2016
Annual Review
For decades, Centene’s unwavering purpose
has propelled our efforts to transform the health of our
community, one person at a time. Our foundational
beliefs and the dedicated, entrepreneurial spirit of our
employees have helped us achieve much success, but
our work is far from over. We will never stop seeking to
find new ways to help more individuals and families.
CENTENE CORPORATION
TABLE OF CONTENTS
Centene Corporation, a Fortune 500 company, is a
diversified, multi-national healthcare enterprise that
provides a portfolio of services to government-sponsored
healthcare programs, focusing on under-insured and
uninsured individuals. Centene operates local health
plans and offers a range of health insurance solutions
and specialty services.
2016 At A Glance
Letter from the Chairman
Company & Financial Summary
1
2
6
8 2016 Highlights
10 Finding New Ways
14
18
19
20 Corporate Information
To Help More People
Quarterly Financial Information
Selected Financial Information
For decades, Centene’s unwavering purpose
has propelled our efforts to transform the health of our
community, one person at a time. Our foundational
beliefs and the dedicated, entrepreneurial spirit of our
employees have helped us achieve much success, but
our work is far from over. We will never stop seeking to
find new ways to help more individuals and families.
CENTENE CORPORATION
TABLE OF CONTENTS
Centene Corporation, a Fortune 500 company, is a
diversified, multi-national healthcare enterprise that
provides a portfolio of services to government-sponsored
healthcare programs, focusing on under-insured and
uninsured individuals. Centene operates local health
plans and offers a range of health insurance solutions
and specialty services.
2016 At A Glance
Letter from the Chairman
Company & Financial Summary
1
2
6
8 2016 Highlights
10 Finding New Ways
14
18
19
20 Corporate Information
To Help More People
Quarterly Financial Information
Selected Financial Information
$3.41
diluted earnings per share
(from continuing operations)
11.4 MILLION
members
(includes 2.8 million
TRICARE eligibles)
2016
A YEAR IN REVIEW
30,500 EMPLOYEES
$40.6 BILLION
in total revenues
$1.9 BILLION
in total operating cash flow
$4.43
adjusted diluted earnings per share
(from continuing operations)
MICHAEL F. NEIDORFF
Chairman, President & Chief Executive Officer
The Year 2016 was a transformational year
strategically and very successful financially.
The successful closing of the Health Net
acquisition on March 24, and the full integration
of the companies’ culture, management and
business systems helped to achieve record
growth in sales and profits, moving us into the
large cap territory of companies. It also gave
Centene important critical mass.
Strong financial results, as well as investments in people, capabilities and technology
have led us to consistently deliver strong performance with an industry-leading growth
rate. Our subsidiaries and suite of products continue to generate great opportunities.
We have added and expanded contracts in existing markets, grown geographically,
acquired new business, and added new capabilities and offerings.
At the conclusion of 2016, Centene was the largest Medicaid managed care organization
in the country, and a leader in three of the largest Medicaid states: California, Florida
and Texas. We were also the largest provider of managed Long-Term Services and
Supports, which is one of the fastest growing segments in the managed care market.
Our support for both the TRICARE and Veterans Choice programs has positioned Centene
as one of the nation’s largest providers of managed care services for military families
and veterans.
We ended 2016 as a $40.6 billion, multi-national enterprise,
reporting 78 percent growth in total revenues, 18 percent growth
in diluted earnings per share and 41 percent growth in adjusted
diluted earnings per share, year over year. Our membership grew
124 percent to more than 11.4 million beneficiaries across 24
states in the U.S.
We were ranked number 124 on the Fortune 500 list of largest U.S.
corporations by revenue, advancing our position by 62 spots over
the previous year. And, were listed at number 470 on the Fortune
Global 500 list. Additionally, we moved into the S&P 500 index,
which was a milestone for Centene. The ranking widened our
investor base and helped increase the liquidity of our stock.
Another important metric, total shareholder return, was adversely
effected by concerns about what impact the election outcome
would have on our government sponsored healthcare programs.
Subsequently, we were able to reassure investors that the
company has a record of adapting, as necessary, to changing
government service programs.
124
on the Fortune
500 list
470
on the Fortune
Global 500 list
S&P 500
included in
the index
A TRANSFORMATIONAL YEAR
Centene successfully secured 11 contracts in 2016, and our pipeline
remains robust with growth prospects. The year 2016 marked
continued growth and profitability on the health insurance
marketplace exchanges. We ended the year with 537,200
marketplace members, compared to the previous year total of
146,100, an increase of 268 percent. Importantly, we were a net
contributor to the risk adjustment pool based on performance
in all of our markets.
With the addition of Health Net, our portfolio now includes a
four-star Medicare Advantage product designed to serve low-
income seniors. This represents a significant growth opportunity
as more than 10,000 people become Medicare-eligible each day.
In 2017, we plan on expanding our Medicare Advantage footprint
into four Centene Medicaid states. The objective is to gain in-
market experience before expanding further. This is in line with
the approach we took with the health insurance marketplace.
Centene also has a growing and profitable international presence
as we partner with governments outside of the U.S. to help address
the healthcare challenges they face. Ribera Salud in Spain and
The Practice Group in the United Kingdom serve approximately
900,000 beneficiaries. Our strategic investments in these
companies have added to the expertise and diversification of
our overall portfolio.
2 CENTENE CORPORATION Letter From The Chairman
Letter From The Chairman CENTENE CORPORATION 3
MICHAEL F. NEIDORFF
Chairman, President & Chief Executive Officer
The Year 2016 was a transformational year
strategically and very successful financially.
The successful closing of the Health Net
acquisition on March 24, and the full integration
of the companies’ culture, management and
business systems helped to achieve record
growth in sales and profits, moving us into the
large cap territory of companies. It also gave
Centene important critical mass.
Strong financial results, as well as investments in people, capabilities and technology
have led us to consistently deliver strong performance with an industry-leading growth
rate. Our subsidiaries and suite of products continue to generate great opportunities.
We have added and expanded contracts in existing markets, grown geographically,
acquired new business, and added new capabilities and offerings.
At the conclusion of 2016, Centene was the largest Medicaid managed care organization
in the country, and a leader in three of the largest Medicaid states: California, Florida
and Texas. We were also the largest provider of managed Long-Term Services and
Supports, which is one of the fastest growing segments in the managed care market.
Our support for both the TRICARE and Veterans Choice programs has positioned Centene
as one of the nation’s largest providers of managed care services for military families
and veterans.
We ended 2016 as a $40.6 billion, multi-national enterprise,
reporting 78 percent growth in total revenues, 18 percent growth
in diluted earnings per share and 41 percent growth in adjusted
diluted earnings per share, year over year. Our membership grew
124 percent to more than 11.4 million beneficiaries across 24
states in the U.S.
We were ranked number 124 on the Fortune 500 list of largest U.S.
corporations by revenue, advancing our position by 62 spots over
the previous year. And, were listed at number 470 on the Fortune
Global 500 list. Additionally, we moved into the S&P 500 index,
which was a milestone for Centene. The ranking widened our
investor base and helped increase the liquidity of our stock.
Another important metric, total shareholder return, was adversely
effected by concerns about what impact the election outcome
would have on our government sponsored healthcare programs.
Subsequently, we were able to reassure investors that the
company has a record of adapting, as necessary, to changing
government service programs.
124
on the Fortune
500 list
470
on the Fortune
Global 500 list
S&P 500
included in
the index
A TRANSFORMATIONAL YEAR
Centene successfully secured 11 contracts in 2016, and our pipeline
remains robust with growth prospects. The year 2016 marked
continued growth and profitability on the health insurance
marketplace exchanges. We ended the year with 537,200
marketplace members, compared to the previous year total of
146,100, an increase of 268 percent. Importantly, we were a net
contributor to the risk adjustment pool based on performance
in all of our markets.
With the addition of Health Net, our portfolio now includes a
four-star Medicare Advantage product designed to serve low-
income seniors. This represents a significant growth opportunity
as more than 10,000 people become Medicare-eligible each day.
In 2017, we plan on expanding our Medicare Advantage footprint
into four Centene Medicaid states. The objective is to gain in-
market experience before expanding further. This is in line with
the approach we took with the health insurance marketplace.
Centene also has a growing and profitable international presence
as we partner with governments outside of the U.S. to help address
the healthcare challenges they face. Ribera Salud in Spain and
The Practice Group in the United Kingdom serve approximately
900,000 beneficiaries. Our strategic investments in these
companies have added to the expertise and diversification of
our overall portfolio.
2 CENTENE CORPORATION Letter From The Chairman
Letter From The Chairman CENTENE CORPORATION 3
that to successfully operate across multi-state service areas,
it is essential to have the ability to access, and more importantly,
interpret data. We collect and store the clinical and financial data
from all of our health plans through Centelligence, our proprietary
data analytics platform. This allows for the seamless flow of
information across the enterprise.
Centene’s competitive advantage also rests in the fact that we
have more than 30 years of experience in operating government-
sponsored healthcare programs. We know that each state is unique
and that healthcare is best delivered locally. Our local approach
enables us to provide accessible, high-quality, culturally sensitive
services to our members. It also creates and maintains jobs in local
markets, stimulates local economic growth and can address
healthcare challenges specific to each state.
Centene’s competitive advantage also rests in
the fact that we have more than 30 years of
experience in operating government-sponsored
healthcare programs.
BUILDING UPON OUR SCALE, CAPABILITY, AND CAPACITY
The capabilities of Centene’s systems are a key differentiating
factor between us and others in the segment. Through our Health
Care Enterprise group, we own and deploy Casenet and its TruCare
case management solution. These tools provide integrated care
models that manage more complex populations in all Centene
states that require both acute care and long-term services and
supports. Our investment in Interpreta, which we are integrating
into TruCare, is designed to help identify quality and risk
adjustment gaps in real time.
We continue to design, integrate and invest in systems that will
scale with the Company’s growth and further support our business
intelligence and analytical capabilities. In the past five years,
Centene has invested approximately $400 million to advance and
secure our platforms, minimizing unexpected issues. We know
A VIEW TOWARD THE FUTURE
The need for high-quality, affordable healthcare is ever
increasing. We have a history of successfully partnering with
states to provide budget predictability and measurable return
on investment — while also providing market-specific solutions
for improving health care outcomes. We have also demonstrated
our agility, and have grown in both capacity and capability,
to successfully navigate industry changes to the benefit of
our members, customers and shareholders.
The accomplishments we realized in 2016 exemplify the kind
of steady growth and successes we have seen over the past
decades. This is a testament to the work of Centene’s more than
30,500 employees. Together, we have demonstrated our ability to
execute on our growth strategies with discipline and agility, while
remaining committed to our purpose to transform the health of
the community one person at a time. We are confident that we
have the scale, networks, expertise, systems and infrastructure
in place to ensure a successful future.
Our multi-line portfolio features a diverse
range of products and services.
