Serco SEA - secures CMS contract valued at $900m
Serco secures US health insurance eligibility support contract valued at $900m
6 June 2018
Serco Group plc
LEI: 549300PT2CIHYN5GWJ21
Serco Group plc ('Serco' or 'the Group'), the international service company, has received formal notification from the US Department of Health and Human Services, Center for Medicare & Medicaid Services (CMS), that Serco has been awarded a contract to continue to support eligibility determinations for citizens purchasing health insurance through the Federal Health Insurance Exchanges. The contract has a one-year base period and four one-year option periods, with an estimated total value to Serco, subject to workload volumes, of approximately $900m if all option years are exercised.
Serco's role is focused on delivering effective and efficient verification of applicants' eligibility for health insurance benefits as citizens enrol for, or renew, a Qualified Health Plan. A wide variety of consumer interactions are processed by Serco using our deep case management and process expertise, as well as our world-class Eligibility Support Platform which we have developed specifically for this demanding work. Tasks include: processing paper-based applications; matching applicants' data through secure electronic interfaces and reconciling any inconsistencies; verifying supporting documentation for eligibility; performing outbound customer contact services; and quality assurance and data analytics to support the integrity of the overall programme.
Serco has been providing CMS with processing support since July 2013. The current five-year contract ends on 30 June 2018 and revenue for the last 12 months has been approximately $210m. Our operation of the contract over the last five years has met the challenges of evolving federal policy requirements, as well as adapting to the changes in volumes, consumer contact channels and the timing and cyclicality of the Open Enrolment Periods. The new contract is forecast to deliver cost savings for CMS against the previous contract as we develop further process efficiencies and technological improvements; the proportion of the contract delivered on a fixed price basis has also been increased.
Rupert Soames, Serco Group Chief Executive, said: "Serco has developed a strong working partnership with CMS to provide it with vital consumer eligibility services. Over the past five years we have assisted millions of Americans by adjudicating their health insurance applications, using a combination of skilled staff and process automation to drive down costs and protect programme integrity. We look forward to delivering additional innovation and continued transformation of the operations, as we further develop the automated processing platforms and staff expertise to provide even better value and efficiency to citizens."
This announcement contains inside information.
Ends
For further information please contact Serco:
Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 227
Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 226
About Serco
Serco is a leading provider of public services. Our customers are governments or others operating in the public sector. We gain scale, expertise and diversification by operating internationally across five sectors and four geographies: Defence, Justice & Immigration, Transport, Health and Citizen Services, delivered in UK & Europe, North America, Asia Pacific and the Middle East.
More information can be found at www.serco.com
Forward looking statements
This announcement contains statements which are, or may be deemed to be, "forward looking statements" which are prospective in nature. All statements other than statements of historical fact are forward looking statements. Generally, words such as "expect", "anticipate", "may", "should", "will", "aspire", "aim", "plan", "target", "goal", "ambition" and similar expressions identify forward looking statements. By their nature, these forward looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements. Factors which may cause future outcomes to differ from those foreseen or implied in forward looking statements include, but are not limited to: general economic conditions and business conditions in Serco's markets; contracts awarded to Serco; customers' acceptance of Serco's products and services; operational problems; the actions of competitors, trading partners, creditors, rating agencies and others; the success or otherwise of partnering; changes in laws and governmental regulations; regulatory or legal actions, including the types of enforcement action pursued and the nature of remedies sought or imposed; the receipt of relevant third party and/or regulatory approvals; exchange rate fluctuations; the development and use of new technology; changes in public expectations and other changes to business conditions; wars and acts of terrorism; and cyber-attacks. Many of these factors are beyond Serco's control or influence. These forward looking statements speak only as of the date of this announcement and have not been audited or otherwise independently verified. Past performance should not be taken as an indication or guarantee of future results and no representation or warranty, express or implied, is made regarding future performance. Except as required by any applicable law or regulation, Serco expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in Serco's expectations or any change in events, conditions or circumstances on which any such statement is based after the date of this announcement, or to keep current any other information contained in this announcement. Accordingly, undue reliance should not be placed on the forward looking statements.
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