Centene has updated its prior authorization system with an eye toward speeding pre-approval decisions for patients and providers.
“We completed an important initiative to simplify our prior authorization process by automating our real-time source data,” CEO Sarah London said during the company’s first-quarter earnings call Friday. “This simplification improves the timeliness of prior authorization decisions, ensuring our members get the care they need quickly and removing friction from the process overall for both members and providers.”
Related: How CMS' prior authorization rule will affect insurers
The company did not respond to an interview request for more details about the real-time source data being automated, or about which insurance lines of business or providers the system update affects. The change comes in the wake of recently published regulations from the Centers for Medicare and Medicaid Services requiring Medicare, Medicaid and exchange plan carriers to accelerate and disclose the results of their prior authorization decisions.
Centene has been working to centralize its insurance subsidiaries’ functions. London said enhancing its clinical productivity tools is a key part of raising its Medicare Advantage star ratings and cutting costs.
Nearly 91 cents of every Medicare premium dollar was spent on medical costs in the first quarter, up from 85 cents during the same period in 2023. Inpatient and outpatient utilization remained up from the year-ago period, Chief Financial Officer Drew Asher said during the call.
"A little bit of tick up in authorizations in January and February so it's good to see a little bit of relief in March, but it's still elevated in [the first quarter]," Asher said.
Centene reported first-quarter net income of $1.2 billion, or $2.16 per share, up 2.9% from the same period last year. The company’s medical loss ratio remained essentially flat at 87.1%. The metric represents medical costs as a percentage of premium revenue.
Centene’s first-quarter membership declined by 0.1% to 28.4 million, with strong exchange growth partially offsetting Medicaid losses.
The insurer’s exchange membership grew to 4.3 million enrollees in the first quarter, up from 3 million a year ago. Nearly 40% of new enrollees were previously uninsured, 25% came from another marketplace carrier and 10% came from losing access to an employer-sponsored plan, London said. The rest were former Medicaid members deemed no longer eligible for coverage as states continue to unwind their Medicaid rolls.
The insurer's Medicaid enrollment declined 18.5%, to 13.3 million enrollees.
“We see additional room to expand the reach of health insurance marketplace offerings overall,” London said.
In response to higher-than-anticipated exchange membership, the company raised its 2024 revenue forecasts to $150.5 billion, up from $147.5 billion, and increased its adjusted earnings per share guidance by $0.10 to more than $6.80.
Centene’s shares opened at $73.96 on the New York Stock Exchange Friday, down 2.3% from Thursday’s close.