Aged, Blind, or Disabled (ABD)
Behavioral and Specialty Therapies
Care Management Software Solutions
Children’s Health Insurance Program (CHIP)
Commercial (Small and Large Group)
Correctional Healthcare Services
Dental Benefits Management
Dual Eligible Special Needs Plans
Foster Care
Health Insurance Marketplace
In-Home Health Services
Institutional Special Needs Plans
Intellectually/Developmentally Disabled
Life and Health Management
Long-Term Services and Supports (LTSS)
Managed Vision
Medicare Advantage (MAPD)
Medicare-Medicaid Plans (MMP)
Medication Adherence
Military and Veterans
Pharmacy Benefits Management
Specialty Pharmacy
Telehealth
Temporary Assistance for Needy Families (TANF)
MICHAEL F. NEIDORFF
Chairman, President & Chief Executive Officer
4 CENTENE CORPORATION Letter From The Chairman
Letter From The Chairman CENTENE CORPORATION 5
that to successfully operate across multi-state service areas,
it is essential to have the ability to access, and more importantly,
interpret data. We collect and store the clinical and financial data
from all of our health plans through Centelligence, our proprietary
data analytics platform. This allows for the seamless flow of
information across the enterprise.
Centene’s competitive advantage also rests in the fact that we
have more than 30 years of experience in operating government-
sponsored healthcare programs. We know that each state is unique
and that healthcare is best delivered locally. Our local approach
enables us to provide accessible, high-quality, culturally sensitive
services to our members. It also creates and maintains jobs in local
markets, stimulates local economic growth and can address
healthcare challenges specific to each state.
Centene’s competitive advantage also rests in
the fact that we have more than 30 years of
experience in operating government-sponsored
healthcare programs.
BUILDING UPON OUR SCALE, CAPABILITY, AND CAPACITY
The capabilities of Centene’s systems are a key differentiating
factor between us and others in the segment. Through our Health
Care Enterprise group, we own and deploy Casenet and its TruCare
case management solution. These tools provide integrated care
models that manage more complex populations in all Centene
states that require both acute care and long-term services and
supports. Our investment in Interpreta, which we are integrating
into TruCare, is designed to help identify quality and risk
adjustment gaps in real time.
We continue to design, integrate and invest in systems that will
scale with the Company’s growth and further support our business
intelligence and analytical capabilities. In the past five years,
Centene has invested approximately $400 million to advance and
secure our platforms, minimizing unexpected issues. We know
A VIEW TOWARD THE FUTURE
The need for high-quality, affordable healthcare is ever
increasing. We have a history of successfully partnering with
states to provide budget predictability and measurable return
on investment — while also providing market-specific solutions
for improving health care outcomes. We have also demonstrated
our agility, and have grown in both capacity and capability,
to successfully navigate industry changes to the benefit of
our members, customers and shareholders.
The accomplishments we realized in 2016 exemplify the kind
of steady growth and successes we have seen over the past
decades. This is a testament to the work of Centene’s more than
30,500 employees. Together, we have demonstrated our ability to
execute on our growth strategies with discipline and agility, while
remaining committed to our purpose to transform the health of
the community one person at a time. We are confident that we
have the scale, networks, expertise, systems and infrastructure
in place to ensure a successful future.
Our multi-line portfolio features a diverse
range of products and services.
Aged, Blind, or Disabled (ABD)
Behavioral and Specialty Therapies
Care Management Software Solutions
Children’s Health Insurance Program (CHIP)
Commercial (Small and Large Group)
Correctional Healthcare Services
Dental Benefits Management
Dual Eligible Special Needs Plans
Foster Care
Health Insurance Marketplace
In-Home Health Services
Institutional Special Needs Plans
Intellectually/Developmentally Disabled
Life and Health Management
Long-Term Services and Supports (LTSS)
Managed Vision
Medicare Advantage (MAPD)
Medicare-Medicaid Plans (MMP)
Medication Adherence
Military and Veterans
Pharmacy Benefits Management
Specialty Pharmacy
Telehealth
Temporary Assistance for Needy Families (TANF)
MICHAEL F. NEIDORFF
Chairman, President & Chief Executive Officer
4 CENTENE CORPORATION Letter From The Chairman
Letter From The Chairman CENTENE CORPORATION 5
FINANCIAL HIGHLIGHTS
FROM CONTINUING
OPERATIONS
(in millions)
2016
2015
2014
2013
2012
Total Revenues
$ 40,607
$ 22,760
$ 16,560
$ 10,863
$ 8,110
GROUP & PRODUCT
SOLUTIONS
(by state)*
Net Earnings(1)
559
356
Adjusted Net Earnings (1)
727
387
268
278
161
165
89
92
Total Assets
20,197
7,339
5,824
3,519
2,764
7
0
6
,
0
4
0
6
7
,
2
2
0
6
5
,
6
1
3
6
8
,
0
1
0
1
1
,
8
9
5
5
6
5
3
8
6
2
2
4
4
,
1
1
8
0
1
,
5
1
6
0
,
4
0
8
8
,
2
2
8
5
,
2
1
6
1
9
8
2016
2015
2014
2013
2012
2016 2015
2014
2013
2012
2016 2015
2014
2013
2012
Total Revenues
(in millions)
Net Earnings (1)
(in millions)
Managed Care
Membership
(in thousands)
(1) Attributable to Centene Corporation
DISTRICT OF COLUMBIA
PUERTO RICO
US VIRGIN ISLANDS
MEDICAID/CHIP Arizona, Arkansas (Private
Option), California, Florida, Georgia, Illinois,
Indiana, Kansas, Louisiana, Maryland*,
Massachusetts, Mississippi, Missouri, Nebraska,
Nevada*, New Hampshire, Ohio, Oregon,
Pennsylvania*, South Carolina, Texas,
Washington, Wisconsin
ABD (NON-DUAL) Arizona, California, Florida,
Illinois, Indiana, Kansas, Louisiana, Maryland*,
Mississippi, Nebraska, New Hampshire, Ohio,
Oregon, Pennsylvania*, South Carolina, Texas,
Washington, Wisconsin
ABD (MEDICAID ONLY DUAL-ELIGIBLE)
Arizona, California, Florida, Kansas, Nebraska,
New Hampshire, Ohio, Oregon, Pennsylvania*,
Texas, Wisconsin
LONG-TERM SERVICES & SUPPORTS
Arizona, California, Florida, Illinois, Kansas,
Ohio, Pennsylvania*, Texas
FOSTER CARE California, Florida, Indiana,
Kansas, Louisiana, Mississippi, Missouri,
Nebraska, New Hampshire, Oregon, Texas,
Washington
MEDICARE Arizona, California, Florida,
Georgia, Mississippi, Ohio, Oregon, Texas,
Washington, Wisconsin
MEDICAID-MEDICARE PLANS (INCLUDES LTSS)
California, Illinois, Michigan, Ohio,
South Carolina, Texas
CORRECTIONAL HEALTHCARE California,
Florida, Massachusetts, Minnesota, Mississippi,
New Mexico, Tennessee, Vermont
HEALTH INSURANCE MARKETPLACE Arizona,
Arkansas, California, Florida, Georgia, Illinois,
Indiana, Massachusetts, Mississippi, Nevada*,
New Hampshire, Ohio, Texas, Washington
COMMERCIAL INSURANCE Arizona,
California, Oregon, Washington
TRICARE** Connecticut, Delaware, District
of Columbia, Illinois, Indiana, Iowa, Kentucky,
Maine, Maryland, Massachusetts, Michigan,
Missouri, New Hampshire, New Jersey, New
York, North Carolina, Ohio, Pennsylvania,
Rhode Island, Vermont, Virginia, West Virginia,
Wisconsin
VA PROGRAMS Alabama, Colorado,
Connecticut, Delaware, District of Columbia,
Florida, Georgia, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Missouri,
Montana, Nebraska, Nevada, New Hampshire,
New Jersey, New York, North Carolina, North
Dakota, Ohio, Pennsylvania, Puerto Rico, Rhode
Island, South Carolina, South Dakota, US Virgin
Islands, Utah, Vermont, Virginia, West Virginia,
Wisconsin, Wyoming
* Pennsylvania Medicaid and ABD non-dual are
expected to commence in Q2 2017. Managed care
contract in Nevada is expected to commence in
Q3 2017. Long-term Services and Supports for New
Hampshire and Managed Service Organization (MSO)
operations in Maryland are expected to commence in
2017. Pennsylvania Long-Term Services and Supports
and ABD dual-eligible are expected to commence in
Q1 2018. Health Insurance Marketplace in Nevada is
expected to commence in 2018. Pennsylvania and
Nevada are pending regulatory approval.
TRICARE North Region until the second half of 2017,
when we expect to start healthcare delivery for the
West Region.
** In July 2016, it was announced that the Department
of Defense awarded our wholly-owned subsidiary,
Health Net Federal Services, the TRICARE West
Region contract. We will continue to operate in the
Company & Financial Summary CENTENE CORPORATION 7
FINANCIAL HIGHLIGHTS
FROM CONTINUING
OPERATIONS
(in millions)
2016
2015
2014
2013
2012
Total Revenues
$ 40,607
$ 22,760
$ 16,560
$ 10,863
$ 8,110
GROUP & PRODUCT
SOLUTIONS
(by state)*
Net Earnings(1)
559
356
Adjusted Net Earnings (1)
727
387
268
278
161
165
89
92
Total Assets
20,197
7,339
5,824
3,519
2,764
7
0
6
,
0
4
0
6
7
,
2
2
0
6
5
,
6
1
3
6
8
,
0
1
0
1
1
,
8
9
5
5
6
5
3
8
6
2
2
4
4
,
1
1
8
0
1
,
5
1
6
0
,
4
0
8
8
,
2
2
8
5
,
2
1
6
1
9
8
2016
2015
2014
2013
2012
2016 2015
2014
2013
2012
2016 2015
2014
2013
2012
Total Revenues
(in millions)
Net Earnings (1)
(in millions)
Managed Care
Membership
(in thousands)
(1) Attributable to Centene Corporation
DISTRICT OF COLUMBIA
PUERTO RICO
US VIRGIN ISLANDS
MEDICAID/CHIP Arizona, Arkansas (Private
Option), California, Florida, Georgia, Illinois,
Indiana, Kansas, Louisiana, Maryland*,
Massachusetts, Mississippi, Missouri, Nebraska,
Nevada*, New Hampshire, Ohio, Oregon,
Pennsylvania*, South Carolina, Texas,
Washington, Wisconsin
ABD (NON-DUAL) Arizona, California, Florida,
Illinois, Indiana, Kansas, Louisiana, Maryland*,
Mississippi, Nebraska, New Hampshire, Ohio,
Oregon, Pennsylvania*, South Carolina, Texas,
Washington, Wisconsin
ABD (MEDICAID ONLY DUAL-ELIGIBLE)
Arizona, California, Florida, Kansas, Nebraska,
New Hampshire, Ohio, Oregon, Pennsylvania*,
Texas, Wisconsin
LONG-TERM SERVICES & SUPPORTS
Arizona, California, Florida, Illinois, Kansas,
Ohio, Pennsylvania*, Texas
FOSTER CARE California, Florida, Indiana,
Kansas, Louisiana, Mississippi, Missouri,
Nebraska, New Hampshire, Oregon, Texas,
Washington
MEDICARE Arizona, California, Florida,
Georgia, Mississippi, Ohio, Oregon, Texas,
Washington, Wisconsin
MEDICAID-MEDICARE PLANS (INCLUDES LTSS)
California, Illinois, Michigan, Ohio,
South Carolina, Texas
CORRECTIONAL HEALTHCARE California,
Florida, Massachusetts, Minnesota, Mississippi,
New Mexico, Tennessee, Vermont
HEALTH INSURANCE MARKETPLACE Arizona,
Arkansas, California, Florida, Georgia, Illinois,
Indiana, Massachusetts, Mississippi, Nevada*,
New Hampshire, Ohio, Texas, Washington
COMMERCIAL INSURANCE Arizona,
California, Oregon, Washington
TRICARE** Connecticut, Delaware, District
of Columbia, Illinois, Indiana, Iowa, Kentucky,
Maine, Maryland, Massachusetts, Michigan,
Missouri, New Hampshire, New Jersey, New
York, North Carolina, Ohio, Pennsylvania,
Rhode Island, Vermont, Virginia, West Virginia,
Wisconsin
VA PROGRAMS Alabama, Colorado,
Connecticut, Delaware, District of Columbia,
Florida, Georgia, Idaho, Illinois, Indiana,
Iowa, Kansas, Kentucky, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Missouri,
Montana, Nebraska, Nevada, New Hampshire,
New Jersey, New York, North Carolina, North
Dakota, Ohio, Pennsylvania, Puerto Rico, Rhode
Island, South Carolina, South Dakota, US Virgin
Islands, Utah, Vermont, Virginia, West Virginia,
Wisconsin, Wyoming
* Pennsylvania Medicaid and ABD non-dual are
expected to commence in Q2 2017. Managed care
contract in Nevada is expected to commence in
Q3 2017. Long-term Services and Supports for New
Hampshire and Managed Service Organization (MSO)
operations in Maryland are expected to commence in
2017. Pennsylvania Long-Term Services and Supports
and ABD dual-eligible are expected to commence in
Q1 2018. Health Insurance Marketplace in Nevada is
expected to commence in 2018. Pennsylvania and
Nevada are pending regulatory approval.
