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WellCare Health Plans, Inc. (NYSE:WCG)

Q1 2014 Earnings Conference Call

May 6, 2014 8:00 a.m. ET

Executives

Gregg Haddad – VP, IR

Dave Gallitano – Chairman and CEO

Tom Tran – SVP and CFO

Ken Burdick – President, National Health Plans

Analysts

Tom Carroll – Stifel Nicolaus

Kevin Fischbeck – Bank of America Merrill Lynch

Josh Raskin – Barclays Capital

Chris Rigg – Susquehanna Financial Group

Peter Costa – Wells Fargo Securities

Carl McDonald – Citigroup

Chris Carter – Credit Suisse

Sarah James – Wedbush Securities Inc.

Scott Fidel – Deutsche Bank

Matthew Borsch – Goldman Sachs

Andrew Schenker – Morgan Stanley

Ana Gupte – Leerink Partners

Michael Baker – Raymond James

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the WellCare Health Plans March 2014 Financial Results Conference Call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions)

As a reminder, this conference is being recorded Tuesday, May 6, 2014.

I would now like to turn the conference over to Gregg Haddad, Vice President of Investor Relations. Please go ahead.

Gregg Haddad

Good morning. And thank you for joining us. Today, we will be making forward-looking statements, including but not limited to, our 2014 financial guidance. Various risks and uncertainties, such as those described in our filings with the SEC, including our 2010-2013 annual report on Form 10-K, may materially impact those statements. While these risks and uncertainties may cause our future results to differ from today's statements, we are not undertaking any obligation to update or revise any forward-looking statement.

Certain financial information that we will discuss today includes adjustments to expenses related to previously disclosed government investigations and related litigation that we believe are not indicative of long-term business operations. We will identify results that have been adjusted. In addition, please refer to our news release and presentation published this morning for supplemental schedules that reconcile results determined under Generally Accepted Accounting Principles, or GAAP, to our adjusted results. The news release and the presentation are published on our website at www.wellcare.com.

The implementation of the Affordable Care Act industry fee has led us to evaluate the calculation of certain non-financial performance measurements. One change involves the non-GAAP calculation of the Medicaid health plan segment and MBR, we now determine the Medicaid MBR using in the denominator, the difference of premium revenue, less Medicaid state premium taxes and less Medicaid state ACA industry fee reimbursements. Our prior guidance of 87.25% to 88.25% included state ACA fee reimbursements in the denominator. Had we removed those reimbursements, the Medicaid MBR guidance in February would have been 89% to 90%.

In addition, during today’s discussion, we will describe changes in the gross margin rates as important indicators of segment performance. Please refer to the basis of presentation section of our news release and Page 2 of today’s presentation for additional information regarding these measurements and ratios. With respect to our updated 2014 financial outlook, our guidance does not include the acquisition of certain assets of Healthfirst Health Plan of New Jersey which is pending regulatory approval. The transaction is expected to close later this year.

Our discussion today is led by Dave Gallitano, WellCare's Chairman and Chief Executive Officer; Tom Tran, Chief Financial Officer; and Ken Burdick, President National Health Plans. I will now turn the discussion over to Dave.

Dave Gallitano

Good morning, everyone. Today, we want to focus on several important updates. I will begin by discussing our first quarter results. I will then provide an update regarding our 2014 outlook and initiatives. Following that Tom Tran will provide a detailed explanation of the first quarter financial results as well as or revised 2014 financial guidance. As of March, WellCare reached another milestone and served more than 3.5 million members across the United States. Our membership grew 31% compared with March 2013 and 24% compared to December 2013. This strong growth demonstrates the value of our products through the lower income people we serve and the government partners with whom we work. We anticipate continued membership growth in each of our segments during the balance of this year.

For the first quarter of 2014, our adjusted net income per diluted share was $1.13 which was well ahead of our expectation. As a result of this performance and better visibility on the execution of the initiatives we have been implementing. We are increasing our 2014 guidance for adjusted net income per diluted share to a range of $4.40 to $4.75, up from $3.75 to $4.05 previously guided. As described on Page 3 of the presentation we published this morning, I would like to highlight five important developments that support this increase.

First, regarding our Medicaid health plan segment performance; the quarter’s results exceeded our expectation and we anticipate higher premium revenue for the rest of the year. The incremental growth is being driven primarily by the Kentucky program and the eligibility expansion in that state. As of March, we served 372,000 members in Kentucky of which over 60,000 became eligible for Medicaid effective January 2014. Membership in our Georgia program also is exceeding our expectation following the state’s resolution of issues associated with this enrollment system and early indications are that the Florida Managed Medical Assistance program is off to a very strong start.

On May 1, we launched the MMA program in three north Florida regions including the Jacksonville area. We’re serving over 185,000 people in those regions, an increase of more than 107,000 members compared -- with enrollment prior to the implementation. Although we are in the early days, so far the implementation in Florida is proceeding in line with our expectations. We continue to expect our Florida MMA membership to exceed half a million people at the end of 2015 with -- and membership growth could be greater than what is currently reflected in our guidance.

Turning to the second factor driving our guidance update, the improved outlook for our Medicaid segment MBR is resulting from better than expected medical cost trends during the first quarter of 2014. In addition, our medical cost management initiatives are gaining traction. These factors will offset in part by increased expenses for Hepatitis C treatments and in particular Solvadi. The state premium rates we received at this time did not reflect the incremental expense associated with these new and extremely expensive treatments. We are working closely with our government partners to determine appropriate clinical approaches to and funding for those costly treatments. While approved cases were relatively low during the first quarter, the number has been growing rapidly and we anticipate will continue to do so. This is reflected in our revised 2014 outlook.

Regarding the third primary operating driver to our guidance update, our Medicare health plan segment MBR now is expected to be higher than the level we guided to in February. Unfavorable development of prior year’s claims reserves as one contributor to this change. Another is the initial performance of the Windsor Medicare Advantage plans which has been slower to improve than we expected. A third factor is that the performance of our California MA plan also continues to lag behind our expectation. We are taking steps to address the latter two issues.

