ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Shares | ||
(Title of class) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company |
Page | |||||
Name | Age | Position | ||||||
G. Mike Mikan | 52 | Chief Executive Officer, President and Director | ||||||
Jay Matushak | 50 | Chief Financial Officer | ||||||
Tomas Orozco | 48 | Executive Vice President, NeueHealth | ||||||
Jeff Craig | 41 | General Counsel and Corporate Secretary |
Year Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Value-Based Care Consumers (1) | 355,000 | 117,000 | |||||||||
Enablement Services Lives | 106,000 | — |
Year Ended December 31, | |||||||||||
($ in thousands) | 2023 | 2022 | |||||||||
Net Loss | $ | (1,265,808) | $ | (1,359,880) | |||||||
Adjusted EBITDA (1) | $ | (8,480) | $ | (75,095) |
Year Ended December 31, | |||||||||||
(in thousands) | 2023 | 2022 | |||||||||
Net loss | $ | (1,265,808) | $ | (1,359,880) | |||||||
Loss from Discontinued Operations (a) | 638,066 | 974,638 | |||||||||
EBITDA adjustments from continuing operations: | |||||||||||
Interest expense | 38,203 | 12,822 | |||||||||
Income tax (benefit) expense | (1,428) | 3,664 | |||||||||
Transaction costs (b) | 23,252 | 386 | |||||||||
Depreciation and amortization | 18,296 | 30,710 | |||||||||
Share-based compensation expense (c) | 83,692 | 109,713 | |||||||||
Restructuring and contract termination costs (d) | 6,990 | 29,678 | |||||||||
Impairment of goodwill and long-lived assets | 401,659 | 42,611 | |||||||||
ACO REACH care partner bankruptcy (e) | 36,454 | — | |||||||||
Change in fair value of warrant liability (f) | 13,971 | — | |||||||||
Change in fair value of contingent consideration (g) | (1,827) | 332 | |||||||||
Change in fair value of equity securities | — | 80,231 | |||||||||
EBITDA adjustments from continuing operations | 619,262 | 310,147 | |||||||||
Adjusted EBITDA | $ | (8,480) | $ | (75,095) |
(in thousands) | Year Ended December 31, | ||||||||||
Consolidated Statements of Income (loss) and operating data: | 2023 | 2022 | |||||||||
Revenue: | |||||||||||
Capitated revenue | $ | 219,774 | $ | 112,904 | |||||||
ACO REACH revenue | 896,504 | 654,087 | |||||||||
Service revenue | 44,438 | 39,601 | |||||||||
Investment income (loss) | 86 | (55,429) | |||||||||
Total revenue | 1,160,802 | 751,163 | |||||||||
Operating costs | |||||||||||
Medical costs | 996,582 | 662,972 | |||||||||
Operating costs | 287,138 | 354,436 | |||||||||
Bad debt expense | 27,407 | 12 | |||||||||
Restructuring charges | 6,990 | 29,178 | |||||||||
Goodwill impairment | 401,385 | — | |||||||||
Intangibles impairment | — | 42,611 | |||||||||
Depreciation and amortization | 18,296 | 30,710 | |||||||||
Total operating costs | 1,737,798 | 1,119,919 | |||||||||
Operating loss | (576,996) | (368,756) | |||||||||
Interest expense | 38,203 | 12,822 | |||||||||
Warrant expense | 13,971 | — | |||||||||
Loss from continuing operations before income taxes | (629,170) | (381,578) | |||||||||
Income tax expense (benefit) | (1,428) | 3,664 | |||||||||
Net loss from continuing operations | (627,742) | (385,242) | |||||||||
Loss from discontinued operations, net of tax (Note 19) | (638,066) | (974,638) | |||||||||
Net loss | (1,265,808) | (1,359,880) | |||||||||
Net loss (earnings) from continuing operations attributable to noncontrolling interests | 114,354 | (95,664) | |||||||||
Series A preferred stock dividend accrued | (40,139) | (37,889) | |||||||||
Series B preferred stock dividend accrued | (9,006) | (1,798) | |||||||||
Net loss attributable to NeueHealth, Inc. common shareholders | $ | (1,200,599) | $ | (1,495,231) | |||||||
Adjusted EBITDA | $ | (8,480) | $ | (75,095) | |||||||
Operating Cost Ratio (1) | 24.7 | % | 47.2% |
NeueCare | |||||||||||
(in thousands) | Year Ended December 31, | ||||||||||
Statements of income (loss) and operating data: | 2023 | 2022 | |||||||||
Revenue: | |||||||||||
Capitated revenue | 219,774 | 112,904 | |||||||||
Service revenue | 41,559 | 39,487 | |||||||||
Total unaffiliated revenue | 261,333 | 152,391 | |||||||||
Affiliated revenue | 5,876 | 1,039,620 | |||||||||
Total segment revenue | 267,209 | 1,192,011 | |||||||||
Operating expenses | |||||||||||
Medical costs | 97,483 | 1,217,742 | |||||||||
Operating costs | 119,922 | 124,780 | |||||||||
Bad debt expense | 4,984 | 5 | |||||||||
Restructuring charges | 130 | — | |||||||||
Goodwill impairment | 401,385 | — | |||||||||
Intangible asset impairment | — | 42,611 | |||||||||
Depreciation and amortization | 12,651 | 22,234 | |||||||||
Total operating expenses | 636,555 | 1,407,372 | |||||||||
Operating loss | $ | (369,346) | $ | (215,361) |
NeueSolutions | |||||||||||
($ in thousands) | Year Ended December 31, | ||||||||||
Statements of income (loss) data: | 2023 | 2022 | |||||||||
Revenue: | |||||||||||
ACO REACH revenue | 896,504 | 654,087 | |||||||||
Service revenue | 2,879 | 114 | |||||||||
Total revenue | 899,383 | 654,201 | |||||||||
Operating expenses | |||||||||||
Medical costs | 904,986 | 644,269 | |||||||||
Operating costs | 14,474 | 8,508 | |||||||||
Bad debt expense | 22,423 | — | |||||||||
Total operating expenses | 941,883 | 652,777 | |||||||||
Operating loss | $ | (42,500) | $ | 1,424 |
Year Ended December 31, | |||||||||||
(in thousands) | 2023 | 2022 | |||||||||
Net cash (used in) provided by operating activities | $ | (2,726,546) | $ | 234,466 | |||||||
Net cash provided by (used in) investing activities | 1,119,630 | (429,723) | |||||||||
Net cash provided by financing activities | 49,906 | 1,066,368 | |||||||||
Net (decrease) increase in cash and cash equivalents | $ | (1,557,010) | $ | 871,111 | |||||||
Cash and cash equivalents at beginning of year | 1,932,290 | 1,061,179 | |||||||||
Cash and cash equivalents at end of year | $ | 375,280 | $ | 1,932,290 |
Completion Factors (Decrease) Increase in Factors | Increase (Decrease) in Medical Costs Payable | |||||||
(in thousands) | ||||||||
(3.00)% | $ | 27,400 | ||||||
(2.00)% | 18,080 | |||||||
(1.00)% | 8,949 | |||||||
1.00% | (8,772) | |||||||
2.00% | (17,371) | |||||||
3.00% | (25,804) |
Page | |||||
Report of Independent Registered Public Accounting Firm ( | |||||
December 31, | |||||||||||
2023 | 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net of allowance of $ | |||||||||||
ACO REACH performance year receivable | |||||||||||
Current assets of discontinued operations (Note 19) | |||||||||||
Prepaids and other current assets | |||||||||||
Total current assets | |||||||||||
Other assets: | |||||||||||
Long-term investments | |||||||||||
Property, equipment and capitalized software, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Long-term assets of discontinued operations (Note 19) | |||||||||||
Other non-current assets | |||||||||||
Total other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities, Redeemable Noncontrolling Interests, Redeemable Preferred Stock and Shareholders’ Equity (Deficit) | |||||||||||
Current liabilities: | |||||||||||
Medical costs payable | $ | $ | |||||||||
Accounts payable | |||||||||||
Short-term borrowings | |||||||||||
Current liabilities of discontinued operations (Note 19) | |||||||||||
Risk share payable to deconsolidated entity | |||||||||||
Warrant liability | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term borrowings | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Redeemable noncontrolling interests | |||||||||||
Redeemable Series A preferred stock, $ | |||||||||||
Redeemable Series B preferred stock, $ | |||||||||||
Shareholders’ equity (deficit): | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total shareholders’ equity (deficit) | ( | ( | |||||||||
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | $ | $ |
For the Years Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue: | |||||||||||
Capitated revenue | $ | $ | |||||||||
ACO REACH revenue | |||||||||||
Service revenue | |||||||||||
Investment income (loss) | ( | ||||||||||
Total revenue | |||||||||||
Operating expenses: | |||||||||||
Medical costs | |||||||||||
Operating costs | |||||||||||
Bad debt expense | |||||||||||
Restructuring charges | |||||||||||
Goodwill impairment | |||||||||||
Intangible assets impairment | |||||||||||
Depreciation and amortization | |||||||||||
Total operating expenses | |||||||||||
Operating loss | ( | ( | |||||||||
Interest expense | |||||||||||
Warrant expense | |||||||||||
Loss from continuing operations before income taxes | ( | ( | |||||||||
Income tax expense (benefit) | ( | ||||||||||
Net loss from continuing operations | ( | ( | |||||||||
Loss from discontinued operations, net of tax (Note 19) | ( | ( | |||||||||
Net loss | ( | ( | |||||||||
Net loss (earnings) from continuing operations attributable to noncontrolling interests | ( | ||||||||||
Series A preferred stock dividend accrued | ( | ( | |||||||||
Series B preferred stock dividend accrued | ( | ( | |||||||||
Net loss attributable to NeueHealth, Inc. common shareholders | $ | ( | $ | ( | |||||||
Basic and diluted loss per share attributable to NeueHealth, Inc. common shareholders | |||||||||||
Continuing operations | $ | ( | $ | ( | |||||||
Discontinued operations | ( | ( | |||||||||
Basic and diluted loss per share | ( | ( | |||||||||
Basic and diluted weighted-average common shares outstanding |
For the Years Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive (loss) income: | |||||||||||
Unrealized investment holding gains (losses) arising during the year, net of tax of $ | ( | ||||||||||
Less: reclassification adjustments for investment gains (losses), net of tax of $ | ( | ( | |||||||||
Other comprehensive (loss) income | ( | ||||||||||
Comprehensive loss | ( | ( | |||||||||
Comprehensive loss (income) attributable to noncontrolling interests | ( | ||||||||||
Comprehensive loss attributable to NeueHealth, Inc. common shareholders | $ | ( | $ | ( |
Redeemable Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares* | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series A preferred stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series B preferred stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series A preferred stock | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series B preferred stock | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( |
For the Years Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Impairment of intangible assets | |||||||||||
Impairment of goodwill | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | ( | ||||||||||
Unrealized loss (gain) on equity securities | |||||||||||
Investment impairment | |||||||||||
Warrant expense | |||||||||||
Net (accretion) and amortization of investments | ( | ||||||||||
Loss on disposal of property, equipment, and capitalized software | |||||||||||
Other, net | |||||||||||
Changes in assets and liabilities, net of acquired assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
ACO REACH performance year receivable | ( | ( | |||||||||
Other assets | ( | ||||||||||
Medical cost payable | ( | ||||||||||
Risk adjustment payable | ( | ||||||||||
Accounts payable and other liabilities | ( | ||||||||||
Unearned revenue | ( | ( | |||||||||
Risk share payable to deconsolidated entity | |||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of investments | ( | ( | |||||||||
Proceeds from sales, paydown, and maturities of investments | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Business divestiture | ( | ||||||||||
Business acquisitions, net of cash acquired | ( | ||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of preferred stock | |||||||||||
Proceeds from issuance of common stock | |||||||||||
Proceeds from long-term borrowings | |||||||||||
Proceeds from short-term borrowings | |||||||||||
Repayments of short-term borrowings | ( | ||||||||||
Distribution to noncontrolling interest holders | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents of continuing and discontinued operations– beginning of year | |||||||||||
Cash and cash equivalents of continuing and discontinued operations– end of year | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Changes in unrealized gain (loss) on available-for-sale securities in OCI | $ | $ | ( | ||||||||
Cash paid for interest |
2023 | 2022 | ||||||||||
Compensation and fringe benefits | $ | $ | |||||||||
Professional fees | |||||||||||
Technology expenses | |||||||||||
General and administrative expenses | |||||||||||
Other operating expenses | |||||||||||
Total operating costs | $ | $ |
Year Ended December 31, 2023 | |||||||||||||||||||||||
NeueCare | NeueSolutions | Corporate & Eliminations | Total | ||||||||||||||||||||
Employee termination benefits | $ | $ | $ | $ | |||||||||||||||||||
Long-lived asset impairments | |||||||||||||||||||||||
Contract termination and other costs | |||||||||||||||||||||||
Total restructuring charges | $ | $ | $ | $ |
Year Ended December 31, 2022 | |||||||||||||||||||||||
NeueCare | NeueSolutions | Corporate & Eliminations | Total | ||||||||||||||||||||
Employee termination benefits | $ | $ | $ | $ | |||||||||||||||||||
Long-lived asset impairments | |||||||||||||||||||||||
Contract termination and other costs | |||||||||||||||||||||||
Total restructuring charges | $ | $ | $ | $ |
Year Ended December 31, 2023 | |||||||||||||||||
Employee Termination Benefits | Contract Termination Costs | Total | |||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
Charges | |||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||
Balance at December 31, 2023 | $ | $ | $ |
Year Ended December 31, 2022 | |||||||||||||||||
Employee Termination Benefits | Contract Termination Costs | Total | |||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ||||||||||||||
Charges | |||||||||||||||||
Cash payments | |||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ |
2023 | 2022 | ||||||||||
Medical costs payable – January 1 | $ | $ | |||||||||
Incurred related to: | |||||||||||
Current year | |||||||||||
Prior year | ( | ( | |||||||||
Total incurred | |||||||||||
Paid related to: | |||||||||||
Current year | |||||||||||
Prior year | |||||||||||
Total paid | |||||||||||
Acquired claims liabilities | |||||||||||
Medical costs payable – December 31 | $ | $ |
2023 | 2022 | ||||||||||
Provider incentive payable | |||||||||||
Incurred but not reported (IBNR) | |||||||||||
Total medical costs payable | $ | $ |
Fair Value | |||||
Balance at January 1, 2023 | $ | ||||
Newly executed Warrantholders Agreement | |||||
Change in fair value of outstanding warrants | ( | ||||
Balance at December 31, 2023 | $ |
2023 | 2022 | ||||||||||
Software | $ | $ | |||||||||
Leasehold improvements | |||||||||||
Medical and other equipment | |||||||||||
Gross property, equipment, and capitalized software | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Property, equipment, and capitalized software, net | $ | $ |
NeueCare | ||||||||||||||
Gross Carrying Amount | Cumulative Impairment | |||||||||||||
Balance at December 31, 2022 | ||||||||||||||
Impairment losses | ( | |||||||||||||
Balance at December 31, 2023 | $ | $ |
December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||
Customer relationships | $ | $ | $ | $ | |||||||||||||||||||
Trade names | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
2024 | $ | ||||
2025 | $ | ||||
2026 | $ | ||||
2027 | $ | ||||
2028 | $ |
2022 | |||||
Risk-free interest rate | % | ||||
Expected volatility | % | ||||
Expected dividend rate | % | ||||
Forfeiture rate | % | ||||
Expected life in years |
Shares | Weighted- Average Exercise Price | Weighted-Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at January 1, 2023 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Outstanding at December 31, 2023 | $ | $ |
RSU | |||||||||||
Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||
Unvested RSUs at January 1, 2023 | $ | ||||||||||
RSUs granted | |||||||||||
RSUs vested | ( | ||||||||||
RSUs canceled | ( | ||||||||||
Unvested RSUs at December 31, 2023 | $ |
PSU | |||||||||||
Number of PSUs | Weighted Average Grant Date Fair Value | ||||||||||
Unvested PSUs at January 1, 2023 | $ | ||||||||||
PSUs granted | |||||||||||
PSUs canceled | |||||||||||
Unvested PSUs at December 31, 2023 | $ |
2023 | 2022 | ||||||||||
Loss from continuing operations, net noncontrolling interests and accrued preferred stock dividends | $ | ( | $ | ( | |||||||
Loss from discontinued operations | ( | ( | |||||||||
Net loss attributable to NeueHealth, Inc. common shareholders | $ | ( | $ | ( | |||||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | |||||||||||
Basic and diluted loss per share attributable to NeueHealth, Inc. common shareholders | |||||||||||
Continuing operations | $ | ( | $ | ( | |||||||
Discontinued operations | $ | ( | $ | ( | |||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( |
2023 | 2022 | ||||||||||
Redeemable preferred stock | |||||||||||
Issued and outstanding common stock warrants | |||||||||||
Stock options to purchase common stock | |||||||||||
Restricted stock units | |||||||||||
Total |
2023 | 2022 | ||||||||||
Current | $ | $ | |||||||||
Deferred | ( | ||||||||||
Total income tax expense (benefit) | $ | ( | $ |
2023 | 2022 | ||||||||||
Tax benefit at federal statutory rate | $ | ( | $ | ( | |||||||
Increase (decrease) in income taxes resulting from: | |||||||||||
Adjustment to deferred tax valuation allowance | |||||||||||
Permanent adjustments - book NCI reversal adjustment | ( | ||||||||||
Permanent adjustments - impairment | |||||||||||
Permanent adjustments - compensation related | |||||||||||
Permanent adjustments - other | |||||||||||
State income taxes, net of federal benefit | |||||||||||
Prior year adjustments | |||||||||||
Other, net | ( | ||||||||||
Income tax expense (benefit) | $ | ( | $ | ||||||||
Effective tax rate | % | ( | %) |
2023 | 2022 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforward | $ | $ | |||||||||
Impairments | |||||||||||
Accrued salaries and benefits | |||||||||||
Section 195 startup expenditures | |||||||||||
Adjustment for noncontrolling interest | |||||||||||
Intangible amortization | |||||||||||
Transaction costs | |||||||||||
Depreciation expense | |||||||||||
Investment loss | |||||||||||
Claims Incurred but not Reported (IBNR) | |||||||||||
Bad debt allowance | |||||||||||
Warrants - Fair Value | |||||||||||
Other | |||||||||||
Total deferred tax assets | |||||||||||
Less valuation allowance | ( | ( | |||||||||
Total deferred tax assets, net valuation allowance | |||||||||||
Deferred tax liabilities: | |||||||||||
Prepaid expenses | ( | ( | |||||||||
Fixed assets | ( | ( | |||||||||
Goodwill and intangible assets | ( | ( | |||||||||
Adjustment for noncontrolling interest | ( | ||||||||||
Investment income | ( | ||||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net deferred tax liabilities | $ | $ | ( |
Balance Sheet Location | 2023 | 2022 | |||||||||||||||
Assets | |||||||||||||||||
Operating lease ROU assets | $ | $ | |||||||||||||||
Liabilities | |||||||||||||||||
Operating lease liabilities - current | |||||||||||||||||
Operating lease liabilities - noncurrent | |||||||||||||||||
Total lease liabilities | $ | $ |
2023 | 2022 | ||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
ROU assets obtained in exchange for new lease liabilities | |||||||||||
Weighted-average remaining lease term (in years) | |||||||||||
Weighted-average discount rate | % | % |
Minimum Lease Payments | |||||
Years ending December 31: | |||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Undiscounted future minimum payments | |||||
Imputed interest | ( | ||||
Total reported lease liability | $ |
Year Ended December 31, 2023 | NeueCare | NeueSolutions | Corporate & Eliminations | Consolidated | ||||||||||||||||||||||
Capitated revenue | $ | $ | $ | $ | ||||||||||||||||||||||
ACO REACH revenue | ||||||||||||||||||||||||||
Service revenue | ||||||||||||||||||||||||||
Investment income | ||||||||||||||||||||||||||
Total unaffiliated revenue | ||||||||||||||||||||||||||
Affiliated revenue | ( | |||||||||||||||||||||||||
Total segment revenue | ( | |||||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | ||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||
Bad debt expense | ||||||||||||||||||||||||||
Restructuring charges | ||||||||||||||||||||||||||
Goodwill impairment |
Year Ended December 31, 2022 | NeueCare | NeueSolutions | Corporate & Eliminations | Consolidated | ||||||||||||||||||||||
Capitated revenue | $ | $ | $ | $ | ||||||||||||||||||||||
ACO REACH revenue | ||||||||||||||||||||||||||
Service revenue | ||||||||||||||||||||||||||
Investment income | ( | ( | ||||||||||||||||||||||||
Total unaffiliated revenue | ( | |||||||||||||||||||||||||
Affiliated revenue | ( | |||||||||||||||||||||||||
Total segment revenue | ( | |||||||||||||||||||||||||
Operating loss | ( | ( | ( | |||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||
Bad debt expense | ||||||||||||||||||||||||||
Restructuring charges | ||||||||||||||||||||||||||
Goodwill impairment | ||||||||||||||||||||||||||
Intangible assets impairment |
Redeemable Noncontrolling Interest | |||||
Balance at December 31, 2021 | $ | ||||
Earnings (losses) attributable to noncontrolling interest | |||||
Distribution to noncontrolling interest holders | ( | ||||
Measurement adjustment | |||||
Balance at December 31, 2022 | $ | ||||
Earnings (losses) attributable to noncontrolling interest | ( | ||||
Distribution to noncontrolling interest holders | ( | ||||
Measurement adjustment | ( | ||||
Balance at December 31, 2023 | $ |
2023 | 2022 | ||||||||||
ACO REACH performance year receivable(1)(2) | $ | $ | |||||||||
ACO REACH performance year obligation(2) |
2023 | 2022 | ||||||||||
Amortization of ACO REACH performance year receivable | $ | $ | |||||||||
Amortization of ACO REACH performance year obligation | |||||||||||
ACO REACH revenue |
Cash and cash equivalents | $ | ||||
Prepaids and other current assets | |||||
Risk Share Receivable | |||||
Total Assets | $ | ||||
Accounts payable | |||||
Medical costs payable | |||||
Other current liabilities | |||||
Risk adjustment payable | |||||
Total Liabilities | $ | ||||
Additional paid in capital | |||||
Accumulated deficit | ( | ||||
Total Equity | $ | ||||
Total Liabilities and Equity | $ |
For the year ending December 31, 2023 | Bright HealthCare - Commercial | Bright HealthCare | Other | Total | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Premium revenue | $ | ( | $ | $ | $ | ||||||||||||||||||
Service revenue | |||||||||||||||||||||||
Investment income (loss) | |||||||||||||||||||||||
Total revenue from discontinued operations | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Medical costs | |||||||||||||||||||||||
Operating costs | |||||||||||||||||||||||
Bad debt expense | |||||||||||||||||||||||
Restructuring charges | |||||||||||||||||||||||
Goodwill impairment | |||||||||||||||||||||||
Intangible assets impairment | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses from discontinued operations | |||||||||||||||||||||||
Operating loss from discontinued operations | ( | ( | ( | ( | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Loss from discontinued operations before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense (benefit) | |||||||||||||||||||||||
Net loss from discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( |
For the year ending December 31, 2022 | Bright HealthCare - Commercial | Bright HealthCare | Other | Total | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Premium revenue | $ | $ | $ | $ | |||||||||||||||||||
Service revenue | |||||||||||||||||||||||
Investment income (loss) | ( | ( | |||||||||||||||||||||
Total revenue from discontinued operations | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Medical costs | |||||||||||||||||||||||
Operating costs | |||||||||||||||||||||||
Bad debt expense | |||||||||||||||||||||||
Restructuring charges | |||||||||||||||||||||||
Goodwill impairment | |||||||||||||||||||||||
Intangible assets impairment | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses from discontinued operations | |||||||||||||||||||||||
Operating loss from discontinued operations | ( | ( | ( | ( | |||||||||||||||||||
Other income | |||||||||||||||||||||||
Loss from discontinued operations before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense (benefit) | |||||||||||||||||||||||
Net loss from discontinued operations | $ | ( | $ | ( | $ | ( | $ | ( |
For the years ending December 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash provided by (used in) operating activities - discontinued operations | $ | ( | $ | ||||||||
Cash provided by (used in) investing activities - discontinued operations | ( |
December 31, 2023 | |||||||||||||||||
Bright HealthCare - Commercial | Bright HealthCare | Total | |||||||||||||||
Assets | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Short-term investments | |||||||||||||||||
Accounts receivable, net of allowance | |||||||||||||||||
Prepaids and other current assets | |||||||||||||||||
Goodwill | |||||||||||||||||
Intangible assets, net | |||||||||||||||||
Property, equipment, and capitalized software, net | |||||||||||||||||
Current assets of discontinued operations | |||||||||||||||||
Total assets of discontinued operations | $ | $ | $ | ||||||||||||||
Liabilities | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Medical costs payable | $ | $ | $ | ||||||||||||||
Accounts payable | |||||||||||||||||
Risk adjustment payable | |||||||||||||||||
Other current liabilities | |||||||||||||||||
Current liabilities of discontinued operations | |||||||||||||||||
Total liabilities of discontinued operations | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Bright HealthCare - Commercial | Bright HealthCare | Other | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Accounts receivable, net of allowance | |||||||||||||||||||||||
Prepaids and other current assets | |||||||||||||||||||||||
Current assets of discontinued operations | |||||||||||||||||||||||
Other assets: | |||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Intangible assets, net | |||||||||||||||||||||||
Property, equipment, and capitalized software, net | |||||||||||||||||||||||
Other non-current assets | |||||||||||||||||||||||
Long-term assets of discontinued operations | |||||||||||||||||||||||
Total assets of discontinued operations | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Medical costs payable | $ | $ | $ | $ | |||||||||||||||||||
Accounts payable | |||||||||||||||||||||||
Risk adjustment payable | |||||||||||||||||||||||
Unearned revenue | |||||||||||||||||||||||
Other current liabilities | |||||||||||||||||||||||
Current liabilities of discontinued operations | |||||||||||||||||||||||
Total liabilities of discontinued operations | $ | $ | $ | $ |
For the years ending December 31, | |||||||||||
2023 | 2022 | ||||||||||
Employee termination benefits | |||||||||||
Long-lived asset impairments | |||||||||||
Contract termination and other costs | ( | ||||||||||
$ | $ |
Employee Termination Benefits | Contract Termination Costs | Total | |||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||||||||
Charges | ( | ||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||
Balance at December 31, 2023 | $ | $ | $ |
Employee Termination Benefits | Contract Termination Costs | Total | |||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ||||||||||||||
Charges | |||||||||||||||||
Cash payments | |||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ |
2023 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Carrying Value | ||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Available for sale: | |||||||||||||||||||||||
U.S. government and agency obligations | ( | ||||||||||||||||||||||
Corporate obligations | ( | ||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
Mortgage-backed securities | ( | ||||||||||||||||||||||
Total available-for-sale securities | ( | ||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||
U.S. government and agency obligations | ( | ||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
Total held-to-maturity securities | ( | ||||||||||||||||||||||
Total investments | $ | $ | $ | ( | $ |
2022 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Carrying Value | ||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Available for sale: | |||||||||||||||||||||||
U.S. government and agency obligations | ( | ||||||||||||||||||||||
Corporate obligations | ( | ||||||||||||||||||||||
State and municipal obligations | ( | ||||||||||||||||||||||
Certificates of deposit | ( | ||||||||||||||||||||||
Mortgage backed securities | ( | ||||||||||||||||||||||
Asset backed securities | |||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||
Total available-for-sale securities | ( | ||||||||||||||||||||||
Held to maturity: | |||||||||||||||||||||||
U.S. government and agency obligations | ( | ||||||||||||||||||||||
Certificates of deposit | $ | $ | $ | $ | |||||||||||||||||||
Total held-to-maturity securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Total investments | $ | $ | $ | ( | $ |
Bright HealthCare - Commercial | Bright HealthCare | ||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||
Claims unpaid | $ | $ | $ | $ | |||||||||||||||||||
Provider incentive payable | |||||||||||||||||||||||
Claims adjustment expense liability | |||||||||||||||||||||||
Incurred but not reported (IBNR) | |||||||||||||||||||||||
Total medical costs payable of discontinued operations | $ | $ | $ | $ |
Bright HealthCare | |||||||||||
2023 | 2022 | ||||||||||
Medical costs payable – January 1 | $ | $ | |||||||||
Incurred related to: | |||||||||||
Current year | |||||||||||
Prior year | |||||||||||
Total incurred | |||||||||||
Paid related to: | |||||||||||
Current year | |||||||||||
Prior year | |||||||||||
Total paid | |||||||||||
Acquired claims liabilities | |||||||||||
Medical costs payable – December 31 | $ | $ |
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (in thousands) | Total Incurred but Not Reported Liabilities Plus Expected Development on Reported Claims | ||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||
Accident Year | 2021 | 2022 | 2023 | ||||||||||||||||||||
2021 | |||||||||||||||||||||||
2022 | |||||||||||||||||||||||
2023 | |||||||||||||||||||||||
Total | $ |
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (in thousands) | ||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Accident Year | 2021 | 2022 | 2023 | |||||||||||||||||
2021 | ||||||||||||||||||||
2022 | ||||||||||||||||||||
2023 | ||||||||||||||||||||
Total | $ | |||||||||||||||||||
All outstanding liabilities before 2021, net of reinsurance | ||||||||||||||||||||
Liabilities for claim and claim adjustment expenses, net of reinsurance | $ |
December 31, 2023 | |||||
Net outstanding liabilities | $ | ||||
Reinsurance recoverable on unpaid claims | ( | ||||
Total gross liability for unpaid claims and claims | $ |
2023 | 2022 | ||||||||||
Software | $ | $ | |||||||||
Leasehold improvements | |||||||||||
Medical and other equipment | |||||||||||
Gross property, equipment, and capitalized software | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Property, equipment, and capitalized software, net | $ | $ |
2023 | 2022 | ||||||||||||||||
Assets | |||||||||||||||||
Operating lease ROU assets | $ | $ | |||||||||||||||
Liabilities | |||||||||||||||||
Operating lease liabilities | $ | $ |
2023 | 2022 | ||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
ROU assets obtained in exchange for new lease liabilities | |||||||||||
Weighted-average remaining lease term (in years) | |||||||||||
