Good morning. My name is Christy and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Centene third quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions) Thank you. Mr. Kroll, you may begin your conference.

Thank you and good morning everyone. I’m Ed Kroll, Senior Vice President, Finance and Investor Relations for Centene. Thank you for joining our Q3 call today. Michael Neidorff, Centene’s Chairman and Chief Executive Officer, and Bill Scheffel, Executive Vice President and Chief Financial Officer of Centene, will host this morning’s call. The call is expected to last about 45 minutes and may also be accessed through our website at www.centene.com. A replay will be available shortly after the call’s completion, also on our website or by dialing 800-642-1687 in the U.S. and Canada, or 706-645-9291 from other countries. The access code for both of those is 30957978. Any remarks that Centene may make about future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Centene’s Form 10-Q dated today, October 27, 2009, and other public SEC filings. Centene anticipates that subsequent events and developments will cause its estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. With that, I’d like to turn the call over to our Chairman and CEO, Michael Neidorff. Michael.

Thank you, Ed. Good morning everyone and thank you for joining Centene’s third quarter earnings call. Before I begin to discuss the highlights of the quarter, as has become our practice, I would like to take a few minutes to provide updates on our view on healthcare reform, overall medical cost trends, H1N1 flu and the rate environment. Speculation about healthcare reform and its potential impact on the managed care sector continues to dominate investors and analysts discussions and comments. The resulting uncertainty has continued to way on the nation’s consciousness and all stocks in our group. At Centene, we continue to believe that the federal health reform should focus on expanding access to the uninsured and under insured, quality enhancements like DRE and increasing overall efficiencies. Whatever the outcome, we firmly believe our company is well positioned to successfully operate in a post reform environment. We have a competitive advantage that our multi-line strategy affords us through diversity, innovation and cost effectiveness. Congress still has much work to do to sort through the Marge of various bills in the Senate and House and it is still too early to note what the specific outcome will be. However, many proposals do read positively for Centene with the opportunity of membership growth. For example, expansion of state Medicaid programs or creation of exchanges in states to help citizens gain easier access to affordable quality health plans are both pertinent to us. Our extensive Medicaid health plan business and unique exchange or connective experience in Massachusetts should serve as well in any reform scenarios like those. The inclusion of Drug Rebate Equalization Legislation or DRE is another favorable item for us. DRE will allow the MCOs the ability to manage the all important therapeutic side of patient care, while yielding significant savings…

Thank you, Michael and good morning. To begin, I would like to mind everyone that the results of operations for our New Jersey health plan are classified in the financial statements as a discontinued operation as a result of our intent to sell the business. Accordingly, the financial results discussed throughout this call will be in the context of continuing operations and therefore exclude our New Jersey health plan unless noted otherwise. For the third quarter of 2009, premium and service revenue grew to $987.3 million, an increase of 18.1% over the third quarter of 2008. Earnings per diluted share from continuing operations were $0.51 per share this quarter, compared to $0.41 per share for the third quarter of 2008. However the third quarter of 2008 included a $0.06 write-down related to our investment in the reserve primary fund. The increase in revenue was a result of premium rate increases, as discussed by Michael, membership growth in all states, including in Florida the conversion of approximately 62,000 members on September 1, 2009 from Access to our full risk plan, Sunshine State Health Plan. As an aside it should be noted that 60% of these members had been previously medically managed by Access under the successful PSN model and both Access and Sunshine have contracts with the major hospitals in the reform markets. There was also a 3% rate increase for the reform areas effective September 1. We believe that, based on Access is prior history in these areas coupled with our contracting strategies, we will be successful in managing the medical costs at an acceptable level. Additional revenue growth contributors were the commencement of our Arizona acute care contract in October 2008 and the consolidation of Access Health Solutions beginning January 1, 2009. For our Georgia health plan, the same…

(Operator Instructions) Your first question comes from Daryn Miller - Goldman Sachs.

Can you give us a sense for how much flu related costs are included in your guidance that you think you might see in the fourth quarter?