The fourth operating change affecting our guidance is the Medicare PDP segment MBR which we have revived substantially higher for the year. This results mainly from greater than expected drug price increases that occurred at the beginning of the year and higher utilization of branded drugs that was anticipated in our bids by members who have been enrolled in our plans starting in January 2014. The final operating update is for our adjusted administrative expense ratio guidance which we have lowered for the year, in part this is due to higher than expected growth in our premium revenue and increased operating leverage. In addition, we are beginning to experience productivity gains from our investments and initiatives which are running ahead of our original expectation. In addition to these operating developments, we also have increased our guidance as a result of non-operating – non-operating gain from the Windsor acquisition which was in excess of our original expectation. Tom will provide more detail on this as well as our recent results in 2014 outlook.

Tom, turn over to you.

Tom Tran

Thank you, Dave, and good morning, everyone. Adjusted net income for the first quarter of 2014 was $50 million compared with $28 million for the same period in 2013. Adjusted net income per diluted share for the first quarter of 2014 was $1.13 compared with $0.63 per share for the same period in 2013. This morning I will discuss some of the more important elements of the first quarter results included the items related to the Windsor transaction as well as the Windsor operating performance. I will also talk about some other important first quarter items including claims reserved development, the effect of the ACA industry fee and the effect of the new expensive Hepatitis C treatments on our results, then I will discuss investment related expenses, performance of our segments, the balance sheet and liquidity and additional details about our 2014 outlook.

Described on Page 4 of today’s presentation, first quarter results include a $28.3 million after tax bargain purchase gain from the Windsor acquisition. The gain result from the estimate of fair value of the net tangible and intangible assets that we acquired that were in excess of the total consideration payable to the seller. The gain was in part due to a reduction in a purchase price to reflect certain cost that we expect to incur after the transaction close. Certain income tax related benefits acquire in the transaction also were a component of the gain. The amount of the gain may change in the future due to potential adjustment to the purchase price as we’ve resort certain matter principally related to the tax benefits.

Doing the first quarter, we incurred $0.09 per share in expenses associated with the Windsor integration and transition of members to our operating infrastructure. For the full year, we currently anticipate this expense will amount to approximately $0.20 to $0.25 per share. The net effect of the gain and the integration expenses add $0.55 per share to first quarter result. For the year 2014, currently we expect net contribution from these items of approximately $0.39 to $0.44 per share. This net contribution exceed the amount we included in our initial 2014 guidance. Consequently, we have increased our guidance by this amount. With regards to operation in the first quarter, Windsor Medicare Advantage plan result were below our initial expectation, mainly due to high utilization of in-patient services. The Medicare PDP and Medicare Supplemental Products performed in line with our initial outlook. We expect integration of Windsor MA plans into our chem management and service infrastructure to improve the performance. The integration occurred on May 1 and today it's performing consistent with our expectation.

Turning to claim reserve on Page 5 of the presentation. First quarter of 2014 medical benefits expense include net unfavorable reserve development related to prior periods has decreased pretax income by $33 million or $0.46 per diluted share. The net unfavorable development result primarily from the Medicare Health Plans segment. $5 million of this unfavorable development resulted from the Windsor acquisition. The Windsor purchase agreement provide us with certain protection against unfavorable reserve development. In addition, we record $7 million of reserve development related to adjustment to payments to our Medicaid providers for reimbursement at Medicare raised level under the ACA. These adjustments result from our work to ensure these reimbursement weigh in accordance with each state requirements. Given the delayed implementation and compressed timeline to render payments, we do not anticipate a meaningful ongoing effect.

In our first quarter of 2013, we experienced net favorable reserve development related to prior periods of $16 million or $0.23 per share, consequentially the effect of reserve development in the first quarter of 2014 compared to first quarter of 2013 was a decreased net income by $0.69 per share, regarding the ACA industry fee as described on Page 6 of the presentation. In our first quarter, we recorded $32 million of fee expense. This expense is deductible in determinate income tax expense. We record Medicaid state reimbursement of $24 million based on our arrangement which with the states of Florida, Georgia, Kentucky, Missouri and South Carolina. The net effect of the shortfall in aspect of Medicaid state reimbursement on the first quarter was a reduced net income by $0.09 per share. We continue to expect that we will enter into arrangement with Hawaii, Illinois, New York and Ohio for the reimbursement of the remaining amount of the ACA industry fee as described on Page 7 of the presentation. The company did not begin serving at New Jersey in Medicaid until January 2014, we will not incur ACA industry fee expense associate with that program until 2015.

Moving to Hepatitis C treatments discussion on Page 8 of the presentation. In our first quarter, we incurred $0.13 per share in expense as a result with the new expensive drugs that came to the market recently. The expense primarily affect the Medicaid segment. This compared to $0.03 per share spend on Hepatitis C drugs in the prior year period. We anticipate that the year-over-year Hepatitis C treatment expense will increase at a faster rate during the remaining nine months of the year, where working closely with all of our government partners to achieve a reimbursement solution.

Page 9 of our presentation provides an update of our 2014 incremental operating expenses. For the first quarter, our growth initiative expense reduced net income by share by $0.08 per share more than in 2013 which mainly the result from the Florida MMA related expenses. For the year, we continue to expect growth initiatives to impact earnings by $0.25 to $0.30 per share. As with the case in the first quarter, these expenditures relate primarily to the Florida MMA implementation. While investment spending on incremental operating expense for quality, service and productivity infrastructure was relatively low during the first quarter, we continue to expect the full year 2014 incremental expense to amount of $0.35 to $0.45 per share.

Turning to the Medicaid Health Plan segment. Membership increased 11% year-over-year to 1.9 million as of March 2014. Organic growth in Kentucky was the primary driver including our eligibility expansion under the ACA as well as a transfer of members to us following a competitive exit from the market in July of 2013. Our acquisition of Missouri Care in 2013 added to the growth. These factors were offset by the loss of members in Ohio resulting from our exit affected 07/01/2013. Excluding premium tax and ACA fee reimbursement, premium revenue for the first quarter increased 24% year-over-year to $1.6 billion, driven by net membership role and change in geographic and demographic mix of our members. As described on Page 11 of the presentation, for the first quarter of 2014 the Medicaid Health Plan segment gross margin rate was 13.2%, an increase of 90 basis point year-over-year. The improvement result principally from the lower medical cost trend and the effect of our medical cost management initiatives, offset in part by the unreimbursed portion of the ACA industry fee expense. The Medicaid Supplement MBR for the first quarter of 2014 was 86.9%, which was below our expectation due mainly to the factors I mentioned.

