By Crystal Owens – Reporter, Tampa Bay
Business Journal
WellCare Health Plans had one busy first
quarter, to the say least.
Just
prior to the end of March 2019 quarter, the Tampa-based health care plan giant
announced it had been acquired by Centene
Corp. in a $17.3 billion deal that is expected to create a
combined company with approximately 22 million members across 50 states.
In
Florida, its geographic and service expansion is largely complete — its
membership in the state surpassed 1 million members across
its Medicaid, Children's Medical Services Health Plan, Healthy Kids and
Medicare plans in mid-February. That same month, North Carolina selected
WellCare to administer the state’s Medicare program.
All of
this, combined with the September 2018 acquisition of Meridian Health Plan of
Michigan, Meridian Health Plan of Illinois and MeridianRx, a pharmacy benefit
manager for $2.5 billion, played a role in the company's reported 48 percent
increase in adjusted total revenue for fiscal 2019’s first quarter.
The
company reported a total revenue of $6.7 billion for the quarter, compared to
$4.5 billion for the same time period last year. Net income for the first
quarter was $151.4 million, or $2.98 per diluted share and adjusted net income
for the first quarter was $187.6 million, or $3.69 per diluted share.
“Our
performance in the first quarter is representative of the discipline and rigor
we place on running three high-performing, profitable and growing businesses.
While we have begun the important task of integration planning with Centene, it
is clear to our 13,000 associates that we must continue to focus on delivering
on the near term commitments that we have made to our members, providers,
government partners and shareholders,” WellCare CEO Ken Burdick said during an investor call
on Tuesday.
The CEO
and Chief Financial Officer Drew Asher did not take questions
following the call.
WellCare
(NYSE: WCG) didn’t provide any forward looking statements as Centene is
expected to finalize its acquisition of the company in the first half of 2020.
For the
first quarter, WellCare grew its Medicaid health plan memberships in Florida
from 744,000 in March 2018 to 1.1 million members, largely in part to its Value
Script program, a plan that provides coverage for outpatient prescription drugs
covered under Medicare Part D.
“The
premium and benefit design of this new product has been highly attractive in
today’s market,” Burdick said.
WellCare’s
overall membership grew almost 52 percent from 2.75 million in March 2018 to
4.1 million in March 2019. It showed the most growth in Illinois, where
membership jumped by 551 percent from 123,000 to 801,000, according to a U.S.
Securities & Exchange Commission filing.
Asher
said WellCare anticipates a 3 percent rate increase from the Centers for
Medicare and Medicaid Services. The rate change, he said, is before risk score
trend and the impact of the Affordable Care Act fee that’s expected to return
in 2020.
“We're
pleased to get off to a strong start for 2019 and maintain our focus as a
standalone company while we look forward to the next chapter of success for
WellCare. We have started the integration planning work with Centene as we map
out how to best form the premier government programs franchise in the first
half of 2020,” Asher said.
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