Weighted-average discount rate | % | % |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights(1) | Weighted-Average Exercise Price per Share of Outstanding Options and Rights(2) | Number of Securities Available for Future Issuance Under Equity Compensation Plans(3) | |||||||||||||||||
Equity compensation plans approved by shareholders | 1,540,917 | $ | 138.33 | 540,303 |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
3.4 | ||||||||
3.5 | ||||||||
3.6 | ||||||||
3.7 | ||||||||
4.1 |
4.2 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
10.4 | ||||||||
10.5 | ||||||||
10.6 | ||||||||
10.7 | ||||||||
10.8 | ||||||||
10.9 | ||||||||
10.10* | ||||||||
10.11 | ||||||||
10.12† | ||||||||
10.13† |
31.2* | ||||||||
32.1* | ||||||||
32.2* | ||||||||
97.1* | ||||||||
101* | The following financial information from our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 28, 2024, formatted in Inline Extensible Business Reporting Language | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101) |
As of December 31, | |||||||||||
2023 | 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Investment in subsidiaries | |||||||||||
Prepaids and other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities, Redeemable Preferred Stock and Shareholders’ Deficit | |||||||||||
Current liabilities: | |||||||||||
Related-party payable, net | $ | $ | |||||||||
Short-term borrowings | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term borrowings | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Redeemable Series A preferred stock, $ | |||||||||||
Redeemable Series B preferred stock, $ | |||||||||||
Shareholders’ equity (deficit): | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings (deficit) | ( | ( | |||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total shareholders’ equity (deficit) | ( | ( | |||||||||
Total liabilities, redeemable preferred stock and shareholders’ equity (deficit) | $ | $ |
For the Years Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue: | |||||||||||
Investment income | $ | $ | ( | ||||||||
Total revenue | ( | ||||||||||
Operating costs: | |||||||||||
Operating costs | |||||||||||
Total operating costs | |||||||||||
Interest expense | |||||||||||
Warrant expense | |||||||||||
Loss before income taxes and equity in net loss of subsidiaries | ( | ( | |||||||||
Income tax expense (benefit) | |||||||||||
Loss before equity in net loss of subsidiaries | ( | ( | |||||||||
Equity in net loss of subsidiaries | ( | ( | |||||||||
Net loss | ( | ( | |||||||||
Unrealized investment holding (losses) gains | ( | ||||||||||
Less: reclassification adjustments for investment (losses) gains | ( | ( | |||||||||
Other comprehensive (loss) income | ( | ||||||||||
Comprehensive loss | $ | ( | $ | ( |
For the Years Ended December 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash provided by (used in) operating activities | $ | ( | $ | ( | |||||||
Cash flows from investing activities: | |||||||||||
Purchases of investments | ( | ||||||||||
Proceeds from sales, paydown, and maturities of investments. | |||||||||||
Capital contributions to operating subsidiaries | ( | ( | |||||||||
Business acquisition, net of cash acquired | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of preferred stock | |||||||||||
Proceeds from issuance of common stock | |||||||||||
Proceeds from short-term borrowings | |||||||||||
Repayments of short-term borrowings | ( | ||||||||||
Proceeds from long-term borrowings | |||||||||||
Net cash provided by financing activities | |||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents – beginning of year | |||||||||||
Cash and cash equivalents – end of year | $ | $ |
NeueHealth, Inc. | ||||||||
Date: March 28, 2024 | By: | /s/ G. Mike Mikan | ||||||
Name: G. Mike Mikan | ||||||||
Title: Chief Executive Officer and President |
SIGNATURE | TITLE | |||||||
/s/ G. Mike Mikan | Chief Executive Officer, President and Director (Principal Executive Officer) | |||||||
G. Mike Mikan | ||||||||
/s/ Jay Matushak | Chief Financial Officer (Principal Financial Officer) | |||||||
Jay Matushak | ||||||||
/s/ Jeffrey J. Scherman | Chief Accounting Officer (Principal Accounting Officer) | |||||||
Jeffrey J. Scherman | ||||||||
/s/ Robert J. Sheehy | ||||||||
Robert J. Sheehy | Chairman | |||||||
/s/ Kedrick D. Adkins Jr. | ||||||||
Kedrick D. Adkins Jr. | Director | |||||||
/s/ Naomi Allen | ||||||||
Naomi Allen | Director | |||||||
/s/ Linda Gooden | ||||||||
Linda Gooden | Director | |||||||
/s/ Jeffrey R. Immelt | ||||||||
Jeffrey R. Immelt | Director | |||||||
/s/ Manual Kadre | ||||||||
Manuel Kadre | Director | |||||||
/s/ Steve Kraus | ||||||||
Steve Kraus | Director | |||||||
/s/ Mohamad Makhzoumi | ||||||||
Mohamad Makhzoumi | Director | |||||||
/s/ Matthew Manders | ||||||||
Matthew Manders | Director | |||||||
/s/ Adair Newhall | ||||||||
Adair Newhall | Director | |||||||
/s/ Andrew M. Slavitt | ||||||||
Andrew M. Slavitt | Director |
Name of Subsidiary | Jurisdiction of Incorporation or Organization | ||||
AssociatesMD Medical Group, Inc. | Delaware | ||||
Bright Health Charitable Foundation | Delaware | ||||
Bright Health Company of Arizona | Arizona | ||||
Bright Health Company of California, Inc. | California | ||||
Bright Health Company of Georgia | Georgia | ||||
Bright Health Company of North Carolina | North Carolina | ||||
Bright Health Company of South Carolina, Inc. | South Carolina | ||||
Bright Health Group, Inc. | Delaware | ||||
Bright Health Insurance Company | Colorado | ||||
Bright Health Insurance Company of Florida | Florida | ||||
Bright Health Insurance Company of Illinois | Illinois | ||||
Bright Health Insurance Company of New York | New York | ||||
Bright Health Insurance Company of Ohio, Inc. | Ohio | ||||
Bright Health Insurance Company of Tennessee | Tennessee | ||||
Bright Health Management, Inc. | Delaware | ||||
Bright Health Services, Inc. | Delaware | ||||
Bright HealthCare Company of Florida, Inc. | Florida | ||||
Bright HealthCare Insurance Company of Texas (1) | Texas | ||||
BrightHealth Networks, LLC | Delaware | ||||
Central Health Plan of California, Inc. | California | ||||
Centrum Health IP, LLC | Delaware | ||||
Centrum Medical Center – Airport, LLC | Florida | ||||
Centrum Medical Center – East Hialeah, LLC | Florida | ||||
Centrum Medical Center – West Hialeah, LLC | Florida | ||||
Centrum Medical Center – Miami Gardens, LLC | Florida | ||||
Centrum Medical Center – South Dade, LLC | Florida | ||||
Centrum Medical Center - Westchester, LLC | Florida | ||||
Centrum Medical Center – Little Havana 27 Ave, LLC | Florida | ||||
Centrum Medical Center – Little Havana 12 Ave, LLC | Florida | ||||
Centrum Medical Centers of Coral Springs, LLC | Florida | ||||
Centrum Medical Centers of Margate, LLC | Florida | ||||
Centrum Medical Centers of Davie, LLC | Florida | ||||
Centrum Medical Centers of Hallandale, LLC | Florida | ||||
Centrum Medical Centers of Lighthouse Point, LLC | Florida | ||||
Centrum Medical Centers of Fort Lauderdale, LLC | Florida | ||||
Centrum Medical Centers of Sheridan, LLC | Florida | ||||
Centrum Medical Centers of Miramar, LLC | Florida | ||||
Centrum Medical Center - Homestead, LLC | Florida |
Centrum Medical Group, PLLC | Texas | ||||
Centrum Medical Holdings of Texas, LLC | Delaware | ||||
Centrum Medical Holdings, LLC | Delaware | ||||
Centrum Pharmacy, LLC | Delaware | ||||
Centrum Specialty Network, LLC | Florida | ||||
Med Care Centers, LLC | Florida | ||||
Med Care Express, LLC | Florida | ||||
Med Plan Clinic, LLC | Florida | ||||
Medcare Quality Medical Centers, LLC | Florida | ||||
Medical Practice Holding Company, LLC | Delaware | ||||
Medlife Wellness Centers, LLC | Florida | ||||
Medplan Holdings, LLC | Florida | ||||
NeueHealth Accountable Care, LLC | Delaware | ||||
NeueHealth Advantage ACO, LLC | Delaware | ||||
NeueHealth LLC | Delaware | ||||
NeueHealth Networks of Texas, Inc. | Texas | ||||
NeueHealth Community ACO, LLC | Delaware | ||||
NeueHealth Partner Services, LLC | Delaware | ||||
NeueHealth Partners of California, LLC | Delaware | ||||
NeueHealth Partners of Central Florida, LLC | Delaware | ||||
NeueHealth Partners of Florida RBE, LLC | Delaware | ||||
NeueHealth Partners of Florida, LLC | Florida | ||||
NeueHealth Partners Texas RBE, LLC | Delaware | ||||
NeueHealth Partners, LLC | Delaware | ||||
NeueHealth Premier ACO, LLC | Delaware | ||||
Premier Medical Associates of Florida Healthcare, P.A. | Delaware | ||||
Premier Medical Associates of Florida, LLC | Delaware | ||||
Premier Specialty Care, LLC | Delaware | ||||
True Health New Mexico, Inc. | New Mexico | ||||
Universal Care, Inc. | California |
Dated: March 28, 2024 | ||
/s/ G. Mike Mikan | ||
G. Mike Mikan | ||
Vice Chairman, President and Chief Executive Officer |
Dated: March 28, 2024 | ||
/s/ Jay Matushak | ||
Jay Matushak | ||
Chief Financial Officer |
Dated: March 28, 2024 | ||
/s/ G. Mike Mikan | ||
G. Mike Mikan | ||
Vice Chairman, President and Chief Executive Officer |
Dated: March 28, 2024 | ||
/s/ Jay Matushak | ||
Jay Matushak | ||
Chief Financial Officer |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Minneapolis, Minnesota |
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
May 19, 2023
$ / shares
|
Dec. 31, 2023
USD ($)
$ / shares
shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
Dec. 31, 2021
shares
|
Jan. 03, 2022
$ / shares
|
|
Accounts receivable allowance for credit loss | $ | $ 14,023 | $ 6,098 | |||
Redeemable preferred stock, shares outstanding (in shares) | 925,000 | 925,000 | 0 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 | |||
Common stock, shares issued (in shares) | 8,053,576 | 7,878,394 | |||
Common stock, shares outstanding (in shares) | 8,053,576 | 7,878,394 | |||
Treasury stock, common, shares (in shares) | 31,526 | 31,526 | |||
Reverse stock split | 0.0125 | 0.0125 | 0.0125 | 0.0125 | |
Series A Preferred Stock | |||||
Redeemable preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Redeemable preferred stock, shares authorized (in shares) | 750,000 | 750,000 | |||
Redeemable preferred stock, shares issued (in shares) | 750,000 | 750,000 | |||
Redeemable preferred stock, shares outstanding (in shares) | 750,000 | 750,000 | |||
Series B Preferred Stock | |||||
Redeemable preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Redeemable preferred stock, shares authorized (in shares) | 175,000 | 175,000 | |||
Redeemable preferred stock, shares issued (in shares) | 175,000 | 175,000 | |||
Redeemable preferred stock, shares outstanding (in shares) | 175,000 | 175,000 |
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Revenue: | ||
ACO REACH revenue | $ 896,504,000 | $ 654,087,000 |
Investment income (loss) | 86,000 | (55,429,000) |
Total revenue | 1,160,802,000 | 751,163,000 |
Operating expenses: | ||
Medical costs | 996,582,000 | 662,972,000 |
Operating costs | 287,138,000 | 354,436,000 |
Bad debt expense | 27,407,000 | 12,000 |
Restructuring charges | 6,990,000 | 29,178,000 |
Goodwill impairment | 401,385,000 | 0 |
Intangible assets impairment | 0 | 42,611,000 |
Depreciation and amortization | 18,296,000 | 30,710,000 |
Total operating expenses | 1,737,798,000 | 1,119,919,000 |
Operating loss | (576,996,000) | (368,756,000) |
Interest expense | 38,203,000 | 12,822,000 |
Warrant expense | 13,971,000 | 0 |
Loss from continuing operations before income taxes | (629,170,000) | (381,578,000) |
Income tax expense (benefit) | (1,428,000) | 3,664,000 |
Net loss from continuing operations | (627,742,000) | (385,242,000) |
Loss from discontinued operations, net of tax (Note 19) | (638,066,000) | (974,638,000) |
Net loss | (1,265,808,000) | (1,359,880,000) |
Net loss (earnings) from continuing operations attributable to noncontrolling interests | 114,354,000 | (95,664,000) |
Net loss attributable to NeueHealth, Inc. common shareholders | $ (1,200,599,000) | $ (1,495,231,000) |
Continuing operations, basic (in dollars per share) | $ (70.72) | $ (66.17) |
Continuing operations, diluted (in dollars per share) | (70.72) | (66.17) |
Discontinued operations, basic (in dollars per share) | (80.22) | (123.87) |
Discontinued operations, diluted (in dollars per share) | (80.22) | (123.87) |
Basic loss per share (in dollars per share) | (150.94) | (190.04) |
Diluted loss per share (in dollars per share) | $ (150.94) | $ (190.04) |
Basic weighted-average common shares outstanding (in shares) | 7,954 | 7,868 |
Diluted weighted-average common shares outstanding (in shares) | 7,954 | 7,868 |
Capitated revenue | ||
Revenue: | ||
Revenue | $ 219,774,000 | $ 112,904,000 |
Service revenue | ||
Revenue: | ||
Revenue | 44,438,000 | 39,601,000 |
Series A Preferred Stock | ||
Operating expenses: | ||
Series A and B preferred stock dividend accrued | (40,139,000) | (37,889,000) |
Series B Preferred Stock | ||
Operating expenses: | ||
Series A and B preferred stock dividend accrued | $ (9,006,000) | $ (1,798,000) |
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (PARENTHETICAL) |
12 Months Ended | |||
---|---|---|---|---|
May 19, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Statement [Abstract] | ||||
Reverse stock split | 0.0125 | 0.0125 | 0.0125 | 0.0125 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (1,265,808) | $ (1,359,880) |
Other comprehensive (loss) income: | ||
Unrealized investment holding gains (losses) arising during the year, net of tax of $0 and $0, respectively | 1,762 | (5,267) |
Less: reclassification adjustments for investment gains (losses), net of tax of $0 and $0, respectively | (2,545) | (4,173) |
Other comprehensive (loss) income | 4,307 | (1,094) |
Comprehensive loss | (1,261,501) | (1,360,974) |
Comprehensive loss (income) attributable to noncontrolling interests | 114,354 | (95,664) |
Comprehensive loss attributable to NeueHealth, Inc. common shareholders | $ (1,147,147) | $ (1,456,638) |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (PARENTHETICAL) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Unrealized investment holding gains (losses) arising during the year, tax | $ 0 | $ 0 |
Reclassification adjustments for investment gains (losses), tax | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands |
Total |
Series A Preferred Stock |
Series B Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Retained Earnings (Deficit) |
Accumulated Other Comprehensive Income (Loss) |
Treasury Stock |
|||
---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2021 | 0 | ||||||||||
Beginning balance at Dec. 31, 2021 | $ 0 | ||||||||||
Redeemable Preferred Stock | |||||||||||
Issuance of preferred stock (in shares) | 750,000 | 175,000 | |||||||||
Issuance of preferred stock | $ 747,481 | $ 172,936 | |||||||||
Ending balance (in shares) at Dec. 31, 2022 | 925,000 | 750,000 | 175,000 | ||||||||
Ending balance at Dec. 31, 2022 | $ 920,417 | $ 747,481 | $ 172,936 | ||||||||
Beginning balance (in shares) at Dec. 31, 2021 | [1] | 7,858,000 | |||||||||
Beginning balance at Dec. 31, 2021 | 1,145,120 | $ 1 | $ 2,861,305 | $ (1,700,851) | $ (3,335) | $ (12,000) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (1,455,544) | (1,455,544) | |||||||||
Issuance and sale of common stock (in shares) | [1] | 20,000 | |||||||||
Issuance of common stock | 1,315 | 1,315 | |||||||||
Share-based compensation | 109,713 | 109,713 | |||||||||
Other comprehensive loss | $ (1,094) | (1,094) | |||||||||
Ending balance (in shares) at Dec. 31, 2022 | 7,878,394 | 7,878,000 | [1] | ||||||||
Ending balance at Dec. 31, 2022 | $ (200,490) | $ 1 | 2,972,333 | (3,156,395) | (4,429) | (12,000) | |||||
Ending balance (in shares) at Dec. 31, 2023 | 925,000 | 750,000 | 175,000 | ||||||||
Ending balance at Dec. 31, 2023 | $ 920,417 | $ 747,481 | $ 172,936 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (1,151,454) | (1,151,454) | |||||||||
Issuance and sale of common stock (in shares) | [1] | 176,000 | |||||||||
Issuance of common stock | 2 | 2 | |||||||||
Share-based compensation | 83,692 | 83,692 | |||||||||
Other comprehensive loss | $ 4,307 | 4,307 | |||||||||
Ending balance (in shares) at Dec. 31, 2023 | 8,053,576 | 8,054,000 | [1] | ||||||||
Ending balance at Dec. 31, 2023 | $ (1,263,943) | $ 1 | $ 3,056,027 | $ (4,307,849) | $ (122) | $ (12,000) | |||||
|
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY (DEFICIT) (PARENTHETICAL) |
12 Months Ended | |||
---|---|---|---|---|
May 19, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Reverse stock split | 0.0125 | 0.0125 | 0.0125 | 0.0125 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Cash flows from operating activities: | ||
Net loss | $ (1,265,808) | $ (1,359,880) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 24,167 | 50,575 |
Impairment of intangible assets | 0 | 49,331 |
Impairment of goodwill | 587,535 | 75,372 |
Share-based compensation | 83,692 | 109,713 |
Deferred income taxes | (3,063) | 2,027 |
Unrealized loss (gain) on equity securities | 0 | 55,449 |
Investment impairment | 0 | 67,723 |
Warrant expense | 13,971 | 0 |
Net (accretion) and amortization of investments | (17,986) | 2,551 |
Loss on disposal of property, equipment, and capitalized software | 6,418 | 10,981 |
Other, net | 1,858 | 10,631 |
Changes in assets and liabilities, net of acquired assets and liabilities: | ||
Accounts receivable | (7,756) | 28,787 |
ACO REACH performance year receivable | (16,697) | (99,181) |
Other assets | 191,441 | (21,832) |
Medical cost payable | (635,616) | 279,563 |
Risk adjustment payable | (1,652,744) | 1,012,720 |
Accounts payable and other liabilities | (149,325) | 2,696 |
Unearned revenue | (10,614) | (42,760) |
Risk share payable to deconsolidated entity | 123,981 | 0 |
Net cash provided by (used in) operating activities | (2,726,546) | 234,466 |
Cash flows from investing activities: | ||
Purchases of investments | (837,074) | (1,457,444) |
Proceeds from sales, paydown, and maturities of investments | 1,960,283 | 1,055,479 |
Purchases of property and equipment | (2,897) | (27,448) |
Business divestiture | (682) | 0 |
Business acquisitions, net of cash acquired | 0 | (310) |
Net cash provided by (used in) investing activities | 1,119,630 | (429,723) |
Cash flows from financing activities: | ||
Proceeds from issuance of preferred stock | 0 | 920,417 |
Proceeds from issuance of common stock | 0 | 1,315 |
Proceeds from long-term borrowings | 66,400 | 0 |
Proceeds from short-term borrowings | 0 | 303,947 |
Repayments of short-term borrowings | 0 | (155,000) |
Distribution to noncontrolling interest holders | (16,494) | (4,311) |
Net cash provided by financing activities | 49,906 | 1,066,368 |
Net increase (decrease) in cash and cash equivalents | (1,557,010) | 871,111 |
Cash and cash equivalents of continuing and discontinued operations– beginning of year | 1,932,290 | 1,061,179 |
Cash and cash equivalents of continuing and discontinued operations– end of year | 375,280 | 1,932,290 |
Supplemental disclosures of cash flow information: | ||
Changes in unrealized gain (loss) on available-for-sale securities in OCI | 4,307 | (1,094) |
Cash paid for interest | $ 36,166 | $ 10,303 |
ORGANIZATION AND OPERATIONS |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS | ORGANIZATION AND OPERATIONS Organizational Structure: NeueHealth, Inc. (formerly known as Bright Health Group, Inc.) and subsidiaries (collectively, “NeueHealth,” “we,” “our,” “us,” or the “Company”) was founded in 2015 to transform healthcare. NeueHealth is a value-driven, consumer-centric healthcare company committed to making high-quality, coordinated healthcare accessible and affordable to all populations. We believe we can reduce the friction and current lack of coordination in today’s healthcare system by uniquely aligning the interests of payors and providers to enable a seamless, consumer-centric healthcare experience that drives value for all. We have two market facing businesses: our NeueCare business, formerly Consumer Care’s Care Delivery, and NeueSolutions business, formerly Consumer Care’s Care Solutions. NeueCare is our value-driven care delivery business that manages risk in partnership with external payors and serves all populations across The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (“ACA”) Marketplace, Medicare, and Medicaid. NeueSolutions is our provider enablement business that includes a suite of technology, services, and clinical care solutions that empower providers to thrive in performance-based arrangements. During our annual meeting on May 4, 2023, our stockholders voted to approve an amendment to our Ninth Amended and Restated Certificate of Incorporation to effect a reverse stock split at a ratio of not less than 1-for-15 and not greater than 1-for-80, with the exact ratio and effective time of the Reverse Stock Split to be determined by our Board of Directors at any time within one year of the date of the Annual Meeting. On May 5, 2023, our Board approved a ratio of 1-for-80. The reverse stock split took effect on May 19, 2023. The reverse stock split decreased the number of outstanding shares of the Company’s common stock by a factor of 80, subject to rounding of shares. The reverse stock split did not affect any stockholder’s proportionate equity interest in the Company. The par value of the Company’s common stock remains at $0.0001 per share following the reverse stock split and the number of outstanding shares of the Company’s common stock was proportionally reduced. As a consequence, the aggregate par value of the Company’s outstanding common stock was reduced, while the aggregate capital in excess of par value attributable to the Company’s outstanding common stock for accounting purposes was correspondingly increased. Total stockholder equity was not affected. All shares and per share information has been retroactively adjusted following the effective date of the reverse stock split to reflect the reverse stock split for all periods presented in future filings. On June 30, 2023, the Company entered into the Molina Purchase Agreement to sell its California Medicare Advantage business, which consists of Universal Care, Inc. d/b/a Brand New Day, a California corporation (“BND”) and Central Health Plan of California, Inc., a California corporation (“CHP”). The aggregate purchase price of the California Medicare Advantage business was reduced in the fourth quarter of 2023 from $600 million to $500 million in cash subject to certain purchase price adjustments. The closing of this transaction occurred on January 1, 2024. Beginning in 2023, we no longer offered Individual Family Plan (“Commercial”) products or Medicare Advantage (“MA”) products outside of California. Both the California MA business (Bright HealthCare) and our Commercial business (Bright HealthCare - Commercial) are presented within discontinued operations for all periods presented within the consolidated financial statements. See Note 19, Discontinued Operations, for further discussion of discontinued operations. The Company’s common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “NEUE”.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The consolidated financial statements include the accounts of NeueHealth, Inc. and all subsidiaries and controlled companies. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions are eliminated upon consolidation. Use of Estimates: The preparation of our consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Our most significant estimates include medical costs payable, provider risk share arrangements, and valuation and impairment of intangible assets. Actual results could differ from these estimates. Capitated Revenue Recognition: Capitated revenue includes revenue earned under capitated agreements recorded in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts With Customers (“ASC 606”). Primary care capitation and global capitation revenue are recognized in the period for which services are covered. Our financial performance pertaining to risk share revenue is evaluated based on the comparison between our year-to-date Medical Loss Ratio (“MLR”) and the corresponding target MLR and risk corridor as per our agreements. Revenue is recognized when we can reasonably estimate expected performance. As part of our NeueCare business, we are party to arrangements that generate capitated revenue in the form of a predetermined per member per month fee in exchange for providing defined healthcare services needed by an eligible member of the health plan, that is the other party to the arrangement. Per ASC 606, the capitated revenue and corresponding medical costs are presented gross when we serve as the principal in the transaction controlling the path of care in the fulfillment of our obligation and are presented net when we determine that we serve as the agent in the transaction. Additionally, we have concluded that we are precluded from serving as the principal in a transaction where we have a limited financial risk profile, as such we present capitated revenue and corresponding medical costs net when we do not bear a meaningful amount of financial risk for the defined healthcare services and care activities in the fulfillment of our obligation. ACO REACH Revenue Recognition: Accountable Care Organizations (“ACO”) Realizing Equity, Access, and Community Health (“REACH”) revenue is recorded in accordance with ASC 460, Guarantees (“ASC 460”). At the inception of the performance year, NeueHealth measures and recognizes the performance guarantee receivable and obligation, issued in a standalone arm’s length transaction, using the practical expedient to fair value as set forth in ASC 460-10-30-2(a). Consistent with ASC 460-10-25-4, which provides that a guarantor shall recognize in its statement of financial position a liability for that guarantee, we estimate the annualized benchmark recognized as the ACO REACH performance year obligation on the Consolidated Balance Sheets. On a periodic basis CMS adjusts the estimated Performance Year Benchmark based upon revised trend assumptions and changes in attributed membership. CMS will also estimate the shared savings or loss for the REACH ACO periodically based upon the estimated Performance Year Benchmark, changes to membership and various other assumptions. Additionally, when the guarantee is issued in a standalone transaction for a premium, the offsetting entry should be considered received according to ASC 460-10-25-4; as such we recognize the ACO REACH performance year receivable on the Consolidated Balance Sheets. The estimated Performance Year Benchmark is our best estimate of our obligation as we are unable to estimate the potential shared savings or loss due to the “stop-loss arrangement”, risk corridor components of the agreement, and a number of variables including but not limited to risk ratings and benchmark trends that could have an inestimable impact on estimated future payments. We follow ASC 460-10-35-2(b) to subsequently measure and recognize the performance guarantee, applying a systematic and rational approach to reflect our release from risk. Per ASC 460-10-35-2, depending on the nature of the guarantee, the guarantor’s release from risk typically can be recognized over the term of the guarantee using one of three methods: (1) upon expiration or settlement, (2) by systematic or rational amortization, or (3) as the fair value of the guarantee changes. Consistent with method (2), as we fulfill our performance obligation, we amortize the guarantee on a straight-line basis for the amount that represents the completed portion of the performance obligation. For each performance year, the final consideration due to the REACH ACOs by the Center for Medicare and Medicaid Services (“CMS”) (shared savings) or the consideration due to CMS by the REACH ACOs (shared loss) is reconciled in the year following the performance year. The above discussion of the ASC 460 accounting treatment for our ACO REACH revenue is related only to the guarantee of the performance of our ACO REACH care partners and not for the performance of our NeueCare affiliates. The revenue generated from the services provided by our NeueCare affiliates is within the scope exception identified within ASC 460-10-15-7(i). a guarantee or an indemnification of an entity’s own performance. As such, reported within ACO REACH revenue on the Consolidated Statements of Income (Loss), there is $1.8 million and $1.5 million revenue presented gross in accordance with ASC 606 related to our NeueCare clinics that are participating providers within our REACH ACOs. Service Revenue Recognition: We generate service revenue from providing primary care services to patients in our medical clinics. Our service revenues include net patient service revenues that we bill the consumer or their insurance plan on a fee-for-service basis. We recognize this revenue as medical services are rendered. Generally patients who are covered by third-party payors are responsible for related deductibles and coinsurance, which vary in amount. We estimate the transaction price for patients with deductibles and coinsurance and from those who are uninsured based on historical experience and current market conditions. The initial estimate of the transaction price is determined by reducing the standard charge by any contractual adjustments, discounts, and implicit price concessions. