, Medicare and Medicaid are going to be linked formally relative to serving dual special needs populations at the state level." --- (CNC, conference, 2024/05/31)

"A second being the timing mismatch between the current health status of remaining Medicaid members and the state rate updates, a timing mismatch we expect to realign in the months ahead." --- (UNH, earning call, 2024/Q2)

"And then ultimately, we do feel good about our discussions with our state partners, and that ultimately that they will adjust the rates to be reflective of those trends.So all things being considered, we still feel good about the Medicaid performance in '24 relative to our expectations, and then also on a go forward basis, given all the items I just mentioned." --- (HUM, earning call, 2024/Q2)

"Operations Enrollment and Premium Revenue Excluding acquisitions and our exit from Puerto Rico, we estimate we added approximately one million new Medicaid members since March 31, 2020, when we first began to report on the impacts of the pandemic." --- (MOH, sec filing, 2024/Q1)

Identifying Enrollment Challenges

Centene faces enrollment challenges with nearly 40% of new members previously uninsured and navigating a complex 24-month redetermination process. Additionally, there is a significant increase in special enrollment in the marketplace, indicating ongoing enrollment difficulties.

"In 2024, the source of our membership growth is widely diversified. Based on a survey we conducted following open enrollment, nearly 40% of new members identify as previously uninsured." --- (CNC, earning call, 2024/Q1)

"In the meantime, we continue to focus on executing on the fundamentals, which has been the hallmark of our financial performance. The unprecedented redetermination process, which will be a 24-month journey from beginning to end, has presented some challenges that we have successfully navigated." --- (MOH, earning call, 2024/Q2)

"We are seeing a significant increase in our special enrollment in marketplace." --- (MOH, earning call, 2024/Q1)

Impact of Policy Changes on Enrollment

Policy changes, including redeterminations and regulatory adjustments, have significantly impacted Medicaid enrollment. Centene's proactive engagement with state regulators and tracking of new members have helped manage these shifts, while Molina and Humana highlight the broader regulatory environment's role in shaping Medicaid's stability and taxpayer value.

"you'll have the full impact of whatever change on the acuity risk pool there is, for legacy, people to stay on the Medicaid." --- (MOH, earning call, 2024/Q1)

"In fact, I would argue that it helps the MA sector, are getting tighter and better and understanding the impact on taxpayers, how the regulatory environment shapes that, what we can do to create a long-term value proposition for taxpayers that creates real stability for the Medicare and Medicaid program over time." --- (HUM, earning call, 2024/Q2)

"The dialogue we established with each state's regulatory and actuarial counterparts early on in the lead-up to redeterminations have in this phase allowed us to profile the shifts we are seeing as they emerge and resulted in rates for the second half of the year that are very much a step in the right direction." --- (CNC, earning call, 2024/Q2)

"Per federal statutory and regulatory requirements, some of these programs concluded with the end of the PHE, while some will continue through 2024, and some will remain in place permanently. Operations Enrollment and Premium Revenue" --- (MOH, sec filing, 2024/Q2)

"And then also we track the new members. And so because we've got visibility into the performance of each of those cohorts, we can sort of triangulate that and attribute most of this to effectively the underlying shift of membership base due to redeterminations." --- (CNC, conference, 2024/05/31)

Strategic Initiatives to Address Challenges

Centene is enhancing access and health outcomes through community partnerships, boosting internet adoption in underserved areas, and focusing on productivity and cost efficiencies. They are also aligning Medicare and Medicaid strategies while prioritizing margin recovery and overcoming Medicaid redetermination challenges.