We put in there more than we put in the third quarter based on what we were seeing. We’ve got the drug information for most of the month of October at this point for example, but I don’t think we want to put a specific number in there.

Third quarter was 5.9?

Yes.

I think what’s important within that forecast, said we recognized it as a major flu incidence of increasing flu and we recognize that in what we see going forward, but we also have offsets one of which Bill commented was that Georgia rate increase that we are not recognizing in the guidance. So what we’ve done is we’ve said let’s take an acceptable level of increases expecting it to be significantly greater than Q3, but we cannot sit here and say there is clear evidence of a widespread pandemic. We’ll also see that the flu incidences more and more are being treated by physicians by telling people to stay home and do certain things and it tends to be a milder version of the flu. I will also add one more thing. I had a board dinner last night and we have a couple of board members, as you know that know a lot about this and we were talking about that there were 1000 deaths so far from this flu and I was reminded that in the United States in the average flu season, there are 36,000 deaths. So while the paper is playing up to 1000 as a tragedy, we have to keep things in perspective as we look at this. We believe we are managing the business. Mary Mason has a Fluvention program in place and it has been there for sometime. So these are things we are proactively doing that end allow us, we believe to give you a reasonable sense of how we see the quarter, versus I don’t know where it is in a doom-and-gloom version, because we think that it could be a little bit less.

Can you remind us what your long term target growth rates are both revenue and earnings and then just in addition to that when we look at the current dialogue around healthcare reform, expectations for Medicaid expansion and what that could potentially do to your long term growth rates?

Bill, do we want to talk about the growth…

I think as we’ve said and particularly in the investor day when we made presentations, 15% revenue growth and 15% or better bottom line growth.

I think said 15% to 20% we said in the bottom line and relative to where I think we see an incredibly long runway. I have jokingly said to investors that it is long enough for the space shuttle to touch and go and it’s just an incredible number of opportunities and calls we are getting. There’s a certain amount of element where the states want to wait and see what reform ultimately looks like, but a lot are in the planning stages with us. So, we see a lot of upside there and I can’t be more specific for obvious reasons.

Any comment on upside on ABD programs?

Sure, that’s all part of it. I mean there’s states’ talking to us about ABD. I think they’re recognizing the success we are having, our ability to manage that population. Now, you look across our whole book of business, when you get the regulatory financial state statutory filings I’m trying to say, you’ll see them and it is called managing the business.

Your next question comes from Brian White - Collins Stewart.

Could you talk a little bit about the unique Foster Care contract, has that led to discussions as far as any other states recently?

We have multiple states that have approached us at various meetings and discussions with them, some of which are current states, some of which are new states that are very interested in talking about Howard works and the unique capabilities we have and I am saying unique in that we’re able to say yes, we have done it; here is the result. So it’s not I can do it. This is very much here is what we have done, and talk to Texas about their level of satisfaction. In fact I think, in some cases, let see the state regulators have told other regulators that they ought to take a look at it at their state meetings.

Your next question comes from John Rex - JP Morgan.

First, as you evaluate things like the current senate finance what was in the senate finance proposal for Medicaid expansion going to 133% FPL and you look at your kind of existing footprint, how do you size kind of the member opportunity on that, if indeed that occurred, kind of assuming consistent share and such?

You can look at your current footprint and sure there is a material increase. There are some states that are already there, so it doesn’t have a whole lot of impact, but I think the impact that we see is more states looking at the connector or exchange model as it relates to that and so what they see them doing by going to the funding to the 133 level is the opportunity to then talk about what do we do up to 300 as Massachusetts is doing, to cover the uninsured and how to do it, so it has multiple impacts.

Have you sized though like a specific membership number in terms of if it were put into effect as it is so maybe in just the exchange probably a little harder to size in terms of how that would play out?

I have not put out a number that we are prepared to talk to, but we’ll probably when we do our ten calls, can give you a little more insight because it will be clearer what they are going to do.

