Shares of Centene cratered Wednesday, a day after the giant managed-care provider withdrew its full-year outlook after receiving new data about enrollments and the health of those covered https://t.co/MzteBda73A ...

Core Insights - Centene Corporation (CNC) has unexpectedly withdrawn its earnings guidance for 2025 due to an unforeseen shift in the health insurance marketplace dynamics, which may significantly impact earnings beyond initial forecasts [1][11] Group 1: Earnings Guidance and Market Impact - The decision to withdraw guidance follows an analysis of industry risk adjustment data from Wakely, covering 22 out of 29 Marketplace states, representing approximately 72% of Centene's Marketplace membership [2] - Centene anticipates a shortfall of about $1.8 billion in net risk adjustment revenues, translating to a $2.75 impact on adjusted diluted EPS for 2025 [3][11] - Following the announcement, CNC shares fell sharply in after-hours trading, reflecting investor concerns over reduced profit margins and broader implications for managed care organizations [3] Group 2: Performance and Challenges - Despite challenges, Centene reported that the final 2024 risk-adjusted results from the Centers for Medicare and Medicaid Services met expectations, with its Medicare Advantage and Medicare PDP segments performing better than anticipated in Q2 2025 [4] - The Medicaid segment is facing difficulties due to rising costs in behavioral health, home care, and expensive medications, particularly in states like New York and Florida [4] Group 3: Future Strategies - Looking ahead to 2026, Centene is proactively adjusting its rates to account for a higher morbidity baseline, indicating a defensive pricing strategy to mitigate potential losses [5][11] - The early refiling of 2026 rates suggests a shift towards a more cautious approach in pricing for the states where Centene conducts most of its marketplace business [5] Group 4: Stock Performance - Year-to-date, CNC shares have declined by 43.3%, compared to a 24.4% decline in the industry [9]

Core Insights - The Oncology Institute, Inc. (TOI) has become the exclusive oncology provider for over 80,000 Medicaid patients associated with SilverSummit Healthplan in Nevada, effective July 1 [1][2] - This partnership aims to enhance access to high-quality cancer care for Medicaid patients in the Las Vegas area [2] Company Overview - TOI, founded in 2007, specializes in value-based cancer care and serves over 1.8 million patients, offering services such as clinical trials and transfusions [4] - The organization employs over 120 clinicians and has more than 700 staff across 70 clinic locations [4] Patient Access - SilverSummit Healthplan members can access TOI's cancer care at three locations in Nevada: Las Vegas, Henderson, and Spring Valley [3] - The Las Vegas location operates Monday to Friday from 8:30 am to 5:00 pm, while the Spring Valley location has specific hours on certain days [3] Strategic Partnership - The partnership between TOI and SilverSummit Healthplan is focused on improving access and quality of cancer care for Medicaid patients [2] - SilverSummit Healthplan emphasizes its commitment to providing high-quality care, particularly for members facing cancer diagnoses [2][5]

Core Points - Health Net is responding to the State of Emergency declared by Gov. Newsom in San Joaquin County due to the Victoria Island Incident, prioritizing support for affected members and healthcare providers [1] Member Support Initiatives - Members can secure emergency medication supplies through two options during the State of Emergency [2] - Health Net offers 24/7 crisis support via Behavioral Health Services and telehealth services at no cost for members unable to reach their primary care provider [2][3] - Members can access local community resources by calling 2-1-1 or visiting 211.org [3] Healthcare Provider Support - Healthcare providers can contact Health Net for assistance during the emergency, with specific support measures in place for those in affected areas [3][4] - Health Net will suspend refill limitations for prescriptions at out-of-network pharmacies if the original pharmacy is closed [4] Additional Resources and Services - Health Net is providing ongoing support including mental health referrals, social services, financial assistance, and legal guidance [4] - The company will extend grace periods for notifications related to various healthcare services and waive prior authorization requirements while maintaining notification requirements [4] Company Overview - Health Net, a subsidiary of Centene Corporation, has been operating in California for over 45 years, serving more than three million members with a network of over 117,000 providers [6] - The company offers a range of health plans and services, including behavioral health and substance abuse programs, and employs over 5,700 people in California [6]

Core Insights - Health Net awarded a $2.6 million grant to support individuals exiting the criminal justice system in Sacramento County, providing access to essential services for successful community reintegration [1][2][4] - The initiative aims to reduce recidivism rates, which show that 66% of individuals are re-arrested within three years and 82% within ten years of release [2] - The project includes the operation of a 59-room motel as an interim shelter, offering comprehensive support services beyond just housing [3][4] Company Overview - Health Net, a subsidiary of Centene Corporation, has been operating in California for over 45 years, providing health plans for various demographics, including those eligible for Medi-Cal and Medicare [6] - The company serves more than three million members and has a network of over 117,000 providers across the state [6] - Health Net has committed over $158 million in funding to community-based organizations from 2017 to 2024, demonstrating its ongoing investment in local initiatives [4]