TRICARE North Region until the second half of 2017,
when we expect to start healthcare delivery for the
West Region.
** In July 2016, it was announced that the Department
of Defense awarded our wholly-owned subsidiary,
Health Net Federal Services, the TRICARE West
Region contract. We will continue to operate in the
Company & Financial Summary CENTENE CORPORATION 7
2016 QUARTERLY HIGHLIGHTS
Q1
Q2
Q3
Q4
JANUARY
Centene announces a partnership with Washington University in
St. Louis and Duke University to launch the Envolve Center for Health
Behavior Change, a unique industry-academic partnership to foster
sustainable change in health-related behaviors.
FEBRUARY
Centene receives a contract recommendation for Nebraska’s new
statewide Heritage Health Program through its subsidiary, Nebraska
Total Care.
Centurion reached a formal agreement to provide correctional
healthcare services for the Florida Department of Corrections in
Regions 1, 2 and 3.
MARCH
Centene completed its acquisition of Health Net, Inc. for approximately
$6.0 billion, including the assumption of debt — providing further
diversification across markets and products including the addition
of government-sponsored care under federal contracts with the
Department of Defense and the U.S. Department of Veterans Affairs,
as well as Medicare Advantage.
RECOGNITIONS & ACCREDITATIONS
Centene’s Arkansas subsidiary receives Accreditation from the
National Committee for Quality Assurance for its Health Insurance
Marketplace Exchange plan.
Centene is added to the Standard & Poor’s 500 Index (S&P 500®), a
stock market index that is widely regarded as the best single gauge of
large-cap U.S. equities chosen for market size, liquidity and industry
grouping, among other factors.
APRIL
Centene appoints Mark Brooks as Senior Vice President and Chief
Information Officer.
Centene selected to provide Medicaid services in three zones in
Pennsylvania. (The RFP was rescinded and Centene was re-issued
the contract in January 2017.)
Centurion is selected by the Mississippi Department of Corrections to
provide correctional healthcare services to more than 17,000 inmates
housed at facilities throughout the state.
Centene celebrates the grand opening of its Ferguson Service Center,
a $25 million investment bringing more than 250 jobs to the Ferguson,
Missouri area.
Centene’s subsidiary, Coordinated Care, began operating as the sole
contractor with the Washington State Health Care Authority to provide
foster care services through the Apple Health Foster Care contract.
Centene appoints Christopher Isaak as Senior Vice President,
Corporate Controller and Chief Accounting Officer.
MAY
Centurion selected by the State of New Mexico Corrections Department
to provide correctional medical healthcare services and pharmacy
services to more than 7,000 offenders throughout the state under two
separate contract awards.
Centene specialty solutions division, Envolve, selected by Maryland
Care, Inc. d/b/a/ Maryland Physicians Care MCO to provide health plan
management services for its managed Medicaid operations in Maryland
effective July 1, 2017.
JUNE
Centene’s Indiana subsidiary is selected by the Indiana Family & Social
Services Administration to begin contract negotiations to provide
risk-based managed care services for enrollees in the Healthy Indiana
Plan and Hoosier Healthwise programs, commencing in January 2017.
Centene receives the Hispanic Health Leadership Award by the
National Hispanic Medical Association.
The Health Net Federal Services call center operations earns the
ranking of first place for large call centers (those with more than 250 full-
time representatives) in BenchmarkPortal’s Top 100 Call Center Contest.
At the Case In Point Platinum Awards, Centene and its specialty
solutions division, Envolve, Inc. are honored with awards in five
categories: Behavioral Health Case Management, Women/Children
Case Management, Acute Care, Care Management, Disease
Management/Population Health.
Centene’s Florida subsidiary receives Accreditation from the National
Committee for Quality Assurance for its Medicaid and Health Insurance
Marketplace Exchange plan, Ambetter from Sunshine Health.
FORTUNE magazine lists Centene’s position of #124 in its annual ranking
of America’s 500 largest companies by revenue.
JULY
The Department of Defense awards Centene’s wholly-owned subsidiary,
Health Net Federal Services, the TRICARE West Region contract.
AUGUST
Centene’s Pennsylvania subsidiary is selected by the department
of Human Services and Aging to serve enrollees in the Community
HealthChoices program statewide. Expected contract commencement
dates vary by zone, starting January 2018, and will be fully
implemented by January 2019, pending regulatory approval.
SEPTEMBER
Centene files to continue its participation as a qualified health plan
issuer in the Arizona Health Insurance Marketplace in 2017.
OCTOBER
State of Missouri awards Centene an expanded, statewide
managed care contract for its Missouri subsidiary, expected to
commence May 1, 2017.
NOVEMBER
Centene’s Nevada subsidiary is selected by the Department of Health
and Human Services and the Division of Health Care Financing and
Policy to serve Medicaid recipients enrolled in Nevada’s Medicaid
managed care program, expected to commence on July 1, 2017,
pending regulatory approval.
The Georgia Department of Community Health (DCH) awards Centene’s
Georgia subsidiary, Peach State Health Plan, a statewide managed care
contract to continue serving members enrolled in the Georgia Families
managed care program. The contract is expected to become effective
July 1, 2017.
Envolve is honored at the National Health Information Awards,
receiving the merit award for the pamphlet Brush with Wisdom,
while Envolve PeopleCare’s “Raising Well” campaign won gold in
the Health Information Program category.
FORTUNE magazine announced Centene’s position of #470 in its annual
ranking of the largest companies globally by revenue.
Centene’s Kansas subsidiary receives Accreditation with a Commendable
status from the National Committee for Quality Assurance.
8 CENTENE CORPORATION 2016 Highlights
2016 Highlights CENTENE CORPORATION 9
2016 QUARTERLY HIGHLIGHTS
Q1
Q2
Q3
Q4
JANUARY
Centene announces a partnership with Washington University in
St. Louis and Duke University to launch the Envolve Center for Health
Behavior Change, a unique industry-academic partnership to foster
sustainable change in health-related behaviors.
FEBRUARY
Centene receives a contract recommendation for Nebraska’s new
statewide Heritage Health Program through its subsidiary, Nebraska
Total Care.
Centurion reached a formal agreement to provide correctional
healthcare services for the Florida Department of Corrections in
Regions 1, 2 and 3.
MARCH
Centene completed its acquisition of Health Net, Inc. for approximately
$6.0 billion, including the assumption of debt — providing further
diversification across markets and products including the addition
of government-sponsored care under federal contracts with the
Department of Defense and the U.S. Department of Veterans Affairs,
as well as Medicare Advantage.
RECOGNITIONS & ACCREDITATIONS
Centene’s Arkansas subsidiary receives Accreditation from the
National Committee for Quality Assurance for its Health Insurance
Marketplace Exchange plan.
Centene is added to the Standard & Poor’s 500 Index (S&P 500®), a
stock market index that is widely regarded as the best single gauge of
large-cap U.S. equities chosen for market size, liquidity and industry
grouping, among other factors.
APRIL
Centene appoints Mark Brooks as Senior Vice President and Chief
Information Officer.
Centene selected to provide Medicaid services in three zones in
Pennsylvania. (The RFP was rescinded and Centene was re-issued
the contract in January 2017.)
Centurion is selected by the Mississippi Department of Corrections to
provide correctional healthcare services to more than 17,000 inmates
housed at facilities throughout the state.
Centene celebrates the grand opening of its Ferguson Service Center,
a $25 million investment bringing more than 250 jobs to the Ferguson,
Missouri area.
Centene’s subsidiary, Coordinated Care, began operating as the sole
contractor with the Washington State Health Care Authority to provide
foster care services through the Apple Health Foster Care contract.
Centene appoints Christopher Isaak as Senior Vice President,
Corporate Controller and Chief Accounting Officer.
MAY
Centurion selected by the State of New Mexico Corrections Department
to provide correctional medical healthcare services and pharmacy
services to more than 7,000 offenders throughout the state under two
separate contract awards.
Centene specialty solutions division, Envolve, selected by Maryland
Care, Inc. d/b/a/ Maryland Physicians Care MCO to provide health plan
management services for its managed Medicaid operations in Maryland
effective July 1, 2017.
JUNE
Centene’s Indiana subsidiary is selected by the Indiana Family & Social
Services Administration to begin contract negotiations to provide
risk-based managed care services for enrollees in the Healthy Indiana
Plan and Hoosier Healthwise programs, commencing in January 2017.
Centene receives the Hispanic Health Leadership Award by the
National Hispanic Medical Association.
The Health Net Federal Services call center operations earns the
ranking of first place for large call centers (those with more than 250 full-
time representatives) in BenchmarkPortal’s Top 100 Call Center Contest.
At the Case In Point Platinum Awards, Centene and its specialty
solutions division, Envolve, Inc. are honored with awards in five
categories: Behavioral Health Case Management, Women/Children
Case Management, Acute Care, Care Management, Disease
Management/Population Health.
Centene’s Florida subsidiary receives Accreditation from the National
Committee for Quality Assurance for its Medicaid and Health Insurance
Marketplace Exchange plan, Ambetter from Sunshine Health.
FORTUNE magazine lists Centene’s position of #124 in its annual ranking
of America’s 500 largest companies by revenue.
JULY
The Department of Defense awards Centene’s wholly-owned subsidiary,
Health Net Federal Services, the TRICARE West Region contract.