Moving to our Medicaid Health Plan segment. Membership was 390,000 as of March 2014, increasing 52% year-over-year. March 2014 membership increased by 134,000 members year-over-year including 38,000 Medicare Advantage members and 48,000 Medicare supplemental members were added to the Windsor transaction effective January 1, 2014. The remaining growth results from organic sales activities.

As described on page 12 of the presentation first quarter of 2014 premium revenue was $963 million, up 34% year-over-year driven by membership growth. We anticipate membership will continue to grow during the remaining months of 2014, although at a slower pace than it grew during 2013. The first quarter of 2014 gross margin rate was 10.5% a 250 basis point decrease from 13% in our first quarter of 2013. The reduction principally is due to the effect of the decrease in 2014 premium rates implemented by Centers for Medicare and Medicaid Services.

The federal budgets sequestration that begin in April 2013, the implementation of the ACA industry fee in 2014 and net unfavorable prior period reserve development in 2014. The performance of the Windsor MA plans also adversely affect the 2014 gross margin rate. This factor will offset in part by change the plan benefit design and member cost sharing in 2014 compared with 2013, as well as, our ongoing medical costs and administrative expense management initiatives.

The Medicare Health Plan segment MBR in the first quarter was 88.4% which was above our expectations. For the remainder of the 2014 we remain focused on the Windsor integration including strengthening care management and operational performance of the MA members. Also we continue to be disappointed in the performance of our California MA plan, which we acquired in October of 2012.We continue to execute on our plans that improve performance of these plans, and expect to achieve progress during 2014.

Regarding Medicare Advantage rate environment for 2015, we continue to evaluate the impact of final rate MA rate announcement as part of our best development process. The reduction in the facing of the risk adjustment model is a favorable change, whereas most other elements of the final rates were similar to our expectation. The risk adjustment models mostly meaningful effect is on our members with complex medical condition including many of our dual eligible and lower income members.

Combining all the elements of the rate announcement, we anticipate in aggregate a rate decrease in 2015 compared with 2014 in a low single digit percentage. We remain focused on executing our plan for strengthening network management, care management, quality sale and operational discipline and other factors in light of the challenging reimbursement environment.

Moving to our Medicare PDP segment, revenue was $373 million for the first quarter of 2014 up 67% year-over-year. Our March 2014 PDP enrollment was 1.3 million members, including over 100,000 members acquired as part of the Windsor transaction. In total, membership increased 68% compared with March 2013, mainly as a result of the organic growth to the Medicare open enrollment last fall. We expect membership continue to grow for the remaining months of 2014.

The PDP segment gross margin rate was negative 5% in the first quarter of 2014 compared with negative 3.5% in first quarter of 2013. This decrease primarily is due to higher drug unit costs as well as high utilization of branded drugs particularly among the members who enrolled in our plans beginning in January of 2014. In addition the gross margin was further negatively impact by the ACA industry free and sequestration. The PDP segment MBR was 104.3% for the first quarter which was significantly above our expectation, as a result of the utilization and unit cost issue that mentioned.

Turning to the balance sheet and liquidity, as of March 31st cash and investment held by our unregulated entities were $488 million, compared with $495 million as of December 31, 2013. With regards to consolidated cash flow, cash provided by operating activities modified for the impact at the timing of receipt from and payments to our government customers was $116 million in the first quarter of 2014, compared with $64 million in 2013. Modified cash provided by operating activities for the first quarter of 2014 was equal to approximately 2.6 times our GAAP net income.

Medical benefits payable on March 31 was $1.13 billion compared with $953 million as of December 31, 2013. Days in claims payable or DCP was 39 days as of March 31, 2014, DCP was 42 days as of December 31, 2013, and 40 days as of March 31, 2013.

Turning to page 13 of the presentation and our 2014 guidance. We now anticipate that our adjusted net income per diluted share will be in a range of approximately $4.40 to $4.75. Our previous guidance for adjusted net income per share of $3.75 to $4.05, the increase compared to our initial guidance is being driven by the net effect of the Windsor bargain purchase gain offset in part by integration expenses.

In addition incremental growth in our Medicaid Health Plan segment premium revenue a reduction in a Medicaid segment MBR and lower adjusted administrative expense ratio are contributing to the increase in adjusted net income. These factors are being offset in part by the net unfavorable development recorded in the first quarter of 2014. The outlook for increased MBR in Medicare Health Plans and Medicaid PDP segments and cost of hepatitis C medications.

As described on page 14 of the presentation, regarding the important component supporting our earnings guidance we currently expect that our aggregate company 2014 premium revenue excluding Medicaid state premium tax and Medicaid state reimbursement for ACA industry fee will be in a range of approximately $12 million to $12.1 billion, an increase of 27% to 28% compared with 2013. The previous guidance was for premium revenue will be $11.6 billion to $11.75 billion.

We anticipate Medicaid Health Plan segment premium revenue excluding Medicaid state premium tax and then Medicaid state reimbursement for the ACA industry fee to increase approximately 27% to 28% compared with our prior guidance of an increase of 22% to 23%. This change result mainly from better than anticipated membership growth in Kentucky and Georgia.

We expect premium revenues for the Medicare Health Plan segment to increase approximately 23% to 24% year-over-year, driven mainly by the Windsor acquisition and largely consistent with our prior guidance. We now anticipate PDP segment premium revenue will increase 46% to 47% compared with our previous guidance of 33% to 37%. This change is primarily due to greater than anticipated membership growth.

With regards to segment MBRs we expect our Medicaid Health Plan segment MBR to be in a range of approximately 88% to 88.5%, our prior guidance was of 87.25% to 88.25% include Medicaid state ACA industry fee reimbursement in the denominator. Had we removed ACA reimbursement the MBR guidance in February would have been 89% to 90%, the decrease in MBR guidance result principally from better than anticipated medical cost trend and the impact of our medical cost management initiatives.

So Medicare Health Plans we now expect MBR in a range of 87% to 87.5% compared to 85% to 86% previously. The increase is due primarily to unfavorable reserve development record in the first quarter, as well as the performance of the Windsor and California MA plans. We currently anticipate our Medicare PDP segment 2014 MBR to be in a range of approximately 88.5% to 89%, compared with previous guidance of 83.25% to 84.25%. The significant increase mainly is due to higher than anticipate drug unit costs and utilization patterns among members who enroll in our plans beginning in 2014.