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to patient service revenue in the period of the change. Additionally, we generate service revenue by providing provider enablement services through our Value Services Organization (“VSO”) within NeueSolutions. The provider enablement services include an enablement suite of technology, services and clinical care solutions that empower providers to succeed in value-based care arrangements. Our enablement services are primarily billed on a per member per month basis with revenue recognized as the service period is completed. Medical Costs and Medical Costs Payable: Medical costs payable on the Consolidated Balance Sheets consists primarily of the liability for claims processed but not yet paid, estimates for claims received but not yet processed, estimates for the costs of health care services that attributed consumers have received but for which claims have not yet been submitted, and any calculated provider risk share deficit. The estimates for claims incurred but not reported (“IBNR”) include estimates for claims which have not been received or fully processed. IBNR estimates are developed using an actuarial process that is consistently applied and centrally controlled. The actuarial models consider factors such as historical submission and payment data, cost trends, customer and product mix, seasonality, utilization of health care services, contracted service rates and other relevant factors. In developing our medical costs payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated. For the most recent months, we estimate claim costs incurred by applying observed medical cost trend factors to the average per consumer per month medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors. For months prior to the most recent months, we apply the completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months. These estimates may change as actuarial methods change or as underlying facts upon which the estimates are based change. Management believes the amount of medical costs payable is the best estimate of our liability as of December 31, 2023; however, actual payments may differ from those established estimates. Note 4, Medical Costs Payable, discusses the development of paid and incurred claims and provides a rollforward of medical costs payable. Quality incentive and shared savings payables to providers are calculated under the contractual terms of each respective agreement. Medical costs payable included $2.4 million and $11.2 million under these contracts at December 31, 2023 and 2022, respectively. Cash and Cash Equivalents: Cash and cash equivalents include cash and investments with maturities of three months or less as of the reporting date. Investments: We invest in money market funds and certificates of deposit. We determine the appropriate classification of investments at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. Realized gains and losses for all investments are included in investment income. The basis for determining realized gains and losses is the specific-identification method. Credit Risk Concentration: We maintain cash in bank accounts that frequently exceed federally insured limits. To date, we have not experienced any losses on such accounts. Restricted Investments: We hold pledged certificates of deposit for certain vendors and lease requirements. Restricted investments are carried at amortized cost. At December 31, 2023 and 2022, pledged certificates of deposit totaled $8.1 million and $3.8 million, respectively, and are included in cash and cash equivalents in the Consolidated Balance Sheets. Accounts Receivable, Net of Allowance: Receivables are reported net of amounts for expected credit loss. The allowance for doubtful accounts is based on historical collection trends, future forecasts and our judgment regarding the ability to collect specific accounts. Balances are carried at original invoice amount less contractual allowances, implicit price concessions, and estimates made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition and credit history, and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. At December 31, 2023 and 2022, accounts receivable was reported net of allowance of $14.0 million and $6.1 million, respectively. Bad Debt Expense: During the year ended December 31, 2023, we recorded bad debt expense of $27.4 million. Our bad debt expense primarily related to one of our ACO REACH care partners filing for bankruptcy during the year ended December 31, 2023. During the year ended December 31, 2022, our bad debt expense was comprised of the allowance recorded per our current expected credit loss policy. There were no similar instances of provider or care partner credit losses during the year ended December 31, 2022. Reinsurance Recoveries: We seek to limit the risk of loss on our ACO REACH contracts through the use of reinsurance agreements. These agreements do not relieve us of our primary obligations. Refer to Note 17, ACO REACH for additional explanation of our arrangements to mitigate risk. ACO REACH Provider Risk Sharing: We have provider risk sharing agreements in place for our ACO REACH arrangements with Participating Providers. The accounting for provider risk share arrangements involves estimation given the inherent uncertainties involved in measuring current performance due to the significant lag time for items like claims run-out. Changes to these estimates over time have the potential to impact our financial results and overall performance. The ACO REACH Model incentivizes participating providers to manage the total cost of care of the Medicare fee-for-service (“FFS”) population aligned to their corresponding REACH ACO. Our REACH ACOs contract directly with CMS to assume the total costs of care risk for Medicare FFS beneficiaries attributed to our Participating Providers within our ACOs. Annually, after a runout period, CMS will perform a settlement process to determine if CMS owes the REACH ACOs payment for surplus (benchmark revenue exceeds actual claim costs incurred for the ACOs attributed beneficiaries) or if the REACH ACO must reimburse CMS for deficits (claim costs incurred for ACO’s attributed beneficiaries exceeds the benchmark revenue). We recognize the expected settlement when it becomes both probable and estimable. Our REACH ACOs contract separately with each of our Participating Provider groups. The terms of these contracts vary including the amount of upside (surplus) and downside (deficit) risk the Participating Provider has agreed to assume for aligned beneficiaries and administrative fees charged by the Participating Provider and REACH ACO. Payments to Participating Providers under these contracts increase NeueHealth’s medical costs. Administrative fees charged, and deficits expected to be recovered from Provider Partners under these contracts result in a decrease in medical costs. Prepaids and Other Current Assets: Prepaids and other current assets primarily include prepaid operating expenses. Performance Guarantees: Through our participation in the ACO REACH Model, we determined that our arrangements with the providers of our aligned beneficiaries require us to guarantee their performance to CMS. We recognized our obligation to guarantee their performance for the duration of the performance year on the Consolidated Balance Sheets. As we fulfill our obligation, we ratably amortize the guarantee for the amount that represents the completed portion of the performance obligation as ACO REACH revenue on the Consolidated Statements of Income (Loss). ACO REACH revenue is derived from the estimated annual sum of the capitation payments made to the REACH ACOs for services within the scope of the capitation arrangement with CMS and FFS payments from CMS made directly to third-party providers for our aligned beneficiaries. For each performance year, the final consideration due to the REACH ACOs by CMS (shared savings) or the consideration due to CMS by the REACH ACOs (shared loss) is reconciled in the year following the performance year. Periodically during the performance year, CMS will measure the shared savings or loss and adjust the performance benchmark and thus the remaining performance obligation if we are in a probable shared loss position. Property, Equipment and Capitalized Software: Property, equipment and capitalized software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method over the estimated useful life, ranging from 3 years to 10 years. Leasehold improvements are depreciated over the shorter of the lease term or their useful life. We capitalize costs incurred during the application development stage related to certain software projects for internal use. Costs related to planning activities and post implementation activities are expensed as incurred. Impairment of Long-Lived Assets: Property, equipment, capitalized software and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When evaluating long-lived assets with impairment indicators for potential impairment, we first compare the carrying value of the asset to its estimated undiscounted future cash flows. If the sum of the estimated undiscounted future cash flows is less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to its estimated fair value, which is typically based on estimated discounted future cash flows. We recognize an impairment loss in the amount of the asset’s carrying value exceeds the asset’s estimated fair value. During the year ended December 31, 2023 we recorded an impairment loss on long-lived assets of $1.2 million. There was no long-lived asset impairment within our continuing operations during the year ended December 31, 2022. Long-lived asset impairment expense is recognized in operating costs in the Consolidated Statements of Income (Loss). Operating Leases: We lease facilities and equipment under long-term operating leases that are non-cancelable and expire on various dates. At the lease commencement date, lease right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. We include options to extend or terminate an operating lease in the measurement of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. For operating leases, the liability is amortized using the effective interest method and the asset is reduced in a manner so that rent is expensed on a straight-line basis, with all cash flows included within operating activities in the Consolidated Statements of Cash Flows. Rent expense for operating leases is recognized on a straight-line basis over the lease term, net of any applicable lease incentives. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. When an interest rate is not implicit in a lease, we utilize our incremental borrowing rate for a period that closely matches the lease term. We determine our incremental borrowing rate as the interest rate needed to finance a similar asset over a similar period of time as the lease term. Our ROU assets are included in other non-current assets, and lease liabilities are included in other current liabilities and other liabilities in the Consolidated Balance Sheets. We have elected the short-term lease exception for all classes of assets and do not apply recognition requirements for leases of 12 months or less. Expense related to short-term leases of 12 months or less is recognized on a straight-line basis over the lease term. See Note 14, Commitments and Contingencies, for additional information on our operating leases. Goodwill and Other Intangible Assets: Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. We test goodwill for impairment annually at the beginning of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. We test for goodwill impairment at the reporting unit level. Reporting units are determined by identifying components of operating segments which constitute businesses for which discrete financial information is available and regularly reviewed by segment management. We have two reporting units – NeueCare and NeueSolutions. The NeueCare reporting unit had allocated goodwill subject to our annual impairment test while the NeueSolutions reporting unit had no allocated goodwill. Our goodwill impairment testing involves a multi-step process. We may first assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. We may also elect to skip the qualitative assessment and proceed directly to the quantitative testing. When performing the quantitative testing, we calculate the fair value of the reporting unit and compare it with its carrying value, including goodwill. We estimate the fair values of our reporting units using a combination of discounted cash flows and comparable market multiples, which include assumptions about a wide variety of internal and external factors. Due to the decline in our stock price and market capitalization, we fully impaired the NeueCare assigned goodwill worth $401.4 million. There was no goodwill impairment within our continuing operations during the year ended December 31, 2022. Our valuation of identifiable intangible assets acquired is based on information and assumptions available to us at the time of acquisition, using income and market approaches to determine fair value, as appropriate. Intangible assets are amortized over their estimated useful lives using the straight-line method. Identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When evaluating intangible assets with impairment indicators for potential impairment, we first compare the carrying value of the asset to its estimated undiscounted future cash flows. If the sum of the estimated undiscounted future cash flows is less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to its estimated fair value, which is typically based on estimated discounted future cash flows. We recognize an impairment loss in the amount of the asset’s carrying value exceeds the asset’s estimated fair value. There was no intangible asset impairment within our continuing operations during the year ended December 31, 2023. During the year ended December 31, 2022 we recorded an impairment loss on intangible assets of $42.6 million, which related to a full impairment of Centrum Medical Holdings’ reacquired contract with Bright HealthCare Florida as a result of Bright HealthCare’s decision to no longer offer commercial products for the 2023 plan year and our exit of select MA marketplaces. Operating Costs: Operating costs are recognized as incurred and relate to selling, general and administrative costs not related to medical costs. Our operating costs, by functional classification for the years ended December 31, 2023, and 2022, are as follows (in thousands):
Share-Based Compensation: We recognize compensation expense for share-based awards, including stock options, restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) on a straight-line basis over the related service period (generally the vesting period) of the award. Compensation expense related to stock options is based on the fair value on the date of grant, which is estimated using a Black-Scholes option valuation model. The fair value of RSUs is determined based on the closing market price of our common stock on the date of grant and the fair value of PSUs is determined using a Monte-Carlo simulation. Share-based compensation expense is recognized in operating costs in the Consolidated Statements of Income (Loss). Income Taxes: The federal income tax returns of NeueHealth are completed as a consolidated return. A tax-sharing agreement allocates the consolidated federal tax liability to each company in proportion to the tax liability that would have resulted for each company if computed on a separate return basis. Deferred taxes are provided on a liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses derecognition, classification, interest and penalties on income taxes, and accounting in interim periods. Management evaluated the Company’s tax positions and concluded that for the years ended December 31, 2023 and 2022, the Company had taken no uncertain tax positions that require adjustment to the consolidated financial statements to comply with the provisions of this guidance. As of the consolidated financial statement date, open tax years subject to potential audit by the taxing authorities are 2020 through 2022 for the federal tax returns and 2019 through 2022 for the state tax returns. We recognize interest and penalties related to income tax matters in income tax expense (benefit). Redeemable Noncontrolling Interest: Redeemable noncontrolling interest in our subsidiaries whose redemption is outside of our control are classified as temporary equity. Net loss per Share: Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net losses attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares. Going Concern: The consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a history of operating losses, and we generated a net loss of $1.3 billion for the year ended December 31, 2023. Additionally, the Company experienced negative operating cash flows primarily related to our discontinued Bright HealthCare – Commercial segment for the year ended December 31, 2023, requiring additional cash to be infused to satisfy statutory capital requirements. The Company paid $1.5 billion of 2022 related risk adjustment obligations in September 2023, and certain of its insurance subsidiaries entered into repayment agreements for an aggregate amount of $380.2 million with the Centers for Medicare & Medicaid Services’ (“CMS”) with respect to the unpaid amount of risk adjustment obligations. The amount owing under the repayment agreements is due March 15, 2025 and bears interest at a rate of 11.5% per annum. As further described in Note 18, Deconsolidation of Bright Healthcare Insurance Company of Texas, on November 29, 2023, Bright Healthcare Insurance Company of Texas was placed into liquidation and the Texas Department of Insurance was appointed as receiver. Of the $380.8 million of risk adjustment repayment liabilities, $89.6 million of this relates to Bright Healthcare Insurance Company of Texas, leaving $291.1 million as a risk adjustment obligation of the Company and is due within one year following the date the consolidated financial statements are issued. The Company’s IFP discontinued operations also continue to experience negative cash flows through the fourth quarter of 2023 as it continues to pay out the remaining inventory of medical claims. We consummated the sale of our California Medicare Advantage business in January 2024, resulting in net proceeds of $31.6 million after debt repayment of $274.6 million, cash collateralization of existing letters of credit of $24.1 million, contingent consideration of $110.0 million, estimated net equity adjustment of $57.3 million and other transaction related fees. See Note 5, Short-Term Borrowings for further details around the debt repayment. Further, as described in Note 6, Long-Term Borrowings and Common Stock Warrants, the Company entered into the New Credit Agreement in 2023 and borrowed a total of $66.4 million as of December 31, 2023. While payment isn’t due for more than 12 months, there are no additional amounts currently available for borrowing in these agreements. Cash and investment balances held at regulated insurance entities are subject to regulatory restrictions and can only be accessed through dividends declared to the non-regulated parent company or through reimbursements from administrative services agreements with the parent company. The Company declared no dividends from the regulated insurance entities to the parent company during the year ended December 31, 2023. The regulated legal entities are required to hold certain minimum levels of risk-based capital and surplus to meet regulatory requirements. As noted further in Note 19, Discontinued Operations, we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. In certain of our other regulated insurance legal entities, we hold surplus levels of risk-based capital, and as we complete the wind-down exercise related to these entities over the next two years, we expect to recapture through dividends and final liquidation actions approximately $110.0 million of cash held in other regulated insurance legal entities as of December 31, 2023. On February 28, 2024, we obtained approval in two states to execute a total of $13.1 million of dividends. We believe that the existing cash on hand and investments will not be sufficient to satisfy our anticipated cash requirements for the next twelve months following the date the consolidated financial statements contained in this Annual Report are issued, for items such as IFP risk adjustment payables, medical costs payable, remaining obligation to the deconsolidated entity, and other liabilities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In response to these conditions, management has implemented a restructuring plan to reduce capital needs and our operating expenses in the future to drive positive operating cash flow and increase liquidity. Additionally, the Company is actively engaged with the Board of Directors and outside advisors to evaluate additional financing. However, the Company may not fully collect the contingent consideration associated with the sale of the California Medicare Advantage business or be able to obtain financing on acceptable terms, as both of these matters will be subject to market conditions that are not fully within the Company’s control. In the event the Company is unable to obtain additional financing or take other management actions, among other potential consequences, the Company forecasts we will be unable to satisfy our obligations. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Recently Issued and Adopted Accounting Pronouncements: In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures, which will require disclosure of incremental segment information on an annual and interim basis for all public entities. The amendments do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU 2023-07 is effective for annual reporting beginning with the fiscal year ending December 31, 2024, and for interim periods thereafter. We are currently evaluating the incremental disclosures that will be required in the footnotes to our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which will require incremental income tax disclosures on an annual basis for all public entities. The amendments require that public business entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items meeting a quantitative threshold. The amendments also require disclosure of income taxes paid to be disaggregated by jurisdiction, and disclosure of income tax expense disaggregated by federal, state, and foreign. ASU 2023-09 is effective for annual reporting beginning with the fiscal year ending December 31, 2025. We are currently evaluating the incremental disclosures that will be required in our consolidated financial statements. There were no other accounting pronouncements that were recently issued and not yet adopted or adopted that had, or are expected to have, a material impact on our consolidated financial position, results of operations, or cash flows.
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RESTRUCTURING CHARGES |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In October 2022, we announced our decision to further focus our business on our Fully Aligned Care Model, and that we will no longer offer commercial plans through Bright HealthCare - Commercial, or Medicare Advantage products outside of California in 2023. In connection with our October 2022 announcement, we incurred restructuring charges throughout 2023 to realign and refocus our supporting business resources. As a result of these strategic changes, we announced and have taken actions to restructure the Company’s workforce and reduce expenses based on our updated business model. Restructuring charges by reportable segment and corporate for the years ended December 31, 2023 and 2022 were as follows (in thousands):
The $0.9 million of long-lived asset impairments is the result of a lease abandonment for one of our corporate office locations during the year ended December 31, 2023. Restructuring accrual activity recorded by major type for the years ended December 31, 2023 and 2022 was as follows; employee termination benefits are within Other current liabilities while contract termination costs are within Accounts payable (in thousands):
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MEDICAL COSTS PAYABLE |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MEDICAL COSTS PAYABLE | MEDICAL COSTS PAYABLE The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
Medical costs payable attributable to prior years decreased by $1.1 million and $2.2 million for the years ended December 31, 2023 and 2022, respectively, resulting from claim settlements being less than original estimates. Medical costs payable estimates are adjusted as additional information becomes known regarding claims. There were no significant changes to estimation methodologies in 2023 or 2022. The table below details the components making up the medical costs payable as of December 31, (in thousands):
Medical costs payable are primarily related to the current year. There are no reinsurance recovery amounts assumed in medical costs payable at December 31, 2023 or 2022.
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SHORT-TERM BORROWINGS |
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Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS In March 2021, we entered into a $350.0 million revolving credit agreement with JPMorgan Chase Bank, N.A., as Collateral Agent and Administrative Agent (in each such capacity, the “Agent”) and a syndicate of banks (the “Credit Agreement”), which was set to mature on February 28, 2024. As of December 31, 2023 and 2022 we had $303.9 million borrowed under the Credit Agreement at a weighted-average effective annual interest rate of 10.06%, which remained outstanding as of December 31, 2023. Refer to Note 14, Commitments and Contingencies for more information on the undrawn letters of credit of $22.9 million under the Credit Agreement, which reduce the amount available to borrow. In June and August of 2023, the Company entered into two limited waivers and consents, which temporarily waived compliance with the minimum liquidity covenant set forth in Section 11.12.2 of the Credit Agreement, and subsequently reduced the minimum liquidity covenant to $25.0 million. These waivers, among other things, also removed the covenant requiring maintenance of a maximum total debt to capitalization ratio, prohibited certain types of debt and required the Company to provide certain financial information to the lenders thereunder. On December 27, 2023, we entered into a letter agreement (the “Letter Agreement”) with the Agent providing that, in each case subject to the Agent’s receipt of (a) the payment in an amount equal to $274.6 million to give effect to the Termination (as defined below) as of January 2, 2024 (the “Payoff Condition”) and (b) payment to the issuer of letters of credit outstanding under the Credit Agreement (the “Existing Letters of Credit”) cash in an amount equal to $24.1 million, which is equal to 105% of the aggregate face amount of the Existing Letters of Credit (the “Cash Collateral”), which shall be held by the Agent as collateral for the obligation of the Company to reimburse the Agent in an amount equal to the amount of any drawing under the Existing Letters of Credit and to pay certain fees in respect of Existing Letters of Credit until the Existing Letters of Credit have terminated or expired (collectively, the “L/C Condition”), (i) the lenders under the Credit Agreement and the Agent consented to the sale of our California Medicare Advantage business (this clause (i), the “Consent”) and (ii) all liabilities, obligations and indebtedness of the Company and its applicable subsidiaries that are guarantors under the Credit Agreement and the other related loan documents (collectively, the “Credit Documents”), other than customary obligations that survive termination of the Credit Agreement by their express terms and the Company’s obligations in respect of the Existing Letters of Credit, owing by the Company and such subsidiaries under the Credit Documents shall be released, discharged and satisfied in full, all liens securing the obligations under the Credit Agreement (other than in respect of the Cash Collateral) shall be terminated and all guarantees under the Credit Agreement shall be released (this clause (ii), the “Termination”). On January 2, 2024, both the Payoff Condition and the L/C Condition were satisfied and, as a result, the Consent and the Termination occurred.
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LONG-TERM BORROWINGS AND COMMON STOCK WARRANTS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
LONG-TERM BORROWINGS AND COMMON STOCK WARRANTS | LONG-TERM BORROWINGS AND COMMON STOCK WARRANTS On August 4, 2023, the Company entered into a Credit Agreement (as amended, supplemented, restated or otherwise modified from time to time, the “New Credit Agreement”), among the Company, NEA 18 Venture Growth Equity, L.P. (“NEA”) and the lenders from time to time party thereto (together with NEA and each of their respective successors and assigns, the “Lenders”), to provide for a credit facility pursuant to which, among other things, the lenders have provided $60.0 million delayed draw term loan commitments, which matures on December 31, 2025. On October 2, 2023, the Company, NEA, as the existing lender (the “Existing Lender”), and California State Teachers’ Retirement System, as an incremental lender (“the New Lender”) entered into Incremental Amendment No. 1 to the New Credit Agreement to provide for a term loan commitment increase in an aggregate principal amount of $6.4 million by the New Lender under the Amended Credit Agreement. Loans under the Commitment Increase will have the same terms as loans under the original term loan commitments provided by the Existing Lender. As of December 31, 2023, we had $66.4 million borrowed under the New Credit Agreement at a weighted-average effective interest rate of 15.00%, which remains outstanding as of December 31, 2023. In the third quarter of 2023, the expectation was to use the proceeds from the sale of our California MA business to repay the amounts drawn on the New Credit Agreement in early 2024, as such they were classified as short-term borrowings. As a result of the reduction in the proceeds received from the sale of the California MA business the expected repayment timeline has changed to a longer term outlook, as such in the fourth quarter of 2023 we have reclassified these to long-term borrowings. On August 4, 2023, we entered into a warrantholders agreement (the “NEA Warrantholders Agreement”) with NEA, setting forth the rights and obligations of the Company and NEA as holders of the warrants to acquire shares of Common Stock at an exercise price of $0.01 per share (the “Warrants”), and providing for the issuance of warrants. We established a warrant liability of $25.1 million on this date, representing the 1.7 million warrants available to be issued under the NEA Warrantholders Agreement at a fair market value of $15.12 (closing share price on August 4th, 2023 minus the $0.01 exercise price). The warrants do not contain any exercise contingencies and expire on the fifth anniversary of the first closing date. On October 2, 2023, we entered into a warrantholders agreement (the “CalSTRS Warrantholders Agreement”) with the New Lender, setting forth the rights and obligations of the Company and the lenders as holders of the warrants to acquire shares of Common Stock at an exercise price of $0.01 per share, and providing for the issuance of warrants. We increased the warrant liability by $1.0 million on this date, representing the 0.2 million warrants available to be issued under the CalSTRS Warrantholders Agreement at a fair market value of $5.80 (closing share price on October 2nd, 2023 minus the $0.01 exercise price). The warrants do not contain any exercise contingencies and expire on the fifth anniversary of the first closing date. We account for our common stock warrants at the time of inception as derivatives, utilizing ASC 815, Derivatives and Hedging, by recording a liability equal to the warrants’ fair market value that is marked to market at the end of each period. Per the terms of the NEA Warrantholders Agreement, the market value is calculated as the ending stock price less the $0.01 exercise price. As we draw on the available funds, warrants are issued; warrants will remain classified as a liability and be fair valued each period until they are exercised by the warrantholder. Upon exercise, we relieve the associated liability into additional paid in capital at the fair value of the warrants on the date of exercise, classifying the exercised warrants as equity.
During the year ended December 31, 2023, we drew $66.4 million on the New Credit Agreement, and issued a total of 1.8 million warrants. As of December 31, 2023 no issued warrants have been exercised and no warrants remain available to be issued under the Warrantholders Agreement. For the year ended December 31, 2023, warrant expense was $14.0 million. There was no equivalent liability and activity for the year ended December 31, 2022. The Company classifies its warrant liability as Level 2 fair value because they are valued using observable, unadjusted quoted prices in active markets. See Note 19, Discontinued Operations for the full definition of Level 1, Level 2, and Level 3 fair values.
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PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE Property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands):
Depreciation expense of $6.6 million and $9.1 million was recognized for the years ended December 31, 2023 and 2022, respectively.