AUGUST
Centene’s Pennsylvania subsidiary is selected by the department
of Human Services and Aging to serve enrollees in the Community
HealthChoices program statewide. Expected contract commencement
dates vary by zone, starting January 2018, and will be fully
implemented by January 2019, pending regulatory approval.
SEPTEMBER
Centene files to continue its participation as a qualified health plan
issuer in the Arizona Health Insurance Marketplace in 2017.
OCTOBER
State of Missouri awards Centene an expanded, statewide
managed care contract for its Missouri subsidiary, expected to
commence May 1, 2017.
NOVEMBER
Centene’s Nevada subsidiary is selected by the Department of Health
and Human Services and the Division of Health Care Financing and
Policy to serve Medicaid recipients enrolled in Nevada’s Medicaid
managed care program, expected to commence on July 1, 2017,
pending regulatory approval.
The Georgia Department of Community Health (DCH) awards Centene’s
Georgia subsidiary, Peach State Health Plan, a statewide managed care
contract to continue serving members enrolled in the Georgia Families
managed care program. The contract is expected to become effective
July 1, 2017.
Envolve is honored at the National Health Information Awards,
receiving the merit award for the pamphlet Brush with Wisdom,
while Envolve PeopleCare’s “Raising Well” campaign won gold in
the Health Information Program category.
FORTUNE magazine announced Centene’s position of #470 in its annual
ranking of the largest companies globally by revenue.
Centene’s Kansas subsidiary receives Accreditation with a Commendable
status from the National Committee for Quality Assurance.
8 CENTENE CORPORATION 2016 Highlights
2016 Highlights CENTENE CORPORATION 9
FINDING NEW WAYS
For over three decades, Centene has
embraced evidence-based initiatives,
state-of-the-art technology, and strong
community partnerships to build
innovative programs that help our
members live healthier lives.
“At Centene, we believe in the power of strategic partnerships
to help address the challenges that directly impact our
members. By working with other industry leaders and
key organizations, we gain insights and exchange ideas,
paving the way and opening doors to healthier communities.”
MICHAEL F. NEIDORFF
Chairman, President & CEO, Centene
FROM SCIENCE TO STRATEGIES AT THE ENVOLVE CENTER
FOR HEALTH BEHAVIOR CHANGE
Nearly two years ago, Centene’s top leaders in healthcare solutions
began to consider the impact of an academic-industry-based
collaboration, focused on one mission: improving the health of
vulnerable populations by using science to foster sustainable
change in health-related behaviors.
On January 28, 2016, a unique partnership between Centene
Corporation, the Brown School at Washington University in
St. Louis, and the Center for Advanced Hindsight at Duke
University, was launched. The Envolve Center for Health Behavior
Change creates an intersection of Centene’s insights on managed
care, and the research and evaluation expertise of the Brown
School and the Center for Advanced Hindsight. By interpreting the
science of behavior change and developing practical strategies and
interventions that result in sustainable health behavior change,
the Envolve Center is positioned to improve the effectiveness of
healthcare delivery, while influencing positive health outcomes
and reducing the economic burdens of poor health on individuals
and society.
The Envolve Center is currently working with Centene’s Louisiana,
Missouri and Florida health plans to evaluate the impact peer
coaches have on reducing childhood obesity, specifically dietary
and activity habits. The Center is also looking beyond the
instruction that members receive about healthy behaviors,
to learn how neighbors, family members and friends can influence
and work together for better health outcomes.
Photo: Attendees at the grand opening of The
Envolve Center for Health Behavior Change at
Washington University in St. Louis.
This partnership brings together academic and
industry leaders in the science of behavior change
including Centene’s newly rebranded specialty
division, Envolve®, The Brown School at Washington
University in St. Louis, and Duke University’s Center
for Advanced Hindsight.
10 CENTENE CORPORATION
Finding New Ways CENTENE CORPORATION 11
FINDING NEW WAYS
For over three decades, Centene has
embraced evidence-based initiatives,
state-of-the-art technology, and strong
community partnerships to build
innovative programs that help our
members live healthier lives.
“At Centene, we believe in the power of strategic partnerships
to help address the challenges that directly impact our
members. By working with other industry leaders and
key organizations, we gain insights and exchange ideas,
paving the way and opening doors to healthier communities.”
MICHAEL F. NEIDORFF
Chairman, President & CEO, Centene
FROM SCIENCE TO STRATEGIES AT THE ENVOLVE CENTER
FOR HEALTH BEHAVIOR CHANGE
Nearly two years ago, Centene’s top leaders in healthcare solutions
began to consider the impact of an academic-industry-based
collaboration, focused on one mission: improving the health of
vulnerable populations by using science to foster sustainable
change in health-related behaviors.
On January 28, 2016, a unique partnership between Centene
Corporation, the Brown School at Washington University in
St. Louis, and the Center for Advanced Hindsight at Duke
University, was launched. The Envolve Center for Health Behavior
Change creates an intersection of Centene’s insights on managed
care, and the research and evaluation expertise of the Brown
School and the Center for Advanced Hindsight. By interpreting the
science of behavior change and developing practical strategies and
interventions that result in sustainable health behavior change,
the Envolve Center is positioned to improve the effectiveness of
healthcare delivery, while influencing positive health outcomes
and reducing the economic burdens of poor health on individuals
and society.
The Envolve Center is currently working with Centene’s Louisiana,
Missouri and Florida health plans to evaluate the impact peer
coaches have on reducing childhood obesity, specifically dietary
and activity habits. The Center is also looking beyond the
instruction that members receive about healthy behaviors,
to learn how neighbors, family members and friends can influence
and work together for better health outcomes.
Photo: Attendees at the grand opening of The
Envolve Center for Health Behavior Change at
Washington University in St. Louis.
This partnership brings together academic and
industry leaders in the science of behavior change
including Centene’s newly rebranded specialty
division, Envolve®, The Brown School at Washington
University in St. Louis, and Duke University’s Center
for Advanced Hindsight.
10 CENTENE CORPORATION
Finding New Ways CENTENE CORPORATION 11
FINDING NEW WAYS
At Centene, we believe in finding new and effective solutions that respond to the
complex health needs of our members. By combining active local involvement in
the communities that we serve with a focus on the individual, and a commitment
to treat the whole person, Centene has been able to establish programs that
work to remove many of the barriers that healthcare consumers face. Oftentimes
these successful health management programs are a result of collaborations with
community partners and other stakeholders.
PERSON-CENTERED INNOVATION AND TECHNOLOGY
Centene has always emphasized innovation and a technology
strategy that prioritize our members’ healthcare needs. Our
Health Care Enterprise group of companies exemplifies how
we put our members at the center of all we do — developing
better tools and techniques by first understanding their
increasingly complex needs.
AcariaHealth matches members with chronic conditions
with the specialty pharmaceuticals they need and works
to ensure that they adhere to their medication routines.
Casenet’s TruCare product has long served as the backbone
of Centene’s case management processes, and with the
addition of integrated care and LTSS capabilities in recent
releases, case managers have more tools than ever before.
In an effort to empower case managers to help close quality
and risk adjustment gaps, Centene made an investment in
Interpreta, a modern analytics tool which is designed to
identify those gaps and help health plans, providers and
members close those gaps.
The Health Care Enterprise portfolio also includes two
provider organizations, LifeShare and USMM. LifeShare
provides both direct services and managed care services to
individuals with intellectual and developmental disabilities.
USMM offers a suite of services ranging from in-home
physician visits, to durable medical equipment, hospice,
and lab services for individuals who are homebound and
have chronic conditions. In addition, USMM now offers care
through the nation’s largest multi-state Accountable Care
Organization (ACO) and has improved outcomes for patients
and achieved savings for CMS through that initiative.
Our Health Care Enterprise group of companies
exemplifies how we put our members at the
center of all we do.
ADDRESSING A NATIONAL EPIDEMIC
According to a 2016 U.S. Department of Health and Human
Services report, on an average day 78 people die from an
opioid-related overdose, and $20 billion is spent annually for
emergency department and inpatient care for opioid poisonings.
With the reality of the nation’s opioid epidemic becoming
evident in every state in both urban and rural communities,
and across social and economic groups, Centene’s clinical
leadership mobilized in 2016 to launch an enterprise-wide
Opioid Management Strategy. Designed to prevent members
from overusing or misusing opioid medications, the program
involves the establishment of three advisory teams. One group
focuses on pharmacy education and outreach, another group
works on provider engagement, and the Member Intervention
Advisory Group identifies high-risk members for targeted
intervention and preventive education. Through collaboration,
education and the use of Centene’s business intelligence tools,
our health plans are looking to this proactive program to help
them address this national epidemic.
One example of programs already operating is in Massachusetts.
CeltiCare Health noted that one fourth of their hospital
admissions were due to substance abuse in 2015, and more
than 10 percent of the health plan’s budget was supporting
medication to treat addiction. CeltiCare Health launched a
state-wide effort to educate both providers and members on
prevention, intervention, treatment, and recovery methods.
Recognized as a “Game Changer” by the Boston Globe,
CeltiCare Health today has a full time substance use disorder
case manager, distributes atomizers for the easy use of the
overdose drug Naloxone, supports Peer Recovery Coach
academies, and has a permanent task force constantly looking
for ways to reduce the incidence of substance use disorders.
The Medical Management team at CeltiCare Health also works
with its network of providers to review prescribing practices,
including the percentage of their prescriptions that are
controlled substances. Follow up with providers who
are suspected of over-prescribing can be as simple as
face-to-face education.
REDUCING AVOIDABLE
HOSPITAL READMISSIONS
Preventable hospital readmissions not
only cause damaging effects on patients’
quality of life, but are also major sources
of unnecessary healthcare costs. Seeking
to address this challenge within the
healthcare system, we developed a
multidisciplinary and collaborative post-
hospitalization outreach program, including
concurrent review of discharge instructions,
medication adherence assessment,
disease-specific education with the Teach
Back method, and telephonic outreach by
care management staff. Results in 2015
demonstrated that our proactive outreach
to members within 10 days of discharge
significantly reduced readmissions at 30
days while saving appropriately $5.8
million. Since its initial launch, we have
improved the program with the integration
of a Readmission Risk Score to further
improve outcomes and cost savings.
10%
year-over-year decrease
in hospital readmission
TOTALING
$5.8M
approximate savings in 2015
TURNING POINT
Children in the Texas foster care system
are admitted into inpatient psychiatric
facilities at a higher rate than children
outside of foster care. These admissions
often cause a disruption in foster home
placement and result in higher readmission
rates to inpatient facilities. To break this
cycle, Centene’s behavioral health and
foster care subsidiary worked with
multiple child-placing agencies and local
psychiatrists in Fort Worth, Texas to launch
the Turning Point program. The program
offers an alternative to inpatient psychiatric
admission for children in foster care.
Patients are treated in a home setting,
staffed by a team of dedicated behavioral
health professionals. Program results show
a 34 percent decrease in 90-day
readmissions to an inpatient psychiatric
facility among the members enrolled.
Turning Point’s success has led to a
decision by Centene to expand the
program to other Texas communities.
Division Treatment – Readmission
(percentage of population)
%
4
.
8
3
%
5
.
7
2
%
8
.
