Variable Interest Entities (VIEs)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities (VIEs)

Variable Interest Entities (VIEs)

The Company’s condensed consolidated financial statements include its subsidiaries and consolidated VIEs. A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE.

Certain state laws prohibit a professional corporation that has more than one shareholder from being a shareholder in another professional corporation. As a result, the Company cannot directly own shares in other professional corporations. However, an exception to this regulation permits a professional corporation that has only one shareholder to own shares in another professional corporation. In reliance on this exception, the Company designated certain key personnel as the nominee shareholders of professional corporations that hold controlling and non-controlling ownership interests in several medical corporations. Via a Physician Shareholder Agreement with the nominee shareholder, the Company has the ability to designate another person to be the equity holder of the professional corporation. In addition, these entities are managed by the Company’s wholly owned MSOs via MSA. In accordance with relevant accounting guidance, the professional corporations and their consolidated medical corporations are consolidated by the Company in the accompanying condensed financial statements.

Due to corporate practice of medicine laws, the Company operates by maintaining long-term MSAs with its affiliated IPAs and medical groups, each of which is owned and operated by physicians only, and employs or contracts with additional physicians to provide medical services. AHM is a wholly owned subsidiary of the Company and has entered into MSAs with several affiliated IPAs, including APC. APC arranges for the delivery of healthcare services by contracting with physicians or professional medical corporations for primary care and specialty care services. The physicians in the IPA are exclusively in control of, and responsible for, all aspects of the practice of medicine for enrolled patients. In accordance with relevant accounting guidance, APC has been determined to be a VIE of AHM, as AHM is its primary beneficiary with the ability, through majority representation on the APC Joint Planning Board and otherwise, to direct the activities (excluding clinical

decisions) that most significantly affect APC’s economic performance. Therefore, APC and its wholly owned subsidiaries and VIEs are consolidated in the accompanying financial statements.

Astrana Medical and Astrana Care Partners Medical were formed in May 2019 and July 2021, respectively, as designated shareholder professional corporations. The Company’s Vice Chairman is the sole shareholder of Astrana Medical and Astrana Care Partners Medical. Via a Physician Shareholder Agreement, Astrana makes all the decisions on behalf of Astrana Medical and Astrana Care Partners Medical. Astrana has the obligation to absorb losses of, or the right to receive benefits from, Astrana Medical and Astrana Care Partners Medical. Therefore, Astrana Medical and Astrana Care Partners Medical are controlled by and consolidated by Astrana as the primary beneficiary of the VIEs.

On January 1, 2024, a 25% equity interest of Eleanor Leung M.D. was re-acquired by the Company. As a result, Astrana Care Partners Medical now owns 100% of Eleanor Leung M.D.

The following table includes assets that can only be used to settle the liabilities of the Company’s VIEs, and to which the creditors of Astrana have no recourse, and liabilities to which the creditors of the Company’s VIEs have no recourse to the general credit of Astrana, as the primary beneficiary of the VIEs. These assets and liabilities, with the exception of investments in affiliates and amounts due to, or from, affiliates, which are eliminated upon consolidation, are included in the accompanying consolidated balance sheets (in thousands).

	March 31, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	212,134	$	184,078
Investment in marketable securities	50		—
Receivables, net	47,169		21,120
Receivables, net – related party	61,870		58,707
Income taxes receivable	—		1,600
Other receivables	997		454
Prepaid expenses and other current assets	11,891		9,991
Total current assets	334,111		275,950
Non-current assets
Land, property and equipment, net	5,084		5,306
Intangible assets, net	85,058		60,906
Goodwill	236,961		140,157
Income taxes receivable, non-current	15,943		15,943
Investments in other entities – equity method	12,560		12,114
Investment in affiliates*	299,502		273,182
Investment in a privately held entity	405		405
Restricted cash	40		40
Operating lease right-of-use assets	26,082		28,796
Other assets	1,214		1,149
Total non-current assets	682,849		537,998
Total assets	$	1,016,960	$	813,948
Current liabilities
Accounts payable and accrued expenses	$	44,058	$	32,707

	March 31, 2024		December 31, 2023
Fiduciary accounts payable	7,792		7,737
Medical liabilities	69,611		55,157
Dividend payable	638		638
Income tax payable	8,431		—
Finance lease liabilities	602		646
Operating lease liabilities	3,092		3,305
Current portion of long-term debt	—		8,542
Amount due to affiliates*	110,117		107,340
Other liabilities	9,387		—
Total current liabilities	253,728		216,072
Non-current liabilities
Finance lease liabilities, net of current portion	905		1,033
Operating lease liabilities, net of current portion	26,186		28,675
Deferred tax liability	7,166		7,284
Other long-term liabilities	1,690		230
Total non-current liabilities	35,947		37,222
Total liabilities	$	289,675	$	253,294

*Investment in affiliates includes the Company’s VIEs’ investment in Astrana, which is reflected as treasury shares and eliminated upon consolidation. Amounts due to, or from, affiliates are receivables with Astrana’s subsidiaries. As a result, these balances are eliminated upon consolidation and are not reflected on Astrana’s condensed consolidated balance sheets as of March 31, 2024, and December 31, 2023.