"We look forward to building on our existing efforts and community partnerships to increase access, improve health outcomes and address social needs for members statewide." --- (CNC, press release, 2024/04/09)

"The first partnership opportunity, Broadband Access Strategic Partnership, will focus on empowering underserved communities by increasing partner organizations' capacity to support internet and technology adoption." --- (CNC, press release, 2024/05/14)

"And WellCare was at scale and operating effectively and efficiently. So the scale, we're not really concerned about scale issues with Medicare even as we expect a little bit more attrition, as we prioritize the strategic goals of being in Medicare and the tie-in to Medicaid to your point, the footprint matching up, as well as prioritizing margin recovery over the next few years, driven predominantly by STAR’s, but other levers like SG&A that we're talking about here and clinical initiatives." --- (CNC, earning call, 2024/Q1)

"We intend to continue to target initiatives to improve productivity, efficiencies and reduced organizational costs, as well as capital deployment activities, including stock repurchases, portfolio optimization and the evaluation of refinancing opportunities." --- (CNC, sec filing, 2024/Q1)

"We are now more than halfway through 2024, and we are making good progress moving the organization beyond real but temporary headwinds, including Medicaid redeterminations and a well-documented Medicare Advantage ARS revenue challenge." --- (CNC, earning call, 2024/Q2)

Role of Partnerships in Enrollment

Centene leverages partnerships to enhance Medicaid enrollment by negotiating with provider partners for better alignment, investing in member outreach call centers, and aligning outcomes with state partners' needs to win new contracts and ensure clinical and financial success.

"So, for example, we're continuing to ensure clinical appropriateness of admissions, especially in light of the 2-midnight rule we are enhancing claims audits and we are negotiating with provider partners to achieve better clinical and contractual alignment. In Medicaid, we're excited about our continued growth through both contract wins and member growth, and we continue to wait for additional RFPs." --- (HUM, earning call, 2024/Q2)

"And as I said, expect a meaningful step up in the results in October. And all of this is really the result of the continued work by the team, our enterprise-wide governance process, awareness and activation across the organization, more different line alignment, the quality is a top priority, and all of the investments that you've heard us talk about along the way and things like member outreach call centers." --- (CNC, earning call, 2024/Q2)

"We remain confident in our ability to win new state contracts and deliver clinical and financial outcomes that align with the needs of our state partners." --- (MOH, earning call, 2024/Q1)

Community Outreach and Education Efforts

Centene's community outreach and education efforts include initiatives like the Strong Youth Strong Communities campaign, increased member outreach to improve care access, and partnerships to open community centers for economic and educational empowerment. These efforts reflect their commitment to equitable care and better health outcomes.

"About Strong Youth Strong CommunitiesSYSC is a nationwide campaign led by Centene Corporation, in partnership with the Pro Football Hall of Fame, national non-profit organizations, and local community service providers to bring teens together to learn life and leadership skills that help unlock their potential." --- (CNC, press release, 2024/06/12)

"We are honored to provide access to care as well as community-based support to improve the lives of those we serve in 31 states across the country." --- (CNC, earning call, 2024/Q1)

"On the HEDIS front, the significant increase in member outreach that you heard about in Q3 and Q4 drove improved physician access and successfully closed gaps in care for many of our members." --- (CNC, earning call, 2024/Q2)

"Our workforce reflects the communities we serve, driving our commitment for equitable care and better health outcomes." --- (CNC, Twitter, 2024/05/13)

"We’re proud to partner with @ulstl on the opening of the Centene Connected Community Center to help drive positive change through programs that support economic and educational empowerment in St. Louis. #STL https://t.co/IyGXBZK4CE" --- (CNC, Twitter, 2024/07/30)

Regulatory Environment and Compliance

Centene's compliance strategy involves adhering to state-specific minimum capital requirements for its subsidiaries, necessitating constant regulatory collaboration and adjustment to fully realize value in a supportive environment.

"We need a regulatory environment that allows that value to be fully realized and that requires constant collaboration and adjustment." --- (HUM, earning call, 2024/Q2)

"Our regulated subsidiaries are required to maintain minimum capital requirements prescribed by various regulatory authorities in each of the states in which we operate." --- (CNC, sec filing, 2024/Q2)