Centene (CNC) Expands CHS Network, Shifts AcariaHealth Facility

Centene Corporation’s CNC two wholly-owned subsidiaries, Collaborative Health Systems (“CHS”) and AcariaHealth, recently undertook initiatives in a bid to enhance patient health outcomes and solidify the nationwide presence of the parent company.

Being a management services organization for providers, CHS steps into a new market, Virginia, thereby offering a chance to the state’s providers to join the CHS-managed Chesapeake Independent Physician Association (“CIPA”). CIPA has been operational in Maryland since 2018. It encompasses more than 150 provider groups and participates in two Medicare Shared Savings Programs, Medicare Advantage plans and various commercial health plan programs.

As a result of its connection with a larger group, participation in CIPA will help reap the benefits of higher Medicare Fee-For-Service rates, and access to value-based programs and financial incentives.  Access to tools and resources that lead to better care coordination, patient engagement and administrative assistance is another benefit.

Additional advantages follow for the participating providers, which are partnerships with healthcare providers committed to value-based care, declining practice expenses, improved operational efficiencies and a higher revenue base. Therefore, expansion into a new market reflects CHS’ endeavor to add more providers to its network and be equipped to extend enhanced value-based care, which in turn, is expected to attract more patients to avail services from the provider network and bring higher revenues.

Concurrently with the recent announcement of CHS, the national specialty pharmacy of Centene, AcariaHealth, came up with the relocation update of its St. Louis-area facility. The new site for the facility, at Chesterfield, MO, has been already inaugurated and stretches across around 40,000 square feet. The facility is expected to be equipped with advanced commercial dispensing and wholesale distribution capabilities. It will therefore, offer personalized care to patients with rare and chronic diseases.

Hence, the relocation announcement indicates the CNC subsidiary’s investments in providing an expanded space and a more comfortable ambiance for pharmacy professionals to treat a higher number of patients. This, in turn, is likely to drive Centene’s Other segment performance in the days ahead, of which AcariaHealth is a part of.

Various other units of Centene are subjected to contract wins or renewals from federal or state authorities, which boost membership growth and provide an impetus to the Managed Care business of the health insurer. Notably, this business contributes the most to CNC’s top line. It has built the business through provider collaborations and significant investments.

In May 2024, its Kansas subsidiary won a contract from the Kansas Department of Administration to continue serving the KanCare program's members while Centene also received Medicaid contracts from the state authorities of Michigan and New Hampshire.

Shares of Centene have risen 17.3% in the past year compared with the industry’s 7.5% growth. CNC currently carries a Zacks Rank #3 (Hold).

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Stocks to Consider

Some better-ranked stocks from the Medical space are Organon & Co. OGN, Lantheus Holdings, Inc. LNTH and The Pennant Group, Inc. PNTG. While Organon currently sports a Zacks Rank #1 (Strong Buy), Lantheus and Pennant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Organon’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 13.62%. The consensus estimate for OGN’s 2024 earnings and revenues suggests an improvement of 6.8% and 1.7% from the respective 2023 reported figure.

The consensus estimate for Organon’s 2024 earnings has moved 4% north in the past 30 days. Shares of OGN have gained 6.3% in the past year.

Lantheus’ earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.61%. The consensus estimate for LNTH’s 2024 earnings and revenues suggests an improvement of 14.1% and 17.2% from the respective 2023 reported number.

The consensus estimate for Lantheus’ 2024 earnings has moved 8.4% north in the past 30 days. Shares of LNTH have declined 8.7% in the past year.

Pennant’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and matched the mark once, the average surprise being 7.22%. The consensus estimate for PNTG’s 2024 earnings and revenues suggests an improvement of 20.6% and 16.3% from the respective 2023 reported figures.  

The consensus estimate for Pennant’s 2024 earnings has moved 1.1% north in the past 30 days. Shares of PNTG have gained 105.5% in the past year.

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Centene Corporation (CNC) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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