Then speaking of that, your ten call, I understand you are not giving guidance until mid-December, but just discuss for us what would be the reasons that in 2010, potentially that you wouldn’t achieve your long term targets? If your long term target is 15% to 20%, tell us maybe kind of the headwinds you would expect in terms of why you wouldn’t achieve that kind of earnings growth rate next year?

I think one of the things we have to talk about is what is the impact of flu in Q1, there’s the Type A flu and in Q1 we are looking at and putting in our plans now as to what should we be doing to get ready for that. Not allow people to get so focused on H1N1 which is real, present an issue in Q3 and Q4, but I think Mary will tell you that there’s a lot of school of thought that we should be concerned about how we are going to deal with that so I think that would be an issue. So what the states do with reform is going to have a major impact on what states do. So, there is some state Jesse, you wanted to add to that?

Yes, one thing in particular, in the face of federal healthcare reform, to the extent that there are federal policies and legislation that is put in place, states may take more, as Michael referenced to wait and see attitude. So there may be things that outside of federal reform that would be in the pipeline that maybe deferred or delayed on some level, pending the implementation of federal reform.

It depends how they fund it, too. There’s a big issue there how much are they going to fund at what level, and when are they going to fund it? Those kinds of issues could impact it.

I guess assuming, though that none other reform initiatives really take place in 2010 are effective in 2010, and absent flu then is there a reason you wouldn’t be your 15 to 20?

Obviously, we said we expect to be at 15 to 20 and we move those major issues and we expect to be at 15% to 20% or else we’d have changed it.

Your next question comes from Tom Carroll - Stifel Nicolaus.

A question on Access Health in Florida given that you’ve managed I think you said 60% of the book, is it fair to assume that the medical claims on that 62,100 people are relatively mature?

I think that we’ve had a very successful PSN program in Florida with Access Health they have had for a number of years in I think five counties, all of the counties in the reform. So, we have a very broad experience with this and the PSN model in effect rewards medical savings and if you’re doing the right things in medical management, it rewards it and that’s worked out well for Access. So, from our standpoint, we do have a good running start in terms of being able to medically manage these members in a tradition that Centene would be used to.

I guess what I’m getting at is medical expenses. Were medical expenses appropriately matched to that revenue that came in the third quarter because that block of business which to risk? Did you accrue it at 90%?

It was considered a new block of business that we recorded at 90%, yes.

Then a follow up on the flu it is fair to say that you are seeing perhaps more flu, but lower severity?

So far, in many ways, yes let me ask Mary Mason.

Yes, we are actually seeing what we would expect. We are seeing some pregnant women being admitted, as what we would expect. About half are children and then the other or adults. So, it’s in some are healthy; some have come or be conditions, but it’s exactly what we would expect are managing it.

Bill, you had a comment about that Georgia retroactivity is hitting in fourth quarter. Then you matched that to a comment about increased flu on the fourth quarter. So, if I just kind of look at you guidance and look at the fourth quarter number, you are basically guiding to like to a $0.55 number on Q4. Is that $0.55 number inclusive of both extra revenue from Georgia plus higher costs from flu or are we going to kind of breakout two pieces next quarter?

I believe that just looking at our annual guidance and subtracting out the first three quarters, you’d be seeing at $0.50 to $0.56 Q4 and so whatever point within that range. I think what we are seeing is we earned $0.53 last year in Q4, so we are seeing we have not up to our guidance for this year’s Q4 for an additional $3 million, which would be about $0.04. We’ve basically held that back to offset the potential of additional flu costs along with other increases we’ve estimated for flu.

We had booked within the guidance, that’s kind of…

What we would be considering, right.

Yes, we have booked additional expectations on flu, but we also wanted you to know that we have this Georgia retroactivity sitting there, that if the flu turns out to be less than that, it will affect where in the range we fall. It’s just an additional conservative offset we are holding.

Your next question comes from Greg Nersessian - Credit Suisse. Greg Nersessian – Credit Suisse: Bill, you guys provide these claims inventory data on page eight of your press release. I guess, in each of the last four quarters, your average claims inventory has declined sequentially, but the period end inventory has been going up. So, I’m just wondering why you are consistently seeing a build up of claims right at the end of the quarter.