Our adjusted administrative expense ratio for 2014 is expected to be between approximately 8.4% and 8.5%. Our previous guidance was for the ratio between 8.6% and 8.7%. The improvement results primarily from improved operating leverage and productivity gains. We continue to expect the ACA industry fee expense to between $125million and $135 million. We continue to anticipate state reimbursement to fully compensate us for Medicaid fee expense and related income tax expenses effect.

Our effective income tax rate now is anticipated to be between 47% and 48%. Our previous guidance went for a range of 50.5% to 51.5%. The reduction in the rates results from the effect of the Windsor market purchase gain on our forecasted income tax expenses. In summary, we remain focused on effectively executing on our importing growth initiative particularly in Florida and for the inauguration of recent acquisitions.

Our meaningful initiatives and investment in quality, care management service and productivity are beginning to yield positive results which will help ensure our ability to manage high quality care for our members. Operator, we’re now ready to being the question and answer session.

Question-and-Answer Session

Operator

(Operator Instructions) And our first question comes from the line of Tom Carroll with Stifel. Please proceed with your question

Tom Carroll – Stifel Nicolaus

Hey, good morning. Yeah, so I guess a couple of questions here. Could you tell us how much of the bargain purchase gain was in your original guidance? And then I have a follow up on the tax rate as well.

Tom Tran

So the net effect of the bargain purchase gain as included in our guidance was very minimal. It was much lower gain that we expected, offset by expected transition cost and integration expense, it was very minimal.

Tom Carroll – Stifel Nicolaus

Okay, and then on the tax rate, the reduction in the guided full year tax rate -- I guess it seems that’s a result of the bargain purchase gain? And if so, I guess will future years push back towards your original estimate in the low 50% range?

Tom Tran

That’s correct Tom. Essentially we benefit from the bargain purchase gain for 2014 lower tax rate and initial guidance. But we expect that to be back into the low 50% rate.

Tom Carroll – Stifel Nicolaus

That’s great. And I’m going to sneak one more in here that’s just kind of a higher level question. You’ve logged a couple of tough quarters in Medicare advantage now and given the acquisition, so you’ve seen -- given the investment spending you continue to do, it appears you are certainly marching ahead with the MA book and of course now the MedSup products you have. Give us a sense of where you see Medicare kind of longer-term at WellCare and do you think this is an inflection point in the performance of that business especially given kind of the commentary you had about the 2015 visibility on rates? Thanks. --

Dave Gallitano

Yeah, Tom, Dave Gallitano; we still like the Medicare advantage business. We think there are tremendous benefits in that program to not only our members, but to our -- to the government -- our government partners. The rate -- the reimbursement or the rate environment in that business I think has been difficult for a couple of years. We see a line of sight for stabilization and slow improvement as we get toward the end of ’15 and then to ’16.

Tom Carroll – Stifel Nicolaus

Great, thank you.

Operator

Our next question comes from the line of Kevin Fischbeck with Bank of America Merrill Lynch. Please go ahead.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay, great. Few questions here; I just wanted to understand the breakout that you have here about developments in the quarter. The parity numbers, is that a number that you would expect to get a revenue contribution from later this year? So it’s a cost in the quarter, but it’s kind of a net neutral for the year.

Tom Tran

Kevin, we have some adjustment to payment for parity in the first quarter following clarification by, if you say, regarding certain providers that would qualify for that as well as certain procedures. And the revenue that we record in the fourth quarter of 2013, so this is really a small adjustment to that. So we don’t expect any additional reimbursement in -- against for $7.5 million. That little detail is on Page 5.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay, so already got them. So Q4 benefited from this and Q1 is being negatively impacted by it.

Tom Tran

That’s correct.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay. And then just to understand the $5 million for the Windsor, so you said that you had some provisions in the merger agreement that protects you from that. Can you go into that? Is that supposed to be a net negative -- I’m sorry, net neutral or is that cost somehow incorporated in the net gain number that you highlighted separately.

Tom Tran

The purchase agreement gave us protection for reconciliation of IBNR now. So that will be basically an adjustment to the purchase price and adjustment of the balance sheet item and would not be a P&L effect for the remainder of 2014.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay, so the development is a negative P&L effect, but the purchase price adjustment is not.

Tom Tran

That’s right. But it will be adjusted positively to us once we reconcile it later this year with the seller.

Gregg Haddad

So Tom, this is Gregg. It will be a cash balance sheet item only. It won't affect the P&L. But we want to see a P&L effect in the first quarter, but no further effect from the rest of the year.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay. And then you said that -- you know -- I think you suspect to see costs in your press release at least potentially offset by Medicaid reimbursement. What are you assuming in your guidance around rates to reflect on accelerating FC costs?

Tom Tran

We assume no reimbursement in our -- you know, Medicaid fee -- Medicaid premium. Right now we are in negotiation, in discussion with various states regarding that effect. But given the uncertainty, we are not predicting NDE reimbursement in our guidance so far. The cost as we detail out will accelerate it for the reminder of the year and we see more and more script being prescribed for that treatment.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay, so with the $0.10 headwind this quarter and we should assume a higher run rate to the rest of the year hopefully offset by reimbursement but not -- that not included in your guidance.

Dave Gallitano

That is correct.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay. And then I guess last two questions; just wanted to go to the -- get clarity on the investment. You mentioned the growth investment were in $0.08 headwind and the quality investments for $0.02 more. Just trying to understand, are these numbers comparable for $0.25 to $0.30 and $0.35 to $0.45 numbers that you provided last year or where those larger numbers -- these are the $0.08 year-over-year – year-over-year impacts or increases. Wasn’t sure if the $0.25 to $0.30 was a year over year increase or was it included -- while you base spending was in 13 plus year-over-year increase?

Tom Tran

That’s the increase year-over-year. So the $0.20 to $0.25 we expect for the full year is an incremental expense over 2014, same for the other category relating to quality, service, and productivity improvement. That also is an increase over 2013.

Kevin Fischbeck – Bank of America Merrill Lynch

So you’re on the run rate for the growth investment number, but the quality number is much lower than what the annual number would be -- can you talk a little bit about how that should be ramping up for the year just to reminding that right and why it ramps up so much?

Dave Gallitano

Yeah, it’s simply a function of being able to hire fast enough.

Kevin Fischbeck – Bank of America Merrill Lynch

Okay. All right, great thanks.