4
2
e
n
i
l
s
i
s
i
r
c
e
n
o
n
n
o
i
s
s
i
m
d
a
25.5%
combination
of intervention
We saw a difference in the readmission rates
for children at each level of intervention by
the Turning Point Program – crisis intervention
alone, admission to crisis residential, and
a combination.
MODIFIED IMPACT PROGRAM
Illnesses like sickle cell anemia, diabetes or
heart disease are often aggravated by newly
diagnosed, undiagnosed or undertreated
behavioral health conditions, with
depression being top concern. Sunshine
Health, Centene’s Florida health plan, and
Cenpatico, Centene’s behavioral health
specialty company, joined a Florida-based
medical center, Family Care Partners, to
introduce Modified IMPACT (Improving
Mood Providing Access to Collaborative
Treatment) program. Members are
identified and assigned to a Cenpatico
wellness coach who is located at the
medical center, allowing for better
coordination with medical staff. The coach
will assess initial needs of the member
and coordinate behavioral healthcare and
community support, as well as consult with
primary care providers. The results show a
decrease in depression symptoms among
members, as well as a finding that patients
enrolled in the program were connected
to behavioral health services 67 percent
more often than patients outside of the
enrolled group.
PATIENT OUTCOMES
Sixty-seven percent were connected to
behavioral health services, nearly double the
rate of those identified but not engaged in
the program.
CLINICIAN OUTCOMES
Nearly 1 out of 3 members achieved goals
indicating a significant improvement in
depression symptoms.
COST SAVINGS
Healthcare costs averaged $2,213 lower
than members identified but not engaged.
Finding New Ways CENTENE CORPORATION 13
FINDING NEW WAYS
At Centene, we believe in finding new and effective solutions that respond to the
complex health needs of our members. By combining active local involvement in
the communities that we serve with a focus on the individual, and a commitment
to treat the whole person, Centene has been able to establish programs that
work to remove many of the barriers that healthcare consumers face. Oftentimes
these successful health management programs are a result of collaborations with
community partners and other stakeholders.
PERSON-CENTERED INNOVATION AND TECHNOLOGY
Centene has always emphasized innovation and a technology
strategy that prioritize our members’ healthcare needs. Our
Health Care Enterprise group of companies exemplifies how
we put our members at the center of all we do — developing
better tools and techniques by first understanding their
increasingly complex needs.
AcariaHealth matches members with chronic conditions
with the specialty pharmaceuticals they need and works
to ensure that they adhere to their medication routines.
Casenet’s TruCare product has long served as the backbone
of Centene’s case management processes, and with the
addition of integrated care and LTSS capabilities in recent
releases, case managers have more tools than ever before.
In an effort to empower case managers to help close quality
and risk adjustment gaps, Centene made an investment in
Interpreta, a modern analytics tool which is designed to
identify those gaps and help health plans, providers and
members close those gaps.
The Health Care Enterprise portfolio also includes two
provider organizations, LifeShare and USMM. LifeShare
provides both direct services and managed care services to
individuals with intellectual and developmental disabilities.
USMM offers a suite of services ranging from in-home
physician visits, to durable medical equipment, hospice,
and lab services for individuals who are homebound and
have chronic conditions. In addition, USMM now offers care
through the nation’s largest multi-state Accountable Care
Organization (ACO) and has improved outcomes for patients
and achieved savings for CMS through that initiative.
Our Health Care Enterprise group of companies
exemplifies how we put our members at the
center of all we do.
ADDRESSING A NATIONAL EPIDEMIC
According to a 2016 U.S. Department of Health and Human
Services report, on an average day 78 people die from an
opioid-related overdose, and $20 billion is spent annually for
emergency department and inpatient care for opioid poisonings.
With the reality of the nation’s opioid epidemic becoming
evident in every state in both urban and rural communities,
and across social and economic groups, Centene’s clinical
leadership mobilized in 2016 to launch an enterprise-wide
Opioid Management Strategy. Designed to prevent members
from overusing or misusing opioid medications, the program
involves the establishment of three advisory teams. One group
focuses on pharmacy education and outreach, another group
works on provider engagement, and the Member Intervention
Advisory Group identifies high-risk members for targeted
intervention and preventive education. Through collaboration,
education and the use of Centene’s business intelligence tools,
our health plans are looking to this proactive program to help
them address this national epidemic.
One example of programs already operating is in Massachusetts.
CeltiCare Health noted that one fourth of their hospital
admissions were due to substance abuse in 2015, and more
than 10 percent of the health plan’s budget was supporting
medication to treat addiction. CeltiCare Health launched a
state-wide effort to educate both providers and members on
prevention, intervention, treatment, and recovery methods.
Recognized as a “Game Changer” by the Boston Globe,
CeltiCare Health today has a full time substance use disorder
case manager, distributes atomizers for the easy use of the
overdose drug Naloxone, supports Peer Recovery Coach
academies, and has a permanent task force constantly looking
for ways to reduce the incidence of substance use disorders.
The Medical Management team at CeltiCare Health also works
with its network of providers to review prescribing practices,
including the percentage of their prescriptions that are
controlled substances. Follow up with providers who
are suspected of over-prescribing can be as simple as
face-to-face education.
REDUCING AVOIDABLE
HOSPITAL READMISSIONS
Preventable hospital readmissions not
only cause damaging effects on patients’
quality of life, but are also major sources
of unnecessary healthcare costs. Seeking
to address this challenge within the
healthcare system, we developed a
multidisciplinary and collaborative post-
hospitalization outreach program, including
concurrent review of discharge instructions,
medication adherence assessment,
disease-specific education with the Teach
Back method, and telephonic outreach by
care management staff. Results in 2015
demonstrated that our proactive outreach
to members within 10 days of discharge
significantly reduced readmissions at 30
days while saving appropriately $5.8
million. Since its initial launch, we have
improved the program with the integration
of a Readmission Risk Score to further
improve outcomes and cost savings.
10%
year-over-year decrease
in hospital readmission
TOTALING
$5.8M
approximate savings in 2015
TURNING POINT
Children in the Texas foster care system
are admitted into inpatient psychiatric
facilities at a higher rate than children
outside of foster care. These admissions
often cause a disruption in foster home
placement and result in higher readmission
rates to inpatient facilities. To break this
cycle, Centene’s behavioral health and
foster care subsidiary worked with
multiple child-placing agencies and local
psychiatrists in Fort Worth, Texas to launch
the Turning Point program. The program
offers an alternative to inpatient psychiatric
admission for children in foster care.
Patients are treated in a home setting,
staffed by a team of dedicated behavioral
health professionals. Program results show
a 34 percent decrease in 90-day
readmissions to an inpatient psychiatric
facility among the members enrolled.
Turning Point’s success has led to a
decision by Centene to expand the
program to other Texas communities.
Division Treatment – Readmission
(percentage of population)
%
4
.
8
3
%
5
.
7
2
%
8
.
4
2
e
n
i
l
s
i
s
i
r
c
e
n
o
n
n
o
i
s
s
i
m
d
a
25.5%
combination
of intervention
We saw a difference in the readmission rates
for children at each level of intervention by
the Turning Point Program – crisis intervention
alone, admission to crisis residential, and
a combination.
MODIFIED IMPACT PROGRAM
Illnesses like sickle cell anemia, diabetes or
heart disease are often aggravated by newly
diagnosed, undiagnosed or undertreated
behavioral health conditions, with
depression being top concern. Sunshine
Health, Centene’s Florida health plan, and
Cenpatico, Centene’s behavioral health
specialty company, joined a Florida-based
medical center, Family Care Partners, to
introduce Modified IMPACT (Improving
Mood Providing Access to Collaborative
Treatment) program. Members are
identified and assigned to a Cenpatico
wellness coach who is located at the
medical center, allowing for better
coordination with medical staff. The coach
will assess initial needs of the member
and coordinate behavioral healthcare and
community support, as well as consult with
primary care providers. The results show a
decrease in depression symptoms among
members, as well as a finding that patients
enrolled in the program were connected
to behavioral health services 67 percent
more often than patients outside of the
enrolled group.
PATIENT OUTCOMES
Sixty-seven percent were connected to
behavioral health services, nearly double the
rate of those identified but not engaged in
the program.
CLINICIAN OUTCOMES
Nearly 1 out of 3 members achieved goals
indicating a significant improvement in
depression symptoms.
COST SAVINGS
Healthcare costs averaged $2,213 lower
than members identified but not engaged.
Finding New Ways CENTENE CORPORATION 13
TO HELP MORE PEOPLE
Centene’s foundational belief that
everyone deserves access to high-quality,
affordable healthcare with dignity drives
our determination to expand the range of
products we offer in our markets — helping
more and more individuals every day.
25% TRICARE Eligibles
11% Commercial
7% ABD & Long-Term
Services and Supports
4% Behavioral Health
3% Medicare & Duals
1% Correctional
49% TANF, CHIP &
Foster Care
Year End Membership, 2016 The continued diversification of our portfolio
increases our ability to provide support to more individuals and address
a wider range of challenges in healthcare today.
Personal engagement is an important part of
how Centene works to help our members live
healthier lives.
2014
+182%
2016
Increase in managed care membership
We take seriously our responsibility toward every
individual we serve, and every life that we impact.
From December 31, 2014 to December 31, 2016, we
increased our managed care membership by
7.4 million, or 182 percent.
HELPING BY FOCUSING ON THE INDIVIDUAL
For 21 years, a Magnolia Health member in Mississippi
has lived with health risks associated with sickle cell
disease, as well as asthma, avascular osteonecrosis
and chronic anemia. In addition to her many health
risks, the young woman had not seen a sickle cell
provider in over three years. She had missed scheduled
visits at the University of Mississippi Medical Center
Sickle Cell Clinic and was not compliant with any of the
care that could help her avoid a pain crisis and regular
visits to the hospital emergency department.
She was enrolled in Magnolia Health’s Care Management program
in summer 2016. She began working with Tracy, a case manager who
scheduled appointments for her, but she continued to miss them.
Finally, the clinic offered one more appointment, but announced
that the member would no longer be seen by any of their providers
if the appointment was missed. Tracy contacted the member
again, pleading with her to get the care she so desperately needed
and then inquired about any obstacles that may prevent her from
keeping the appointment, “Do you need a babysitter? Do you want
someone to go with you?” The member admitted being afraid of
going alone to the doctor. The day of the appointment the case
manager made phone contact early in the morning and stayed
connected with her as she left her home heading to the clinic.
When the member called her case manager to report that she
was lost, they remained on the phone, as Tracy navigated her
through the streets and landmarks until the member finally
arrived at her destination.
With fear behind her and her confidence steady, the member
has kept regular appointments, begun to take her medicine as
prescribed and worked with her care team at Magnolia Health
to improve her quality of life.
14 CENTENE CORPORATION
To Help More People CENTENE CORPORATION 15
TO HELP MORE PEOPLE
Centene’s foundational belief that
everyone deserves access to high-quality,
affordable healthcare with dignity drives
our determination to expand the range of
products we offer in our markets — helping
more and more individuals every day.
25% TRICARE Eligibles
11% Commercial
7% ABD & Long-Term
Services and Supports
4% Behavioral Health
3% Medicare & Duals
1% Correctional
49% TANF, CHIP &
Foster Care
Year End Membership, 2016 The continued diversification of our portfolio
increases our ability to provide support to more individuals and address
a wider range of challenges in healthcare today.