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Changes in the carrying value of goodwill by reportable segment were as follows (in thousands):
For the periods ended December 31, 2023 and 2022, NeueSolutions had no assigned goodwill. Historically, we test goodwill for impairment annually at the beginning of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. During the three months ended September 30, 2023, we determined that the decrease in our enterprise market capitalization due to a decrease in the price of our common stock represented an event that indicated the carrying value of our NeueCare reporting unit may not be recoverable. As such, we performed an interim impairment test as of September 30, 2023. We estimated the fair value of our NeueCare reporting unit using a combination of discounted cash flows and comparable market multiples, which include assumptions about a wide variety of internal and external factors. As a result of our interim impairment, we fully impaired the NeueCare assigned goodwill due to the decline in our stock price and market capitalization. Given there was no assigned goodwill at our NeueSolutions and NeueCare segments on our annual goodwill impairment measurement date (first day of our fiscal fourth quarter - October 1, 2023), we did not perform an annual goodwill impairment test. The gross carrying value and accumulated amortization for definite-lived intangible assets were as follows (in thousands):
Amortization expense relating to intangible assets of $11.7 million and $21.6 million was recognized for the years ended December 31, 2023 and 2022, respectively. Impairment expense relating to intangible assets for the year ended December 31, 2022 was $42.6 million as a result of the impairment of the reacquired contract between our discontinued Bright HealthCare - Commercial business and continuing NeueCare business, due to our decision to no longer offer commercial products for the 2023 plan year. We used the income approach in our assessment of the fair value of the impaired intangible assets. We did not have any impairment expense for the year ended December 31, 2023. Estimated full year amortization expense relating to intangible assets for each of the next five years ending December 31, is as follows (in thousands):
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PREFERRED STOCK |
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Dec. 31, 2023 | |
Temporary Equity Disclosure [Abstract] | |
PREFERRED STOCK | PREFERRED STOCK Series A Convertible Preferred Stock On January 3, 2022, we issued 750,000 shares of the Company’s Series A Convertible Perpetual Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), for an aggregate purchase price of $750.0 million, or $1,000 per share. Pursuant to the Certificate of Designations designating the shares of our Series A Preferred Stock and the Certificate of Designations designating the shares of our Series B Convertible Perpetual Preferred Stock (collectively, the “Preferred Stock”) each of which we filed with the Secretary of State of the State of Delaware (together, the “Certificate of Designations”), the Preferred Stock ranks senior to our shares of common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Series A Preferred Stock has an initial liquidation preference of $1,000 per share, which shall increase by accumulated quarterly dividends that are not paid in cash (“Compounded Dividends”). Holders of the Series A Preferred Stock are entitled to a dividend at the rate of 5.0% per annum, accruing daily and payable quarterly in arrears and subject to certain adjustments, as set forth in the Certificate of Designations. Dividends will be payable in cash, by increasing the amount of Compounded Dividends with respect to a share of Series A Preferred Stock, or any combination thereof, at the sole discretion of the Company. The Series A Preferred Stock had accrued Compounded Dividends of $78.0 million and $37.9 million as of December 31, 2023 and 2022, respectively. The Series A Preferred Stock will be convertible at the option of the holders into (I) the number of shares of common stock equal to the quotient of (a) the sum of (x) the liquidation preference (reflecting increases for Compounded Dividends) plus (y) the accrued dividends with respect to each share of Series A Preferred Stock as of the applicable conversion date divided by (b) the conversion price (initially approximately $364.00 per share and approximately $283.20 per share subsequent to the issuance of warrants during the year ended December 31, 2023) as of the applicable conversion date plus (II) cash in lieu of fractional shares, subject to certain anti‑dilution adjustments. At any time after January 3, 2025, if the closing price per share of Common Stock on the New York Stock Exchange was greater than 175% of the then effective conversion price (approximately $283.20 per share subsequent to the issuance of warrants during the year ended December 31, 2023) for (x) each of at least twenty (20) trading days in any period of thirty (30) consecutive trading days and (y) the last trading day immediately before the Company provides the holders with notice of its election to convert all of the Series A Preferred Stock into the relevant number of shares of common stock, the Company may elect to convert all of the Series A Preferred Stock into the relevant number of shares of common stock. Under the Certificate of Designations, holders of the Series A Preferred Stock are entitled to vote with the holders of the common stock on an as‑converted basis, solely with respect to (i) a change of control transaction (to the extent such change of control transaction is submitted to a vote of the holders of the common stock) or (ii) the issuance of capital stock by the Company in connection with an acquisition by the Company (to the extent such issuance is submitted to a vote of the holders of the common stock), subject to certain restrictions. Holders of the Series A Preferred Stock are entitled to a separate class vote with respect to, among other things, amendments to the Company’s organizational documents that have an adverse effect on the Series A Preferred Stock, authorizations or issuances by the Company of securities that are senior to the Series A Preferred Stock, increases or decreases in the number of authorized shares of Preferred Stock, and issuances of shares of the Series A Preferred Stock after the Closing Date of January 3, 2022. At any time following the fifth anniversary of the original issuance date, the Company may redeem all of the Series A Preferred Stock for a per share amount in cash equal to: (i) the sum of (A) the liquidation preference (reflecting increases for Compounded Dividends) thereof plus (B) all accrued dividends as of the applicable redemption date, multiplied by (ii) (A) 105% if the redemption occurs at any time prior to the seventh anniversary of the Closing Date and (B) 100% if the redemption occurs at any time on or after the seventh anniversary of the Closing Date. Upon certain change of control events involving the Company, the holders of the Series A Preferred Stock may, at such holder’s election, convert their shares of Series A Preferred Stock into common stock at the then‑current conversion price or require the Company to purchase all or a portion of such holder’s shares of Preferred Stock that have not been so converted at a purchase price per share of Preferred Stock, payable in cash, equal to the greater of (I) (A) if the change of control effective date occurs at any time prior to the seventh anniversary of the Closing Date, the product of 105% multiplied by the sum of (x) the liquidation preference of such share of Series A Preferred Stock (reflecting increases for Compounded Dividends) plus (y) the accrued dividends in respect of such share of Series A Preferred Stock as of the change of control purchase date and (B) if the change of control effective date occurs on or after the seventh anniversary of the Closing Date, the sum of (x) the liquidation preference (reflecting increases for Compounded Dividends) of such share of Series A Preferred Stock plus (y) the accrued dividends in respect of such share of Series A Preferred Stock as of the change of control purchase date and (II) the consideration that would have been payable in connection with such change of control if such share of Series A Preferred Stock had been converted into common stock immediately prior to the change of control. Series B Convertible Preferred Stock On October 10, 2022, we entered into an investment agreement with certain purchasers relating to the issuance of 175,000 shares of the Company’s Series B Convertible Perpetual Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), for an aggregate purchase price of $175.0 million, or $1,000 per share. The close of the Series B Preferred Stock issuance occurred on October 17, 2022 (the “Series B Closing Date”). The Series B Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Preferred Stock has an initial liquidation preference of $1,000 per share, which shall increase by Compounded Dividends. Holders of the Series B Preferred Stock are entitled to a dividend at the rate of 5.0% per annum, accruing daily and payable quarterly in arrears and subject to certain adjustments, as set forth in the Series B Certificate of Designations. Dividends will be payable in cash, by increasing the amount of liquidation preference (Compounded Dividends) with respect to a share of Series B Preferred Stock, or any combination thereof, at the sole discretion of the Company. The Series B Preferred Stock had accrued Compounded Dividends of $10.8 million and $1.8 million as of December 31, 2023 and 2022, respectively. The Series B Preferred Stock will be convertible at the option of the holders into (I) the number of shares of common stock equal to the quotient of (a) the sum of (x) the liquidation preference (reflecting increases for Compounded Dividends) plus (y) the accrued dividends with respect to each share of Series B Preferred Stock as of the applicable conversion date divided by (b) the conversion price (initially approximately $113.60 per share and approximately $99.59 per share subsequent to the issuance of warrants during the year ended December 31, 2023) as of the applicable conversion date plus (II) cash in lieu of fractional shares, subject to certain anti‑dilution adjustments. At any time after the third anniversary of the Series B Closing Date, if the closing price per share of common stock on the NYSE was greater than 287% of the then effective Series B Conversion Price (approximately $99.59 per share subsequent to the issuance of warrants during the year ended December 31, 2023) for (x) each of at least twenty (20) trading days in any period of thirty (30) consecutive trading days and (y) the last trading day immediately before the Company provides the holders with notice of its election to convert all of the Series B Preferred Stock into the relevant number of shares of common stock, the Company may elect to convert all of the Series B Preferred Stock into the relevant number of shares of common stock. Under the Series B Certificate of Designations, holders of the Series B Preferred Stock are entitled to vote with the holders of the common stock on an as‑converted basis, solely with respect to (i) a change of control transaction (to the extent such change of control transaction is submitted to a vote of the holders of the common stock) or (ii) the issuance of capital stock by the Company in connection with an acquisition by the Company (to the extent such issuance is submitted to a vote of the holders of the common stock), subject to certain restrictions. Holders of the Series B Preferred Stock are entitled to a separate class vote with respect to, among other things, amendments to the Company’s organizational documents that have an adverse effect on the Series B Preferred Stock, authorizations or issuances by the Company of securities that are senior to the Series B Preferred Stock, increases or decreases in the number of authorized shares of Series B Preferred Stock, and issuances of shares of the Series B Preferred Stock after the Series B Closing Date. At any time following the fifth anniversary of the original issuance date, the Company may redeem all of the Series B Preferred Stock for a per share amount in cash equal to: (i) the sum of (A) the liquidation preference (reflecting increases for Compounded Dividends) thereof plus (B) all accrued dividends as of the applicable redemption date, multiplied by (ii) (A) 105% if the redemption occurs at any time prior to the seventh anniversary of the Series B Closing Date and (B) 100% if the redemption occurs at any time on or after the seventh anniversary of the Series B Closing Date. Upon certain change of control events involving the Company, the holders of the Series B Preferred Stock may, at such holder’s election, convert their shares of Series B Preferred Stock into common stock at the then‑current conversion price or require the Company to purchase all or a portion of such holder’s shares of Preferred Stock that have not been so converted at a purchase price per share of Preferred Stock, payable in cash, equal to the greater of (I) (A) if the change of control effective date occurs at any time prior to the seventh anniversary of the Series B Closing Date, the product of 105% multiplied by the sum of (x) the liquidation preference of such share of Series B Preferred Stock (reflecting increases for Compounded Dividends) plus (y) the accrued dividends in respect of such share of Series B Preferred Stock as of the change of control purchase date and (B) if the change of control effective date occurs on or after the seventh anniversary of the Series B Closing Date, the sum of (x) the liquidation preference (reflecting increases for Compounded Dividends) of such share of Series B Preferred Stock plus (y) the accrued dividends in respect of such share of Series B Preferred Stock as of the change of control purchase date and (II) the consideration that would have been payable in connection with such change of control if such share of Series B Preferred Stock had been converted into common stock immediately prior to the change of control.
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SHARE-BASED COMPENSATION |
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SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION 2016 Incentive Plan The Company adopted its 2016 Stock Incentive Plan (the “2016 Incentive Plan”) in March 2016. The 2016 Incentive Plan allowed for the Company to grant stock options, RSUs, and RSAs to certain employees, consultants and non-employee directors. The 2016 Incentive Plan was initially adopted on March 25, 2016, and most recently amended in December 2020. Following the effectiveness of our 2021 Omnibus Plan (the “2021 Incentive Plan”), no further awards will be granted under the 2016 Incentive Plan. However, all outstanding awards granted under the 2016 Incentive Plan will continue to be governed by the existing terms of the 2016 Incentive Plan and the applicable award agreements. 2021 Incentive Plan The 2021 Incentive Plan was adopted by our Board of Directors on May 21, 2021 and approved by our stockholders on May 25, 2021 and June 5, 2021. The 2021 Incentive Plan allows the Company to grant stock options, RSAs, RSUs, stock appreciation rights, other equity based awards, and cash based incentive awards to certain employees, consultants and non-employee directors. There are 1.6 million shares of common stock authorized for issuance under the 2021 Incentive Plan. As of December 31, 2023, a total of 0.5 million shares of common stock were available for future issuance under the 2021 Incentive Plan. Share-Based Compensation Expense We recognized share-based compensation expense of $83.7 million and $109.7 million for the years ended December 31, 2023 and 2022, respectively, which is included in operating costs in the Consolidated Statements of Income (Loss). Stock Options The Board of Directors or the Compensation Committee of the Board of Directors determines the exercise price, vesting periods and expiration date at the time of the grant. Stock options granted prior to the third quarter of 2021 generally vest 25% at one year from the grant date, then ratably over the next 36 months with continuous employee service. Stock options granted after the beginning of the third quarter of 2021 generally vest ratably over three years. Option grants generally expire 10 years from the date of grant. There were no stock options granted during the year ended December 31, 2023. The calculated value of each option award is estimated on the date of grant using a Black- Scholes option valuation model that used the following assumptions for options granted during 2022:
Risk-free interest rates are based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on the historical volatility of our publicly traded industry peers. We use historical data to estimate option forfeitures within the valuation model. The expected lives of options granted represent the period of time that the awards granted are expected to be outstanding based on historical exercise patterns. The activity for the stock options for the year ended December 31, 2023 is as follows (in thousands, except exercise price and contractual life):
The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2022 was $76.80 per share. There were no stock options exercised during the year ended December 31, 2023. The aggregate intrinsic value of stock options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during the year ended December 31, 2022 was $1.1 million. We recognized share-based compensation expense related to stock options of $35.3 million and $51.4 million for the years ended December 31, 2023, and 2022, respectively. At December 31, 2023, there was $27.0 million of unrecognized compensation expense related to stock options that is expected to be recognized over a weighted-average period of 1.1 years. Restricted Stock Units RSUs represent the right to receive shares of our common stock at a specified date in the future and generally vest over a three-year period. The fair value of RSUs is determined based on the closing market price of our common stock on the date of grant. The following table summarizes RSU award activity for the year ended December 31, 2023 (in thousands, except weighted average grant date fair value):
We recognized share-based compensation expense related to RSUs of $27.9 million and $23.6 million for the years ended December 31, 2023 and 2022, respectively, and is included in operating costs in the Consolidated Statements of Income (Loss). As of December 31, 2023, there was $24.2 million of unrecognized compensation expense related to the RSU grants, which is expected to be recognized over a weighted-average period of 1.3 years. Performance-based Restricted Stock Units In connection with our IPO, our Board of Directors approved the grant of PSUs to members of our executive leadership team. The grant encompasses a total of 14.7 million PSUs, separated into four equal tranches, each of which are eligible to vest based on the achievement of predetermined stock price goals and a minimum service period of 3 years. This grant is intended to retain and incentivize our executive leadership to lead the Company to sustained, long-term financial and operational performance. The fair value of the PSUs was determined using a Monte-Carlo simulation. The following table summarizes PSU award activity for the year ended December 31, 2023 (in thousands, except weighted average grant date fair value):
We recognized share-based compensation expense related to the PSU grant of $20.5 million and $34.8 million for the years ended December 31, 2023 and 2022, respectively, and is included in operating costs in the Consolidated Statements of Income (Loss). At December 31, 2023, there was $12.4 million of unrecognized compensation expense related to the PSU grant, which is expected to be recognized over a weighted-average period of 0.5 years.
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NET LOSS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, (in thousands, except for per share amounts):
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the years ended December 31, (in thousands):
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BENEFIT PLANS |
12 Months Ended |
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Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | BENEFIT PLANSThe Company has a 401(k) retirement salary savings plan (“the 401(k) Plan”) for all eligible employees. We made safe harbor matching contributions equal to 100% of the first 2% and 50% of the next 4% of employee contributions to the 401(k) Plan. The Company’s contribution expense was $5.5 million and $7.0 million for 2023 and 2022, respectively, and was included in operating costs in the Consolidated Statements of Income (Loss). |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income tax expense (benefit) for the years ended December 31, 2023 and 2022 are as follows (in thousands):
A reconciliation of the statutory tax rate (21%) to the effective income tax rate for the years ended December 31, 2023 and 2022 is as follows (in thousands):
The tax effects of temporary differences related to deferred tax assets and liabilities for the years ended December 31, 2023 and 2022, are as follows (in thousands):
Not included in the deferred tax table above as of December 31, 2023 are $667.8 million deferred tax assets, $35.9 million deferred tax liabilities and $631.9 million valuation allowance related to operations classified as discontinued operations in the consolidated balance sheet. Of the $667.8 million deferred tax assets classified as discontinued operations as of December 31, 2023, $634.9 million consists of net operating losses. Not included in the deferred tax table above as of December 31, 2022 are $538.2 million deferred tax assets, $16.5 million deferred tax liabilities and $521.7 million valuation allowance related to operations classified as discontinued operations in the consolidated balance sheet. Of the $538.2 million deferred tax assets classified as discontinued operations as of December 31, 2022, $515.6 million consists of net operating losses. Net operating losses (“NOLs”) were $2.5 billion and $2.8 billion as of December 31, 2023 and 2022, respectively. These NOLs start to expire in 2036. Of the operating loss carryforwards noted, a portion of them may not be available after the application of Internal Revenue Code (“IRC”) Section 382 limitations. The IRC Section 382 imposes restrictions on the utilization of various carryforward tax attributes in the event of a change in ownership of the Company, as defined by IRC Section 382. In addition, IRC Section 382 may limit the Company’s built-in items of deduction, including capitalized start-up costs. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Based on the level of historical taxable losses and projections of future taxable income (losses) over the periods in which the deferred tax assets can be realized, management currently believes that it is not more likely than not that the Company will be able to realize the benefits of these deductible differences. Accordingly, a valuation allowance has been established to reserve for potential benefits of the remaining carryforwards and tax credits in our consolidated financial statements to reflect the uncertainty of future taxable income required to utilize available tax loss carryforwards and other deferred tax assets. As of December 31, 2023, there were no unrecognized tax benefits recorded. The Company files income tax returns in the U.S. federal jurisdiction and all state jurisdictions as necessary. The Company’s U.S. federal returns are no longer subject to income tax examinations for taxable years before 2020. State tax returns for taxable years before 2019 are no longer subject to examination. The Company’s effective income tax rate varies from the federal statutory rate of 21% due to state income taxes, changes in the valuation allowance for deferred tax assets and adjustments for permanent differences. The overall tax expense for the year ended December 31, 2023 is primarily due to the reversal of the amortization of originating goodwill from asset acquisitions as well as estimated state income taxes attributable to income earned in separate filing states without state net operating loss carryforwards. In the year ended December 31, 2022, the overall tax expense was attributable to amortization of originating goodwill from asset acquisitions and estimated state income taxes attributable to income earned in separate filing states without state net operating loss carryforwards.
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases: We lease our facilities under operating leases that are noncancelable and expire on various dates with options to renew. Operating lease costs were $9.3 million and $13.7 million for the years ended December 31, 2023, and 2022, respectively. The years ended December 31, 2023 and 2022 included immaterial short-term lease costs and sublease income. Operating lease costs are included in operating costs in the Consolidated Statements of Income (Loss). At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
At December 31, 2023, future minimum annual lease payments under all noncancelable operating leases are as follows (in thousands):
Legal proceedings: In the normal course of business, we could be involved in various legal proceedings such as, but not limited to, the following: lawsuits alleging negligence in care or general liability, violation of regulatory bodies’ rules and regulations, or violation of federal and/or state laws. On January 6, 2022, a putative securities class action lawsuit was filed against us and certain of our officers and directors in the Eastern District of New York. The case is captioned Marquez v. Bright Health Group, Inc. et al., 1:22-cv-00101 (E.D.N.Y.). The lawsuit alleges, among other things, that we made materially false and misleading statements regarding our business, operations, and compliance policies, which in turn adversely affected our stock price. An amended complaint was filed on June 24, 2022, which expands on the allegations in the original complaint and alleges a putative class period of June 24, 2021 through March 1, 2022. The amended complaint also adds as defendants the underwriters of our initial public offering. The Company has served a motion to dismiss the amended complaint, which has not yet been ruled on by the court. We intend to vigorously defend the Company in the above actions, but there can be no assurance that we will be successful in any defense. Based on our assessment of the facts underlying the claims and the degree to which we intend to defend the Company in these matters, other than as set forth above, the amount or range of reasonably possible losses, if any, cannot be estimated. We have not accrued for any potential loss as of December 31, 2023 for these actions. Other commitments: As of December 31, 2023, we had $22.9 million outstanding, undrawn letters of credit under the Credit Agreement. As of January 2, 2024 the letters of credit outstanding under the Credit Agreement are collateralized in cash in an amount equal to $24.1 million, which is equal to 105% of the aggregate face amount of the Existing Letters of Credit.
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SEGMENT AND GEOGRAPHICAL INFORMATION |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHICAL INFORMATION | SEGMENTS AND GEOGRAPHIC INFORMATION Factors used to determine our reportable segments include the nature of operating activities, economic characteristics, existence of separate senior management teams and the type of information used by the Company’s chief operating decision maker (“CODM”) to evaluate its results of operations. We have identified two operating segments based on our primary product and service offerings: NeueCare, formerly Care Delivery, and NeueSolutions, formerly Care Solutions. The Care Delivery and Care Solutions segments were new starting in the second quarter of 2023 and were formerly reported together within the aggregated Consumer Care segment. The updates to our reportable segments conform with the Company’s CODM’s view of our ongoing operations. NeueCare and NeueSolutions, which make up our value-driven Consumer Care business that manages risk in partnership with external payors, aim to significantly reduce the friction and current lack of coordination between payors by delivering on our Fully Aligned Care Model with multiple payors. The following is a description of the types of products and services from which the two reportable segments of our continuing operations derive their revenues: NeueCare: Provides care services in our clinics with wrap around care management and care coordination activities for those members where we take full or partial risk. As of December 31, 2023, NeueCare provides in-person and virtual clinical care through its 73 owned primary care clinics. Through these risk-bearing clinics and our affiliated network of care providers, our NeueCare segment serves approximately 336,000 consumers, inclusive of 293,000 value-based care consumers and 43,000 fee-for-service consumers. NeueCare customers include external payors, third party administrators, affiliated providers, and direct-to-government programs. NeueSolutions: Our provider enablement business that facilitates care coordination activities through the use of population health tools including technology, data analytics, care and utilization management, and clinical solutions and care teams to support patients. As of December 31, 2023, NeueSolutions has approximately 62,000 value-based care consumers attributed to its REACH ACOs. The Company’s accounting policies for reportable segment operations are consistent with those described in Note 2, Summary of Significant Accounting Policies. We utilize operating income (loss) before income taxes as the profitability metric for our reportable segments. For all periods presented, all of our long-lived assets were located in the United States, and all revenues were earned in the United States. The following tables present the reportable segment financial information for the years ended December 31, 2023, and 2022 (in thousands):
We do not include asset information by reportable segment in the reporting provided to the CODM.
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REDEEMABLE NONCONTROLLING INTEREST |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REDEEMABLE NONCONTROLLING INTEREST | REDEEMABLE NONCONTROLLING INTEREST Effective December 31, 2020, we acquired a 62% controlling interest in Premier Medical Associates of Florida, LLC (“PMA”). As part of this acquisition, we entered into a put/call agreement with respect to the equity interests in PMA held by the controlling interest holder. The call options allow for the Company to purchase the 38% noncontrolling interest equity beginning on the fifth anniversary of the transaction date and each subsequent anniversary thereafter, or under certain other accelerating events as defined in the agreement, solely at the Company’s discretion. The put option allows the noncontrolling interest holder the ability to cause the Company to purchase their noncontrolling equity interest beginning on the seventh anniversary of the transaction date and each subsequent anniversary thereafter. Based on the nature of the put option redemption feature, which is outside the control of the Company, the noncontrolling interests are classified as redeemable in the accompanying Consolidated Balance Sheets. The put option redemption feature that is outside the control of the Company is settled at a multiple of EBITDA, which is an other than fair value settlement amount. As such, we will make a measurement adjustment when the put option redemption price exceeds the carrying amount as calculated under ASC 810, Consolidation (“ASC 810”). Effective July 1, 2021, we acquired a 75% controlling interest in Centrum, a value-based primary care focused, multi-specialty medical group, serving Commercial, Medicare, and Medicaid consumers across multiple payors. As part of the Centrum acquisition, we entered into put/call agreements with respect to the equity interests in Centrum held by the controlling interest holder. The call options allow for the Company to purchase the 25% noncontrolling interest equity over time beginning on September 30, 2022, or under certain other accelerating events as defined in the agreement, solely at the Company’s discretion. The put options allow the noncontrolling interest holder the ability to cause the Company to purchase their noncontrolling equity interest on consistent terms with the call options. Based on the nature of the put option redemption feature, which is outside the control of the Company, each of these noncontrolling interests are classified as redeemable in the accompanying Consolidated Balance Sheets at December 31, 2023. The put option redemption feature that is outside the control of the Company is settled at a multiple of EBITDA, which is an other than fair value settlement amount. As such, we will make a measurement adjustment when the put option redemption price exceeds the carrying amount as calculated under ASC 810. The following table provides details of our redeemable noncontrolling interest activity for the years ended December 31, 2023 and 2022 (in thousands):
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ACO REACH |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACO REACH | ACO REACH We participate in the CMS ACO REACH Model with three REACH ACOs participating through the global risk arrangement and assuming full risk for the total cost of care of aligned beneficiaries. As part of our participation in the ACO REACH Model, we are guaranteeing the performance of our care network of participating and preferred providers. The intention of the ACO REACH Model is to enhance the quality of care for Medicare FFS beneficiaries while reducing the administrative burden, supporting a focus on complex, chronically ill patients, and encouraging physician organizations that have not typically participated in Medicare FFS programs to serve Medicare FFS beneficiaries. Key components of the financial agreement for the ACO REACH Model include: •Performance Year Benchmark: The target amount for Medicare expenditures on covered services (Medicare Part A and B) furnished to a REACH ACO’s aligned beneficiaries during a performance year. The Performance Year Benchmark will be compared to the REACH ACO’s performance year expenditures. This comparison will be used to calculate shared savings and shared losses. The Performance Year Benchmark is established at the beginning of the performance year utilizing prospective trend estimates and is subject to retrospective trend adjustments, if warranted, before the Financial Reconciliation. •Risk-Sharing Arrangements: Used in determining the percent of savings and losses that REACH ACOs are eligible to receive as shared savings or may be required to repay as shared losses. •Financial Reconciliation: The process by which CMS determines shared savings or shared losses by comparing the calculated total benchmark expenditures for a given REACH ACO’s aligned population to the actual expenditures of that REACH ACO’s aligned beneficiaries over the course of a performance year that includes various risk-mitigation options such as stop-loss reinsurance and risk corridors. •Risk-Mitigation Options: Two of our REACH ACOs elected to participate in a “stop-loss arrangement” for the current and prior performance year offered by CMS, while one REACH ACO has elected third-party coverage. The “stop-loss arrangement” and third-party coverage are designed to reduce the financial uncertainty associated with high-cost expenditures of individual beneficiaries. Additionally, CMS has created a mandatory risk corridor program that allocates the REACH ACO’s shared savings and losses in bands of percentage thresholds, after a deviation of greater than 25.0% of the Performance Year Benchmark. Performance Guarantees Through our participation in the ACO REACH Model, we determined that our arrangements with the providers of our REACH ACO beneficiaries require us to guarantee their performance to CMS. At the beginning of the performance year, we recognized the ACO REACH estimated performance year obligation and receivable for the duration of the performance year. This receivable and obligation are measured at an amount equivalent to the estimated Performance Year Benchmark per CMS that is representative of the expected Medicare expenditures for beneficiaries aligned to our REACH ACOs. As we fulfill our obligation, we amortize the guarantee on a straight-line basis for the amount that represents the completed portion of the performance obligation. The receivable is reduced as we receive payments from CMS for in-network claims or receive CMS reporting detailing out-of-network claims paid by CMS on behalf of our aligned beneficiaries. At the end of each reporting period, we estimate both in-network claims and out-of-network claims incurred by beneficiaries aligned to our REACH ACOs but not yet reported and record a reserve for the estimated amount which is included in medical costs payable on the Consolidated Balance Sheets. For each performance year, the final consideration due to the REACH ACOs by CMS (shared savings) or the consideration due to CMS by the REACH ACOs (shared loss) is reconciled in the year following the performance year. On a periodic basis CMS adjusts the estimated Performance Year Benchmark based upon revised trend assumptions and changes in attributed membership. CMS will also estimate the shared savings or loss for the REACH ACO periodically based upon the estimated Performance Year Benchmark, changes to membership, payments made to the REACH ACO for in-network claims, out-of-network claims paid on behalf of the REACH ACO and various other assumptions including incurred but not reported reserves. The estimated Performance Year Benchmark is our best estimate of our obligation as we are unable to estimate the potential shared savings or loss due to the “stop-loss arrangement”, risk corridor components of the agreement, and a number of variables including but not limited to risk ratings and benchmark trends that could have an inestimable impact on estimated future payments. Our REACH ACOs netted a shared savings of $8.2 million for performance year 2022. The tables below include the financial statement impacts of the performance guarantee at December 31, 2023 and 2022 and for the years then ended (in thousands):
(1) We estimate there to be $146.1 million in in-network and out-of-network claims incurred by beneficiaries aligned to our REACH ACOs but not reported as of December 31, 2023; this is included in medical costs payable on the Consolidated Balance Sheet. (2) Our CMS benchmark was reduced by $64.8 million and $71.6 million during the years ended December 31, 2023, and 2022, respectively.
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DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS | DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS On November 29, 2023, BHIC-Texas (the “Deconsolidated Entity”) was placed into liquidation and the Texas Department of Insurance was appointed as receiver. The Deconsolidated Entity’s financial results are included in the Company’s consolidated results through November 28, 2023, the day prior to the date of the receivership. However, under ASC 810, consolidation of a majority-owned subsidiary is precluded where control of the subsidiary does not rest with the majority owners. Once the Texas Department of Insurance was appointed as receiver of BHIC-Texas we concluded the Company no longer controlled the subsidiary, and we deconsolidated BHIC-Texas as of that date. The deconsolidation of BHIC-Texas resulted in certain related party balances that had previously been eliminated upon consolidation to become liabilities of the Company. In 2022, BHIC-Texas entered into a risk share contract with a different NeueHealth affiliate, whereby losses incurred at BHIC-Texas over a specified medical loss ratio target were transferred from BHIC-Texas to the affiliated entity. On November 29, 2023 the accrued loss of BHIC-Texas related to the risk share contract was $124.0 million. Upon deconsolidation of BHIC-Texas, this liability is required to be recorded as risk share payable to deconsolidated entity on the Consolidated Balance Sheet. The corresponding receivable on BHIC-Texas was included in our carrying value evaluation described below. The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership.