Operator

Our next question comes from the line of Josh Raskin with Barclays. Please go ahead.

Josh Raskin – Barclays Capital

Hi thanks. Good morning, just want revisit the bargain purchase gain with supposedly I guess in guidance. I guess the way I’m looking at it is the $0.54 -- if you take out the $0.39 to $0.44 incremental, it seems like you’re implying $0.20 to $0.25 in your previous guidance and that seems like a pretty big number not to have ever mentioned previously. So I’m just curious if that was really in guidance, how come you -- why is this first goes hearing of it?

Tom Tran

What we had assumed in our February guidance was very minimal effect, that any minimal impact on EPS relating to the net effect of the bargain purchase gain as well as the integration expense for Q1. So we have now seen a larger backend purchase gain following the completion, the evaluation of tangible intangible. And so we are updating in our guidance based on that.

Josh Raskin – Barclays Capital

But, Tom is it fair to say that the gain was $0.20 to $0.25 offset by integration cost that were I guess something in that ballpark?

Tom Tran

No, it was some level, but it’s a very low number.

Josh Raskin – Barclays Capital

And then I guess more specifically, if you guys are adjusting the purchase price downward and obviously you’ve got these assets that are running at much lower earnings numbers, would there be an anticipation of a good will write-down for this acquisition?

Tom Tran

That was really part of the whole evaluation of the assets that we purchased, so it’s already factored in what we put on the book on the opening balance sheet as a good will and intangible.

Josh Raskin – Barclays Capital

Okay, you’re paying even lower than the written down estimated impact of good will?

Tom Tran

I don’t know what you mean by written down, but certainly the asset we acquire, we pay a certain consideration that is, you know much less than the market value of the asset that we purchased. Within that negotiation, we also factor in certain cost that we would assume such as severance expenses, contract termination and other things as part of our purchase consideration and that’s what you see us recording some of that as a net number to the back end purchase gain in the first quarter.

Dave Gallitano

And Josh, there will not be any good will recorded in conjunction with this transaction. There will be certain intangible assets recorded specific to member ship and provider networks and so forth, but no good will. The nature of the accounting for a bargain purchase gain defines that there will not be good will recorded.

Josh Raskin – Barclays Capital

And then and the second question is -- the first quarter came in a lot better than expected, you know from the consensus numbers et cetera. It sounds like there was much better than your expectations. So how do we think about the guidance where the remaining three quarter, in your perspective with the remaining three quarters now expected to be better or worse than you had previously guided to?

Dave Gallitano

Well, based on the guidance that we just put out this morning. Hopefully, it’s obvious that we’re expecting the year to be better than what we originally were thinking in the first quarter.

Josh Raskin – Barclays Capital

Okay.

Dave Gallitano

And Josh, there will not be any goodwill recorded in conjunction with this transaction. There will be certain intangible assets recorded specific membership and provider networks and so forth. But no goodwill the nature of the accounting for bargain purchase gain defines there will not be goodwill recorded.

Josh Raskin – Barclays Capital

Right. And then I have second question, this first quarter came in a lot better than expected from the consensus numbers extra, it sounds like there was much better than your expectation. So how do we think about guidance for the remaining three quarters in your perspective for the remaining three quarters now expected to be better or worse than you would previously guided?

Dave Gallitano

Well, based on the guidance that we just put out this morning, I – hopefully it obvious that we’re expecting the year to be better than what we originally were thinking.

Josh Raskin – Barclays Capital

I don’t know if it’s obvious, but I guess if I exclude the first quarter and just look at the remaining three quarters is that components, so obviously I understand the first quarter was lot better, but isolating the better than expected first quarter of the remaining three quarters better than you previously expected?

Dave Gallitano

Yes.

Josh Raskin – Barclays Capital

Okay, I gotcha. And then just last question on M&A and maybe on process and thoughts going forward, look like easy choice in Windsor acquisitions are not going according to plan, last quarter I think you guys had specifically that you’re very comfortable with MBR financial outcome of that transaction. So I’m curious if you could walk us through sort of the diligence process on M&A and if these last two have changed the way you think about potential acquisitions in the future?

Dave Gallitano

As we said at the end of last year we’re being asked about future acquisitions the philosophy is very much acquisitions, if it is in line with the strategy that we have for the company there is no acquisition strategy per say, we’re not looking to do deals if you would. The easy choice and Windsor acquisitions there are operational details that frankly probably should have been found during due diligence. And as we dig into those transactions and more and more about what it will take to make them successful there is more work to be done, and I think they are under performing now, but we do see have a line of sight to see the both of them being good acquisition for us on a longer term basis.

Ken Burdick

Josh this is Ken. One thing I would add to that is there are lessons learned relative to integration, I know you asked about the diligence, but respect integration moving the acquired entity onto our own legacy platforms is something that we will certainly do more quickly going forward.

Josh Raskin – Barclays Capital

Okay, got it, thanks.

Operator

(Operator Instructions) Our next question comes from the line of Chris Rigg with Susquehanna Financial Group. Please go ahead.

Chris Rigg – Susquehanna Financial Group

Good morning guys. Just wanted to come back to the unfavorable reserve development, I think you said earlier in the call that some of that related to inpatient utilization, and I guess – I’m just hoping for some additional color. Was that isolated to a few markets and if so can you tell us where? And then more importantly was there a big bump right at the end of the quarter? I’m just trying to get a sense whether that’s continued into 2014 or whether it was really just sort of an isolated bump end of the last year. Thanks.

Dave Gallitano

Sure. We did not specifically say that the reserve development were relate into inpatient services. So if you look at the reserve development of $22.5 million isolating all the parity payment for K and Windsor development then the remaining reserve development is attributed to the Medicare segment. For Medicaid reserve very minimal, so on the Medicare side certainly we obviously didn’t estimate, best estimate at point in time in Q4 we’ll certainly see somewhat higher expense coming down to first quarter, however for the remaining business of WellCare excluding the Windsor that we acquired in 1:1 Medicare is running pretty close to our expectation in the current quarter.

Chris Rigg – Susquehanna Financial Group

So I guess that just some clarification there, when I look at slide five, the 19.8 is also Windsor or is that core WellCare?

Dave Gallitano

It’s core WellCare. And Windsor, we detail that out separately $5 million. So if you kind of look at excluding that so called $20 million from the current quarter, the MA reserve for the WellCare business is running within our expectation.