Personal engagement is an important part of
how Centene works to help our members live
healthier lives.
2014
+182%
2016
Increase in managed care membership
We take seriously our responsibility toward every
individual we serve, and every life that we impact.
From December 31, 2014 to December 31, 2016, we
increased our managed care membership by
7.4 million, or 182 percent.
HELPING BY FOCUSING ON THE INDIVIDUAL
For 21 years, a Magnolia Health member in Mississippi
has lived with health risks associated with sickle cell
disease, as well as asthma, avascular osteonecrosis
and chronic anemia. In addition to her many health
risks, the young woman had not seen a sickle cell
provider in over three years. She had missed scheduled
visits at the University of Mississippi Medical Center
Sickle Cell Clinic and was not compliant with any of the
care that could help her avoid a pain crisis and regular
visits to the hospital emergency department.
She was enrolled in Magnolia Health’s Care Management program
in summer 2016. She began working with Tracy, a case manager who
scheduled appointments for her, but she continued to miss them.
Finally, the clinic offered one more appointment, but announced
that the member would no longer be seen by any of their providers
if the appointment was missed. Tracy contacted the member
again, pleading with her to get the care she so desperately needed
and then inquired about any obstacles that may prevent her from
keeping the appointment, “Do you need a babysitter? Do you want
someone to go with you?” The member admitted being afraid of
going alone to the doctor. The day of the appointment the case
manager made phone contact early in the morning and stayed
connected with her as she left her home heading to the clinic.
When the member called her case manager to report that she
was lost, they remained on the phone, as Tracy navigated her
through the streets and landmarks until the member finally
arrived at her destination.
With fear behind her and her confidence steady, the member
has kept regular appointments, begun to take her medicine as
prescribed and worked with her care team at Magnolia Health
to improve her quality of life.
14 CENTENE CORPORATION
To Help More People CENTENE CORPORATION 15
TO HELP MORE PEOPLE
Centene serves more than 11 million managed care members through our
portfolio of high-quality commercial and government sponsored healthcare
programs. The broad offering of programs that we provide has helped us build
both capacity and capability to successfully navigate a changing healthcare
environment, while continuing to offer better health outcomes at lower costs.
MEDICAID
Includes TANF, CHIP, Foster Care, ABD and
Long Term Services and Supports
23 states with Medicaid programs*
6 RFP wins in 2016
MEDICARE
Includes Medicare Advantage, Medicare Supplement,
Special Needs Plans and Medicare-Medicare Plans
4-Star parent organization rating
334,300 year-end membership (2016)
CORRECTIONAL
2 new contracts in Florida and New Mexico
8 state-wide correctional care contracts
FEDERAL SERVICES
Includes TRICARE, Veterans Choice and Military
& Family Life Counseling (MFLC)
Awarded TRICARE West Region
3,200 employees
2.8 million TRICARE Eligibles
28 years serving military families
COMMERCIAL
1.2 million year-end membership
4 states with small and large group commercial
13 states with Marketplace contracts
ENVOLVE
Includes a comprehensive portfolio of specialty
healthcare solutions
4,300 employees
13 Quality Recognition & Innovation Awards in 2016
MEDICAID
The Centene story began over 30 years ago
as a single nonprofit Medicaid health plan
operating in the basement of a Milwaukee,
Wisconsin hospital. Today, Centene is the
nation’s largest Medicaid Managed Care
Organization serving more than 6.9 million
Medicaid members, including behvioral
health. Centene is also a leader in three
of the largest Medicaid states: California,
Florida and Texas. In 2016, Centene was
awarded contracts to continue providing
managed care services in three of our
existing states, while picking up new
contracts in Nebraska, Pennsylvania and
Nevada. The success of Centene’s Medicaid
programs supports our multi-line portfolio
approach, allowing us to leverage existing
Medicaid infrastructure to support
expansion of other business lines such
as Medicare Advantage and our Ambetter
Marketplace product.
MEDICARE
Centene served more than 334,000
Medicare beneficiaries in 2016. Our
acquisition of Heath Net paved the way
for us to offer consumers a 4 Star Medicare
Advantage product. More than 10,000
people a day become Medicare eligible,
and 65 percent of the more than $700
billion annual medical spend on Medicare
is at or below 400 percent of the Federal
Poverty Level. Our focus remains on service
to low-income elderly populations, allowing
us to leverage existing networks and
geographic footprint. In 2017, Centene
will begin providing Medicare Advantage
plans in four of our existing states—Florida,
Georgia, Mississippi, and Texas.
COMMERCIAL
In addition to offering large group and
small group commercial coverage in
Arizona, California, Oregon and Washington,
Centene also offers health insurance plans
on state and federal exchanges. While other
companies have struggled to succeed in the
Health Insurance Marketplace, Centene is
one of the few managed care organizations
that has been effective in navigating the
Affordable Care Act (ACA), with excellent
results. Many of our exchange members
were previously Medicaid members, and
they are subsidy-eligible under the ACA.
Centene’s Ambetter product is strategically
priced and designed to serve low-income
individuals. We have relied on a very
deliberate and methodical approach
to how we design and price the plans,
and build networks.
CORRECTIONAL
Since receiving its first state contract in
2015, Centurion (our joint venture
correctional healthcare services subsidiary
with MHM Services Inc.) has maintained a
solid growth position in the development
pipeline of our core businesses platform.
By combining sound financial discipline with
the delivery of appropriate care, Centurion
is gaining recognition among states as a top
correctional healthcare provider. In 2016,
Florida and New Mexico marked Centurion’s
sixth and seventh state-wide correctional
healthcare contract, respectively, joining
Massachusetts, Minnesota, Mississippi,
Tennessee and Vermont. Additionally,
Health Net Federal Services holds a
correctional contract with the California
Department of Corrections and
Rehabilitation.
FEDERAL SERVICES
Centene has a long history of supporting our
nation’s service men and women, and now
our network of over 470,000 providers
across 39 states serves close to 3 million
military families and veterans across
multiple contracts. Federal Services
programs are an important addition to the
Centene government healthcare portfolio,
and they represent significant growth
opportunities ahead, especially with our
ability to deploy our specialty solutions
through Envolve. We are honored to have
received an award for the 2017 TRICARE
contract in the Western region, representing
a return to the original Health Net region at
the launch of the TRICARE program in 1988.
Additionally, Centene has been able to
address concerns around access to care
by coordinating over 1 million appointments
for more than 700,000 veterans across
our Veterans Choice service area.
ENVOLVE
Centene has a longstanding commitment to
serving the whole person, and over the last
dozen years we have built a continuum of
integrated capabilities to support our
internal health plans, and a wide range of
external customers. The Envolve family of
health solutions works together to make
healthcare simpler, more effective and more
accessible for healthcare consumers.
Specialty services deployed through Envolve
realized increasing success in 2016. Through
the delivery of innovative and high-quality
programs, including a management service
agreements in Maryland and the successful
award of 13 fee-based contracts with
third-party customers, Envolve has emerged
as a key part of Centene’s growth strategy.
* includes implementations
expected to commence in 2017
To Help More People CENTENE CORPORATION 17
TO HELP MORE PEOPLE
Centene serves more than 11 million managed care members through our
portfolio of high-quality commercial and government sponsored healthcare
programs. The broad offering of programs that we provide has helped us build
both capacity and capability to successfully navigate a changing healthcare
environment, while continuing to offer better health outcomes at lower costs.
MEDICAID
Includes TANF, CHIP, Foster Care, ABD and
Long Term Services and Supports
23 states with Medicaid programs*
6 RFP wins in 2016
MEDICARE
Includes Medicare Advantage, Medicare Supplement,
Special Needs Plans and Medicare-Medicare Plans
4-Star parent organization rating
334,300 year-end membership (2016)
CORRECTIONAL
2 new contracts in Florida and New Mexico
8 state-wide correctional care contracts
FEDERAL SERVICES
Includes TRICARE, Veterans Choice and Military
& Family Life Counseling (MFLC)
Awarded TRICARE West Region
3,200 employees
2.8 million TRICARE Eligibles
28 years serving military families
COMMERCIAL
1.2 million year-end membership
4 states with small and large group commercial
13 states with Marketplace contracts
ENVOLVE
Includes a comprehensive portfolio of specialty
healthcare solutions
4,300 employees
13 Quality Recognition & Innovation Awards in 2016
MEDICAID
The Centene story began over 30 years ago
as a single nonprofit Medicaid health plan
operating in the basement of a Milwaukee,
Wisconsin hospital. Today, Centene is the
nation’s largest Medicaid Managed Care
Organization serving more than 6.9 million
Medicaid members, including behvioral
health. Centene is also a leader in three
of the largest Medicaid states: California,
Florida and Texas. In 2016, Centene was
awarded contracts to continue providing
managed care services in three of our
existing states, while picking up new
contracts in Nebraska, Pennsylvania and
Nevada. The success of Centene’s Medicaid
programs supports our multi-line portfolio
approach, allowing us to leverage existing
Medicaid infrastructure to support
expansion of other business lines such
as Medicare Advantage and our Ambetter
Marketplace product.
MEDICARE
Centene served more than 334,000
Medicare beneficiaries in 2016. Our
acquisition of Heath Net paved the way
for us to offer consumers a 4 Star Medicare
Advantage product. More than 10,000
people a day become Medicare eligible,
and 65 percent of the more than $700
billion annual medical spend on Medicare
is at or below 400 percent of the Federal
Poverty Level. Our focus remains on service
to low-income elderly populations, allowing
us to leverage existing networks and
geographic footprint. In 2017, Centene
will begin providing Medicare Advantage
plans in four of our existing states—Florida,
Georgia, Mississippi, and Texas.
COMMERCIAL
In addition to offering large group and
small group commercial coverage in
Arizona, California, Oregon and Washington,
Centene also offers health insurance plans
on state and federal exchanges. While other
companies have struggled to succeed in the
Health Insurance Marketplace, Centene is
one of the few managed care organizations
that has been effective in navigating the
Affordable Care Act (ACA), with excellent
results. Many of our exchange members
were previously Medicaid members, and
they are subsidy-eligible under the ACA.
Centene’s Ambetter product is strategically
priced and designed to serve low-income
individuals. We have relied on a very
deliberate and methodical approach
to how we design and price the plans,
and build networks.
CORRECTIONAL
Since receiving its first state contract in
2015, Centurion (our joint venture
correctional healthcare services subsidiary
with MHM Services Inc.) has maintained a
solid growth position in the development
pipeline of our core businesses platform.
By combining sound financial discipline with
the delivery of appropriate care, Centurion
is gaining recognition among states as a top
correctional healthcare provider. In 2016,
Florida and New Mexico marked Centurion’s
sixth and seventh state-wide correctional
healthcare contract, respectively, joining
Massachusetts, Minnesota, Mississippi,
Tennessee and Vermont. Additionally,
Health Net Federal Services holds a
correctional contract with the California
Department of Corrections and
Rehabilitation.