I think one of the reasons we had Florida at the end of this quarter for example, which helped increase the period end inventory and I think some of the average is just we have been trying to process some of the high dollar claims quicker and get those through to reduce interest and that has some of the impacts on the averages. I wouldn’t read too much into the individual numbers, because it fluctuates from month-to-month and I think maybe 10% of our reserves are rarely represented by claims in house, not processed yet. Greg Nersessian – Credit Suisse: Okay, but it just seems like a strange pattern that, right at the end of the quarter, it seems to be going up?

I think this quarter’s particularly was just Florida. I mean it all of those members September 1. Greg Nersessian – Credit Suisse: Then the fee based revenue came in a little bit higher than we’ve seen recently and we were expecting in this quarter. I guess what was driving that? Is that the new, should we consider that a new run rate, kind of $27 million going forward or any sense of how to model that?

With the consolidation of Access now, they’ve got additional service revenue in their numbers, which is what’s driving most of those changes. We are consolidating Access. Since they are doing a non-risk basis, their revenue shows up as service revenue. So the answer is it should decline overtime because those members are transitioning to Sunshine State Health Plan, so you’ll see that sort of peak and then decline. Greg Nersessian – Credit Suisse: So we should think about 4Q being closer to kind of the first half run rate or even below that?

Maybe even a little bit below that, given that we moved so many members over on September 1. Greg Nersessian – Credit Suisse: Then tax rate you should expect that to go back to normal 35ish range in the fourth quarter?

Well, I think it is that the normal 35.3 range in the third quarter. I think that you have to look at the issue with respect to what I call minority interest or non-controlling interest. We don’t pay taxes on an LLC or an LLP. So, particularly if you look in our 10-Q, I think we spelled this out a little more in the discussion of the tax rate, but you should add back the non-controlling interest where we provide no taxes for it on the face of the income statement and then consider what the tax rate is before consideration of that. So, we are really looking at the net earnings attributable to Centene and what the taxes are related to that. So, it is more of a mathematical issue, I think, the people trying to do the taxes divided by earnings including the non-controlling interest portion and that number gives you a lower number the 33% number, but when you really factor out the fact that’s partnership type income, that the true numbers, what I would say is 35.3 and we’ve been talking about 36.0 or something as our true effective tax rate for the year, plus or minus.

Your next question comes from Josh Raskin - Barclays Capital.

Two questions on sort of growth opportunities I guess the first is Amerigroup it sounds like they are going to be leaving the Ohio ABD. I’m curious about the timing and the opportunity, as you are one of the two plans there for I guess the 8000 lives up progress and then the second question and that’s on Massachusetts how does that membership come in is that sort of ratably renewed throughout the year or are there bigger periods of enrollment at certain times during the year?

I will answer the Ohio. Obviously, with them pulling out and I think there’s two plans left the state will work through some algorithms to assign them and whether we get 3000, 5000 depending on what people select and what is left for auto assign, we will get our share. I have not given a lot of thought to it. Whatever we get, we will just continue to manage as we always have.

I think that’s a first quarter 2010 issue.

Jesse, do you want to talk about how Massachusetts roll in it?

So I will break it out. Michael mentioned in his initial comments the three various products within Massachusetts the Commonwealth Care Program, the Commonwealth Bridge Program and the Commonwealth Choice Program. The Commonwealth Care and Commonwealth Choice programs, both of those do have an open enrollment period at the beginning of the fiscal year for those programs. So there is probably a little more waiting on the front end of those open enrollment periods, but people can come on both through those are eligible can come on both through Choice and under normal circumstances in the Commonwealth Care Program could come on through auto assignment, but as we talked about, that has been temporarily suspended for the Commonwealth Care Program. On the Commonwealth Bridge Program for the legal immigrants, that it was a unique population where we were selected to serve the totality of those members statewide for a limited period of time. So, those are rolled beginning in September or beginning of October, over the course of the end of 2009. So that contract, as it is structured, is only in place through June 30, ‘10. So, that is a separate contract.

