ST. LOUIS, Dec. 2, 2019 /PRNewswire/ -- Centene
Corporation (NYSE: CNC) ("Centene") and CVS Health (NYSE:
CVS) announced today that, in connection with the previously
announced merger agreement between Centene and WellCare Health
Plans, Inc. (NYSE: WCG), Centene has entered into a definitive
agreement under which CVS Health will acquire Centene's
Illinois health plan subsidiary,
IlliniCare Health Plan, Inc. ("IlliniCare"). The transaction
entails the sale of Centene's Medicaid and Medicare Advantage lines
of business in Illinois.
Centene will retain IlliniCare's Medicare-Medicaid Alignment
Initiative ("MMAI") business and IlliniCare's statewide YouthCare
foster care contract, set to commence in February 2020. Centene's Ambetter business in
Illinois is not affected. The
companies are committed to ensuring that there is a smooth
transition for members.
"We are continuing to make progress towards completing our
transaction with WellCare and the divestiture of our IlliniCare
Health plan is the next step in that process," said Michael F. Neidorff, Centene's Chairman,
President and Chief Executive Officer. "Our employees in
Illinois have done an exceptional
job serving our communities in the state. We are pleased to enter
this agreement with CVS Health, under which these employees can
continue helping members achieve better health outcomes while
delivering benefits to providers. We will work closely with CVS
Health to ensure a smooth transition of this business for members,
employees and providers."
"Expanding our Medicaid and Medicare Advantage presence in
Illinois will allow us to serve
more members with our proven holistic approach that addresses
physical, behavioral and social determinants of care," said
Karen S. Lynch, Executive Vice
President, CVS Health and President, Aetna. "We look forward to
working with Centene on a seamless transition and developing a
deeper relationship with the state and local providers."
The closing of the transaction with CVS Health is subject to
U.S. federal antitrust clearance, receipt of Illinois state regulatory approvals and other
customary closing conditions, as well as the closing of the Centene
– WellCare transaction.
As previously announced on March 27,
2019, Centene and WellCare agreed to combine in a
transaction that will create a premier healthcare enterprise
focused on government-sponsored healthcare programs and a leader in
Medicaid, Medicare and the Health Insurance Marketplace. The
combination has received approvals from insurance and health care
departments from 26 states. Completion of the Centene – WellCare
transaction remains subject to clearance under the
Hart-Scott-Rodino Act, receipt of required state regulatory
approvals and other customary closing conditions.
Centene and WellCare continue to expect that the Centene –
WellCare transaction will be completed by the first half of
2020.
The financial terms of this transaction will not be disclosed
and the impact to CVS Health earnings once closed is expected to be
immaterial.
Additional information about the Centene – WellCare transaction
can be found at centene-wellcare.com.
About Centene
Centene Corporation, a Fortune 100
company, is a diversified, multi-national healthcare enterprise
that provides a portfolio of services to government sponsored and
commercial healthcare programs, focusing on under-insured and
uninsured individuals. Many receive benefits provided under
Medicaid, including the State Children's Health Insurance Program
(CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long-Term Services and Supports
(LTSS), in addition to other state-sponsored programs, Medicare
(including the Medicare prescription drug benefit commonly known as
"Part D"), dual eligible programs and programs with the U.S.
Department of Defense. Centene also provides healthcare services to
groups and individuals delivered through commercial health plans.
Centene operates local health plans and offers a range of health
insurance solutions. It also contracts with other healthcare and
commercial organizations to provide specialty services including
behavioral health management, care management software,
correctional healthcare services, dental benefits management,
commercial programs, home-based primary care services, life and
health management, vision benefits management, pharmacy benefits
management, specialty pharmacy and telehealth services.
Centene uses its investor relations website to publish important
information about the company, including information that may be
deemed material to investors. Financial and other information about
Centene is routinely posted and is accessible on Centene's investor
relations website, http://www.centene.com/investors.
About CVS Health
CVS Health is the nation's premier
health innovation company helping people on their path to better
health. Whether in one of its pharmacies or through its health
services and plans, CVS Health is pioneering a bold new approach to
total health by making quality care more affordable, accessible,
simple and seamless. CVS Health is community-based and locally
focused, engaging consumers with the care they need when and where
they need it. The Company has more than 9,800 retail locations,
approximately 1,100 walk-in medical clinics, a leading pharmacy
benefits manager with approximately 93 million plan members, a
dedicated senior pharmacy care business serving more than one
million patients per year, expanding specialty pharmacy services,
and a leading stand-alone Medicare Part D prescription drug plan.