Chris Rigg – Susquehanna Financial Group

Okay. And then I guess just one other sort of big picture question for Dave, I mean you’ve been at the helm essentially for six months, and I guess with the company on the board for longer than that, when you sort of step back and looking how the company’s performed over the last year or so, there always seems to be some good that sort of nullified by some bad. And I guess how do we get comfortable as sell-side guys and buy-side guys that you’re going to get your arms a little bit more around the business and so that we can just feel little bit more consistency in results going forward, is there systems issues going on or anything that you could sort of help us feel a little bit more comfortable, but that thing should become a little bit more consistent going forward would be great. Thanks.

Dave Gallitano

Yeah, I think that’s a great question. The answer to your question is yes, there are systems and infrastructure issues that we have talked about previously that need to be put in place that will lead to greater consistency. In any business that I ever run you do have ups and downs in various segments, it’s pretty hard to avoid all surprises, but net-net we should have a more consistent positive trend as we look ahead. And lot of it is driven by infrastructure spend which we have been, which we ramped up very significantly this year as I think you know, and we have put in place a number of initiatives that will lead to more consistency. We’re getting tremendous traction in our – with the model of care that our Chief Medical Officer Steve Goldberg has developed, we’re getting tremendous traction in terms of our medical expense initiatives and we’re seeing very good results from that, you can expect more consistency in that regard as we look ahead. On the operation side Mike Polen, our Senior Vice President of Operations has began putting in place processes and producers that we are getting productivity gains from and more consistent operational performance from even without the IT infrastructure bill that is coming along behind it. So I think the combination of the processes he is putting in place and then – what I would call the institutionalization of those processes with the IT bill will lead to much greater consistency and we will have a better ability to continuously improve our costs in our spend.

Chris Rigg – Susquehanna Financial Group

Thanks a lot.

Operator

Our next question comes from the line of Peter Costa with Wells Fargo Securities. Please go ahead.

Peter Costa – Wells Fargo Securities

Hi guys. Can you update us on the CEO and CFO search?

Dave Gallitano

Sure. We are continuing down the path on both those dimensions as I said, as we announced previously the neither myself nor the board are looking to do anything on a perceptive basis we like the program that we’re making at the stage of the game, and we want to make sure that whoever we bring in both those positions will continue the positive trend in that cause us to get side track. So we are being very careful, we’d be very thoughtful, we are talking with the number of good people in both those areas, that I’m sure will lead to a successful result. But I do not have a timeframe for you at this point in time.

Peter Costa – Wells Fargo Securities

Okay. Back in September you talked about Healthfirst being accretive to 2014 net income, do you still expect that or do you have change of views on Healthfirst at this point?

Dave Gallitano

We as you know the Healthfirst transaction hasn’t been closed yet, is expect to close in the second half of this year, more unlikely in the third quarter and we continue to expect that to be acquitted our earnings.

Peter Costa – Wells Fargo Securities

Even with the reconsideration given the performance of some the other acquisitions that you have done?

Dave Gallitano

Healthfirst transaction is predominately a Medicaid business and certainly, Medicare is a very small component of that and we have very good line of sight on their performance bring them right in medical cost structure, so we feel comfortable with that it will be accretive to our earnings.

Peter Costa – Wells Fargo Securities

Okay. And then can you talk about the days in claims payable drop that happened in the quarter, both sequentially and year-over-year?

Dave Gallitano

Yes, sequentially as you know we have very large increase in our Part D business and Part D business in the first quarter always have very high expense and the payable increase in that business is very minimal. So Part D certainly has the significant impact on the sequential decrease in the DCP. Year-over-year, similar kind of affect last year we had the much lower Part D business as well, so the cost per day for Part D is very high this year, that’s really, really the main effect of the decrees in DCP year-over-year as well as sequentially.

Operator

Our next question comes from the line of Carl McDonald with Citigroup. Please go ahead.

Carl McDonald – Citigroup

Thanks, so wanted to go back for couple of more questions on the development just to understand the – so you’re showing us the net development, was there any positive developments in the Medicaid business with the adjustment for the parity payment that you mentioned, so basically just trying to see whether the Medicaid development was sort of as it's reported on the net basis or the negative development was bigger than that?

Tom Tran

Carl, the Medicaid development was very minimal for the quarter and most of the negative development in the first quarter was related to MA, if you take out the Windsor item and parity payment.

Carl McDonald – Citigroup

Okay, and then a bigger picture question in the development, you’ve had negative developments the last two quarters, roughly $50 million or so. So the question basically is are there adjustments that need to be made to the reserving process – or maybe a better question, you have any adjustments that made to the reserving process?

Dave Gallitano

Let me answer that for you. We have been looking at that and I think your concern is legitimate. We have been looking at that, we have made some adjustments in this past quarter. I would expect to see a more normalized distribution of positive and negative settlement as we look forward.

Carl McDonald – Citigroup

Okay, thank you.

Operator

Our next question comes from the line of Chris Carter with Credit Suisse. Please go ahead.

Chris Carter – Credit Suisse

Thanks, good morning. Just quick question on the guidance, on the Slide 13, the $0.72, anyway you kind of breakdown the different bucket positive and negative that kind of net to that 72?

Tom Tran

Chris, what I could provide reconciliation to the $0.72 but we provide the context here which is that our Medicaid segment revenue is growing much more than we had expected initially. So you can do it a math between this quarter and we’re now in guidance, it's somewhere closer to the $300 million plus, and that the MBR has also gone down, right so for the Medicaid segment, admin ratio also went down. So those are really the positive components, on the negative side we already stake out that PDP segment, MBR goes up by almost 500 bps and that Medicare also went up as well. So those are really the kind of elements. Hepatitis C certainly we see significant increase in cost in last three quarters, obviously that’s our best estimate, obviously this is fairly new treatment and we are being cautious about that and hopefully if we can work with government partners here to get reimbursement for that, that could give some positive effect but we cannot assure of any kind of success on that side.

Chris Carter – Credit Suisse

Okay, thanks. And then just on the Medicaid side I think you said you have 60,000 Medicaid expansion lives, was that mostly in Kentucky?