FEDERAL SERVICES
Centene has a long history of supporting our
nation’s service men and women, and now
our network of over 470,000 providers
across 39 states serves close to 3 million
military families and veterans across
multiple contracts. Federal Services
programs are an important addition to the
Centene government healthcare portfolio,
and they represent significant growth
opportunities ahead, especially with our
ability to deploy our specialty solutions
through Envolve. We are honored to have
received an award for the 2017 TRICARE
contract in the Western region, representing
a return to the original Health Net region at
the launch of the TRICARE program in 1988.
Additionally, Centene has been able to
address concerns around access to care
by coordinating over 1 million appointments
for more than 700,000 veterans across
our Veterans Choice service area.
ENVOLVE
Centene has a longstanding commitment to
serving the whole person, and over the last
dozen years we have built a continuum of
integrated capabilities to support our
internal health plans, and a wide range of
external customers. The Envolve family of
health solutions works together to make
healthcare simpler, more effective and more
accessible for healthcare consumers.
Specialty services deployed through Envolve
realized increasing success in 2016. Through
the delivery of innovative and high-quality
programs, including a management service
agreements in Maryland and the successful
award of 13 fee-based contracts with
third-party customers, Envolve has emerged
as a key part of Centene’s growth strategy.
* includes implementations
expected to commence in 2017
To Help More People CENTENE CORPORATION 17
QUARTERLY SELECTED
FINANCIAL INFORMATION
Amounts Attributable
to Centene Corporation
Common Shareholders
Net Earnings (Loss) Per Common Share
Attributable to Centene Corporation
SELECTED FINANCIAL
INFORMATION
For the Quarter Ended, 2016 (1)
(in millions, except share data) (unaudited)
March 31
$6,953
June 30
$10,897
September 30
December 31
$10,846
$11,911
Revenues
(15)
(1)
$(16)
$(0.12)
(0.01)
$(0.13)
$(0.12)
(0.01)
$(0.13)
$171
(1)
$170
$1.00
—
$1.00
$0.98
(0.01)
$0.9 7
$148
(1)
$147
$0.87
(0.01)
$0.86
$0.84
—
$0.84
$255
6
$261
$1.49
0.04
$1.53
$1.45
0.04
$1.49
Expenses
Other Income (Expense)
Total revenues
Earnings (loss) from continuing
operations, net of income tax
expense
Discontinued operations,
net of income tax expense (benefit)
Net earnings (loss)
Basic:
Continuing operations
Discontinued operations
Basic earnings per common share
Diluted:
Continuing operations
Discontinued operations
Diluted earnings per common share
Weighted Average Number of
Common Shares Outstanding
Basic
Diluted
125,543,076
170,558,778
125,543,076
174,848,996
170,774,587
175,495,339
171,143,624
175,511,179
Amounts Attributable
to Centene Corporation
Common Shareholders
Net Earnings (Loss) Per Common Share
Attributable to Centene Corporation
Total revenues
Earnings from continuing
operations, net of income tax
expense
Discontinued operations,
net of income tax expense
(benefit)
Net earnings
Basic:
Continuing operations
Discontinued operations
Basic earnings per common share
Diluted:
Continuing operations
Discontinued operations
Diluted earnings per
common share
For the Quarter Ended, 2015
(in millions, except share data) (unaudited)
March 31
June 30
September 30
December 31
$5,131
$5,506
$5,821
$6,302
$64
$88
(1)
$63
$0.54
(0.01)
$0.53
$0.52
(0.01)
—
$88
$0.74
—
$0.74
$0.72
—
$0.51
$0.72
$92
1
$93
$0.77
0.01
$0.78
$0.75
0.01
$0.76
$112
(1)
$111
$0.94
(0.01)
$0.93
$0.91
(0.01)
$0.90
(1) The Company early adopted ASU (Accounting Standards Update)
2016-09 during the fourth quarter of 2016. The ASU requires adjustments be
reflected as of the beginning of the fiscal year of adoption and as a result,
prior periods have been restated accordingly. Refer to Note 2, Summary of
Significant Accounting Policies in our form 10-K.
Premium
Service
Premium and service revenues
Premium tax and health insurer fee
Total Revenues
Medical costs
Cost of services
Selling, general and administrative expenses
Amortization of acquired intangible assets
Premium tax expense
Health insurer fee expense
Total operating expenses
Earnings from operations
Investment and other income
Interest expense
Earnings from continuing
operations, before income
tax expense
Income tax expense
Earnings from continuing operations,
net of income tax expense
Discontinued operations, net of income
tax expense (benefit) of $2, $(1), and $1
respectively
Net earnings
(Earnings) loss attributable
to noncontrolling interests
Net earnings attributable
to Centene Corporation
Year Ended December 31
(in millions, except share data)
2016
$35,399
2,180
37,579
3,028
40,607
30,636
1,864
3,676
147
2,563
461
39,347
1,260
114
(217)
1,157
599
558
3
561
1
$562
$559
3
$562
$3.50
0.02
$3.52
$3.41
0.02
$3.43
2015
$19,389
1,876
21,265
1,495
22,760
17,242
1,621
1,802
24
1,151
215
22,055
705
35
(43)
697
339
358
(1)
357
(2)
$355
$356
(1)
$355
$2.99
(0.01)
$2.98
$2.89
(0.01)
$2.88
2014
$14,198
1,469
15,667
893
16,560
12,678
1,280
1,298
16
698
126
16,096
464
28
(35)
457
196
261
3
264
7
$271
$268
3
$271
$2.30
0.03
$2.33
$2.23
0.02
$2.25
Amounts Attributable to Centene
Corporation Common Shareholders
Earnings from continuing operations,
net of income tax expense
Net Earnings (Loss) Per Common Share
Attributable to Centene Corporation
Discontinued operations, net of
income tax expense (benefit)
Net earnings
Basic:
Continuing operations
Discontinued operations
Basic earnings per common share
Diluted:
Continuing operations
Discontinued operations
Diluted earnings per common share
Weighted Average Number of
Common Shares Outstanding
Basic
Diluted
159,567,607
163,975,407
119,100,744
123,066,370
116,345,764
120,360,212
18 CENTENE CORPORATION Quarterly Financial Information
Selected Financial Information CENTENE CORPORATION 19
QUARTERLY SELECTED
FINANCIAL INFORMATION
Amounts Attributable
to Centene Corporation
Common Shareholders
Net Earnings (Loss) Per Common Share
Attributable to Centene Corporation
SELECTED FINANCIAL
INFORMATION
For the Quarter Ended, 2016 (1)
(in millions, except share data) (unaudited)
March 31
$6,953
June 30
$10,897
September 30
December 31
$10,846
$11,911
Revenues
(15)
(1)
$(16)
$(0.12)
(0.01)
$(0.13)
$(0.12)
(0.01)
$(0.13)
$171
(1)
$170
$1.00
—
$1.00
$0.98
(0.01)
$0.9 7
$148
(1)
$147
$0.87
(0.01)
$0.86
$0.84
—
$0.84
$255
6
$261
$1.49
0.04
$1.53
$1.45
0.04
$1.49
Expenses
Other Income (Expense)
Total revenues
Earnings (loss) from continuing
operations, net of income tax
expense
Discontinued operations,
net of income tax expense (benefit)
Net earnings (loss)
Basic:
Continuing operations
Discontinued operations
Basic earnings per common share
Diluted:
Continuing operations
Discontinued operations
Diluted earnings per common share
Weighted Average Number of
Common Shares Outstanding
Basic
Diluted
125,543,076
170,558,778
125,543,076
174,848,996
170,774,587
175,495,339
171,143,624
175,511,179
Amounts Attributable
to Centene Corporation
Common Shareholders
Net Earnings (Loss) Per Common Share
Attributable to Centene Corporation
Total revenues
Earnings from continuing
operations, net of income tax
expense
Discontinued operations,
net of income tax expense
(benefit)
Net earnings
Basic:
Continuing operations
Discontinued operations
Basic earnings per common share
Diluted:
Continuing operations
Discontinued operations
Diluted earnings per
common share
For the Quarter Ended, 2015
(in millions, except share data) (unaudited)
March 31
June 30
September 30
December 31
$5,131
$5,506
$5,821
$6,302
$64
$88
(1)
$63
$0.54
(0.01)
$0.53
$0.52
(0.01)
—
$88
$0.74
—
$0.74
$0.72
—
$0.51
$0.72
$92
1
$93
$0.77
0.01
$0.78
$0.75
0.01
$0.76
$112
(1)
$111
$0.94
(0.01)
$0.93
$0.91
(0.01)
$0.90
(1) The Company early adopted ASU (Accounting Standards Update)
2016-09 during the fourth quarter of 2016. The ASU requires adjustments be
reflected as of the beginning of the fiscal year of adoption and as a result,
prior periods have been restated accordingly. Refer to Note 2, Summary of
Significant Accounting Policies in our form 10-K.
Premium
Service
Premium and service revenues
Premium tax and health insurer fee
Total Revenues
Medical costs
Cost of services
Selling, general and administrative expenses
Amortization of acquired intangible assets
Premium tax expense
Health insurer fee expense
Total operating expenses
Earnings from operations
Investment and other income
Interest expense
Earnings from continuing
operations, before income
tax expense
Income tax expense
Earnings from continuing operations,
net of income tax expense
Discontinued operations, net of income
tax expense (benefit) of $2, $(1), and $1
respectively
Net earnings
(Earnings) loss attributable
to noncontrolling interests
Net earnings attributable
to Centene Corporation
Year Ended December 31
(in millions, except share data)
2016
$35,399
2,180
37,579
3,028
40,607
30,636
1,864
3,676
147
2,563
461
39,347
1,260
114
(217)
1,157
599
558
3
561
1
$562
$559
3
$562
$3.50
0.02
$3.52
$3.41
0.02
$3.43
2015
$19,389
1,876
21,265
1,495
22,760
17,242
1,621
1,802
24
1,151
215
22,055
705
35
(43)
697
339
358
(1)
357
(2)
$355
$356
(1)
$355
$2.99
(0.01)
$2.98
$2.89
(0.01)
$2.88
2014
$14,198
1,469
15,667
893
16,560
12,678
1,280
1,298
16
698
126
16,096
464
28
(35)
457
196
261
3
264
7
$271
$268
3
$271
$2.30
0.03
$2.33
$2.23
0.02
$2.25
Amounts Attributable to Centene
Corporation Common Shareholders
Earnings from continuing operations,
net of income tax expense
Net Earnings (Loss) Per Common Share
Attributable to Centene Corporation
Discontinued operations, net of
income tax expense (benefit)
Net earnings
Basic:
Continuing operations
Discontinued operations
Basic earnings per common share
Diluted:
Continuing operations
Discontinued operations
Diluted earnings per common share
Weighted Average Number of
Common Shares Outstanding
Basic
Diluted
159,567,607
163,975,407
119,100,744
123,066,370
116,345,764
120,360,212
18 CENTENE CORPORATION Quarterly Financial Information
Selected Financial Information CENTENE CORPORATION 19
CORPORATE INFORMATION
The graph to the right compares the cumulative
total stockholder return on our common stock from
December 31, 2011 to December 31, 2016, with
the cumulative total return of the New York Stock
Exchange Composite Index and the Standard &
Poor’s Supercomposite Managed Healthcare Index
over the same period. The graph assumes an
investment of $100 on December 31, 2011, in our
common stock (at the last reported sale price on
such day), the New York Stock Exchange Composite
Index and the Standard & Poor’s Supercomposite
Managed Healthcare Index and assumes the
reinvestment of any dividends.