CVS Health also serves an estimated 39 million people through
traditional, voluntary and consumer-directed health insurance
products and related services, including a rapidly expanding
Medicare Advantage offering. This innovative health care model
increases access to quality care, delivers better health outcomes
and lowers overall health care costs. Find more information about
how CVS Health is shaping the future of health at
https://www.cvshealth.com.
Cautionary Statement on Forward-Looking Statements of
Centene
All statements, other than statements of current or
historical fact, contained in this communication are
forward-looking statements. Without limiting the foregoing,
forward-looking statements often use words such as "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 particular, these statements include, without
limitation, statements about Centene's future operating or
financial performance, market opportunity, growth strategy,
competition, expected activities in completed and future
acquisitions, including statements about the impact of Centene's
proposed acquisition of WellCare Health Plans, Inc. (the "WellCare
Transaction"), Centene's recent acquisition (the "Fidelis Care
Transaction") of substantially all the assets of New York State Catholic Health Plan, Inc.,
d/b/a Fidelis Care New York ("Fidelis
Care"), investments and the adequacy of Centene's available
cash resources.
These forward-looking statements reflect Centene's current views
with respect to future events and are based on numerous assumptions
and assessments made by us in light of Centene's experience and
perception of historical trends, current conditions, business
strategies, operating environments, future developments and other
factors Centene believes appropriate. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties and are subject to change because they relate to
events and depend on circumstances that will occur in the future,
including economic, regulatory, competitive and other factors that
may cause Centene's or its 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 filing are based
on information available to us on the date of this communication.
Except as may be otherwise required by law, Centene undertakes no
obligation to update or revise the forward-looking statements
included in this communication, 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, variables and events including, but
not limited to, the following: (i) the risk that regulatory or
other approvals required for the WellCare Transaction may be
delayed or not obtained or are obtained subject to conditions that
are not anticipated that could require the exertion of management's
time and Centene's resources or otherwise have an adverse effect on
Centene; (ii) the possibility that certain conditions to the
consummation of the WellCare Transaction will not be satisfied or
completed on a timely basis and accordingly the WellCare
Transaction may not be consummated on a timely basis or at all;
(iii) uncertainty as to the expected financial performance of the
combined company following completion of the WellCare Transaction;
(iv) the possibility that the expected synergies and value creation
from the WellCare Transaction will not be realized, or will not be
realized within the expected time period; (v) the exertion of
management's time and Centene's resources, and other expenses
incurred and business changes required, in connection with
complying with the undertakings in connection with any regulatory,
governmental or third party consents or approvals for the WellCare
Transaction; (vi) the risk that unexpected costs will be incurred
in connection with the completion and/or integration of the
WellCare Transaction or that the integration of WellCare will be
more difficult or time consuming than expected; (vii) the risk that
potential litigation in connection with the WellCare Transaction
may affect the timing or occurrence of the WellCare Transaction or
result in significant costs of defense, indemnification and
liability; (viii) a downgrade of the credit rating of Centene's
indebtedness, which could give rise to an obligation to redeem
existing indebtedness; (ix) unexpected costs, charges or expenses
resulting from the WellCare Transaction; (x) the inability to
retain key personnel; (xi) disruption from the announcement,
pendency and/or completion of the WellCare Transaction, including
potential adverse reactions or changes to business relationships
with customers, employees, suppliers or regulators, making it more
difficult to maintain business and operational relationships; and
(xii) the risk that, following the WellCare Transaction, the
combined company may not be able to effectively manage its expanded
operations.
Additional factors that may cause actual results to differ
materially from projections, estimates, or other forward-looking
statements include, but are not limited to, the following: (i)
Centene's 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 healthcare costs, (vi) changes
in economic, political or market conditions; (vii) changes in
federal or state laws or regulations, including changes with
respect to income tax reform or government healthcare programs as
well as changes with respect to the Patient Protection and
Affordable Care Act and the Health Care and Education Affordability
Reconciliation Act, collectively referred to as the Affordable Care
Act ("ACA"), and any regulations enacted thereunder that may result
from changing political conditions or judicial actions, including
the ultimate outcome of the District Court decision in "Texas v.