Under ASC 810, this loss of control would likely trigger a gain or loss for the parent as the parent would remeasure its retained noncontrolling investment at fair value. Upon deconsolidation, the Company valued its investment in BHIC-Texas to be $91.5 million, which is equivalent to the Deconsolidated Entity's carrying value. Upon valuing the investment in BHIC-Texas we assessed the current expected credit loss associated with the underlying receivables; as a result of our analysis we recorded a full valuation allowance on the investment due to uncertainties related to the collection of the risk share receivable. The $91.5 million bad debt expense within the discontinued Bright HealthCare - Commercial reporting segment is recorded within net loss from discontinued operations on the consolidated statements of income (loss). DISCONTINUED OPERATIONSIn April 2023, we announced that we were exploring strategic alternatives for our California Medicare Advantage business, the Bright HealthCare reporting segment, with the focus on a potential sale. At that time, we met the criteria for “held for sale,” in accordance with ASC 205-20. This represents a strategic shift that will have a material impact on our business and financial results. As such, we have reflected amounts relating to Bright HealthCare as a disposal group as part of discontinued operations. On June 30, 2023, the Company entered into the Molina Purchase Agreement to sell its California Medicare Advantage business, which consists of Brand New Day and Central Health Plan. On December 13, 2023, the Company, Molina, BHCC, CHP and BND amended the Molina Purchase Agreement, pursuant to which, the parties agreed to amend the total purchase considerations to $500.0 million subject to certain contingencies and tangible net equity (“TNE”) adjustments. The transaction was consummated on January 1, 2024. In October 2022, we announced that we will no longer offer commercial plans through our Bright HealthCare - Commercial segment in 2023. As a result, we exited the Commercial marketplace effective December 31, 2022. We determined this exit represented a strategic shift that will have a material impact on our business and financial results that requires presentation as discontinued operations. The Bright HealthCare - Commercial segment is also inclusive of our MA Legacy business; all periods presented have been recast to reflect this presentation. While we are no longer offering plans in the Commercial marketplace as of December 31, 2022, we continue to have involvement in the states where we formerly operated in as we support run out activities of medical claims incurred in the 2022 plan year and perform other activities necessary to wind down our operations in each state, including making payments of 2022 risk adjustment payable liabilities during the third quarter of 2023. We are substantially complete with medical claim payments as of the end of 2023, and we will continue to make remaining medical claim payments and payments towards the remaining risk adjustment obligations through 2024 and early 2025. Our discontinued operations are also inclusive of our DocSquad business that was sold in March 2023; this is presented within the column labeled Other in the tables below. The discontinued operations presentation has been retrospectively applied to all prior periods presented. The financial results of discontinued operations by major line item for the years ended December 31 were as follows (in thousands):
The following table presents cash flows from operating and investing activities for discontinued operations (in thousands):
Assets and liabilities of discontinued operations were as follows (in thousands):
Revenue Recognition: Premium revenue includes revenue derived from insurance contracts of Bright HealthCare - Commercial, within the scope of ASC 944, Financial Services - Insurance. Premium revenue is recognized in the period for which services are covered. Individual policies can be terminated by a consumer without advance notice to the Company. Consumers that have unpaid premium balances for the coverage period are subject to certain termination requirements depending on whether the premium is subsidized or nonsubsidized by CMS. The Company estimates the portion of unpaid balances that will not be collected from consumers and records an allowance accordingly. For Bright HealthCare - Commercial, we record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by the Department of Health and Human Services (“HHS”), which could result in future payments applicable to benefit years. The Company, in conjunction with the MA program, covers prescription drug benefits under the Medicare Prescription Drug Benefit (“Medicare Part D”) program. Premium revenue includes CMS monthly premiums, consumer premium and CMS low-income premium subsidy for our insurance risk coverage. Premiums are recognized ratably over the period in which eligible individuals are entitled to receive covered benefits. CMS covers 80% of allowed claims costs above the defined standard true out-of-pocket threshold of $7,050 for any individual beneficiary enrolled in a Medicare Advantage plan (“MAO”). The reinsurance calculation is based on the benefit actually offered (i.e. basic or enhanced) and with CMS covering 80% of a member’s drug costs in the catastrophic phase. CMS provides upfront subsidies to MAO’s through a monthly payment in the Monthly Membership Report to cover the estimated cost of federal reinsurance on a per-member-per-month basis. Reinsurance subsidies in excess of federal reinsurance claims are paid back to CMS (a payable). If the MAO does not have enough federal reinsurance revenue to cover the federal reinsurance claims, CMS will pay the shortfall to the MAO. Premium revenue under the MA program includes CMS monthly premiums that are risk adjusted based on CMS defined formulas using consumer demographics and hierarchical condition category codes calculated based on historical data submitted to CMS on a lagged basis. Risk Adjustment Factor-related (“RAF”) premiums settle between CMS and the Company during both a midyear and final reconciliation process. Due to the lagged nature of the reconciliation and settlement, RAF-related premiums are estimated based on the lagged information that we submitted to CMS. The accuracy of the data submissions to CMS used in the RAF reconciliation are subject to CMS audit under the risk adjustment data validation audits and could result in future adjustments to premiums. As of December 31, 2023 and 2022, our MA risk adjustment receivable was $51.3 million and $62.2 million, respectively, recorded in accounts receivable within current assets of discontinued operations. Our monthly payment from CMS includes prospective subsidies to cover catastrophic reinsurance and low-income cost subsidies, and the Medicare Part D coverage gap discount that the Company must cover at the point-of-sale for prescription drugs. We are not at risk for these portions of the Medicare Part D benefit design. We account for these CMS-provided subsidies and related costs on the Consolidated Balance Sheets and ultimately settle with CMS and pharmaceutical companies during the final Medicare Part D reconciliation subsequent to the plan year. As of December 31, 2023 and 2022, we had receivables of $6.9 million and $6.7 million, respectively, recorded as prepaid and other current assets in current assets of discontinued operations, and payables of $35.0 million and $24.6 million, respectively, recorded as other current liabilities, within current liabilities of discontinued operations related to these programs. Our Medicare Part D premiums are subject to risk sharing with CMS under the risk corridor provisions. The risk corridor provisions compare costs targeted in our annual bid to actual prescription drug costs incurred. Our profit or loss is shared with or covered by CMS depending on the relative position within the risk corridor band. Changes in the risk corridor payable or receivable are recognized in premium revenue. As of December 31, 2023 and 2022, we had a risk corridor payable of $29.3 million and $15.2 million, respectively, included in other current liabilities in current liabilities of discontinued operations. The 2022 risk corridor payable was not settled as of December 31, 2023. We had no material risk corridor receivable as of December 31, 2023 and 2022, respectively. Investments: We invest in debt securities of the U.S. government and other government agencies, corporate investment grade, money market funds and various other securities. We determine the appropriate classification of investments at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. We classify our investments in individual debt securities as available-for-sale securities or held-to-maturity securities. All available-for-sale investments maturing less than one year from the statement date that management intends to liquidate within the next year are reflected as short-term investments. Available-for-sale investments with a maturity date greater than one year are classified as long-term investments. All available-for-sale investments are measured and carried at fair value. Changes in unrealized holding gains and losses on available-for-sale securities are reflected in other comprehensive income (loss). Realized gains and losses for all investments are included in investment income. The basis for determining realized gains and losses is the specific-identification method. Interest on debt securities is recognized in investment income when earned. Premiums and discounts are amortized/accreted using methods that result in a constant yield over the securities’ expected lives. Beginning January 1, 2020, we adopted the new current expected credit losses (“CECL”) model. The CECL model retained many similarities from the previous OTTI model, except it eliminated the length of time over which the fair value had been less than cost from consideration in the impairment analysis. Also, under the CECL model, expected losses on available-for-sale debt securities are recognized through an allowance for credit losses rather than as a reduction in the amortized cost of the securities. For debt securities whose fair value is less than their amortized cost which we do not intend to sell or are not required to sell, we evaluate the expected cash flows to be received as compared to amortized cost and determine if an expected credit loss has occurred. In the event of an expected credit loss, only the amount of the impairment associated with the expected credit loss is recognized in income with the remainder, if any, of the loss recognized in other comprehensive income (loss). To the extent we have the intent to sell the debt security, or it is more likely than not we will be required to sell the debt security, before recovery of our amortized cost basis, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value. Potential expected credit loss impairment is considered using a variety of factors, including the extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a debt security; changes in the quality of the debt security's credit enhancement; payment structure of the debt security; changes in credit rating of the debt security by the rating agencies; failure of the issuer to make scheduled principal or interest payments on the debt security and changes in prepayment speeds. For debt securities, we take into account expectations of relevant market and economic data. We estimate the amount of the expected credit loss component of a debt security as the difference between the amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. The expected credit loss cannot exceed the full difference between the amortized cost basis and the fair value. Accrued interest receivable relating to our debt securities is presented within prepaids and other current assets of current assets of discontinued operations. We do not measure an allowance for credit losses on accrued interest receivable. We recognize interest receivable write offs as a reversal of interest income. We had no write offs of accrued interest receivable in the years ended December 31, 2023 and 2022. Medical Costs and Medical Costs Payable: In developing our medical costs payable estimates, we apply completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months, and also review our remaining claims inventory to further validate expected medical costs. These estimates may change as actuarial methods change or as underlying facts upon which the estimates are based change. Management believes the amount of medical costs payable is the best estimate of our liability as of December 31, 2023; however, actual payments may differ from those established estimates. Restricted Investments and Statutory Deposits: The regulated insurance entities of NeueHealth are required to, among other things, hold certain statutory deposits and comply with certain minimum capital requirements, such as risk-based capital requirements, under applicable state regulations. Statutory deposits are classified as held-to-maturity investments and are carried at cost. The Company’s regulated legal entities held the required deposit amounts at December 31, 2023 and 2022, totaling $6.8 million and $8.6 million, respectively. The statutory deposits are principally held in U.S. Treasury securities within a custodial or controlled account with a custodial trustee and are included primarily in short-term investments and long-term investments, consistent with classification of other similar invested assets, in the Consolidated Balance Sheets. Reinsurance Recoveries: We have a quota share agreement with RGA, an alien unauthorized reinsurer, which cedes proportional percentages of premiums and medical costs of covered business of the Company, with the difference as an experience refund of ceded premiums, less a ceding fee paid to the reinsurer. Coverage includes comprehensive individual commercial policies in Colorado, Nebraska, Oklahoma and Florida. Effective January 1, 2021, we entered into a quota share agreement with the Canada Life Assurance Company, an alien unauthorized reinsurer, which cedes proportional percentages of premiums and medical costs of covered business of the Company, with the difference as an experience refund of ceded premiums, less a ceding fee paid to the reinsurer. Coverage includes comprehensive individual commercial policies in Florida. Deposit accounting is used for this arrangement and only ceding fees are recognized in the Consolidated Statements of Income (Loss) for the years ended December 31, 2023 and 2022, respectively. Within our Medicare Advantage business we have an agreement with Swiss Re Life & Health America, Inc. (“Swiss Re”) in which Swiss Re provides excess loss reinsurance coverage to the Company on individuals covered under our individual and small group policies. Effective January 1, 2021 we entered an agreement with RGA Reinsurance Company (“RGA”) in which RGA provides loss reinsurance coverage to the Company on individuals covered under our MA polices. Receivables from reinsurers under these agreements totaled $10.6 million and $14.9 million as of December 31, 2023 and 2022, respectively, and are recorded in prepaids and other current assets within current assets of discontinued operations in the Consolidated Balance Sheets. Payables for reinsurance premiums and ceding fees of $0.5 million and $4.7 million are recorded as other current liabilities within current liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively. Net reinsurance recoveries (net ceded premiums) of $3.4 million and $10.6 million were recorded as a reduction of medical costs within loss from discontinued operations in the Consolidated Statements of Income (Loss) for the years ended December 31, 2023 and 2022, respectively. Provider Risk Sharing: Our MA insurance business in California maintains a risk-sharing program with contracted primary care providers and hospitals. Risk-sharing payables of $30.7 million and $30.6 million for our MA insurance business in California and risk-sharing receivables of $28.7 million and $17.8 million for agreements between our provider practices and insurers were recorded as of December 31, 2023 and 2022, respectively. Risk-sharing payables are presented within medical costs payable of our current liabilities of discontinued operations while risk-sharing receivables are presented in prepaids and other current assets of our current assets of discontinued operations. Premium Deficiency Reserve: Premium deficiency reserve (“PDR”) liabilities are established when it is probable that expected future claims and maintenance expenses will exceed future premium and reinsurance recoveries on existing medical insurance contracts, including consideration of investment income. We assess if a PDR liability is needed through review of current results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent with our method of acquiring, servicing, and measuring the profitability of such contracts. As of December 31, 2023 and 2022 we accrued no PDR liability. Goodwill and Other Intangible Assets: On December 13, 2023 we announced the $100.0 million decrease in the purchase price of our California MA business from $600.0 million to $500.0 million; we identified this decrease in purchase price as an event that indicated the carrying value of our Bright HealthCare reporting unit may not be recoverable. As such we performed an interim impairment test as of December 31, 2023. To estimate the fair value of the Bright HealthCare reporting unit we reduced the $500.0 million purchase price by $175.8 million, the amount subject to contingencies and TNE adjustments that create uncertainties in what will be the final adjusted purchase prices as well as the transaction costs incurred to complete the sale. As a result of the decreased purchase price, we recognized a $186.2 million goodwill impairment related to our Bright HealthCare reporting unit within discontinued operations for the year ended December 31, 2023. For the year ended December 31, 2022, we recognized a $70.0 million goodwill impairment of the Bright HealthCare reporting unit primarily driven by an increase in the discount rate, which was impacted by higher interest rates and other market factors. The Company classifies its valuation of the held for sale Bright Healthcare reporting unit as Level 1 fair value because the adjusted purchase price serves as a quoted price for the exact disposal group. Restructuring Charges: As a result of the strategic changes, we announced and have taken actions to restructure the Company’s workforce and reduce expenses based on our updated business model. Restructuring charges within our discontinued operations for the years ended December 31, 2023, and 2022 were as follows (in thousands):
Restructuring accrual activity recorded by major type for the years ended December 31, 2023, and 2022 was as follows; employee termination benefits are within Other current liabilities of discontinued operations while contract termination costs are within Accounts payable of discontinued operations (in thousands):
Fixed Maturity Securities: Available-for-sale securities within our discontinued operations are reported at fair value as of December 31, 2023 and 2022. Held-to-maturity securities are reported at amortized cost as of December 31, 2023 and 2022. The following is a summary of our investment securities as of December 31, (in thousands):
As of December 31, 2023, we believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of December 31, 2022, we concluded that it was more likely than not that we would have to sell some of the securities before recovering the amortized cost basis due to our decision to exit the commercial business. We recognized an impairment of $67.7 million in our available-for-sale securities portfolio. This impairment is related to the decrease in the fair value of debt securities primarily driven by an increase in market interest rates since the time the securities were purchased. At each reporting period, we evaluate securities for impairment when the fair value of the investment is less than its amortized cost. We evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. Fair Value Measurements: The Fair Value Measurements and Disclosures topic in FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures of fair value measurements, which applies to all assets and liabilities measured on a fair value basis. The standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Basis of fair value measurement: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities Level 2: Quoted prices for similar assets or liabilities in active markets or quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity) There were no investments in Level 3 securities and no transfers in or out of Level 3 financial assets or liabilities as of and during the years ended December 31, 2023 or 2022. Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no significant fair value adjustments for these assets and liabilities recorded during the years ended December 31, 2023 or 2022. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following methods and assumptions were used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument included in the tables below: Cash and Cash equivalents — The carrying value of cash and cash equivalents approximates fair value as maturities are less than three months. Fair values of cash equivalent investments outside of money- market funds and U.S treasury securities are classified as Level 2. Debt Securities — The fair values of debt securities are based on quoted market prices, where available. We obtain one price for each security primarily from its custodian, or if unavailable, securities evaluations, prices received from a secondary pricing source, or other third-party calculated prices based on observable inputs in the market are used to price securities. If these are unavailable, we are able to provide pricing overrides from other acceptable sources or methods; however, based upon the relatively high rating of our investments, this is generally not required. We are ultimately responsible for determining fair value, as well as the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. At the end of each reporting period, we review third-party pricing services’ pricing methodologies, data sources and pricing inputs to ensure the fair values obtained are reasonable. As of December 31, 2023, investments and cash equivalents within our discontinued operations were comprised of $157.8 million and $22.6 million with fair value measurements of Level 1 and Level 2, respectively. As of December 31, 2022, the investments and cash equivalents within our discontinued operations were comprised of $1.3 billion and $826.0 million with fair value measurements of Level 1 and Level 2, respectively. Medical Costs Payable: The table below details the components making up the medical costs payable within current liabilities of discontinued operations as of December 31, (in thousands):
The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
Medical costs payable attributable to prior years increased by $26.6 million and $6.2 million for the years ended December 31, 2023 and 2022, respectively, resulting from claim settlements being more than original estimates. Medical costs payable estimates are adjusted as additional information becomes known regarding claims. There were no significant changes to estimation methodologies in 2023 or 2022. The following is information about incurred and cumulative paid claims development as of December 31, 2023, net of reinsurance, and the total claims payable plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2021 through 2023 is presented as supplementary information as follows and is inclusive of claims incurred and paid related to CHP prior and subsequent to the acquisition date (in thousands):
Risk Adjustment: We record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by HHS, which could result in future payments applicable to benefit years. Risk adjustment payable for our discontinued operations was estimated to be $291.1 million and $1.9 billion at December 31, 2023 and 2022, respectively. Accounts Payable: As of December 31, 2023, the majority of the Accounts payable of discontinued operations balance included $22.5 million of contract termination costs related to restructuring. As of December 31, 2022, the Accounts payable of discontinued operations balance included $41.8 million of broker commissions payable and $36.5 million of premium taxes payable. Property, Equipment and Capitalized Software: The table below details the property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands).
Depreciation expense of $0.7 million and $3.2 million was recognized for the years ended December 31, 2023 and 2022, respectively. Fixed asset impairment expense of $3.9 million and $5.9 million was recognized for the years ended December 31, 2023 and 2022, respectively. Leases: Operating lease costs were $10.2 million and $4.6 million for the years ended December 31, 2023, and 2022, respectively. The years ended December 31, 2023 and 2022 included immaterial short-term lease costs and sublease income. Operating lease costs are included in operating costs in the Consolidated Statements of Income (Loss). Operating lease ROU assets for our discontinued operations are included in prepaids and other current assets and other non-current assets. Operating lease liabilities for our discontinued operations are included in other current liabilities. At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
We incurred $7.0 million in operating lease costs related to the full abandonment of operating leases for our discontinued operations for the year ended December 31, 2023. Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
Restricted Capital and Surplus: Our regulated insurance legal entities are required by statute to meet and maintain a minimum level of capital as stated in applicable state regulations, such as risk-based capital requirements. These balances are monitored regularly to ensure compliance with these regulations. Our regulated subsidiaries had statutory capital and surplus of $(225.0) million and $42.1 million as of December 31, 2023 and 2022, respectively. We are out of compliance with the minimum levels for certain of our regulated insurance legal entities of our discontinued operations.
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DISCONTINUED OPERATIONS | DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS On November 29, 2023, BHIC-Texas (the “Deconsolidated Entity”) was placed into liquidation and the Texas Department of Insurance was appointed as receiver. The Deconsolidated Entity’s financial results are included in the Company’s consolidated results through November 28, 2023, the day prior to the date of the receivership. However, under ASC 810, consolidation of a majority-owned subsidiary is precluded where control of the subsidiary does not rest with the majority owners. Once the Texas Department of Insurance was appointed as receiver of BHIC-Texas we concluded the Company no longer controlled the subsidiary, and we deconsolidated BHIC-Texas as of that date. The deconsolidation of BHIC-Texas resulted in certain related party balances that had previously been eliminated upon consolidation to become liabilities of the Company. In 2022, BHIC-Texas entered into a risk share contract with a different NeueHealth affiliate, whereby losses incurred at BHIC-Texas over a specified medical loss ratio target were transferred from BHIC-Texas to the affiliated entity. On November 29, 2023 the accrued loss of BHIC-Texas related to the risk share contract was $124.0 million. Upon deconsolidation of BHIC-Texas, this liability is required to be recorded as risk share payable to deconsolidated entity on the Consolidated Balance Sheet. The corresponding receivable on BHIC-Texas was included in our carrying value evaluation described below. The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership.
Under ASC 810, this loss of control would likely trigger a gain or loss for the parent as the parent would remeasure its retained noncontrolling investment at fair value. Upon deconsolidation, the Company valued its investment in BHIC-Texas to be $91.5 million, which is equivalent to the Deconsolidated Entity's carrying value. Upon valuing the investment in BHIC-Texas we assessed the current expected credit loss associated with the underlying receivables; as a result of our analysis we recorded a full valuation allowance on the investment due to uncertainties related to the collection of the risk share receivable. The $91.5 million bad debt expense within the discontinued Bright HealthCare - Commercial reporting segment is recorded within net loss from discontinued operations on the consolidated statements of income (loss). DISCONTINUED OPERATIONSIn April 2023, we announced that we were exploring strategic alternatives for our California Medicare Advantage business, the Bright HealthCare reporting segment, with the focus on a potential sale. At that time, we met the criteria for “held for sale,” in accordance with ASC 205-20. This represents a strategic shift that will have a material impact on our business and financial results. As such, we have reflected amounts relating to Bright HealthCare as a disposal group as part of discontinued operations. On June 30, 2023, the Company entered into the Molina Purchase Agreement to sell its California Medicare Advantage business, which consists of Brand New Day and Central Health Plan. On December 13, 2023, the Company, Molina, BHCC, CHP and BND amended the Molina Purchase Agreement, pursuant to which, the parties agreed to amend the total purchase considerations to $500.0 million subject to certain contingencies and tangible net equity (“TNE”) adjustments. The transaction was consummated on January 1, 2024. In October 2022, we announced that we will no longer offer commercial plans through our Bright HealthCare - Commercial segment in 2023. As a result, we exited the Commercial marketplace effective December 31, 2022. We determined this exit represented a strategic shift that will have a material impact on our business and financial results that requires presentation as discontinued operations. The Bright HealthCare - Commercial segment is also inclusive of our MA Legacy business; all periods presented have been recast to reflect this presentation. While we are no longer offering plans in the Commercial marketplace as of December 31, 2022, we continue to have involvement in the states where we formerly operated in as we support run out activities of medical claims incurred in the 2022 plan year and perform other activities necessary to wind down our operations in each state, including making payments of 2022 risk adjustment payable liabilities during the third quarter of 2023. We are substantially complete with medical claim payments as of the end of 2023, and we will continue to make remaining medical claim payments and payments towards the remaining risk adjustment obligations through 2024 and early 2025. Our discontinued operations are also inclusive of our DocSquad business that was sold in March 2023; this is presented within the column labeled Other in the tables below. The discontinued operations presentation has been retrospectively applied to all prior periods presented. The financial results of discontinued operations by major line item for the years ended December 31 were as follows (in thousands):
The following table presents cash flows from operating and investing activities for discontinued operations (in thousands):
Assets and liabilities of discontinued operations were as follows (in thousands):
Revenue Recognition: Premium revenue includes revenue derived from insurance contracts of Bright HealthCare - Commercial, within the scope of ASC 944, Financial Services - Insurance. Premium revenue is recognized in the period for which services are covered. Individual policies can be terminated by a consumer without advance notice to the Company. Consumers that have unpaid premium balances for the coverage period are subject to certain termination requirements depending on whether the premium is subsidized or nonsubsidized by CMS. The Company estimates the portion of unpaid balances that will not be collected from consumers and records an allowance accordingly. For Bright HealthCare - Commercial, we record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by the Department of Health and Human Services (“HHS”), which could result in future payments applicable to benefit years. The Company, in conjunction with the MA program, covers prescription drug benefits under the Medicare Prescription Drug Benefit (“Medicare Part D”) program. Premium revenue includes CMS monthly premiums, consumer premium and CMS low-income premium subsidy for our insurance risk coverage. Premiums are recognized ratably over the period in which eligible individuals are entitled to receive covered benefits. CMS covers 80% of allowed claims costs above the defined standard true out-of-pocket threshold of $7,050 for any individual beneficiary enrolled in a Medicare Advantage plan (“MAO”). The reinsurance calculation is based on the benefit actually offered (i.e. basic or enhanced) and with CMS covering 80% of a member’s drug costs in the catastrophic phase. CMS provides upfront subsidies to MAO’s through a monthly payment in the Monthly Membership Report to cover the estimated cost of federal reinsurance on a per-member-per-month basis. Reinsurance subsidies in excess of federal reinsurance claims are paid back to CMS (a payable). If the MAO does not have enough federal reinsurance revenue to cover the federal reinsurance claims, CMS will pay the shortfall to the MAO. Premium revenue under the MA program includes CMS monthly premiums that are risk adjusted based on CMS defined formulas using consumer demographics and hierarchical condition category codes calculated based on historical data submitted to CMS on a lagged basis. Risk Adjustment Factor-related (“RAF”) premiums settle between CMS and the Company during both a midyear and final reconciliation process. Due to the lagged nature of the reconciliation and settlement, RAF-related premiums are estimated based on the lagged information that we submitted to CMS. The accuracy of the data submissions to CMS used in the RAF reconciliation are subject to CMS audit under the risk adjustment data validation audits and could result in future adjustments to premiums. As of December 31, 2023 and 2022, our MA risk adjustment receivable was $51.3 million and $62.2 million, respectively, recorded in accounts receivable within current assets of discontinued operations. Our monthly payment from CMS includes prospective subsidies to cover catastrophic reinsurance and low-income cost subsidies, and the Medicare Part D coverage gap discount that the Company must cover at the point-of-sale for prescription drugs. We are not at risk for these portions of the Medicare Part D benefit design. We account for these CMS-provided subsidies and related costs on the Consolidated Balance Sheets and ultimately settle with CMS and pharmaceutical companies during the final Medicare Part D reconciliation subsequent to the plan year. As of December 31, 2023 and 2022, we had receivables of $6.9 million and $6.7 million, respectively, recorded as prepaid and other current assets in current assets of discontinued operations, and payables of $35.0 million and $24.6 million, respectively, recorded as other current liabilities, within current liabilities of discontinued operations related to these programs. Our Medicare Part D premiums are subject to risk sharing with CMS under the risk corridor provisions. The risk corridor provisions compare costs targeted in our annual bid to actual prescription drug costs incurred. Our profit or loss is shared with or covered by CMS depending on the relative position within the risk corridor band. Changes in the risk corridor payable or receivable are recognized in premium revenue. As of December 31, 2023 and 2022, we had a risk corridor payable of $29.3 million and $15.2 million, respectively, included in other current liabilities in current liabilities of discontinued operations. The 2022 risk corridor payable was not settled as of December 31, 2023. We had no material risk corridor receivable as of December 31, 2023 and 2022, respectively. Investments: We invest in debt securities of the U.S. government and other government agencies, corporate investment grade, money market funds and various other securities. We determine the appropriate classification of investments at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. We classify our investments in individual debt securities as available-for-sale securities or held-to-maturity securities. All available-for-sale investments maturing less than one year from the statement date that management intends to liquidate within the next year are reflected as short-term investments. Available-for-sale investments with a maturity date greater than one year are classified as long-term investments. All available-for-sale investments are measured and carried at fair value. Changes in unrealized holding gains and losses on available-for-sale securities are reflected in other comprehensive income (loss). Realized gains and losses for all investments are included in investment income. The basis for determining realized gains and losses is the specific-identification method. Interest on debt securities is recognized in investment income when earned. Premiums and discounts are amortized/accreted using methods that result in a constant yield over the securities’ expected lives. Beginning January 1, 2020, we adopted the new current expected credit losses (“CECL”) model. The CECL model retained many similarities from the previous OTTI model, except it eliminated the length of time over which the fair value had been less than cost from consideration in the impairment analysis. Also, under the CECL model, expected losses on available-for-sale debt securities are recognized through an allowance for credit losses rather than as a reduction in the amortized cost of the securities. For debt securities whose fair value is less than their amortized cost which we do not intend to sell or are not required to sell, we evaluate the expected cash flows to be received as compared to amortized cost and determine if an expected credit loss has occurred. In the event of an expected credit loss, only the amount of the impairment associated with the expected credit loss is recognized in income with the remainder, if any, of the loss recognized in other comprehensive income (loss). To the extent we have the intent to sell the debt security, or it is more likely than not we will be required to sell the debt security, before recovery of our amortized cost basis, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value. Potential expected credit loss impairment is considered using a variety of factors, including the extent to which the fair value has been less than cost; adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a debt security; changes in the quality of the debt security's credit enhancement; payment structure of the debt security; changes in credit rating of the debt security by the rating agencies; failure of the issuer to make scheduled principal or interest payments on the debt security and changes in prepayment speeds. For debt securities, we take into account expectations of relevant market and economic data. We estimate the amount of the expected credit loss component of a debt security as the difference between the amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. The expected credit loss cannot exceed the full difference between the amortized cost basis and the fair value. Accrued interest receivable relating to our debt securities is presented within prepaids and other current assets of current assets of discontinued operations. We do not measure an allowance for credit losses on accrued interest receivable. We recognize interest receivable write offs as a reversal of interest income. We had no write offs of accrued interest receivable in the years ended December 31, 2023 and 2022. Medical Costs and Medical Costs Payable: In developing our medical costs payable estimates, we apply completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months, and also review our remaining claims inventory to further validate expected medical costs. These estimates may change as actuarial methods change or as underlying facts upon which the estimates are based change. Management believes the amount of medical costs payable is the best estimate of our liability as of December 31, 2023; however, actual payments may differ from those established estimates. Restricted Investments and Statutory Deposits: The regulated insurance entities of NeueHealth are required to, among other things, hold certain statutory deposits and comply with certain minimum capital requirements, such as risk-based capital requirements, under applicable state regulations. Statutory deposits are classified as held-to-maturity investments and are carried at cost. The Company’s regulated legal entities held the required deposit amounts at December 31, 2023 and 2022, totaling $6.8 million and $8.6 million, respectively. The statutory deposits are principally held in U.S. Treasury securities within a custodial or controlled account with a custodial trustee and are included primarily in short-term investments and long-term investments, consistent with classification of other similar invested assets, in the Consolidated Balance Sheets. Reinsurance Recoveries: We have a quota share agreement with RGA, an alien unauthorized reinsurer, which cedes proportional percentages of premiums and medical costs of covered business of the Company, with the difference as an experience refund of ceded premiums, less a ceding fee paid to the reinsurer. Coverage includes comprehensive individual commercial policies in Colorado, Nebraska, Oklahoma and Florida. Effective January 1, 2021, we entered into a quota share agreement with the Canada Life Assurance Company, an alien unauthorized reinsurer, which cedes proportional percentages of premiums and medical costs of covered business of the Company, with the difference as an experience refund of ceded premiums, less a ceding fee paid to the reinsurer. Coverage includes comprehensive individual commercial policies in Florida. Deposit accounting is used for this arrangement and only ceding fees are recognized in the Consolidated Statements of Income (Loss) for the years ended December 31, 2023 and 2022, respectively. Within our Medicare Advantage business we have an agreement with Swiss Re Life & Health America, Inc. (“Swiss Re”) in which Swiss Re provides excess loss reinsurance coverage to the Company on individuals covered under our individual and small group policies. Effective January 1, 2021 we entered an agreement with RGA Reinsurance Company (“RGA”) in which RGA provides loss reinsurance coverage to the Company on individuals covered under our MA polices. Receivables from reinsurers under these agreements totaled $10.6 million and $14.9 million as of December 31, 2023 and 2022, respectively, and are recorded in prepaids and other current assets within current assets of discontinued operations in the Consolidated Balance Sheets. Payables for reinsurance premiums and ceding fees of $0.5 million and $4.7 million are recorded as other current liabilities within current liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively. Net reinsurance recoveries (net ceded premiums) of $3.4 million and $10.6 million were recorded as a reduction of medical costs within loss from discontinued operations in the Consolidated Statements of Income (Loss) for the years ended December 31, 2023 and 2022, respectively. Provider Risk Sharing: Our MA insurance business in California maintains a risk-sharing program with contracted primary care providers and hospitals. Risk-sharing payables of $30.7 million and $30.6 million for our MA insurance business in California and risk-sharing receivables of $28.7 million and $17.8 million for agreements between our provider practices and insurers were recorded as of December 31, 2023 and 2022, respectively. Risk-sharing payables are presented within medical costs payable of our current liabilities of discontinued operations while risk-sharing receivables are presented in prepaids and other current assets of our current assets of discontinued operations. Premium Deficiency Reserve: Premium deficiency reserve (“PDR”) liabilities are established when it is probable that expected future claims and maintenance expenses will exceed future premium and reinsurance recoveries on existing medical insurance contracts, including consideration of investment income. We assess if a PDR liability is needed through review of current results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent with our method of acquiring, servicing, and measuring the profitability of such contracts. As of December 31, 2023 and 2022 we accrued no PDR liability. Goodwill and Other Intangible Assets: On December 13, 2023 we announced the $100.0 million decrease in the purchase price of our California MA business from $600.0 million to $500.0 million; we identified this decrease in purchase price as an event that indicated the carrying value of our Bright HealthCare reporting unit may not be recoverable. As such we performed an interim impairment test as of December 31, 2023. To estimate the fair value of the Bright HealthCare reporting unit we reduced the $500.0 million purchase price by $175.8 million, the amount subject to contingencies and TNE adjustments that create uncertainties in what will be the final adjusted purchase prices as well as the transaction costs incurred to complete the sale. As a result of the decreased purchase price, we recognized a $186.2 million goodwill impairment related to our Bright HealthCare reporting unit within discontinued operations for the year ended December 31, 2023. For the year ended December 31, 2022, we recognized a $70.0 million goodwill impairment of the Bright HealthCare reporting unit primarily driven by an increase in the discount rate, which was impacted by higher interest rates and other market factors. The Company classifies its valuation of the held for sale Bright Healthcare reporting unit as Level 1 fair value because the adjusted purchase price serves as a quoted price for the exact disposal group. Restructuring Charges: As a result of the strategic changes, we announced and have taken actions to restructure the Company’s workforce and reduce expenses based on our updated business model. Restructuring charges within our discontinued operations for the years ended December 31, 2023, and 2022 were as follows (in thousands):
Restructuring accrual activity recorded by major type for the years ended December 31, 2023, and 2022 was as follows; employee termination benefits are within Other current liabilities of discontinued operations while contract termination costs are within Accounts payable of discontinued operations (in thousands):
Fixed Maturity Securities: Available-for-sale securities within our discontinued operations are reported at fair value as of December 31, 2023 and 2022. Held-to-maturity securities are reported at amortized cost as of December 31, 2023 and 2022. The following is a summary of our investment securities as of December 31, (in thousands):
As of December 31, 2023, we believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of December 31, 2022, we concluded that it was more likely than not that we would have to sell some of the securities before recovering the amortized cost basis due to our decision to exit the commercial business. We recognized an impairment of $67.7 million in our available-for-sale securities portfolio. This impairment is related to the decrease in the fair value of debt securities primarily driven by an increase in market interest rates since the time the securities were purchased. At each reporting period, we evaluate securities for impairment when the fair value of the investment is less than its amortized cost. We evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. Fair Value Measurements: The Fair Value Measurements and Disclosures topic in FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures of fair value measurements, which applies to all assets and liabilities measured on a fair value basis. The standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Basis of fair value measurement: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities Level 2: Quoted prices for similar assets or liabilities in active markets or quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity) There were no investments in Level 3 securities and no transfers in or out of Level 3 financial assets or liabilities as of and during the years ended December 31, 2023 or 2022. Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no significant fair value adjustments for these assets and liabilities recorded during the years ended December 31, 2023 or 2022. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following methods and assumptions were used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument included in the tables below: Cash and Cash equivalents — The carrying value of cash and cash equivalents approximates fair value as maturities are less than three months. Fair values of cash equivalent investments outside of money- market funds and U.S treasury securities are classified as Level 2. Debt Securities — The fair values of debt securities are based on quoted market prices, where available. We obtain one price for each security primarily from its custodian, or if unavailable, securities evaluations, prices received from a secondary pricing source, or other third-party calculated prices based on observable inputs in the market are used to price securities. If these are unavailable, we are able to provide pricing overrides from other acceptable sources or methods; however, based upon the relatively high rating of our investments, this is generally not required. We are ultimately responsible for determining fair value, as well as the appropriate level within the fair value hierarchy, based on the significance of unobservable inputs. At the end of each reporting period, we review third-party pricing services’ pricing methodologies, data sources and pricing inputs to ensure the fair values obtained are reasonable. As of December 31, 2023, investments and cash equivalents within our discontinued operations were comprised of $157.8 million and $22.6 million with fair value measurements of Level 1 and Level 2, respectively. As of December 31, 2022, the investments and cash equivalents within our discontinued operations were comprised of $1.3 billion and $826.0 million with fair value measurements of Level 1 and Level 2, respectively. Medical Costs Payable: The table below details the components making up the medical costs payable within current liabilities of discontinued operations as of December 31, (in thousands):
The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
Medical costs payable attributable to prior years increased by $26.6 million and $6.2 million for the years ended December 31, 2023 and 2022, respectively, resulting from claim settlements being more than original estimates. Medical costs payable estimates are adjusted as additional information becomes known regarding claims. There were no significant changes to estimation methodologies in 2023 or 2022. The following is information about incurred and cumulative paid claims development as of December 31, 2023, net of reinsurance, and the total claims payable plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2021 through 2023 is presented as supplementary information as follows and is inclusive of claims incurred and paid related to CHP prior and subsequent to the acquisition date (in thousands):
Risk Adjustment: We record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by HHS, which could result in future payments applicable to benefit years. Risk adjustment payable for our discontinued operations was estimated to be $291.1 million and $1.9 billion at December 31, 2023 and 2022, respectively. Accounts Payable: As of December 31, 2023, the majority of the Accounts payable of discontinued operations balance included $22.5 million of contract termination costs related to restructuring. As of December 31, 2022, the Accounts payable of discontinued operations balance included $41.8 million of broker commissions payable and $36.5 million of premium taxes payable. Property, Equipment and Capitalized Software: The table below details the property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands).