Then I’m sorry, just a quick follow-up on the ABD there’s no selection process for the members that they are all going to be auto assigned, is that right?

No, these are members will they usually get a choice period.

You don’t think any revenues until 1/1/10?

For that additional region in Ohio.

Probably maybe 1/1 or 2/1. Its 2/1?

Your next question comes from Scott Fidel - Deutsche Bank.

The first question is just on the ABD loss ratio, which obviously bounces around a lot each quarter. Just if you can update us on what you think a good, normalized long term loss ratio range is for the ABD.

I think it is in the 84% to 86% range maybe a little higher. It could go up to 87%.

Just on this market share tax that they are talking about in Washington, obviously I know it’s early here, but have you guys gotten any sense or any feedback on just how they are thinking about structuring this for Medicaid MCOs do you think this would be straight across premiums looking at all the different product segments or has there been any feedback that they might discount it for the Medicaid MCOs or use any different type of formula?

I really don’t have a sense for where they are going to end up on it, if they do it. Some of these things, every time they float an idea, we hear something, but we’ve not spent a lot of timeline, because what they talk about now, where they end up, can be so different that we are spending our time thinking about the Q1 flu issues and how we are going to manage those.

Then just one last question, just on the cost of services ratio and it looks like back dropped down to 58%, which sounds like it is just a function of getting that Access Health revenue. So, would you expect that normalizes as well to sort of the run rate you’ve seen in prior quarters as the Access revenues come in, as you convert those members?

Yes, we think that ratio will be closer to 78% to 80% without Access included and we expect that to come down quite a bit over the next several quarters.

Your next question comes from Carl McDonald - Oppenheimer.

Just to be interest in the latest understanding of where things are within Mississippi RFP and then separately if there’s any early indication about how Wisconsin is thinking about structuring their RFP for the area.

Sure. So on the Mississippi RFP; we have submitted those there have been a couple of updates. I think the state has requested amendments to the RFP, etc., so the ball is in their court I guess is what I would say. Everything that we have that all of the bidders have been requested has been provided to the states, so they have that information. We and I’m sure others are awaiting the response on that. On Wisconsin, I’m not sure what the specific question is in terms of the structure. I don’t know we want more add some clarity in terms of where that’s going. I don’t know we have any new information with respect to structure on that.

The RFP is not out yet.

In Mississippi, is there a specific date that the states targeting for an award or is it still open ended?

I think it is open ended at this point.

Your final question comes from Matt Perry - Wells Fargo.

Michael, you mentioned that potential $6.7 billion industry fee and I just want to relevant to that a little more deeply. I know you and members of your team have a lot of interaction with governors and state legislators and people in the various like Medicaid offices are those people aware of this fee? I mean, is it on their radar screen, because if it isn’t, that would be something that maybe concerns me?

I think they are aware of it and we don’t support it. We’re working through the industry and when we get questions about it we don’t support it. I think everybody is aware of it, but they raise the actuarial soundness issue and the impact and what it does to it. So, it’s an idea out there right now, Matt and so it comes and goes. It is kind of like a tide, the ebb and flow Right now, I’m not sure that anybody is aggressively talking about it, but we are not sure it may not affect Medicaid some talk that the Medicaid plans will be exempted from it. So it’s the kind of thing, until you have somebody really firmly saying and here is what we’re going to do, it is hard to have any specific opinion except to say we don’t support that kind of tax.

Maybe this is just asking too much of a what if question, but do you think it’s the type of thing that, if it was put into law, the states could use the premium tax mechanism that they use to draw down federal funds to help the managed care companies offset it?

I think the states would look at what they can do to maximize their revenue from the Federal Government and minimize any actuarial soundness issues. So, they will look at every alternative and we will support them in it.

(Operator Instructions) There are no further questions at this time.

Well, we thank everyone for calling in and we’ll talk to you at the end of the year. Thank you.

This concludes today’s conference call. You may now disconnect.