United States of America"
regarding the constitutionality of the ACA; (viii) rate cuts or
other payment reductions or delays by governmental payors and other
risks and uncertainties affecting Centene's government businesses;
(ix) Centene's 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 Centene's
contracts with federal or state governments (including but not
limited to Medicaid, Medicare, TRICARE or other customers); (xvi)
the difficulty of predicting the timing or outcome of pending or
future litigation or government investigations; (xvii) challenges
to Centene's contract awards; (xviii) cyber-attacks or other
privacy or data security incidents; (xix) the possibility that the
expected synergies and value creation from acquired businesses,
including, without limitation, the Fidelis Care Transaction, will
not be realized, or will not be realized within the expected time
period; (xx) the exertion of management's time and Centene's
resources, and other expenses incurred and business changes
required in connection with complying with the undertakings in
connection with any regulatory, governmental or third party
consents or approvals for acquisitions, including the Fidelis Care
Transaction; (xxi) disruption caused by significant completed and
pending acquisitions, including, among others, the Fidelis Care
Transaction, making it more difficult to maintain business and
operational relationships; (xxii) the risk that unexpected costs
will be incurred in connection with the completion and/or
integration of acquisition transactions, including, among others,
the Fidelis Care Transaction; (xxiii) changes in expected closing
dates, estimated purchase price and accretion for acquisitions;
(xxiv) the risk that acquired businesses, including Fidelis Care, will not be integrated
successfully; (xxv) the risk that, following the Fidelis Care
Transaction, Centene may not be able to effectively manage its
expanded operations; (xxvi) restrictions and limitations in
connection with Centene's indebtedness; (xxvii) Centene's ability
to maintain the Centers for Medicare and Medicaid Services (CMS)
Star ratings and maintain or achieve improvement in other quality
scores in each case that can impact revenue and future growth;
(xxviii) availability of debt and equity financing, on terms that
are favorable to us; (xxxix) inflation; and (xxx) 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 factors that may affect Centene's business operations,
financial condition and results of operations, in Centene's filings
with the Securities and Exchange Commission (the "SEC"), including
the registration statement on Form S-4 filed by Centene with the
Securities and Exchange Commission on May
23, 2019 (the "Registration Statement"), and Centene's
Annual Report on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K. Due to these important factors and
risks, Centene cannot give assurances with respect to Centene's
future performance, including without limitation Centene's ability
to maintain adequate premium levels or Centene's ability to control
its future medical and selling, general and administrative
costs.
Important Additional Information and Where to Find
It
In connection with the WellCare Transaction, on
May 23, 2019, Centene filed with the
SEC the Registration Statement, which included a prospectus with
respect to the shares of Centene's common stock to be issued in the
WellCare Transaction and a joint proxy statement for Centene's and
WellCare's respective stockholders (the "Joint Proxy Statement").
The SEC declared the Registration Statement effective on
May 23, 2019, and the Joint Proxy
Statement was first mailed to stockholders of Centene and WellCare
on or about May 24, 2019. Each of
Centene and WellCare may file other documents regarding the
WellCare Transaction with the SEC. This communication is not a
substitute for the Registration Statement, the Joint Proxy
Statement or any other document that Centene or WellCare may send
to their respective stockholders in connection with the WellCare
Transaction. INVESTORS AND SECURITY HOLDERS OF CENTENE AND WELLCARE
ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) FILED WITH THE SEC CAREFULLY AND
IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CENTENE, WELLCARE, THE
WELLCARE TRANSACTION AND RELATED MATTERS. Investors and security
holders of Centene and WellCare are able to obtain free copies of
the Registration Statement, the Joint Proxy Statement and other
documents (including any amendments or supplements thereto)
containing important information about Centene and WellCare through
the website maintained by the SEC at www.sec.gov. Centene and
WellCare make available free of charge at www.centene.com and
www.ir.wellcare.com, respectively, copies of materials they file
with, or furnish to, the SEC.
No Offer or Solicitation
This communication is for
informational purposes only and does not constitute, or form a part
of, an offer to sell or the solicitation of an offer to sell or an
offer to buy or the solicitation of an offer to buy any securities,
and there shall be no sale of securities, in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
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SOURCE Centene Corporation