Depreciation expense of $0.7 million and $3.2 million was recognized for the years ended December 31, 2023 and 2022, respectively. Fixed asset impairment expense of $3.9 million and $5.9 million was recognized for the years ended December 31, 2023 and 2022, respectively. Leases: Operating lease costs were $10.2 million and $4.6 million for the years ended December 31, 2023, and 2022, respectively. The years ended December 31, 2023 and 2022 included immaterial short-term lease costs and sublease income. Operating lease costs are included in operating costs in the Consolidated Statements of Income (Loss). Operating lease ROU assets for our discontinued operations are included in prepaids and other current assets and other non-current assets. Operating lease liabilities for our discontinued operations are included in other current liabilities. At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
We incurred $7.0 million in operating lease costs related to the full abandonment of operating leases for our discontinued operations for the year ended December 31, 2023. Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
Restricted Capital and Surplus: Our regulated insurance legal entities are required by statute to meet and maintain a minimum level of capital as stated in applicable state regulations, such as risk-based capital requirements. These balances are monitored regularly to ensure compliance with these regulations. Our regulated subsidiaries had statutory capital and surplus of $(225.0) million and $42.1 million as of December 31, 2023 and 2022, respectively. We are out of compliance with the minimum levels for certain of our regulated insurance legal entities of our discontinued operations.
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SUBSEQUENT EVENTS |
12 Months Ended |
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Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Effective as of January 1, 2024, the Molina Purchase Agreement transaction was consummated for an aggregate purchase price of $500.0 million subject to certain contingencies and TNE adjustments. Upon completion of the sale, the Bright HealthCare reporting unit of our discontinued operations was no longer included in our operations. On January 2, 2024, both the Payoff Condition and the L/C Condition were satisfied pursuant to the Letter Agreement entered into by the Company, the Agent, the Lenders, and the Guarantors. As a result, the Consent and the Termination of our Credit Agreement occurred. We have evaluated the events and transactions that have occurred through the date at which the consolidated financial statements were issued. Other than those described above, no additional events or transactions have occurred that may require adjustment to the consolidated financial statements or disclosures.
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CONDENSED FINANCIAL INFORMATION |
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CONDENSED FINANCIAL INFORMATION | Condensed Financial Information of Registrant (Parent Company Only) NeueHealth, Inc. Parent Company Condensed Balance Sheets
Condensed Financial Information of Registrant (Parent Company Only) NeueHealth, Inc. Parent Company Condensed Statements of Income (Loss) and Comprehensive Income (Loss)
Condensed Financial Information of Registrant (Parent Company Only) NeueHealth, Inc. Parent Company Condensed Statements of Cash Flows
NOTE 1. BASIS OF PRESENTATION The NeueHealth, Inc. (the “Parent Company”) condensed financial statements should be read in conjunction with our consolidated financial statements. The condensed financial statements include the activity of the Parent Company and reflect its subsidiaries using the equity method of accounting. Under the equity method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries. NOTE 2. SUBSIDIARY TRANSACTIONS Investment in Subsidiaries: The Parent Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries. Dividends and Capital Distributions: There were no cash dividends from unregulated subsidiaries for the years ended December 31, 2023 and 2022. NOTE 3. SHORT-TERM BORROWINGS Discussion of short-term borrowings can be found in Note 5 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.” NOTE 4. LONG-TERM BORROWINGS & COMMON STOCK WARRANTS Discussion of long-term borrowings and common stock warrants can be found in Note 6 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.” NOTE 5. COMMITMENTS AND CONTINGENCIES Certain regulated subsidiaries are guaranteed by the Parent Company in the event of insolvency. For a summary of commitments and contingencies, see Note 14 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended |
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Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The consolidated financial statements include the accounts of NeueHealth, Inc. and all subsidiaries and controlled companies. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions are eliminated upon consolidation.
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Use of Estimates | Use of Estimates: The preparation of our consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Our most significant estimates include medical costs payable, provider risk share arrangements, and valuation and impairment of intangible assets. Actual results could differ from these estimates.
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Revenue Recognition | Capitated Revenue Recognition: Capitated revenue includes revenue earned under capitated agreements recorded in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts With Customers (“ASC 606”). Primary care capitation and global capitation revenue are recognized in the period for which services are covered. Our financial performance pertaining to risk share revenue is evaluated based on the comparison between our year-to-date Medical Loss Ratio (“MLR”) and the corresponding target MLR and risk corridor as per our agreements. Revenue is recognized when we can reasonably estimate expected performance. As part of our NeueCare business, we are party to arrangements that generate capitated revenue in the form of a predetermined per member per month fee in exchange for providing defined healthcare services needed by an eligible member of the health plan, that is the other party to the arrangement. Per ASC 606, the capitated revenue and corresponding medical costs are presented gross when we serve as the principal in the transaction controlling the path of care in the fulfillment of our obligation and are presented net when we determine that we serve as the agent in the transaction. Additionally, we have concluded that we are precluded from serving as the principal in a transaction where we have a limited financial risk profile, as such we present capitated revenue and corresponding medical costs net when we do not bear a meaningful amount of financial risk for the defined healthcare services and care activities in the fulfillment of our obligation. ACO REACH Revenue Recognition: Accountable Care Organizations (“ACO”) Realizing Equity, Access, and Community Health (“REACH”) revenue is recorded in accordance with ASC 460, Guarantees (“ASC 460”). At the inception of the performance year, NeueHealth measures and recognizes the performance guarantee receivable and obligation, issued in a standalone arm’s length transaction, using the practical expedient to fair value as set forth in ASC 460-10-30-2(a). Consistent with ASC 460-10-25-4, which provides that a guarantor shall recognize in its statement of financial position a liability for that guarantee, we estimate the annualized benchmark recognized as the ACO REACH performance year obligation on the Consolidated Balance Sheets. On a periodic basis CMS adjusts the estimated Performance Year Benchmark based upon revised trend assumptions and changes in attributed membership. CMS will also estimate the shared savings or loss for the REACH ACO periodically based upon the estimated Performance Year Benchmark, changes to membership and various other assumptions. Additionally, when the guarantee is issued in a standalone transaction for a premium, the offsetting entry should be considered received according to ASC 460-10-25-4; as such we recognize the ACO REACH performance year receivable on the Consolidated Balance Sheets. The estimated Performance Year Benchmark is our best estimate of our obligation as we are unable to estimate the potential shared savings or loss due to the “stop-loss arrangement”, risk corridor components of the agreement, and a number of variables including but not limited to risk ratings and benchmark trends that could have an inestimable impact on estimated future payments. We follow ASC 460-10-35-2(b) to subsequently measure and recognize the performance guarantee, applying a systematic and rational approach to reflect our release from risk. Per ASC 460-10-35-2, depending on the nature of the guarantee, the guarantor’s release from risk typically can be recognized over the term of the guarantee using one of three methods: (1) upon expiration or settlement, (2) by systematic or rational amortization, or (3) as the fair value of the guarantee changes. Consistent with method (2), as we fulfill our performance obligation, we amortize the guarantee on a straight-line basis for the amount that represents the completed portion of the performance obligation. For each performance year, the final consideration due to the REACH ACOs by the Center for Medicare and Medicaid Services (“CMS”) (shared savings) or the consideration due to CMS by the REACH ACOs (shared loss) is reconciled in the year following the performance year. The above discussion of the ASC 460 accounting treatment for our ACO REACH revenue is related only to the guarantee of the performance of our ACO REACH care partners and not for the performance of our NeueCare affiliates. The revenue generated from the services provided by our NeueCare affiliates is within the scope exception identified within ASC 460-10-15-7(i). a guarantee or an indemnification of an entity’s own performance. As such, reported within ACO REACH revenue on the Consolidated Statements of Income (Loss), there is $1.8 million and $1.5 million revenue presented gross in accordance with ASC 606 related to our NeueCare clinics that are participating providers within our REACH ACOs. Service Revenue Recognition: We generate service revenue from providing primary care services to patients in our medical clinics. Our service revenues include net patient service revenues that we bill the consumer or their insurance plan on a fee-for-service basis. We recognize this revenue as medical services are rendered. Generally patients who are covered by third-party payors are responsible for related deductibles and coinsurance, which vary in amount. We estimate the transaction price for patients with deductibles and coinsurance and from those who are uninsured based on historical experience and current market conditions. The initial estimate of the transaction price is determined by reducing the standard charge by any contractual adjustments, discounts, and implicit price concessions. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to patient service revenue in the period of the change. Additionally, we generate service revenue by providing provider enablement services through our Value Services Organization (“VSO”) within NeueSolutions. The provider enablement services include an enablement suite of technology, services and clinical care solutions that empower providers to succeed in value-based care arrangements. Our enablement services are primarily billed on a per member per month basis with revenue recognized as the service period is completed.
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Medical Costs and Medical Cost Payable | Medical Costs and Medical Costs Payable: Medical costs payable on the Consolidated Balance Sheets consists primarily of the liability for claims processed but not yet paid, estimates for claims received but not yet processed, estimates for the costs of health care services that attributed consumers have received but for which claims have not yet been submitted, and any calculated provider risk share deficit. The estimates for claims incurred but not reported (“IBNR”) include estimates for claims which have not been received or fully processed. IBNR estimates are developed using an actuarial process that is consistently applied and centrally controlled. The actuarial models consider factors such as historical submission and payment data, cost trends, customer and product mix, seasonality, utilization of health care services, contracted service rates and other relevant factors. In developing our medical costs payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated. For the most recent months, we estimate claim costs incurred by applying observed medical cost trend factors to the average per consumer per month medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors. For months prior to the most recent months, we apply the completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months. These estimates may change as actuarial methods change or as underlying facts upon which the estimates are based change. Management believes the amount of medical costs payable is the best estimate of our liability as of December 31, 2023; however, actual payments may differ from those established estimates. Note 4, Medical Costs Payable, discusses the development of paid and incurred claims and provides a rollforward of medical costs payable.
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Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents include cash and investments with maturities of three months or less as of the reporting date.
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Investments | Investments: We invest in money market funds and certificates of deposit. We determine the appropriate classification of investments at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. Realized gains and losses for all investments are included in investment income. The basis for determining realized gains and losses is the specific-identification method.
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Credit Risk Concentration | Credit Risk Concentration: We maintain cash in bank accounts that frequently exceed federally insured limits. To date, we have not experienced any losses on such accounts.
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Restricted Investments and Statutory Deposits | Restricted Investments: We hold pledged certificates of deposit for certain vendors and lease requirements. Restricted investments are carried at amortized cost. At December 31, 2023 and 2022, pledged certificates of deposit totaled $8.1 million and $3.8 million, respectively, and are included in cash and cash equivalents in the Consolidated Balance Sheets.
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Accounts Receivable, Net of Allowance | Accounts Receivable, Net of Allowance: Receivables are reported net of amounts for expected credit loss. The allowance for doubtful accounts is based on historical collection trends, future forecasts and our judgment regarding the ability to collect specific accounts. Balances are carried at original invoice amount less contractual allowances, implicit price concessions, and estimates made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition and credit history, and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.
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Reinsurance Recoveries | Reinsurance Recoveries: We seek to limit the risk of loss on our ACO REACH contracts through the use of reinsurance agreements. These agreements do not relieve us of our primary obligations. Refer to Note 17, ACO REACH for additional explanation of our arrangements to mitigate risk.
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Prepaids and Other Current Assets | Prepaids and Other Current Assets: Prepaids and other current assets primarily include prepaid operating expenses.
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Performance Guarantees | Performance Guarantees: Through our participation in the ACO REACH Model, we determined that our arrangements with the providers of our aligned beneficiaries require us to guarantee their performance to CMS. We recognized our obligation to guarantee their performance for the duration of the performance year on the Consolidated Balance Sheets. As we fulfill our obligation, we ratably amortize the guarantee for the amount that represents the completed portion of the performance obligation as ACO REACH revenue on the Consolidated Statements of Income (Loss). ACO REACH revenue is derived from the estimated annual sum of the capitation payments made to the REACH ACOs for services within the scope of the capitation arrangement with CMS and FFS payments from CMS made directly to third-party providers for our aligned beneficiaries. For each performance year, the final consideration due to the REACH ACOs by CMS (shared savings) or the consideration due to CMS by the REACH ACOs (shared loss) is reconciled in the year following the performance year. Periodically during the performance year, CMS will measure the shared savings or loss and adjust the performance benchmark and thus the remaining performance obligation if we are in a probable shared loss position.
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Property, Equipment and Capitalized Software | Property, Equipment and Capitalized Software: Property, equipment and capitalized software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method over the estimated useful life, ranging from 3 years to 10 years. Leasehold improvements are depreciated over the shorter of the lease term or their useful life. We capitalize costs incurred during the application development stage related to certain software projects for internal use. Costs related to planning activities and post implementation activities are expensed as incurred.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: Property, equipment, capitalized software and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When evaluating long-lived assets with impairment indicators for potential impairment, we first compare the carrying value of the asset to its estimated undiscounted future cash flows. If the sum of the estimated undiscounted future cash flows is less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to its estimated fair value, which is typically based on estimated discounted future cash flows. We recognize an impairment loss in the amount of the asset’s carrying value exceeds the asset’s estimated fair value.
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Operating Leases | Operating Leases: We lease facilities and equipment under long-term operating leases that are non-cancelable and expire on various dates. At the lease commencement date, lease right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. We include options to extend or terminate an operating lease in the measurement of the ROU asset and lease liability when it is reasonably certain that such options will be exercised. For operating leases, the liability is amortized using the effective interest method and the asset is reduced in a manner so that rent is expensed on a straight-line basis, with all cash flows included within operating activities in the Consolidated Statements of Cash Flows. Rent expense for operating leases is recognized on a straight-line basis over the lease term, net of any applicable lease incentives. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. When an interest rate is not implicit in a lease, we utilize our incremental borrowing rate for a period that closely matches the lease term. We determine our incremental borrowing rate as the interest rate needed to finance a similar asset over a similar period of time as the lease term. Our ROU assets are included in other non-current assets, and lease liabilities are included in other current liabilities and other liabilities in the Consolidated Balance Sheets. We have elected the short-term lease exception for all classes of assets and do not apply recognition requirements for leases of 12 months or less. Expense related to short-term leases of 12 months or less is recognized on a straight-line basis over the lease term. See Note 14, Commitments and Contingencies, for additional information on our operating leases.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. We test goodwill for impairment annually at the beginning of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. We test for goodwill impairment at the reporting unit level. Reporting units are determined by identifying components of operating segments which constitute businesses for which discrete financial information is available and regularly reviewed by segment management. We have two reporting units – NeueCare and NeueSolutions. The NeueCare reporting unit had allocated goodwill subject to our annual impairment test while the NeueSolutions reporting unit had no allocated goodwill. Our goodwill impairment testing involves a multi-step process. We may first assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. We may also elect to skip the qualitative assessment and proceed directly to the quantitative testing. When performing the quantitative testing, we calculate the fair value of the reporting unit and compare it with its carrying value, including goodwill. We estimate the fair values of our reporting units using a combination of discounted cash flows and comparable market multiples, which include assumptions about a wide variety of internal and external factors. Due to the decline in our stock price and market capitalization, we fully impaired the NeueCare assigned goodwill worth $401.4 million. There was no goodwill impairment within our continuing operations during the year ended December 31, 2022. Our valuation of identifiable intangible assets acquired is based on information and assumptions available to us at the time of acquisition, using income and market approaches to determine fair value, as appropriate. Intangible assets are amortized over their estimated useful lives using the straight-line method. Identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When evaluating intangible assets with impairment indicators for potential impairment, we first compare the carrying value of the asset to its estimated undiscounted future cash flows. If the sum of the estimated undiscounted future cash flows is less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to its estimated fair value, which is typically based on estimated discounted future cash flows. We recognize an impairment loss in the amount of the asset’s carrying value exceeds the asset’s estimated fair value. There was no intangible asset impairment within our continuing operations during the year ended December 31, 2023. During the year ended December 31, 2022 we recorded an impairment loss on intangible assets of $42.6 million, which related to a full impairment of Centrum Medical Holdings’ reacquired contract with Bright HealthCare Florida as a result of Bright HealthCare’s decision to no longer offer commercial products for the 2023 plan year and our exit of select MA marketplaces.
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Operating Costs | Operating Costs: Operating costs are recognized as incurred and relate to selling, general and administrative costs not related to medical costs. |
Share-Based Compensation | Share-Based Compensation: We recognize compensation expense for share-based awards, including stock options, restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) on a straight-line basis over the related service period (generally the vesting period) of the award. Compensation expense related to stock options is based on the fair value on the date of grant, which is estimated using a Black-Scholes option valuation model. The fair value of RSUs is determined based on the closing market price of our common stock on the date of grant and the fair value of PSUs is determined using a Monte-Carlo simulation. Share-based compensation expense is recognized in operating costs in the Consolidated Statements of Income (Loss).
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Income Taxes | Income Taxes: The federal income tax returns of NeueHealth are completed as a consolidated return. A tax-sharing agreement allocates the consolidated federal tax liability to each company in proportion to the tax liability that would have resulted for each company if computed on a separate return basis. Deferred taxes are provided on a liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses derecognition, classification, interest and penalties on income taxes, and accounting in interim periods. Management evaluated the Company’s tax positions and concluded that for the years ended December 31, 2023 and 2022, the Company had taken no uncertain tax positions that require adjustment to the consolidated financial statements to comply with the provisions of this guidance. As of the consolidated financial statement date, open tax years subject to potential audit by the taxing authorities are 2020 through 2022 for the federal tax returns and 2019 through 2022 for the state tax returns. We recognize interest and penalties related to income tax matters in income tax expense (benefit).
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Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest: Redeemable noncontrolling interest in our subsidiaries whose redemption is outside of our control are classified as temporary equity.
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Net Loss per Share | Net loss per Share: Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net losses attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares.