Core Insights - Health Net and the Centene Foundation announced a partnership investment exceeding $7.2 million to enhance healthcare services for underserved Californians through mobile health clinics [1][2] - The initiative aims to address barriers to care such as transportation issues and lost wages by providing essential preventive screenings and services directly to communities [2][3] Investment and Program Details - The funding is part of Health Net's new Mobile Outreach for Value, Equity and Sustainability (MOVES) program, which focuses on improving access to quality care in underserved areas [2][3] - Health Net has committed over $158 million in funding to community-based organizations from 2017 to 2024, reflecting a long-term investment in health equity and access [5][6] Community Impact - Mobile health clinics are designed to meet the healthcare needs of individuals in resource-limited areas, ensuring that those who require care are not overlooked [3][5] - The initiative aims to build sustainable care delivery models that foster trust between healthcare providers and communities, leading to better health outcomes [3][4] Grant Recipients and Collaborations - Grant recipients include organizations like AltaMed, Community Medical Centers, and Kaweah Health, which will use the funding to enhance their healthcare services [6][10] - The grants are intended to position these organizations as conveners, collaborating with local partners to address a wide range of physical, behavioral, and social needs [4]

May 23, 2025 03:55 AM GMT Managed Care | North America Underscoring the PBM Value Proposition: A Look at Recent LLY/NVO GLP-1 Benefit Offerings; Policy Dynamics Leveraging the PBM Toolkit: Yesterday, CI announced its Evernorth business will offer an enhanced benefit offering for GLP-1s, in its pursuit to further bend the drug cost curve and address key pain points for many of its customers. We discussed the latest offerings with CI, and there are two key components: (1) According to the company, CI has nego ...

Core Insights - UnitedHealth Group Inc's stock has experienced a significant decline, down over 42% year-to-date and over 31% in the past month, indicating a deterioration in fundamentals [1][2] - The exit of an asset manager from UnitedHealth stock was prompted by unexpected CEO resignation, withdrawal of fiscal 2025 guidance, and a rare earnings miss, signaling a lack of forward guidance and leadership issues [2][3] Company-Specific Issues - The Medicare Advantage segment, previously a profit driver for UnitedHealth, is facing challenges such as rising utilization, tighter reimbursement, and structural adjustments, leading to margin compression [3] - The overall managed care sector is under pressure, with increasing medical loss ratios and regulatory scrutiny, suggesting a capped upside compared to previous cycles [4] Investment Strategy Shift - The asset manager is shifting focus towards innovation-driven sectors, including early-stage biotech and gene editing, which are less affected by reimbursement dynamics [4] - Despite exiting UnitedHealth equities, the firm retains bonds maturing in 2026, citing the company's A+ rating and balance sheet strength as positive factors [4]

Summary of Clover Health Investments (CLOV) and Aviana Healthcare Conference Calls Clover Health Investments (CLOV) Industry Overview - Focus on Medicare Advantage market with a technology-driven approach to healthcare delivery Key Financial Results - Medicare Advantage membership increased by 30% year over year [2] - Total revenues rose by 33% year over year [3] - Adjusted EBITDA surged by 279% year over year [3] - Net income increased by over 300% year over year [3] Core Business Model - Technology-first, AI-driven clinical health plan aimed at improving early disease diagnosis and treatment [3] - Utilizes a machine learning and AI-powered platform that integrates over 100 healthcare data sources [3] - Physicians are empowered with actionable insights at the point of care, leading to earlier diagnoses and better health outcomes [3][4] Clinical Outcomes - Significant reduction in hospitalization rates for congestive heart failure patients using Clover Assistant software: 18% decrease in all-cause hospitalization and 25% decrease in 30-day readmissions [5] - Achieved the highest HEDIS score for plans with over 2,000 members, indicating superior quality of care [6][7] Competitive Positioning - Differentiates from traditional Managed Care Organizations (MCOs) by being clinically focused and enabling earlier diagnosis and treatment [8][9] - No risk delegation in financial results, indicating a pure operational model [9] Growth Strategy - Aiming for 30% member growth in 2025, focusing on areas with high member concentration [11] - Cohort analysis shows a decrease in medical cost ratio (MCR) by 700 basis points from year one to year two, indicating cost efficiency [13] - Plans to expand into additional states and offer software to third-party providers [14] Market Potential - Approximately 35 million people in the Medicare Advantage market, with a shift from HMO to PPO plans [15] - Strong conviction in guidance for continued membership and revenue growth [16] Aviana Healthcare Industry Overview - Leading national provider of home care services, focusing on pediatric, adult, and geriatric care [35] Key Financial Results - Revenue expected to exceed $2.15 billion in 2025, with adjusted EBITDA over $207 million [40] - Achieved a 7.5% revenue CAGR over the last five years [39] Strategic Transformation - Five primary strategic initiatives for 2025: 1. Enhance partnerships with government and preferred payers [42] 2. Identify cost efficiencies and synergies [42] 3. Modernize medical solutions [42] 4. Manage capital structure and produce positive free cash flow [42] 5. Engage leaders and employees to deliver the mission [42] Growth and Expansion - Plans to acquire Thrive Skilled Pediatric Care, expanding footprint to 36 states [38] - Targeting organic growth of 5% to 7%, with potential for 10% growth through acquisitions [52] Financial Health - Consolidated adjusted EBITDA increased by 93.1% year over year [60] - Maintains strong liquidity of over $260 million [61] - Focused on deleveraging and maintaining a balanced capital structure [62] Market Demand - Strong demand for home and community-based care, with a focus on reducing total healthcare costs [44] - Continued advocacy for improved reimbursement rates and Medicaid rate integrity [48] Conclusion - Both Clover Health and Aviana Healthcare are positioned for significant growth in their respective markets, leveraging technology and strategic partnerships to enhance service delivery and financial performance.

Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $1.53 billion, down from $1.6 billion in Q1 2024, primarily due to market and partnership exits, partially offset by premium growth [21] - Membership at the end of Q1 2025 was 491,000, a decrease from 523,000 in Q1 2024, reflecting a cautious approach to growth and partner exits [19] - Medical margin for Q1 2025 was $128 million, down from $157 million in Q1 2024, driven by elevated utilization and costs [21][22] - Adjusted EBITDA for Q1 2025 was $21 million, compared to $29 million in Q1 2024, reflecting ongoing elevated cost trends [23] Business Line Data and Key Metrics Changes - ACO REACH membership decreased to 114,000 in Q1 2025 from 131,000 in Q1 2024, primarily due to exiting an underperforming partnership [20] - Medical costs for Q1 2025 were in line with expectations, driven by elevated utilization and flu-related costs [22] - The medical cost trend for year two plus markets was 5.5% in Q1 2025, down from 6.7% in Q1 2024 [24] Market Data and Key Metrics Changes - The Medicare Advantage market continues to expand, with CMS data showing a year-over-year growth trend of 3.9% [10] - Overall market trends in 2025 remain consistent with the prior year, with an expected full-year trend of 5.3% [9] Company Strategy and Development Direction - The company is focused on disciplined growth, reducing exposure to costs outside of its control, and enhancing clinical and operational capabilities [6][12] - Investments in technology and clinical programs are expected to drive competitive advantages and improve quality outcomes [13][14] - The company anticipates a more favorable environment in 2026, supported by improved payer bids and final rate notices from CMS [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the final rate notice from CMS for 2026, which is expected to address high cost and utilization trends [6][18] - The company is taking a cautious approach to membership growth, with expectations for retroactive membership assignments in Q2 [5][19] - Management highlighted the importance of early identification and management of chronic diseases as a key focus of their model [7][10] Other Important Information - The company ended Q1 2025 with $369 million in cash and marketable securities, expecting to use approximately $110 million of cash in 2025 [27] - The company is maintaining a disciplined approach to capital allocation to support business objectives while aiming for cash flow breakeven in 2027 [27] Q&A Session Summary Question: Impact of V-28 risk model transition on value-based care companies - Management indicated that the risk adjustment perspective for 2025 is in line with expectations, with a 2% net increase year over year, despite a 3% headwind from V-28 [33][34] Question: Contribution from previously exited areas - Management noted that unfavorable development from exited markets would not impact 2025 significantly, with minimal remaining IBNR [37][38] Question: 2026 MA final rate notice and its flow-through - Management confirmed that 40% of membership was repriced for January 2025, with expected benefits from the average 9% increase across the network [41][42] Question: Risk scores and patient movement - Management clarified that the 2% increase in risk adjustment is on a same member basis, with some movement between payers noted but not significantly affecting care models [49][52] Question: Expectations for 2026 MA bit cycle - Management expressed optimism about the 2026 environment, with a focus on quality incentives and clinical cost-saving initiatives tracking well [58][61] Question: Medical cost trends and visibility on completed claims - Management stated that medical cost trends were in line with expectations, with improved visibility from the new financial data pipeline [65][66] Question: Potential membership reduction due to Part D - Management indicated that they are making progress in reducing Part D exposure and do not anticipate a reduction in membership for 2026 [75][76] Question: Clinical programs and their impact - Management confirmed that while 2025 is an investment year for new clinical programs, benefits are expected to materialize in 2026 and beyond [104][106]