Centene Loses Appeal Over Kansas Medicaid Contract

Centene Corporation announced Wednesday that it has received notification from the Shawnee County District Court, which dismissed a FirstGuard Health Plan Kansas, Inc. (FirstGuard) petition seeking review and relief of the decision by the Kansas Division of Purchases to award contracts for Medicaid managed care services; a copy of the petition will be available on Centene’s website within 24 hours. On August 25th, the Kansas Health Policy Authority notified FirstGuard, a wholly owned subsidiary of Centene, that its contract would end December 31, 2006.

Previously, Centene announced that it had reached an agreement to sell certain assets of its Missouri health plan. The transaction is expected to be completed during the first quarter of 2007

Michael F. Neidorff, Chairman and Chief Executive Officer of Centene, stated, "We are disappointed by the District Court action but do not plan further legal action. We are now working with Kansas and Missouri officials to ensure that we meet all financial and operational requirements to accomplish a successful transition of membership and meet our post-termination obligations."

As a result of both of these actions, there will be severance and other costs associated with exiting the Missouri and Kansas markets. The Company’s previously issued guidance excludes the effect of any such exit costs.