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Going Concern | Going Concern: The consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a history of operating losses, and we generated a net loss of $1.3 billion for the year ended December 31, 2023. Additionally, the Company experienced negative operating cash flows primarily related to our discontinued Bright HealthCare – Commercial segment for the year ended December 31, 2023, requiring additional cash to be infused to satisfy statutory capital requirements. The Company paid $1.5 billion of 2022 related risk adjustment obligations in September 2023, and certain of its insurance subsidiaries entered into repayment agreements for an aggregate amount of $380.2 million with the Centers for Medicare & Medicaid Services’ (“CMS”) with respect to the unpaid amount of risk adjustment obligations. The amount owing under the repayment agreements is due March 15, 2025 and bears interest at a rate of 11.5% per annum. As further described in Note 18, Deconsolidation of Bright Healthcare Insurance Company of Texas, on November 29, 2023, Bright Healthcare Insurance Company of Texas was placed into liquidation and the Texas Department of Insurance was appointed as receiver. Of the $380.8 million of risk adjustment repayment liabilities, $89.6 million of this relates to Bright Healthcare Insurance Company of Texas, leaving $291.1 million as a risk adjustment obligation of the Company and is due within one year following the date the consolidated financial statements are issued. The Company’s IFP discontinued operations also continue to experience negative cash flows through the fourth quarter of 2023 as it continues to pay out the remaining inventory of medical claims. We consummated the sale of our California Medicare Advantage business in January 2024, resulting in net proceeds of $31.6 million after debt repayment of $274.6 million, cash collateralization of existing letters of credit of $24.1 million, contingent consideration of $110.0 million, estimated net equity adjustment of $57.3 million and other transaction related fees. See Note 5, Short-Term Borrowings for further details around the debt repayment. Further, as described in Note 6, Long-Term Borrowings and Common Stock Warrants, the Company entered into the New Credit Agreement in 2023 and borrowed a total of $66.4 million as of December 31, 2023. While payment isn’t due for more than 12 months, there are no additional amounts currently available for borrowing in these agreements. Cash and investment balances held at regulated insurance entities are subject to regulatory restrictions and can only be accessed through dividends declared to the non-regulated parent company or through reimbursements from administrative services agreements with the parent company. The Company declared no dividends from the regulated insurance entities to the parent company during the year ended December 31, 2023. The regulated legal entities are required to hold certain minimum levels of risk-based capital and surplus to meet regulatory requirements. As noted further in Note 19, Discontinued Operations, we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. In certain of our other regulated insurance legal entities, we hold surplus levels of risk-based capital, and as we complete the wind-down exercise related to these entities over the next two years, we expect to recapture through dividends and final liquidation actions approximately $110.0 million of cash held in other regulated insurance legal entities as of December 31, 2023. On February 28, 2024, we obtained approval in two states to execute a total of $13.1 million of dividends. We believe that the existing cash on hand and investments will not be sufficient to satisfy our anticipated cash requirements for the next twelve months following the date the consolidated financial statements contained in this Annual Report are issued, for items such as IFP risk adjustment payables, medical costs payable, remaining obligation to the deconsolidated entity, and other liabilities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In response to these conditions, management has implemented a restructuring plan to reduce capital needs and our operating expenses in the future to drive positive operating cash flow and increase liquidity. Additionally, the Company is actively engaged with the Board of Directors and outside advisors to evaluate additional financing. However, the Company may not fully collect the contingent consideration associated with the sale of the California Medicare Advantage business or be able to obtain financing on acceptable terms, as both of these matters will be subject to market conditions that are not fully within the Company’s control. In the event the Company is unable to obtain additional financing or take other management actions, among other potential consequences, the Company forecasts we will be unable to satisfy our obligations. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
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Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements: In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures, which will require disclosure of incremental segment information on an annual and interim basis for all public entities. The amendments do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. ASU 2023-07 is effective for annual reporting beginning with the fiscal year ending December 31, 2024, and for interim periods thereafter. We are currently evaluating the incremental disclosures that will be required in the footnotes to our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which will require incremental income tax disclosures on an annual basis for all public entities. The amendments require that public business entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items meeting a quantitative threshold. The amendments also require disclosure of income taxes paid to be disaggregated by jurisdiction, and disclosure of income tax expense disaggregated by federal, state, and foreign. ASU 2023-09 is effective for annual reporting beginning with the fiscal year ending December 31, 2025. We are currently evaluating the incremental disclosures that will be required in our consolidated financial statements. There were no other accounting pronouncements that were recently issued and not yet adopted or adopted that had, or are expected to have, a material impact on our consolidated financial position, results of operations, or cash flows.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Schedule of Operating Costs By Functional Classification | Our operating costs, by functional classification for the years ended December 31, 2023, and 2022, are as follows (in thousands):
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RESTRUCTURING CHARGES (Tables) |
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Schedule of Restructuring Charges | Restructuring charges by reportable segment and corporate for the years ended December 31, 2023 and 2022 were as follows (in thousands):
Restructuring charges within our discontinued operations for the years ended December 31, 2023, and 2022 were as follows (in thousands):
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Schedule of Restructuring Accrual Activity Recorded by Major Type | Restructuring accrual activity recorded by major type for the years ended December 31, 2023 and 2022 was as follows; employee termination benefits are within Other current liabilities while contract termination costs are within Accounts payable (in thousands):
Restructuring accrual activity recorded by major type for the years ended December 31, 2023, and 2022 was as follows; employee termination benefits are within Other current liabilities of discontinued operations while contract termination costs are within Accounts payable of discontinued operations (in thousands):
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MEDICAL COSTS PAYABLE (Tables) |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of and Change in Medical Costs Payable | The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
The table below details the components making up the medical costs payable as of December 31, (in thousands):
The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
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LONG-TERM BORROWINGS AND COMMON STOCK WARRANTS (Tables) |
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Schedule of Common Stock Warrants | We account for our common stock warrants at the time of inception as derivatives, utilizing ASC 815, Derivatives and Hedging, by recording a liability equal to the warrants’ fair market value that is marked to market at the end of each period. Per the terms of the NEA Warrantholders Agreement, the market value is calculated as the ending stock price less the $0.01 exercise price. As we draw on the available funds, warrants are issued; warrants will remain classified as a liability and be fair valued each period until they are exercised by the warrantholder. Upon exercise, we relieve the associated liability into additional paid in capital at the fair value of the warrants on the date of exercise, classifying the exercised warrants as equity.
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PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Equipment and Capitalized Software | Property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands):
Property, Equipment and Capitalized Software: The table below details the property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands).
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes in the carrying value of goodwill by reportable segment were as follows (in thousands):
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Schedule of Definite-lived Intangible Assets | The gross carrying value and accumulated amortization for definite-lived intangible assets were as follows (in thousands):
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Schedule of Estimated Amortization Expense Relating to Intangible Assets | Estimated full year amortization expense relating to intangible assets for each of the next five years ending December 31, is as follows (in thousands):
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SHARE-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Valuation Assumptions for Options | The calculated value of each option award is estimated on the date of grant using a Black- Scholes option valuation model that used the following assumptions for options granted during 2022:
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Schedule of Stock Option Activity | The activity for the stock options for the year ended December 31, 2023 is as follows (in thousands, except exercise price and contractual life):
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Schedule of RSU Award Activity | The following table summarizes RSU award activity for the year ended December 31, 2023 (in thousands, except weighted average grant date fair value):
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Schedule of PSU Award Activity | The following table summarizes PSU award activity for the year ended December 31, 2023 (in thousands, except weighted average grant date fair value):
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NET LOSS PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, (in thousands, except for per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the years ended December 31, (in thousands):
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) for the years ended December 31, 2023 and 2022 are as follows (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory tax rate (21%) to the effective income tax rate for the years ended December 31, 2023 and 2022 is as follows (in thousands):
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences related to deferred tax assets and liabilities for the years ended December 31, 2023 and 2022, are as follows (in thousands):
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Assets and Liabilities | At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
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Schedule of Supplemental Cash Flow and Non cash Information | Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
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Schedule of Future Minimum Annual Lease Payments | At December 31, 2023, future minimum annual lease payments under all noncancelable operating leases are as follows (in thousands):
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SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reportable Segment Financial Information | The following tables present the reportable segment financial information for the years ended December 31, 2023, and 2022 (in thousands):
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REDEEMABLE NONCONTROLLING INTEREST (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Redeemable Noncontrolling Interest | The following table provides details of our redeemable noncontrolling interest activity for the years ended December 31, 2023 and 2022 (in thousands):
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ACO REACH (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Performance Guarantees | The tables below include the financial statement impacts of the performance guarantee at December 31, 2023 and 2022 and for the years then ended (in thousands):
(1) We estimate there to be $146.1 million in in-network and out-of-network claims incurred by beneficiaries aligned to our REACH ACOs but not reported as of December 31, 2023; this is included in medical costs payable on the Consolidated Balance Sheet. (2) Our CMS benchmark was reduced by $64.8 million and $71.6 million during the years ended December 31, 2023, and 2022, respectively.
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DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Balance Sheet of BHIC-Texas | The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership.
The financial results of discontinued operations by major line item for the years ended December 31 were as follows (in thousands):
The following table presents cash flows from operating and investing activities for discontinued operations (in thousands):
Assets and liabilities of discontinued operations were as follows (in thousands):
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DISCONTINUED OPERATIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership.
The financial results of discontinued operations by major line item for the years ended December 31 were as follows (in thousands):
The following table presents cash flows from operating and investing activities for discontinued operations (in thousands):
Assets and liabilities of discontinued operations were as follows (in thousands):
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Schedule of Restructuring Charges | Restructuring charges by reportable segment and corporate for the years ended December 31, 2023 and 2022 were as follows (in thousands):
Restructuring charges within our discontinued operations for the years ended December 31, 2023, and 2022 were as follows (in thousands):
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Schedule of Restructuring Accrual Activity Recorded by Major Type | Restructuring accrual activity recorded by major type for the years ended December 31, 2023 and 2022 was as follows; employee termination benefits are within Other current liabilities while contract termination costs are within Accounts payable (in thousands):
Restructuring accrual activity recorded by major type for the years ended December 31, 2023, and 2022 was as follows; employee termination benefits are within Other current liabilities of discontinued operations while contract termination costs are within Accounts payable of discontinued operations (in thousands):
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Schedule of Components of and Change in Medical Costs Payable | The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
The table below details the components making up the medical costs payable as of December 31, (in thousands):
The following table shows the components of the change in medical costs payable for the years ended December 31, (in thousands):
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Schedule of Incurred and Cumulative Paid Claims Development | The following is information about incurred and cumulative paid claims development as of December 31, 2023, net of reinsurance, and the total claims payable plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2021 through 2023 is presented as supplementary information as follows and is inclusive of claims incurred and paid related to CHP prior and subsequent to the acquisition date (in thousands):
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Schedule of Property, Equipment and Capitalized Software | Property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands):
Property, Equipment and Capitalized Software: The table below details the property, equipment and capitalized software at December 31, 2023 and 2022, consists of the following (in thousands).
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Schedule of Operating Lease Assets and Liabilities | At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
At December 31, 2023 and 2022, the assets and liabilities related to operating leases in our Consolidated Balance Sheets are as follows (in thousands):
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Schedule of Supplemental Cash Flow and Non cash Information | Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
Supplemental cash flow and noncash information related to our operating leases was as follows (in thousands):
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CONDENSED FINANCIAL INFORMATION (Tables) |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parent Company Condensed Balance Sheets | Parent Company Condensed Balance Sheets
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Parent Company Condensed Statements of Income (Loss) and Comprehensive Income (Loss) | Parent Company Condensed Statements of Income (Loss) and Comprehensive Income (Loss)
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Parent Company Condensed Statements of Cash Flows | Parent Company Condensed Statements of Cash Flows
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ORGANIZATION AND OPERATIONS (Details) $ / shares in Units, $ in Millions |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
May 19, 2023
$ / shares
|
May 04, 2023 |
Dec. 31, 2023
USD ($)
business
$ / shares
|
Dec. 31, 2022
$ / shares
|
Dec. 31, 2021 |
Dec. 13, 2023
USD ($)
|
Dec. 12, 2023
USD ($)
|
Sep. 30, 2023
USD ($)
|
|
Organization and Basis of Presentation [Line Items] | ||||||||
Number of market facing businesses | business | 2 | |||||||
Reverse stock split | 0.0125 | 0.0125 | 0.0125 | 0.0125 | ||||
Ratio determination period | 1 year | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Discontinued Operations | California Medicare Advantage Business | ||||||||
Organization and Basis of Presentation [Line Items] | ||||||||
Total purchase considerations | $ 500.0 | $ 600.0 | ||||||
Discontinued Operations | California Medicare Advantage Business | Subject to certain purchase price adjustments | ||||||||
Organization and Basis of Presentation [Line Items] | ||||||||
Total purchase considerations | $ 500.0 | $ 600.0 | ||||||
Minimum | ||||||||
Organization and Basis of Presentation [Line Items] | ||||||||
Reverse stock split | 0.0667 | |||||||
Maximum | ||||||||
Organization and Basis of Presentation [Line Items] | ||||||||
Reverse stock split | 0.0125 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) |
1 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Feb. 28, 2024
USD ($)
state
|
Nov. 29, 2023
USD ($)
|
Sep. 15, 2023 |
Jan. 31, 2024
USD ($)
|
Sep. 30, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
reportingUnit
|
Dec. 31, 2022
USD ($)
|
|
Property, Plant and Equipment [Line Items] | |||||||
Provider incentive payable | $ 2,367,000 | $ 11,233,000 | |||||
Pledged certificates of deposit | 87,299,000 | 217,006,000 | |||||
Accounts receivable allowance for credit loss | 14,023,000 | 6,098,000 | |||||
Bad debt expense | 27,407,000 | 12,000 | |||||
Impairment of long-lived assets | $ 1,200,000 | 0 | |||||
Number of reporting units | reportingUnit | 2 | ||||||
Goodwill impairment | $ 401,385,000 | 0 | |||||
Intangible assets impairment | 0 | 42,611,000 | |||||
Net loss | (1,265,808,000) | (1,359,880,000) | |||||
Short-term borrowings | 303,947,000 | 303,947,000 | |||||
Asset Pledged as Collateral | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Pledged certificates of deposit | $ 8,100,000 | 3,800,000 | |||||
Discontinued Operations | California Medicare Advantage Business | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Wind-down period | 2 years | ||||||
Dividends and final liquidation | $ 110,000,000 | ||||||
Subsidiaries | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Pledged certificates of deposit | $ 60,560,000 | ||||||
Repayment aggregate amount | 89,638,000 | ||||||
Parent Company | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Pledged certificates of deposit | 1,540,000 | 335,000 | |||||
Net loss | (1,151,454,000) | (1,455,544,000) | |||||
Short-term borrowings | 303,947,000 | 303,947,000 | |||||
Subsequent Events | Discontinued Operations | California Medicare Advantage Business | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Net proceeds of after debt repayment | $ 31,600,000 | ||||||
Debt repayment | 274,600,000 | ||||||
Cash collateralization of existing letters | 24,100,000 | ||||||
Contingent consideration | 110,000,000 | ||||||
Estimated net equity adjustment | $ 57,300,000 | ||||||
Number of approving states | state | 2 | ||||||
Approved dividends | $ 13,100,000 | ||||||
Secured Debt | Delayed Draw Term Loan | Line of Credit | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Short-term borrowings | $ 66,400,000 | ||||||
Centers for Medicare & Medicaid Services (CMS) | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Cash settlement | $ 1,500,000,000 | ||||||
Repayment aggregate amount | $ 380,800,000 | $ 380,200,000 | |||||
Repayment period | 1 year | ||||||
Interest rate | 11.50% | ||||||
Centers for Medicare & Medicaid Services (CMS) | Subsidiaries | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Repayment aggregate amount | $ (89,600,000) | ||||||
Centers for Medicare & Medicaid Services (CMS) | Parent Company | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Repayment aggregate amount | $ 291,100,000 | ||||||
Minimum | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and capitalized software, estimated useful lives | 3 years | ||||||
Maximum | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, plant and capitalized software, estimated useful lives | 10 years | ||||||
ACO REACH revenue | NeueCare | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Revenue | $ 1,800,000 | $ 1,500,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Operating Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Accounting Policies [Abstract] | ||
Compensation and fringe benefits | $ 191,289 | $ 252,415 |
Professional fees | 41,372 | 37,280 |
Technology expenses | 22,710 | 30,256 |
General and administrative expenses | 26,496 | 25,415 |
Other operating expenses | 5,271 | 9,070 |
Total operating costs | $ 287,138 | $ 354,436 |
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
USD ($)
lease
|
Dec. 31, 2022
USD ($)
|
|
Restructuring and Related Activities [Abstract] | ||
Long-lived asset impairments | $ 880 | $ 0 |
Number of leases abandoned | lease | 1 | |
Abandonment of operating leases | $ 900 |
RESTRUCTURING CHARGES - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | $ 5,897 | $ 24,033 |
Long-lived asset impairments | 880 | 0 |
Contract termination and other costs | 213 | 5,145 |
Total discontinued operations restructuring charges | 6,990 | 29,178 |
NeueCare | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | 0 | 0 |
Long-lived asset impairments | 0 | 0 |
Contract termination and other costs | 130 | 0 |
Total discontinued operations restructuring charges | 130 | 0 |
NeueSolutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | 0 | 0 |
Long-lived asset impairments | 0 | 0 |
Contract termination and other costs | 0 | 0 |
Total discontinued operations restructuring charges | 0 | 0 |
Corporate & Eliminations | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | 5,897 | 24,033 |
Long-lived asset impairments | 880 | 0 |
Contract termination and other costs | 83 | 5,145 |
Total discontinued operations restructuring charges | $ 6,860 | $ 29,178 |
RESTRUCTURING CHARGES - Schedule of Restructuring Reserve by Type of Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 24,077 | $ 0 |
Charges | 6,110 | 24,077 |
Cash payments | (21,798) | 0 |
Ending balance | 8,389 | 24,077 |
Employee Termination Benefits | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 24,077 | 0 |
Charges | 5,897 | 24,077 |
Cash payments | (21,585) | 0 |
Ending balance | 8,389 | 24,077 |
Contract Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | 0 |
Charges | 213 | 0 |
Cash payments | (213) | 0 |
Ending balance | $ 0 | $ 0 |
MEDICAL COSTS PAYABLE - Schedule of Components of Change in Medical Costs Payable (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Beginning balance | $ 116,021 | $ 6,764 |
Incurred related to: | ||
Current year | 997,687 | 665,145 |
Prior year | (1,105) | (2,173) |
Total incurred | 996,582 | 662,972 |
Paid related to: | ||
Current year | 839,772 | 549,108 |
Prior year | 114,929 | 4,607 |
Total paid | 954,701 | 553,715 |
Acquired claims liabilities | 0 | 0 |
Ending balance | $ 157,903 | $ 116,021 |
MEDICAL COSTS PAYABLE - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Insurance [Abstract] | ||
Medical costs payable, decrease to prior years | $ (1.1) | $ (2.2) |
MEDICAL COSTS PAYABLE - Components of Medical Costs Payable (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Insurance [Abstract] | |||
Provider incentive payable | $ 2,367 | $ 11,233 | |
Incurred but not reported (IBNR) | 155,536 | 104,788 | |
Total medical costs payable | $ 157,903 | $ 116,021 | $ 6,764 |
SHORT-TERM BORROWINGS (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 27, 2023
USD ($)
|
Aug. 31, 2023
USD ($)
waiver
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Mar. 31, 2021
USD ($)
|
|
Short-term Debt [Line Items] | |||||
Short-term borrowings | $ 303,947 | $ 303,947 | |||
Revolving Credit Facility | Line of Credit | |||||
Short-term Debt [Line Items] | |||||
Revolving credit facility | $ 350,000 | ||||
Short-term borrowings | $ 303,900 | $ 303,900 | |||
Interest rate | 10.06% | ||||
Undrawn letters of credit | $ 22,900 | ||||
Waivers | waiver | 2 | ||||
Minimum liquidity covenant | $ 25,000 | ||||
Revolving Credit Facility | Letter of Credit | Debt Instrument, Redemption, Period One | |||||
Short-term Debt [Line Items] | |||||
Repayments of lines of credit | $ 274,600 | ||||
Letters of credit outstanding, amount | $ 24,100 | ||||
Letter of credit outstanding cash amount percentage | 105.00% |
LONG-TERM BORROWINGS AND COMMON STOCK WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 02, 2023 |
Aug. 04, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2021 |
|
Class of Warrant or Right [Line Items] | |||||
Short-term borrowings | $ 303,947,000 | $ 303,947,000 | |||
Warrant liability | 13,971,000 | 0 | |||
Proceeds from short-term borrowings | 0 | 303,947,000 | |||
Warrant expense | 13,971,000 | 0 | |||
Revolving Credit Facility | Line of Credit | |||||
Class of Warrant or Right [Line Items] | |||||
Delayed draw term loan commitments | $ 350,000,000 | ||||
Short-term borrowings | $ 303,900,000 | $ 303,900,000 | |||
Interest rate | 10.06% | ||||
Revolving Credit Facility | New Credit Agreement | Line of Credit | |||||
Class of Warrant or Right [Line Items] | |||||
Proceeds from short-term borrowings | $ 66,400,000 | ||||
Secured Debt | Delayed Draw Term Loan | Line of Credit | |||||
Class of Warrant or Right [Line Items] | |||||
Delayed draw term loan commitments | $ 60,000,000 | ||||
Term loan commitment increase in an aggregate principal amount | $ 6,400,000 | ||||
Short-term borrowings | $ 66,400,000 | ||||
Interest rate | 15.00% | ||||
Warrantholders Agreement | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price of warrants (in dollars per share) | $ 0.01 | $ 0.01 | |||
Warrant liability | $ 25,100,000 | ||||
Warrant available to be issued (in shares) | 1.7 | ||||
Fair market value per share (in dollars per share) | $ 15.12 | ||||
Warrants outstanding (in shares) | 1.8 | ||||
Warrant expense | $ (12,105,000) | ||||
CalSTRS Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant liability | $ 1,000,000 | ||||
Warrant available to be issued (in shares) | 0.2 | ||||
Fair market value per share (in dollars per share) | $ 5.80 |
LONG-TERM BORROWINGS AND COMMON STOCK WARRANTS - Common Stock Warrants (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Class Of Warrants [Roll Forward] | ||
Change in fair value of outstanding warrants | $ 13,971 | $ 0 |
Warrantholders Agreement | ||
Class Of Warrants [Roll Forward] | ||
Beginning balance | 0 | |
Newly executed Warrant holders Agreement | 26,076 | |
Change in fair value of outstanding warrants | (12,105) | |
Ending balance | $ 13,971 | $ 0 |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE - Schedule of Property, Equipment and Capitalized Software (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Gross property, equipment, and capitalized software | $ 22,692 | $ 31,173 |
Less accumulated depreciation | (8,193) | (9,875) |
Property, equipment, and capitalized software, net | 14,499 | 21,298 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, equipment, and capitalized software | 14,215 | 20,961 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, equipment, and capitalized software | 7,366 | 9,182 |
Medical and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, equipment, and capitalized software | $ 1,111 | $ 1,030 |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 6.6 | $ 9.1 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Goodwill [Roll Forward] | ||
Goodwill impairment | $ 401,385,000 | $ 0 |
Consumer Care [Member] | ||
Goodwill [Roll Forward] | ||
Gross Carrying Amount, Beginning balance | 401,385,000 | |
Cumulative Impairment, Beginning balance | 0 | |
Goodwill impairment | 401,385,000 | |
Gross Carrying Amount, Ending balance | 0 | 401,385,000 |
Cumulative Impairment, Ending balance | $ 401,385,000 | $ 0 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Definite-lived Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 128,382 | $ 128,382 |
Accumulated Amortization | 35,144 | 23,430 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 80,021 | 80,021 |
Accumulated Amortization | 26,144 | 17,654 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 48,361 | 48,361 |
Accumulated Amortization | $ 9,000 | $ 5,776 |
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 11,700,000 | $ 21,600,000 |
Intangible assets impairment | 0 | 42,611,000 |
Bright HealthCare | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets impairment | $ 0 | $ 42,600,000 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Asset Amortization Expense (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 11,574 |
2025 | 11,574 |
2026 | 11,574 |
2027 | 11,574 |
2028 | $ 10,295 |
PREFERRED STOCK (Details) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Oct. 10, 2022
USD ($)
tradingDay
$ / shares
shares
|
Jan. 03, 2022
USD ($)
tradingDay
$ / shares
shares
|
Dec. 31, 2023
USD ($)
$ / shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
|
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Issuance of preferred stock (in shares) | shares | 750,000 | 750,000 | ||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Issuance of preferred stock | $ | $ 750.0 | |||
Preferred stock value (in dollars per share) | $ 1,000 | |||
Liquidation preference per share (in dollars per share) | $ 1,000 | |||
Dividend rate, percentage | 5.00% | |||
Accretion to redemption value | $ | $ 78.0 | $ 37.9 | ||
Initial convertible conversion price (in dollars per share) | $ 364.00 | $ 283.20 | ||
Weighted average price of common stock percentage | 175.00% | |||
Threshold trading days | tradingDay | 20 | |||
Threshold consecutive trading days | tradingDay | 30 | |||
Multiplier for accrued and unpaid dividends, before seventh anniversary | 105.00% | |||
Multiplier for accrued and unpaid dividends, after seventh anniversary | 100.00% | |||
Liquidation preference multiplier | 105.00% | |||
Series B Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Issuance of preferred stock (in shares) | shares | 175,000 | |||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Liquidation preference per share (in dollars per share) | $ 1,000 | |||
Dividend rate, percentage | 5.00% | |||
Accretion to redemption value | $ | $ 10.8 | $ 1.8 | ||
Initial convertible conversion price (in dollars per share) | $ 113.60 | $ 99.59 | ||
Weighted average price of common stock percentage | 287.00% | |||
Threshold trading days | tradingDay | 20 | |||
Threshold consecutive trading days | tradingDay | 30 | |||
Multiplier for accrued and unpaid dividends, before seventh anniversary | 105.00% | |||
Multiplier for accrued and unpaid dividends, after seventh anniversary | 100.00% | |||
Liquidation preference multiplier | 105.00% | |||
Number of shares issued (in shares) | shares | 175,000 | |||
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | |||
Proceeds from sale of stock | $ | $ 175.0 | |||
Price per share of common stock (in dollars per share) | $ 1,000 |
SHARE-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Dec. 31, 2023
USD ($)
vestingTranche
shares
|
Dec. 31, 2022
USD ($)
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for future issuance (in shares) | shares | 1,600,000 | ||
Number of shares available for grant (in shares) | shares | 500,000 | ||
Aggregate intrinsic value of stock options | $ 1.1 | ||
Share-based compensation expense | $ 83.7 | $ 109.7 | |
Weighted-average grant date fair value of stock options granted (in dollars per share) | $ / shares | $ 76.80 | ||