CENTENE CORPORATION BOARD OF DIRECTORS
Bottom row, from left to right: Orlando Ayala, Vicki B. Escarra,
Michael F. Neidorff, David L. Steward. Top row, from left to right:
Richard A. Gephardt, Robert K. Ditmore, Tommy G. Thompson,
Frederick H. Eppinger, John R. Roberts
$400
$300
$200
$100
$0
2011
2012
2013
2014
2015
2016
Stock Performance Graph
(in dollars)
Centene Corporation
S&P Supercomposite Managed Healthcare Index
New York Stock Exchange Composite Index
BOARD OF DIRECTORS
MICHAEL F. NEIDORFF
Chairman, President &
CEO; Centene Corporation
ORLANDO AYALA
Retired Vice President,
Chairman, Emerging
Markets & Chief Advisor
to Chief Operating Officer;
Microsoft Corporation
ROBERT K. DITMORE
Retired President &
COO; UnitedHealthcare
Corporation
FREDERICK H. EPPINGER
Retired President & CEO;
The Hanover Insurance
Group, Inc.
JOHN R. ROBERTS
Retired Regional
Managing Partner;
Arthur Andersen LLP
VICKI B. ESCARRA
CEO of Opportunity
International
DAVID L. STEWARD
Chairman of the
Board; World Wide
Technology, Inc.
RICHARD A. GEPHARDT
CEO of Gephardt &
Associates; Former Majority
Leader of the U.S. House
of Representatives
TOMMY G. THOMPSON
Former Health and Human
Services Secretary; Former
Governor of Wisconsin
NON-GAAP FINANCIAL
RECONCILIATIONS*
Adjusted Diluted EPS
Year ended December 31
2015
2016
Adjusted Net Earnings
GAAP diluted earnings per share (EPS)
$3.41
$2.89
GAAP net earnings from continuing operations
Health Net acquisition related expenses
Amortization of acquired intangible assets
California minimum MLR change
Charitable contribution
Debt extinguishment
Adjusted Diluted EPS
0.98
0.57
(0.76)
0.19
0.04
$4.43
0.14
0.11
—
—
—
$3.14
Health Net acquisition related expenses
Amortization of acquired intangible assets
California minimum MLR change
Charitable contribution
Debt extinguishment
Income tax effects of adjustments
Adjusted net earnings from continuing operations
2016
$559
234
147
(195)
50
11
(79)
$727
2015
$356
27
24
—
—
—
(20)
2014
$268
2013
$161
2012
$89
—
16
—
—
—
(6)
—
6
—
—
—
(2)
—
5
—
—
—
(2)
$387
$278
$165
$92
* The Health Net acquisition related expenses per diluted share are net of the income tax benefit of $0.45 and $0.08 for the years ended December 31, 2016 and 2015, respectively.
The amortization of acquired intangible assets per diluted share are net of the income tax benefit of $0.33 and $0.08 for the years ended December 31, 2016 and 2015, respectively.
The impact associated with the retroactive contract amendment received in the fourth quarter of 2016 that changed the minimum MLR calculation per diluted share is net of
the income tax expense of $(0.43) for the year ended December 31, 2016. The charitable contribution per diluted share is net of the income tax benefit of $0.11 for the year ended
December 31, 2016. The debt extinguishment cost per diluted share is net of the income tax benefit of $0.03 for the year ended December 31, 2016.
20 CENTENE CORPORATION Corporate Information
OTHER INFORMATION
Included in this 2016 Annual Review are
financial and operating highlights and
summary financial statements. For complete
financial statements, including notes, please
refer to Centene’s Annual Report on Form
10-K for the fiscal year ended December 31,
2016, filed with the Securities and Exchange
Commission (the “2016 Form 10-K”), which
also includes Management’s Discussion and
Analysis of Financial Condition and Results
of Operations. This 2016 Annual Review,
together with our 2016 Form 10-K, constitute
our annual report to security holders for
purposes of Rule 14A-3(b) of the Securities
Exchange Act of 1934, as amended. Our 2016
Form 10-K may be obtained by accessing the
investor section of our company’s website at
www.centene.com, or by going to the SEC’s
website at www.sec.gov.
NON-GAAP FINANCIAL PRESENTATION
The Company is providing certain non-GAAP
financial measures in this report as the
Company believes that these figures are
helpful in allowing investors to more
accurately assess the ongoing nature of
the Company’s operations and measure
the Company’s performance more
consistently across periods. The Company
uses the presented non-GAAP financial
measures internally to allow management
to focus on period-to-period changes in
the Company’s core business operations.
Therefore, the Company believes that this
information is meaningful in addition to
the information contained in the GAAP
presentation of financial information. The
presentation of this additional non-GAAP
financial information is not intended to be
considered in isolation or as a substitute
for the financial information prepared
and presented in accordance with GAAP.
Specifically, the Company believes the
presentation of non-GAAP financial
information that excludes Health Net
acquisition related expenses, amortization
of acquired intangible assets, as well as
other items, allows investors to develop
a more meaningful understanding of the
Company’s performance over time.
FORM 10-K
Centene has filed an Annual Report on Form
10-K for the year ended December 31, 2016,
with the Securities and Exchange Commission.
Stockholders may obtain a copy of this report,
without charge, by writing:
Investor Relations
Centene Corporation
7700 Forsyth Boulevard
St. Louis, MO 63105
www.centene.com
TRANSFER AGENT
Broadridge Corporate Issuer Solutions, Inc.
1717 Arch Street, Suite 1300
Philadelphia, PA 19103
855-627-5087
www.broadridge.com/TransferAgent
ANNUAL MEETING
The Annual Meeting of Stockholders will
be held on Tuesday, April 25, 2017, at
9 a.m. at Centene Corporation, 7700
Forsyth Boulevard, St. Louis, MO 63105
in the Auditorium, 314-725-4477.
CASH DIVIDEND POLICY
Centene has not paid any dividends on its
common stock and expects that its earnings
will continue to be retained for use in the
operation and expansion of its business.
COMMON STOCK INFORMATION
Centene common stock is traded and quoted
on the New York Stock Exchange under the
symbol “CNC.” All share, per share and stock
price information presented in this Annual
Review has been adjusted for Centene’s
February 2015 two-for-one stock split.
Stock
Price
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2017*
2016
2015
High
Low
High
Low
High
Low
$ 71.89 $ 56.00 $ 68.42 $ 47.36 $ 71.66 $ 51.73
$71.53 $ 55.60 $82.18 $ 61.85
$ 75.57 $ 63.37 $ 83.00 $ 50.93
$ 67.41 $ 50.00 $67.53 $51.75
* Stock price through February 17, 2017
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
All statements, other than statements of current or historical fact, contained in this 2016
Annual Review or incorporated by reference herein are forward-looking statements. We
intend such forward looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform Act of
1995, and we are including this statement for purposes of complying with these safe-harbor
provisions. We have attempted to identify these statements by terminology including
“believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “seek,” “target,” “goal,”
“may,” “will,” “would,” “could,” “should,” “can,” “continue” and other similar words or
expressions (and the negative thereof) in connection with, among other things, any
discussion of future operating or financial performance. In particular, these statements
include without limitation statements about our market opportunity, our growth strategy,
competition, expected activities and future acquisitions, investments and the adequacy of
our available cash resources. Readers are cautioned that matters subject to forward-looking
statements involve known and unknown risks and uncertainties, including economic,
regulatory, competitive and other factors that may cause our or our industry’s actual results,
levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements. These statements are not guarantees of future performance and
are subject to risks, uncertainties and assumptions. All forward-looking statements included
in this 2016 Annual Review are based on information available to us on the date of this 2016
Annual Review. Except as may be otherwise required by law, we undertake no obligation to
update or revise the forward-looking statements included in this 2016 Annual Review,
whether as a result of new information, future events or otherwise, after the date of this
filing. You should not place undue reliance on any forward looking statements, as actual results
may differ materially from projections, estimates, or other forward-looking statements due to
a variety of important factors, including but not limited to (i) our ability to accurately predict
and effectively manage health benefits and other operating expenses and reserves; (ii)
competition; (iii) membership and revenue declines or unexpected trends; (iv) changes in
healthcare practices, new technologies, and advances in medicine; (v) increased health care
costs; (vi) changes in economic, political or market conditions; (vii) changes in federal or state
laws or regulations, including changes with respect to government health care programs as
well as changes with respect to the Patient Protection and Affordable Care Act and the
Health Care and Education Affordability Reconciliation Act and any regulations enacted
thereunder that may result from changing political conditions; (viii) rate cuts or other
payment reductions or delays by governmental payors and other risks and uncertainties
affecting our government businesses; (ix) our ability to adequately price products on
federally facilitated and state based Health Insurance Marketplaces; (x) tax matters; (xi)
disasters or major epidemics; (xii) the outcome of legal and regulatory proceedings; (xiii)
changes in expected contract start dates; (xiv) provider, state, federal and other contract
changes and timing of regulatory approval of contracts; (xv) the expiration, suspension, or
termination of our contracts with federal or state governments (including but not limited to
Medicaid, Medicare, and TRICARE); (xvi) challenges to our contract awards; (xvii)
cyber-attacks or other privacy or data security incidents; (xviii) the possibility that the
expected synergies and value creation from acquired businesses, including, without
limitation, the acquisition of Health Net, Inc., will not be realized, or will not be realized
within the expected time period, including, but not limited to, as a result of conditions,
terms, obligations or restrictions imposed by regulators in connection with their approval of,
or consent to, the acquisition; (xix) the exertion of management’s time and our resources,
and other expenses incurred and business changes required in connection with complying
with the undertakings in connection with certain regulatory approvals; (xx) disruption from
the acquisition making it more difficult to maintain business and operational relationships;
(xxi) the risk that unexpected costs will be incurred in connection with, among other things,
the acquisition and/or the integration; (xxii) changes in expected closing dates, estimated
purchase price and accretion for acquisitions; (xxiii) the risk that acquired businesses will
not be integrated successfully; (xxiv) our ability to maintain or achieve improvement in the
Centers for Medicare and Medicaid Services (CMS) Star ratings and other quality scores that
impact revenue; (xxv) availability of debt and equity financing, on terms that are favorable to
us; (xxvi) inflation; and (xxvii) foreign currency fluctuations. This list of important factors is
not intended to be exhaustive. We discuss certain of these matters more fully, as well as
certain other risk factors that may affect our business operations, financial condition and
results of operations, in our filings with the Securities and Exchange Commission, including
our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K. Item 1A. “Risk Factors” of Part I of our Annual Report on Form 10-K filed with the
SEC on February 21, 2017 contains a further discussion of these and other important factors
that could cause actual results to differ from expectations. Due to these important factors
and risks, we cannot give assurances with respect to our future performance, including
without limitation our ability to maintain adequate premium levels or our ability to control
our future medical costs.
7700 Forsyth Boulevard
St. Louis, MO 63105, U.S.A.
1-314-725-4477
www.centene.com