Centene (CNC) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01Failure to accurately estimate and price our medical expenses or effectively manage our medical costs or related administrative costs could have a material adverse effect on our results of operations, financial condition and cash flows
2. 02Our Medicare programs are subject to a variety of unique risks that could adversely impact our financial results
3. 03Risk-adjustment payment systems make our revenue and results of operations more difficult to estimate and could result in retroactive adjustments that have a material adverse effect on our results of operations, financial condition and cash flows
4. 04If we are not successful in procuring new government contracts or renewing existing government contracts, or if we receive an adverse finding or review resulting from an audit or investigation, our business may be adversely affected
5. 05We derive a portion of our cash flow and gross margin from our PDP operations, for which we submit annual bids for participation. The results of our bids could have a material adverse effect on our results of operations, financial condition and cash flows
6. 06Our encounter data may be inaccurate or incomplete, which could have a material adverse effect on our results of operations, financial condition and cash flows and ability to bid for, and continue to participate in, certain programs
7. 07Increases in our pharmaceutical costs could have a material adverse effect on the level of our medical costs and our results of operations
8. 08Ineffectiveness of state-operated systems and subcontractors could adversely affect our business
9. 09If state regulators do not approve payments of dividends and distributions by our subsidiaries to us, we may not have sufficient funds to implement our business strategy
10. 10We derive a significant portion of our premium revenues from operations in a number of states, and our results of operations, financial condition or cash flows could be materially adversely affected by a decrease in premium revenues or profitability in any one of those states
11. 11Competition may limit our ability to increase penetration of the markets that we serve
12. 12We operate in a highly competitive, dynamic and rapidly evolving industry and our failure to adapt could negatively impact our business
13. 13If our third-party vendors fail to meet their contractual obligations to us or fail to comply with applicable laws or regulations, our results of operations may be adversely affected and we may be exposed to brand and reputational harm, litigation and/or regulatory action
14. 14If we are unable to maintain relationships with our provider networks and timely update our provider directories, our profitability may be materially adversely affected
15. 15If we or our third-party vendors are unable to integrate and manage information systems and networks effectively, our operations could be disrupted
16. 16A failure in or breach of our operational or security systems, networks or infrastructure, or those of third-party vendors with which we do business, including as a result of cyber-attacks and other data security incidents, could have a material adverse effect on our business
17. 17Our operations rely on the secure transmission, storage and other processing of confidential, personal, proprietary, sensitive and other information in our computer systems and networks as well as third-party vendors with which we do business
18. 18We may be unable to attract, retain or effectively manage the succession of key personnel
19. 19An impairment charge with respect to our recorded goodwill, intangible assets and real estate portfolio could have a material impact on our results of operations and shareholders' equity

Risks Relating to Regulatory and Legal Matters

1. 20If eligibility for the enhanced advance premium tax credit for Marketplace members expires without renewal or the eligibility for the credit is modified or delayed, our results of operations, financial condition, and cash flows could be materially and adversely affected
2. 21In addition, new CMS regulations will require beneficiaries dually enrolled in Medicare and Medicaid to receive integrated care through Medicare Advantage D-SNPs beginning in 2030, with restrictions beginning in 2027, which may restrict our product offerings in some geographic service areas
3. 22Significant changes or judicial challenges to the ACA and the other government-sponsored healthcare programs in which we participate could materially and adversely affect our results of operations, financial condition, and cash flows
4. 23Negative public perception of the managed care industry, including industry practices, could adversely affect our business, operating results, cash flows and prospects
5. 24Our business activities are highly regulated and new laws or regulations or changes in existing laws or regulations or their enforcement or application could force us to change how we operate and could harm our reputation and business
6. 25Our ability to provide services and support to manage our members' pharmacy benefits face regulatory risks and uncertainties which could materially and adversely affect our results of operations, financial condition and cash flows
7. 26We have been and may from time to time become involved in costly and time-consuming litigation and other regulatory proceedings, which require significant attention from our management and could adversely affect our business
8. 27If we fail to comply with the extensive federal and state fraud, waste and abuse laws, our business, reputation, results of operations, financial condition and cash flows could be materially and adversely affected
9. 28We might be adversely impacted by tax legislation or challenges to our tax positions

Risks Relating to Conditions in the Financial Markets and Economy

1. 29Our investment portfolio may suffer losses which could materially and adversely affect our results of operations or liquidity
2. 30Adverse credit market conditions may have a material adverse effect on our liquidity or our ability to obtain credit on acceptable terms
3. 31This may have the effect, among other things, of subjecting us to additional restrictive covenants and reducing our flexibility to respond to changing business and economic conditions and increasing borrowing costs
4. 32Previous or future acquisitions may not perform as expected and we may not realize the financial results expected from acquisitions or divestitures
5. 33We may be unable to successfully integrate our existing business with acquired businesses and realize the anticipated benefits of such acquisitions
6. 34Our business and results of operations may be materially adversely affected if we fail to manage and complete divestitures