Tom Tran

That’s correct, that was really Kentucky, we gained slightly over 60,000 from the new Affordable Care Act expansion at PL [ph] level, there are also some woodworking effect that you see in Kentucky as well, in addition to that we have seen but we do not see the woodworking effect in other state. In Kentucky we did see a very significant jump in the total Medicaid eligibility for the whole market.

Chris Carter – Credit Suisse

Got it, and where – can you kind of give us a number of where you think Kentucky lands for enrollment for the year at least what’s included in guidance and then may be how is the – what's your early read of how that business is tracking versus your rate structure?

Dave Gallitano

Yeah, we’re not in a position to get into the detail on behind the growth rates by state at this point.

Tom Tran

I can provide some content and performance of this new population. Certainly everybody is concerned about pent-up demand in services, however we do not see a lot of anomaly compared to our existing Medicaid population, we do see some up and downs in certain category of service but by and large it is within our expectation.

Chris Carter – Credit Suisse

Okay, thank you.

Operator

Our next question comes from the line of Sarah James with Wedbush. Please go ahead.

Sarah James – Wedbush Securities Inc.

Thank you. You had some large enrollment gains in Part D that you also brought up the MLR good amount in guidance, so how should we think about your pricing strategy in that respect?

Dave Gallitano

Yeah, this is pretty straight forward, based on the data we have now, we underprice the Part D program and we have -- as we look into 2015, we will be adjusting our pricing methodology to reflect the new information we have. The Part D program I think is the information we provided in our guidance. We’re seeing a lot greater use of branded drugs than we expected and we’re also seeing somewhat higher utilization, so the combination in effect has us being underpriced relative to what we expected.

Sarah James – Wedbush Securities Inc.

Okay, that’s helpful. And then I was wondering if there is any change to your assumptions of how much ACA you’re recruiting in the old versus the new guidance or the assumptions on that line the same?

Dave Gallitano

No, the assumptions are the same.

Sarah James – Wedbush Securities Inc.

Okay, thank you.

Operator

Our next question comes from the line of Scott Fidel with Deutsche Bank. Please go ahead.

Scott Fidel – Deutsche Bank

Thanks, just following up on Part D. I remember when you were pricing for this year, some of the more aggressive pricing was predicated on the assumption that you’re going to see better risk scores due to some of the Part D risk score changes that they’ve made – CMS had made. Are you still expecting to see that the better risk scores in just you’re using that higher utilization or seeing some adverse selection on the membership or is there a change to the risk score assumptions as well?

Dave Gallitano

I’m not sure we’re seeing adverse selection but the risk score is certainly different and you know we will adjust accordingly.

Scott Fidel – Deutsche Bank

Okay, then just one at follow up, just on the Medicaid MLR guidance, so that now incorporates considerably higher Hep C spend and you’re not assuming yet that you’re going to have to states reimburse that clue, are there some positive offset there so can you talk about in terms of the components you know what you’re seeing trending better on Medicaid, is this more on the in-patient, the physician utilization side?

Tom Tran

So, on the Medicaid side I would point at two factors, one is that we do see naturally lower cost trend if you will. Secondly, we also are seeing a great attraction on our medical cost management initiative that we started in the fourth quarter of 2013. So those two components really helping our MBR to decrease, it's really one in our expectation.

Scott Fidel – Deutsche Bank

Okay, just had a last question just going back to Windsor, so I know that you initially resuming that the deal was going to be accretive and clearly it's not going to be now. Were you assuming Windsor was going to be getting back to profitability on an operating basis this year or was the assumption for accretion you know more around the purchase gained benefit just given that we know Windsor for years have been really generating very significant losses, so just trying to get a sense of how quickly you’re assuming in the guidance that their performance would be able to improve?

Ken Burdick

Scott, this is Ken. We were expecting operating improvement and based on the first quarter, it didn’t materialize close to your expectations. We are encouraged in that we successfully migrated them to our platform on May 1 and immediately we can introduce some additional payment added and we are strengthening our utilization management procedures, so we expect that performance will continue but clearly it disappointed in the first quarter.

Scott Fidel – Deutsche Bank

Okay, thank you.

Operator

Our next question comes from the line of Matthew Borsch with Goldman. Please go ahead.

Matthew Borsch – Goldman Sachs

Yes. Good morning. I’m curious, what’s your insight on the your utilization over the course of the first quarter and maybe if you have some view on it even into early April, did you see weather impact in the quarter, have you seen any variation in what you’re getting for March and maybe into April versus January, February?

Dave Gallitano

Utilization there is pretty consistent with what we expected. The primary drive on utilizations with some of the medical expense initiatives that we’ve begun to implement in hiring, the – we have a very aggressive plan to hire Case Managers this year. And every Case Manger we bring on has having positive effect on utilization.

Matthew Borsch – Goldman Sachs

Can you just talk a little bit more about the Hepatitis C and how you are handling the drugs? Are you allowing or encouraging or facilitating doctors to prescribe it in every one of your Medicaid markets or are some states saying, “don’t do it yet” and are there any particular treatments in terms of the patient protocols that you are using?

Dave Gallitano

The protocols we’re using, we’re reviewing those constantly with clinical standards that are appropriate for the disease. And we are being guided by that to be candid. We want to control the usage where we think it’s appropriate given the likely clinical outcomes.

Matthew Borsch – Goldman Sachs

But are just, to be clear, are you prescribing it in every one of your medicate markets or essentially are there somewhere, where that, that’s not essentially permitted yet?

Dave Gallitano

It is, to our knowledge, is permitted in all of our markets. So –

Ken Burdick

Matthew, we haven’t targeted any particular states or markets where it’s not being prescribed.

Matthew Borsch – Goldman Sachs

I got it. Okay. Thank you.

Operator

Our next question comes from the line of Andrew Schenker with Morgan Stanley. Please go ahead.

Andrew Schenker – Morgan Stanley

Hi, good morning. So just following up on the SG&A expense, can you maybe give a little bit more details on how much there was actual productivity gains that carries throughout the year and how much of it was just a leverage on the higher revenues you realized dollar expect to raise for the year.

Tom Tran

Yeah. We haven’t broken that out Andy, but the – if you look at the first quarter, it’s – I would say it’s artificially low as a result of a lag in hiring, but as we go through the course of the year, we expect the hiring to get more traction. But again as we hire the assets that we’re adding are very productive and we’re getting greater traction – greater productivity traction on those people as they come on faster than we expect it. So that impact is positive. So it is a combination of volume leverage, but also productivity gains.

