WellCare Health Plans, Inc. (NYSE:WCG) Q1 2018 Earnings Conference Call Transcript

May 01, 2018 • 08:30 am ET

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WellCare Health Plans, Inc. (NYSE:WCG) Q1 2018 Earnings Conference Call Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. The first question comes from Kevin Fischbeck of Bank of America Merrill Lynch. Please go ahead.

Analyst
Kevin Fischbeck

Great. Thanks. You guys showed some improvement here in the quarter on margins, but you still talk about additional opportunity going forward. Where do you think the biggest opportunity in margins is going to be going forward?

Executive
Kenneth A. Burdick

Well, Kevin, we think that our PDP performance is awfully strong. So we sort of look to both Medicaid and Medicare Advantage as opportunities where as Drew said we have not exhausted our playbook. So each day and each week we're finding new opportunities to refine and improve our fundamental performance. So, for the vast majority of our business, we still see a margin expansion opportunity.

Analyst
Kevin Fischbeck

Okay. And then can you -- obviously I didn't hear this -- did you quantify the impact of flu in the quarter?

Executive
Andrew Lynn Asher

No, but I will. If you look at -- if you isolate the flu, the CPT codes, the diagnosis codes, what we classify as flu, it was about 50 basis points across Medicare Advantage and Medicaid combined.

Analyst
Kevin Fischbeck

Okay. Is that -- is it one versus the other more impacted?

Executive
Andrew Lynn Asher

Medicaid was more impacted than Medicare.

Analyst
Kevin Fischbeck

All right. Okay. Great. Thank you.

Operator
Operator

The next question comes from Peter Costa of Wells Fargo Securities. Please go ahead. Mr. Costa, your line is open. Please go ahead with your question.

Analyst
Peter Costa

All right. Sorry about that. Two of your -- my question relates to two of your growth opportunities going forward, Illinois and Florida. And I'm wondering if you can sort of give us a timeframe in terms of what revenues could come through and then Illinois in particular how do you see this -- the startup of those new businesses coming on in terms of profitability and getting to the margins that are similar to the rest of your margins?

Executive
Andrew Lynn Asher

Thanks, Peter. This is Drew. I'll take Illinois first. It's still pretty early in the Illinois process. We're pleased with the operational readiness which is important obviously to be ready to accept an influx of auto-assigned membership, most of which came during the second quarter, not the first quarter. So it's still very early in terms of what we have to do to execute and improve the financial performance of Illinois. And on Florida, Ken, you want to take Florida?

Executive
Kenneth A. Burdick

Sure. Florida is a bit of a different story. Florida has a mature program. So we are stepping in to long-term care, and to the SMI plan that have been in existence. So we're optimistic that relatively early on we'll be able to demonstrate strong margins.

Analyst
Peter Costa

Can you talk about the cost of getting started first and then what kind of revenues you expect to incrementally pick up in Florida?

Executive
Kenneth A. Burdick

Yeah, on the revenue side, I think we still have to see that play out with the state will have to promulgate the beneficiary assignment process, and so that will drive the distribution of revenue across