Health insurance giant Centene (NYSE: CNC) has announced a new deal with Express Scripts, Evernorth’s pharmacy benefits management business of Cigna Corp. (NYSE: CI). From January 2024, Express Scripts will manage pharmacy benefits for approximately 20 million Senten members.
On Centene’s recent third-quarter earnings call, Drew Asher, executive vice president and chief financial officer, said the company has spent “about $40 billion plus or minus” in pharmacy benefits to date, and that I mentioned that almost everything is from CVS Caremark.
Also on the conference call, Centene CEO Sarah London said: As many of you know, we expected the RFP process to bring great value to Centene, our members, our state and federal partners. This new partnership will enable us to innovate and redesign how pharmacy benefits are managed while delivering better value to our customers and shareholders. As a result of this new agreement, we expect to realize savings beyond our previous expectations in 2024 and throughout the term of the multi-year agreement. “
Amy Bricker, president of Express Scripts, said in a statement: “This further demonstrates the value of our growth strategy, our long track record as a partner in government-sponsored programs, and the opportunity to further extend our services to a growing number of Americans. Together with .Centene, we will create innovative health services that help people live healthier lives and unlock meaningful savings for the people we serve.”
In addition to significant savings on prescription drugs, Centene customers will also have access to Express Scripts’ extensive nationwide network of retail pharmacies, the company said.
St. Louis-based Centene says on its website, “Almost 1 in 15 people nationwide, including Medicaid and Medicare members (including Medicare prescription drug plans) and individuals and families served by the health insurance marketplace. It explains that it offers coverage to individuals., the TRICARE program, and individuals in correctional facilities.
Also on the conference call, Centene announced third-quarter revenue of $35.9 billion, up 11% from the third quarter of 2021, and earnings per share of $1.30. The company successfully refinanced Medicaid in Mississippi, Nebraska, and Texas this quarter, but Healthnet’s subsidiaries did not win refunds in Los Angeles, Sacramento, or Kern County, California.
London said California’s RFP will affect its earning power in 2024. Centene takes the issue of filing a protest seriously. When we do so, it is not a matter of reflex, it is only done when we find a serious error in the decision-making process, with negative consequences for our beneficiaries. Centene has a proven track record of successful protests we have conducted. And given our strong views on the merits of protesting in California, we intend to exhaust all available appeal avenues. “
Centene also saw a year-over-year deterioration in its Medicare Advantage star rating. London said the repeal of COVID-related disaster relief provisions has helped in part. “We were also impacted by a decline in certain metrics related to operations and management as a result of our own operational challenges in late 2020 and into 2021,” she said.
London said the company has taken aggressive action to change its approach to the Stars programme. Hire a Chief Quality Officer to centrally oversee the quality program and move the entire organization under Jim Murray, the company’s Chief Transformation Officer, to “link quality directly into our value creation office, Medicare Leveraging Jim’s years of experience in driving quality outcomes,” she said. She added, “In addition, we initiated a focused effort to standardize and streamline our quality processes, implementing real-time operational dashboards to track key performance indicators.”
London added that Centene has invested in new technology to enhance access to clinical data on gaps in care. Finally, we invested heavily in improving a Medicare member’s onboarding journey, including redesigning our approach to mission-critical survey questions that impact caps and other metrics. “