Andrew Schenker – Morgan Stanley

Okay. And then, going back to PDP, obviously one of the drivers that you call that historically for a lower MBR this year was the preferred pharmacy network that you obviously highlighted that in higher utilization branded et cetera. I mean, how as the preferred pharmacy network component of it performed versus your expectations, was that where the kind of miss alignment of expectations resulted from or has that actually been performing well, but new members that came were just simply thicker, had adverse expectations.

Tom Tran

Your preferred network is working. What we see as new members enrolling into our plan is that, they tend to have somewhat lower risk, however the utilization is also low. On the other hands, to counter the debt they are utilizing much higher branded cost, branded throughout the cost that far more than generics and the generic dispense way for that population is somewhat lower than our expectation, lower than our existing member, so we do see that.

The other fact that we mentioned was that we do see some higher drug price increase in the first quarter, higher than we normally would see historically, that seemed to taper off in the last month or two. However, in January and February we do see a much higher bigger jump in price increase, so those are really the main effect of higher PDP.

Andrew Schenker – Morgan Stanley

Yeah. Thanks.

Operator

Our next question comes from the line of Ana Gupte with Leerink Partners. Please go ahead.

Ana Gupte – Leerink Partners

Yeah, hi. Thanks. Good morning. So just coming back to the development in the Medicare book and your revised guidance and the MBRs that you have, can you tell us exactly – I am not clear this is because of utilization or is it a billing intensity issue, can you give us a sense of what remediation steps you are taking that gives you comfort that your revised guidance in your new MBRs are achievable and there is at least no downside risk for that number?

Tom Tran

Sure. The developments were relying [ph] on primarily the last two quarters of 2013 and concentrated in a couple of markets. And that as we kind of see developments of the first quarter, the result of the first quarter for those particular markets and we do see that current quarter run rate is actually much improved in terms of relating to our expectation. So based on that, we feel comfortable that the MBR as we guided is really fairly solid. And then we don’t see any further – I’d say the deterioration following if you remove that development out of the equation.

Ana Gupte – Leerink Partners

And was it the cost per claim issue or was it a volume of claims issue for the last quarter though it sounds like it’s improved for this quarter. ?

Tom Tran

Yeah, it’s primary relating to certainly in-patient cost that we saw in Q4 and Q3 and those are really the main factors.

Ana Gupte – Leerink Partners

Then on the Medicaid expansion, some of the hospitals are beginning to report increased volumes and so on. How much time does it take for ER claims that might be presenting themselves in the first quarter or inpatient claims, when will that likely be visible in your claims inventory, is there possible that there is stuff hanging up in the claims that given visibility that you had?

Tom Tran

Sure. Sure. We do look at claim inventory, we do attract certainly key hospital facility, we don’t see anything unusual and typically our claim payment turnaround is fairly quick. So as you can see the DCP, we have is roughly about 40 days. Traditionally on the Medicare it’s a little bit longer than that, but nothing unusual that we have seen so far in terms of volume of claim as well as inventory level.

Ana Gupte – Leerink Partners

And then would you say based on your response to the previous that the $0.35 to $0.45 that you are putting out is productivity initiative, that’s where the conservatives lies in that, if there were any upticks never knows, if that happen in any of the Medicare or Medicate that you have ongoing medical cost reduction imitative that you are not taking entirely into your guidance. Does that give you some cushion if you will?

Dave Gallitano

Ana, our guidance reflects our best judgment as to what we expect.

Ana Gupte – Leerink Partners

And finally can you give us an update on the Georgia rebid status?

Ken Burdick

Ana, this is Ken. The Georgia rebid we expect in that initial drop in the first quarter of 2015. We expect the decision will be made proximately July of 15 for a July 1, 2016 effective date.

Ana Gupte – Leerink Partners

Got it. Thanks for taking the question.

Operator

And our final question comes from the line of Michael Baker with Raymond James. Please go ahead.

Michael Baker – Raymond James

Thanks a lot. Dave, just a question for you in terms of obviously being the CEO you have greater insights into the business. Have any of your timelines change with respect to the CEO, CFO search and/or the type of individual that you are looking for?

Dave Gallitano

The simple answer is no. The timelines as we readjusted them at the end of last year or beginning of this year, I should say are intact, we’re again in no rush, we want to be very thoughtful and make sure that we get the right people in both those positions and the type of person absolutely not. We are still steadfast focused on getting strong leaders that have the vision to provide the leadership needed to guide the company on a long term basis.

Michael Baker – Raymond James

How about the balance between large company experience versus healthcare expertise and manage care?

Dave Gallitano

Well, I think, both are important. I think if I had to put a bias on one versus the other I think strong leadership and ability to lead a larger more complex organization is more critical. However, you can’t be naïve as to the industry and if you are going to come in from a tangential part of the industry, you’re going to have to come up learn quickly on the specific of this business. Do I think that’s insurmountable, no I don’t. So I think it’s our approach in the boards thoughts behind the type of person we’re looking for are still very consistent.

Michael Baker – Raymond James

Thanks. And another question on a different topic and that is one of the things that you mentioned is are focusing in on investing on systems to improve those and was trying to get as some additional color on that given the fact that you made a number of acquisitions and it sounds like you are transitioning on to your existing platform, can you give us a sense of which pieces of the existing platform work and just a bit of better clarity around some of those dynamics of change going on in that specific area.

Dave Gallitano

We have, as you know, we increased our CapEx this year by 50% and roughly $90 million. We are – we have a very detailed program of IT spent for the year and frankly working out even further than that. They are sequenced to have to give us the greatest impact the soonest and our progress to date under our new Chief Information Officer, Rose Hauser, has been tremendous where we’re getting a lot of traction very fast and we’re very much on track to get the pieces to start falling in place as we expected. But as with any IT project it doesn’t happen tomorrow, we’d say it’s a longer proposition on many of these platforms and if not all of them. And this is a more by the year infrastructure built.

Michael Baker – Raymond James

Thanks.

Operator

And that’s all the time for question we do have today. Mr. Haddad, I’ll turn it back to you.

Gregg Haddad

Thank you, operator. And thanks to everyone for listening in today’s call. We look forward to talking again with you as soon.

Operator

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.

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Source: WellCare Health Plans' (WCG) CEO Dave Gallitano on Q1 2014 Results - Earnings Call Transcript
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