8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 25, 2006

CENTENE CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-33395	42-1406317
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

7711 Carondelet Avenue, Suite 800 St. Louis, Missouri	63105
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (314) 725-4477

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01.  REGULATION FD DISCLOSURE

On July 25, 2006, as part of our 2nd quarter 2006 earnings conference call, we posted on our website a presentation entitled “Claims Liabilities: Change in Estimates for Q1 2006.” A copy of the presentation is included as Exhibit 99.1 to this report.

The information in this Form 8-K and exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Nor shall such information or exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit   Number	Description
99.1	Copy of presentation entitled “Claims Liabilities: Change in Estimates for Q1 2006” presented on July 25, 2006

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CENTENE CORPORATION
Date: July 26, 2006	By:	/s/    J. Per Brodin
		J. Per Brodin Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit   Number	Description
99.1	Copy of presentation entitled “Claims Liabilities: Change in Estimates for Q1 2006” presented on July 25, 2006

EX-99.1

Claims Liabilities:

Change in Estimates for Q1 2006

July 25, 2006

Exhibit 99.1

>>>

Common Themes Across Markets

•

Increased physician costs.

•

Changes in member demographics.

•

Injectible drug compounds avoided prior authorization

requirements when dosed in physician offices.

•

Underestimation of inpatient bed day costs due primarily

to deteriorating conditions of complex cases.

2

>>>

Indiana

$   3,690

Total

There is a significant increase in injectibles due to Synagis and Somatropin

(growth hormone).  Additionally, home infusion increased with new members

receiving hemophilia blood factors.

1,066

Other

This increase is driven by an increase in labor/false labor.

100

Emergency

Department

The per member per month (PMPM) costs for professional services associated

with

primary

care

physicians

who

have

been

recently

added

to

the

network are

significantly

higher.

A

comparison

of

all

professional

services

shows

an increase

in PMPM costs for all regions: 19% in Central; 11% in North and 21% in South.

Unit

cost

comparisons

also

show

increases

in

all

regions:

16%

in

Central,

9% in

North and 14% in South.

1,285

Professional

Physician

Increase

in

observation

days,

and

an

increase

in

tonsillectomies

and other

seasonal ENT procedures.

391

Hospital Outpatient

$636 relates to increased admissions and inpatient days; $212 relates to

increased cost per day.

$     848

Hospital Inpatient

Comments

Amount

(in 000s)

3

>>>

Texas

$   2,234

Total

Overall, Texas has seen an increase in the newborn and pregnant women aid categories, offset by a decline in the

SCHIP category.  As a result, deliveries and delivery related costs have increased.

Two catastrophic newborns significantly increased home health costs.

495

Other

121

Emergency Department

The increase in professional services is significantly attributable to an

increase

in

the

number

of

pregnancies/deliveries.

Additionally,

Synagis

utilization increased approximately 40%, of which 62% of all utilization

is being supplied in the physician office.

1,378

Professional Physician

This increase is attributable to utilization in the aggregate.  Specifically,

there is a significant increase in imaging, operating room and anesthesia

costs.

488

Hospital Outpatient

Favorable development

$    (248)

Hospital Inpatient

Comments

Amount

(in 000s)

4

>>>

Process Improvements

In order to improve the medical claims liability estimatation process, we have or

are in the process of implementing the following:

1.

Retraining of nurses on bed day estimation process and system reporting.

2.

Mandating daily rounds by staff nurses at significant hospitals.

3.

Increased scrutiny of estimated remaining inpatient days required for

complex cases by Medical Management and finance personnel.

4.

Requiring all new hospital contracts to be evaluated prior to approval by the

Health Economics Unit and Health Plan Controllers.

5.

Preparation of provider rate summaries by health plan that identify changes

in contracted rates for all providers.

6.

Face-to-face meetings between Health Plan Controllers, Plan Finance

Directors, Medical Management and Contracting to ensure most current

information is used to evaluate unit cost estimates.

7.

Staff enhancements.

8.

Enhanced monthly review of member demographics by health plan.

5