Unrecognized compensation expense | $ 27.0 | ||
Granted (in shares) | shares | 0 | ||
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 35.3 | $ 51.4 | |
Vesting period | 3 years | ||
Option grants expiration | 10 years | ||
Weighted average recognition period | 1 year 1 month 6 days | ||
RSU's | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 27.9 | 23.6 | |
Vesting period | 3 years | ||
Weighted average recognition period | 1 year 3 months 18 days | ||
Unrecognized compensation expense, other than options | $ 24.2 | ||
Granted (in shares) | shares | 964,000 | ||
PSU's | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 20.5 | $ 34.8 | |
Weighted average recognition period | 6 months | ||
Unrecognized compensation expense, other than options | $ 12.4 | ||
Granted (in shares) | shares | 0 | ||
PSU's | IPO | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | shares | 14,700,000 | ||
Number of vesting tranches | vestingTranche | 4 | ||
Service period | 3 years | ||
Tranche one | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting | 25.00% | ||
Vesting period | 1 year | ||
Tranche two | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 36 months |
SHARE-BASED COMPENSATION - Schedule of Valuation Assumptions for Options (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Risk-free interest rate | 1.90% |
Expected volatility | 54.30% |
Expected dividend rate | 0.00% |
Forfeiture rate | 10.20% |
Expected life in years | 6 years |
SHARE-BASED COMPENSATION - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Shares | ||
Beginning balance (in shares) | 804 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (50) | |
Expired (in shares) | (121) | |
Ending balance (in shares) | 633 | 804 |
Weighted- Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 145.60 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 190.49 | |
Expired (in dollars per share) | 164.18 | |
Ending balance (in dollars per share) | $ 138.33 | $ 145.60 |
Weighted-Average Remaining Contractual Life (In Years) | 5 years 2 months 12 days | 6 years 8 months 12 days |
Aggregate Intrinsic Value | ||
Beginning balance | $ 6,560 | |
Ending balance | $ 213 | $ 6,560 |
SHARE-BASED COMPENSATION - Schedule of RSU and PSU Activity (Details) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2023
$ / shares
shares
| |
RSU's | |
Number of RSUs | |
Beginning balance (in shares) | shares | 470 |
Granted (in shares) | shares | 964 |
Vested (shares) | shares | (176) |
Canceled (in shares) | shares | (482) |
Ending balance (in shares) | shares | 776 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 189.88 |
Granted (in dollars per share) | $ / shares | 32.24 |
Vested (in dollars per share) | $ / shares | 201.41 |
Canceled (in dollars per share) | $ / shares | 87.70 |
Ending balance (in dollars per share) | $ / shares | $ 53.32 |
PSU's | |
Number of RSUs | |
Beginning balance (in shares) | shares | 131 |
Granted (in shares) | shares | 0 |
Canceled (in shares) | shares | 0 |
Ending balance (in shares) | shares | 131 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 744.00 |
Granted (in dollars per share) | $ / shares | 0 |
Canceled (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 744.00 |
NET LOSS PER SHARE - Schedule of Net Loss Per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Earnings Per Share [Abstract] | ||
Loss from continuing operations, net noncontrolling interests and accrued preferred stock dividends | $ (562,533) | $ (520,593) |
Loss from discontinued operations | (638,066) | (974,638) |
Net loss attributable to NeueHealth, Inc. common shareholders | $ (1,200,599) | $ (1,495,231) |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic (in shares) | 7,954 | 7,868 |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted (in shares) | 7,954 | 7,868 |
Continuing operations, basic (in dollars per share) | $ (70.72) | $ (66.17) |
Continuing operations, diluted (in dollars per share) | (70.72) | (66.17) |
Discontinued operations, basic (in dollars per share) | (80.22) | (123.87) |
Discontinued operations, diluted (in dollars per share) | (80.22) | (123.87) |
Basic loss per share (in dollars per share) | (150.94) | (190.04) |
Diluted loss per share (in dollars per share) | $ (150.94) | $ (190.04) |
NET LOSS PER SHARE - Schedule of Antidilutive Securities Excluded From Net Loss Per Share (Details) - shares shares in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 8,033 | 5,256 |
Redeemable preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 4,790 | 3,982 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 1,834 | 0 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 633 | 804 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 776 | 470 |
BENEFIT PLANS (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Retirement Benefits [Abstract] | ||
Employer matching 401(k) contribution gross pay | 100.00% | 50.00% |
Employer matching 401(k) contribution | 2.00% | 4.00% |
Employer 401(k) contributions | $ 5.5 | $ 7.0 |
INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Current | $ 1,635 | $ 1,637 |
Deferred | (3,063) | 2,027 |
Total income tax expense (benefit) | $ (1,428) | $ 3,664 |
INCOME TAXES - Schedule of Income Tax Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Tax benefit at federal statutory rate | $ (108,111) | $ (80,131) |
Adjustment to deferred tax valuation allowance | 93,532 | 26,225 |
Permanent adjustments - book NCI reversal adjustment | (24,014) | 20,089 |
Permanent adjustments - impairment | 18,043 | 14,704 |
Permanent adjustments - compensation related | 17,208 | 16,644 |
Permanent adjustments - other | 599 | 1,091 |
State income taxes, net of federal benefit | 1,381 | 1,708 |
Prior year adjustments | 7 | 92 |
Other, net | (73) | 3,242 |
Total income tax expense (benefit) | $ (1,428) | $ 3,664 |
Effective tax rate | 0.30% | (1.00%) |
INCOME TAXES - Reconciliation of Temporary Differences Related to Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforward | $ 285,462 | $ 327,644 |
Impairments | 150,138 | 0 |
Accrued salaries and benefits | 25,211 | 38,132 |
Section 195 startup expenditures | 1,971 | 2,645 |
Adjustment for noncontrolling interest | 1,393 | 0 |
Intangible amortization | 14,984 | 22,643 |
Transaction costs | 1,293 | 2,258 |
Depreciation expense | 4,706 | 3,873 |
Investment loss | 110 | 0 |
Claims Incurred but not Reported (IBNR) | 40,945 | 31,887 |
Bad debt allowance | 9,769 | 1,771 |
Warrants - Fair Value | 3,735 | 0 |
Other | 1,862 | 4,037 |
Total deferred tax assets | 541,579 | 434,890 |
Less valuation allowance | (488,937) | (362,797) |
Total deferred tax assets, net valuation allowance | 52,642 | 72,093 |
Deferred tax liabilities: | ||
Prepaid expenses | (967) | (2,855) |
Fixed assets | (383) | (383) |
Goodwill and intangible assets | (51,292) | (59,847) |
Adjustment for noncontrolling interest | 0 | (3,237) |
Investment income | 0 | (8,834) |
Total deferred tax liabilities | (52,642) | (75,156) |
Net deferred tax liabilities | $ 0 | $ (3,063) |
INCOME TAXES - Narrative (Details) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Income Tax Contingency [Line Items] | ||
Net operating losses expiring | $ 2,500,000,000 | $ 2,800,000,000 |
Unrecognized tax benefits | 0 | |
Discontinued Operations | California Medicare Advantage Business | ||
Income Tax Contingency [Line Items] | ||
Deferred tax assets | 667,800,000 | 538,200,000 |
Deferred tax liabilities | (35,900,000) | (16,500,000) |
Valuation allowance | 631,900,000 | 521,700,000 |
Net operating losses | $ 634,900,000 | $ 515,600,000 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 02, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Loss Contingencies [Line Items] | |||
Operating lease costs | $ 9.3 | $ 13.7 | |
Revolving Credit Facility | Line of Credit | |||
Loss Contingencies [Line Items] | |||
Undrawn letters of credit | $ 22.9 | ||
Revolving Credit Facility | Letter of Credit | Subsequent Events | |||
Loss Contingencies [Line Items] | |||
Letter of credit outstanding cash amount percentage | 105.00% | ||
Pledged assets | $ 24.1 |
COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease ROU assets | $ 26,765 | $ 30,521 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other non-current assets | Other non-current assets |
Operating lease liabilities - current | $ 7,092 | $ 8,326 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Operating lease liabilities - noncurrent | $ 22,431 | $ 25,222 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Total lease liabilities | $ 29,523 | $ 33,548 |
COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Supplemental Cash Flow (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 15,765 | $ 14,013 |
ROU assets obtained in exchange for new lease liabilities | $ 2,910 | $ 7,417 |
Weighted-average remaining lease term (in years) | 4 years 9 months 18 days | 5 years 3 months 18 days |
Weighted-average discount rate | 6.00% | 6.00% |
COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Annual Lease Payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
2024 | $ 7,937 | |
2025 | 7,709 | |
2026 | 6,608 | |
2027 | 4,726 | |
2028 | 2,952 | |
Thereafter | 4,110 | |
Undiscounted future minimum payments | 34,042 | |
Imputed interest | (4,519) | |
Total reported lease liability | $ 29,523 | $ 33,548 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) individual in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2023
individual
segment
primaryCareClinic
| |
Concentration Risk [Line Items] | |
Number of operating segments | segment | 2 |
Number of reportable segments | segment | 2 |
NeueCare | |
Concentration Risk [Line Items] | |
Number of primary care clinics | primaryCareClinic | 73 |
Number of individuals served | 336 |
NeueCare | Value Based Care Consumers | |
Concentration Risk [Line Items] | |
Number of individuals served | 293 |
NeueCare | Fee for Service Consumers | |
Concentration Risk [Line Items] | |
Number of individuals served | 43 |
NeueSolutions | |
Concentration Risk [Line Items] | |
Number of individuals served | 62 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Schedule of Segment Information (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | $ 896,504,000 | $ 654,087,000 |
Investment income | 86,000 | (55,429,000) |
Total revenue | 1,160,802,000 | 751,163,000 |
Operating loss | (576,996,000) | (368,756,000) |
Depreciation and amortization | 18,296,000 | 30,710,000 |
Bad debt expense | 27,407,000 | 12,000 |
Restructuring charges | 6,990,000 | 29,178,000 |
Goodwill impairment | 401,385,000 | 0 |
Intangible assets impairment | 0 | 42,611,000 |
Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 219,774,000 | 112,904,000 |
Service revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 44,438,000 | 39,601,000 |
Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 1,160,802,000 | 751,163,000 |
Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | NeueCare | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 0 | 0 |
Investment income | 0 | 0 |
Total revenue | 267,209,000 | 1,192,011,000 |
Operating loss | (369,346,000) | (215,361,000) |
Depreciation and amortization | 12,651,000 | 22,234,000 |
Bad debt expense | 4,984,000 | 5,000 |
Restructuring charges | 130,000 | 0 |
Goodwill impairment | 401,385,000 | 0 |
Intangible assets impairment | 42,611,000 | |
Operating Segments | NeueCare | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 219,774,000 | 112,904,000 |
Operating Segments | NeueCare | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 41,559,000 | 39,487,000 |
Operating Segments | NeueCare | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 261,333,000 | 152,391,000 |
Operating Segments | NeueCare | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 5,876,000 | 1,039,620,000 |
Operating Segments | NeueSolutions | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 896,504,000 | 654,087,000 |
Investment income | 0 | 0 |
Total revenue | 899,383,000 | 654,201,000 |
Operating loss | (42,500,000) | 1,424,000 |
Depreciation and amortization | 0 | 0 |
Bad debt expense | 22,423,000 | 0 |
Restructuring charges | 0 | 0 |
Goodwill impairment | 0 | 0 |
Intangible assets impairment | 0 | |
Operating Segments | NeueSolutions | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 0 | 0 |
Operating Segments | NeueSolutions | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 2,879,000 | 114,000 |
Operating Segments | NeueSolutions | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 899,383,000 | 654,201,000 |
Operating Segments | NeueSolutions | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Corporate & Eliminations | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 0 | 0 |
Investment income | 86,000 | (55,429,000) |
Total revenue | (5,790,000) | (1,095,049,000) |
Operating loss | (165,150,000) | (154,819,000) |
Depreciation and amortization | 5,645,000 | 8,476,000 |
Bad debt expense | 0 | 7,000 |
Restructuring charges | 6,860,000 | 29,178,000 |
Goodwill impairment | 0 | 0 |
Intangible assets impairment | 0 | |
Corporate & Eliminations | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 0 | 0 |
Corporate & Eliminations | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Service revenue | 0 | 0 |
Corporate & Eliminations | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 86,000 | (55,429,000) |
Corporate & Eliminations | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ (5,876,000) | $ (1,039,620,000) |
REDEEMABLE NONCONTROLLING INTEREST - Narrative (Details) |
Sep. 30, 2022 |
Jul. 01, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Controlling Interest Holder | PMA | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage | 38.00% | ||
Controlling Interest Holder | Centrum | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage | 25.00% | ||
PMA | |||
Noncontrolling Interest [Line Items] | |||
Voting interest acquired | 62.00% | ||
Centrum | |||
Noncontrolling Interest [Line Items] | |||
Voting interest acquired | 75.00% |
REDEEMABLE NONCONTROLLING INTEREST - Schedule of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Redeemable Preferred Stock | ||
Beginning balance | $ 219,758 | $ 128,407 |
Earnings (losses) attributable to noncontrolling interest | (73,199) | 29,883 |
Distribution to noncontrolling interest holders | (16,496) | (4,311) |
Measurement adjustment | (41,155) | 65,779 |
Ending balance | $ 88,908 | $ 219,758 |
ACO REACH - Narrative (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023
directContractingEntity
|
Dec. 31, 2022
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Number of direct contracting entities | 3 | |
Number of entities elected to participate in stop-loss arrangement | 2 | |
Number of entities elected to third-party coverage | 1 | |
Shared savings and losses deviation from bands threshold | 25.00% | |
ACO reach performance netted shared savings | $ | $ 8.2 |
ACO REACH - Schedule Of Performance Guarantees (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Revenue from Contract with Customer [Abstract] | ||
ACO REACH performance year receivable | $ 115,878 | $ 99,181 |
ACO REACH performance year obligation | 0 | 0 |
Direct contracting, medical costs payable | 146,100 | |
CMS performance year benchmark | (64,800) | (71,600) |
Amortization of ACO REACH performance year receivable | 877,685 | 554,905 |
Amortization of ACO REACH performance year obligation | 894,382 | 654,087 |
ACO REACH revenue | $ 896,504 | $ 654,087 |
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS - Narrative (Details) - USD ($) $ in Thousands |
Nov. 29, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | ||||
Risk Share Receivable | $ 115,878 | $ 99,181 | ||
Total stockholder's equity | $ (1,263,943) | $ (200,490) | $ 1,145,120 | |
BHIC-Texas | ||||
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | ||||
Risk Share Receivable | $ 123,981 | |||
Total stockholder's equity | 91,484 | |||
Bad debt expense | $ 91,500 |
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS - Schedule of Balance Sheet of BHIC-Texas (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Nov. 29, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | ||||
Cash and cash equivalents | $ 87,299 | $ 217,006 | ||
Prepaids and other current assets | 17,831 | 46,538 | ||
Risk Share Receivable | 115,878 | 99,181 | ||
Total current assets | 1,088,927 | 3,570,634 | ||
Accounts payable | 11,841 | 18,714 | ||
Medical costs payable | 157,903 | 116,021 | $ 6,764 | |
Other current liabilities | 79,856 | 97,241 | ||
Total liabilities | 1,480,098 | 3,725,367 | ||
Additional paid-in capital | 3,056,027 | 2,972,333 | ||
Accumulated deficit | (4,307,849) | (3,156,395) | ||
Total shareholders’ equity (deficit) | (1,263,943) | (200,490) | $ 1,145,120 | |
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | $ 1,225,480 | $ 4,665,052 | ||
BHIC-Texas | ||||
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | ||||
Cash and cash equivalents | $ 60,560 | |||
Prepaids and other current assets | 1,522 | |||
Risk Share Receivable | 123,981 | |||
Total current assets | 186,063 | |||
Accounts payable | 135 | |||
Medical costs payable | 3,283 | |||
Other current liabilities | 1,523 | |||
Risk adjustment payable | 89,638 | |||
Total liabilities | 94,579 | |||
Additional paid-in capital | 204,753 | |||
Accumulated deficit | (113,269) | |||
Total shareholders’ equity (deficit) | 91,484 | |||
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | $ 186,063 |
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 13, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 12, 2023 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Medical costs payable, decrease to prior years | $ (1,100,000) | $ (2,200,000) | ||
Prior year | (1,105,000) | (2,173,000) | ||
Depreciation expense | 6,600,000 | 9,100,000 | ||
Operating lease costs | 9,300,000 | 13,700,000 | ||
Abandonment of operating leases | $ 900,000 | |||
Discontinued Operations | California Medicare Advantage Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total purchase considerations | $ 500,000,000 | $ 600,000,000 | ||
Percentage of claim cost | 80.00% | |||
Threshold of individual beneficiary | $ 7,050,000 | |||
Risk adjustment receivable, current | 51,300,000 | 62,200,000 | ||
Prescription drug benefits, receivables | 6,900,000 | 6,700,000 | ||
Prescription drug benefits, payable | 35,000,000 | 24,600,000 | ||
Risk corridor payable | 29,300,000 | 15,200,000 | ||
Amortized Cost | 6,837,000 | 8,558,000 | ||
Receivables from reinsurers | 10,600,000 | 14,900,000 | ||
Reinsurance payable | 500,000 | 4,700,000 | ||
Net reinsurance recoveries | 3,400,000 | 10,600,000 | ||
Risk sharing payable | 30,700,000 | 30,600,000 | ||
Risk sharing receivable | 28,700,000 | 17,800,000 | ||
Premium deficiency reserve liability | 0 | 0 | ||
Impairment due, decrease in purchase price | $ 100,000,000 | |||
Purchase price | 175,800,000 | |||
Goodwill impairment | 186,150,000 | 75,372,000 | ||
Impairment of available-for-sale securities | 67,700,000 | |||
Risk adjustment payable | 291,146,000 | 1,943,890,000 | ||
Accounts payable | 36,500,000 | |||
Depreciation expense | 700,000 | 3,200,000 | ||
Fixed asset impairment expense | 3,900,000 | 5,900,000 | ||
Operating lease costs | 10,200,000 | 4,600,000 | ||
Abandonment of operating leases | 7,000,000 | |||
Statutory capital shortfall | (225,000,000.0) | |||
Statutory capital and surplus | 42,100,000 | |||
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Goodwill impairment | 186,150,000 | 70,017,000 | ||
Prior year | 26,573,000 | 6,244,000 | ||
Risk adjustment payable | 0 | 1,247,000 | ||
Discontinued Operations | California Medicare Advantage Business | Contract Termination Costs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Contract termination costs | 22,500,000 | |||
Broker commissions payable | 41,800,000 | |||
Discontinued Operations | California Medicare Advantage Business | Level 1 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash, cash equivalents, and short-term investments | 157,800,000 | 1,300,000,000 | ||
Discontinued Operations | California Medicare Advantage Business | Level 2 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash, cash equivalents, and short-term investments | $ 22,600,000 | $ 826,000,000 |
DISCONTINUED OPERATIONS - Statement of Income (Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Operating expenses: | ||
Net loss from discontinued operations | $ (638,066) | $ (974,638) |
Discontinued Operations | California Medicare Advantage Business | ||
Revenue: | ||
Premium revenue | 1,710,053 | 5,650,667 |
Service revenue | 2,413 | 8,559 |
Investment income (loss) | 64,834 | (40,811) |
Total revenue from discontinued operations | 1,777,300 | 5,618,415 |
Operating expenses: | ||
Medical costs | 1,758,935 | 5,283,689 |
Operating costs | 343,710 | 1,132,230 |
Bad debt expense | 97,326 | 21,021 |
Restructuring charges | 11,626 | 53,265 |
Goodwill impairment | 186,150 | 75,372 |
Intangible assets impairment | 0 | 6,720 |
Depreciation and amortization | 5,871 | 19,865 |
Total operating expenses from discontinued operations | 2,403,618 | 6,592,162 |
Operating loss from discontinued operations | (626,318) | (973,747) |
Interest expense | 11,608 | |
Other income | 799 | |
Loss from discontinued operations before income taxes | (637,926) | (972,948) |
Income tax expense (benefit) | 140 | 1,690 |
Net loss from discontinued operations | (638,066) | (974,638) |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare - Commercial | ||
Revenue: | ||
Premium revenue | (18,129) | 4,064,119 |
Service revenue | 30 | 148 |
Investment income (loss) | 57,415 | (41,221) |
Total revenue from discontinued operations | 39,316 | 4,023,046 |
Operating expenses: | ||
Medical costs | 137,239 | 3,808,006 |
Operating costs | 118,870 | 916,048 |
Bad debt expense | 97,141 | 20,271 |
Restructuring charges | 11,620 | 50,748 |
Goodwill impairment | 0 | 4,147 |
Intangible assets impairment | 0 | 6,720 |
Depreciation and amortization | 0 | 145 |
Total operating expenses from discontinued operations | 364,870 | 4,806,085 |
Operating loss from discontinued operations | (325,554) | (783,039) |
Interest expense | 11,608 | |
Other income | 0 | |
Loss from discontinued operations before income taxes | (337,162) | (783,039) |
Income tax expense (benefit) | 140 | 1,674 |
Net loss from discontinued operations | (337,302) | (784,713) |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | ||
Revenue: | ||
Premium revenue | 1,728,182 | 1,586,548 |
Service revenue | 0 | 0 |
Investment income (loss) | 7,419 | 410 |
Total revenue from discontinued operations | 1,735,601 | 1,586,958 |
Operating expenses: | ||
Medical costs | 1,621,696 | 1,475,683 |
Operating costs | 222,460 | 190,549 |
Bad debt expense | 93 | 194 |
Restructuring charges | 5 | 445 |
Goodwill impairment | 186,150 | 70,017 |
Intangible assets impairment | 0 | 0 |
Depreciation and amortization | 5,871 | 17,702 |
Total operating expenses from discontinued operations | 2,036,275 | 1,754,590 |
Operating loss from discontinued operations | (300,674) | (167,632) |
Interest expense | 0 | |
Other income | 0 | |
Loss from discontinued operations before income taxes | (300,674) | (167,632) |
Income tax expense (benefit) | 0 | 3 |
Net loss from discontinued operations | (300,674) | (167,635) |
Discontinued Operations | California Medicare Advantage Business | Other | ||
Revenue: | ||
Premium revenue | 0 | 0 |
Service revenue | 2,383 | 8,411 |
Investment income (loss) | 0 | 0 |
Total revenue from discontinued operations | 2,383 | 8,411 |
Operating expenses: | ||
Medical costs | 0 | 0 |
Operating costs | 2,380 | 25,633 |
Bad debt expense | 92 | 556 |
Restructuring charges | 1 | 2,072 |
Goodwill impairment | 0 | 1,208 |
Intangible assets impairment | 0 | 0 |
Depreciation and amortization | 0 | 2,018 |
Total operating expenses from discontinued operations | 2,473 | 31,487 |
Operating loss from discontinued operations | (90) | (23,076) |
Interest expense | 0 | |
Other income | 799 | |
Loss from discontinued operations before income taxes | (90) | (22,277) |
Income tax expense (benefit) | 0 | 13 |
Net loss from discontinued operations | $ (90) | $ (22,290) |
DISCONTINUED OPERATIONS - Cash Flows From Operating and Investing Activities for Discontinued Operations (Details) - Discontinued Operations - California Medicare Advantage Business - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash provided by (used in) operating activities - discontinued operations | $ (2,656,876) | $ 362,695 |
Cash provided by (used in) investing activities - discontinued operations | $ 1,127,673 | $ (466,385) |
DISCONTINUED OPERATIONS - Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Nov. 29, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Current assets: | |||
Current assets of discontinued operations | $ 822,570 | $ 3,187,464 | |
Other assets: | |||
Long-term assets of discontinued operations | 0 | 529,117 | |
Current liabilities: | |||
Current liabilities of discontinued operations | 699,758 | 3,157,236 | |
Discontinued Operations | California Medicare Advantage Business | |||
Current assets: | |||
Cash and cash equivalents | 287,981 | 1,715,284 | |
Short-term investments | 29,381 | 1,133,772 | |
Accounts receivable, net of allowance | 53,359 | 65,111 | |
Prepaids and other current assets | 122,370 | 273,297 | |
Goodwill | 172,543 | ||
Intangible assets, net | 138,982 | ||
Property, equipment, and capitalized software, net | 17,954 | ||
Current assets of discontinued operations | 822,570 | 3,187,464 | |
Other assets: | |||
Goodwill | 358,693 | ||
Intangible assets, net | 144,131 | ||
Property, equipment, and capitalized software, net | 21,298 | ||
Other non-current assets | 4,995 | ||
Long-term assets of discontinued operations | 529,117 | ||
Total assets of discontinued operations | 822,570 | 3,716,581 | |
Current liabilities: | |||
Medical costs payable | 304,019 | 981,517 | |
Accounts payable | 33,367 | 171,565 | |
Risk adjustment payable | 291,146 | 1,943,890 | |
Unearned revenue | 242 | ||
Other current liabilities | 71,226 | 60,022 | |
Current liabilities of discontinued operations | 699,758 | 3,157,236 | |
Total liabilities of discontinued operations | 699,758 | 3,157,236 | |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare - Commercial | |||
Current assets: | |||
Cash and cash equivalents | 159,769 | 1,469,577 | |
Short-term investments | 9,163 | 1,129,800 | |
Accounts receivable, net of allowance | 1,430 | 4,167 | |
Prepaids and other current assets | 7,838 | 187,818 | |
Goodwill | 0 | ||
Intangible assets, net | 0 | ||
Property, equipment, and capitalized software, net | 0 | ||
Current assets of discontinued operations | 178,200 | 2,791,362 | |
Other assets: | |||
Goodwill | 0 | ||
Intangible assets, net | 0 | ||
Property, equipment, and capitalized software, net | 0 | ||
Other non-current assets | 0 | ||
Long-term assets of discontinued operations | 0 | ||
Total assets of discontinued operations | 178,200 | 2,791,362 | |
Current liabilities: | |||
Medical costs payable | 31,881 | 691,221 | |
Accounts payable | 25,648 | 160,707 | |
Risk adjustment payable | 291,100 | $ 291,146 | 1,942,643 |
Unearned revenue | 0 | ||
Other current liabilities | 28,045 | 19,373 | |
Current liabilities of discontinued operations | 376,720 | 2,813,944 | |
Total liabilities of discontinued operations | 376,720 | 2,813,944 | |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | |||
Current assets: | |||
Cash and cash equivalents | 128,212 | 244,616 | |
Short-term investments | 20,218 | 3,972 | |
Accounts receivable, net of allowance | 51,929 | 59,308 | |
Prepaids and other current assets | 114,532 | 85,479 | |
Goodwill | 172,543 | ||
Intangible assets, net | 138,982 | ||
Property, equipment, and capitalized software, net | 17,954 | ||
Current assets of discontinued operations | 644,370 | 393,375 | |
Other assets: | |||
Goodwill | 358,693 | ||
Intangible assets, net | 144,131 | ||
Property, equipment, and capitalized software, net | 21,298 | ||
Other non-current assets | 4,995 | ||
Long-term assets of discontinued operations | 529,117 | ||
Total assets of discontinued operations | 644,370 | 922,492 | |
Current liabilities: | |||
Medical costs payable | 272,138 | 290,296 | |
Accounts payable | 7,719 | 10,858 | |
Risk adjustment payable | 0 | 1,247 | |
Unearned revenue | 0 | ||
Other current liabilities | 43,181 | 40,002 | |
Current liabilities of discontinued operations | 323,038 | 342,403 | |
Total liabilities of discontinued operations | $ 323,038 | 342,403 | |
Discontinued Operations | California Medicare Advantage Business | Other | |||
Current assets: | |||
Cash and cash equivalents | 1,091 | ||
Short-term investments | 0 | ||
Accounts receivable, net of allowance | 1,636 | ||
Prepaids and other current assets | 0 | ||
Current assets of discontinued operations | 2,727 | ||
Other assets: | |||
Goodwill | 0 | ||
Intangible assets, net | 0 | ||
Property, equipment, and capitalized software, net | 0 | ||
Other non-current assets | 0 | ||
Long-term assets of discontinued operations | 0 | ||
Total assets of discontinued operations | 2,727 | ||
Current liabilities: | |||
Medical costs payable | 0 | ||
Accounts payable | 0 | ||
Risk adjustment payable | 0 | ||
Unearned revenue | 242 | ||
Other current liabilities | 647 | ||
Current liabilities of discontinued operations | 889 | ||
Total liabilities of discontinued operations | $ 889 |
DISCONTINUED OPERATIONS - Restructuring and Related Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total discontinued operations restructuring charges | Total discontinued operations restructuring charges |
Employee termination benefits | $ 5,897 | $ 24,033 |
Long-lived asset impairments | 880 | 0 |
Contract termination and other costs | 213 | 5,145 |
California Medicare Advantage Business | Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Employee termination benefits | 3,743 | 16,097 |
Long-lived asset impairments | 8,398 | 7,126 |
Contract termination and other costs | (515) | 30,042 |
Total discontinued operations restructuring charges | $ 11,626 | $ 53,265 |
DISCONTINUED OPERATIONS - Schedule of Restructuring Reserve by Type of Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 24,077 | $ 0 |
Restructuring charges | 6,990 | 29,178 |
Cash payments | (21,798) | 0 |
Ending balance | 8,389 | 24,077 |
Employee Termination Benefits | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 24,077 | 0 |
Cash payments | (21,585) | 0 |
Ending balance | 8,389 | 24,077 |
Contract Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | 0 |
Cash payments | (213) | 0 |
Ending balance | 0 | 0 |
Discontinued Operations | California Medicare Advantage Business | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 45,106 | 0 |
Restructuring charges | 3,228 | 45,106 |
Cash payments | (22,975) | 0 |
Ending balance | 25,359 | 45,106 |
Discontinued Operations | California Medicare Advantage Business | Employee Termination Benefits | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 16,053 | 0 |
Restructuring charges | 3,743 | 16,053 |
Cash payments | (16,929) | 0 |
Ending balance | 2,867 | 16,053 |
Discontinued Operations | California Medicare Advantage Business | Contract Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 29,053 | 0 |
Restructuring charges | (515) | 29,053 |
Cash payments | (6,046) | 0 |
Ending balance | $ 22,492 | $ 29,053 |
DISCONTINUED OPERATIONS - Schedule of Investment Securities (Details) - Discontinued Operations - California Medicare Advantage Business - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Cash equivalents, Amortized Cost | $ 150,939 | $ 963,062 |
Cash equivalents, Gross Unrealized Gains | 0 | 32 |
Cash equivalents, Gross Unrealized Losses | 0 | 0 |
Cash equivalents, Carrying Value | 150,939 | 963,094 |
Available for sale: | ||
Amortized Cost | 22,776 | 1,129,025 |
Gross Unrealized Gains | 0 | 568 |
Gross Unrealized Losses | (174) | (4,221) |
Carrying Value | 22,602 | 1,125,372 |
Held to maturity: | ||
Amortized Cost | 6,837 | 8,558 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (59) | (158) |
Carrying Value | 6,779 | 8,400 |
Total investments | ||
Amortized Cost | 180,552 | 2,100,645 |
Gross Unrealized Gains | 1 | 600 |
Gross Unrealized Losses | (233) | (4,379) |
Carrying Value | 180,320 | 2,096,866 |
U.S. government and agency obligations | ||
Available for sale: | ||
Amortized Cost | 1,557 | 372,244 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (100) | (3,239) |
Carrying Value | 1,457 | 369,006 |
Held to maturity: | ||
Amortized Cost | 6,503 | 6,622 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (59) | (158) |
Carrying Value | 6,445 | 6,464 |
Corporate obligations | ||
Available for sale: | ||
Amortized Cost | 615 | 520,619 |
Gross Unrealized Gains | 0 | 521 |
Gross Unrealized Losses | (11) | (714) |
Carrying Value | 604 | 520,426 |
State and municipal obligations | ||
Available for sale: | ||
Amortized Cost | 10,308 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (96) | |
Carrying Value | 10,212 | |
Certificates of deposit | ||
Available for sale: | ||
Amortized Cost | 19,653 | 12,012 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (2) |
Carrying Value | 19,653 | 12,010 |
Held to maturity: | ||
Amortized Cost | 334 | 1,936 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Carrying Value | 334 | 1,936 |
Mortgage-backed securities | ||
Available for sale: | ||
Amortized Cost | 951 | 154,167 |
Gross Unrealized Gains | 0 | 46 |
Gross Unrealized Losses | (63) | (156) |
Carrying Value | $ 888 | 154,057 |
Asset backed securities | ||
Available for sale: | ||
Amortized Cost | 59,289 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Carrying Value | 59,289 | |
Other | ||
Available for sale: | ||
Amortized Cost | 386 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (14) | |
Carrying Value | $ 372 |
DISCONTINUED OPERATIONS - Schedule of Liability for Unpaid Claims and Claims Adjustment Expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Provider incentive payable | $ 2,367 | $ 11,233 | |
Incurred but not reported (IBNR) | 155,536 | 104,788 | |
Total medical costs payable | 157,903 | 116,021 | $ 6,764 |
Discontinued Operations | California Medicare Advantage Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total medical costs payable | 272,138 | ||
Discontinued Operations | California Medicare Advantage Business | Bright Healthcare – Commercial Segment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Claims unpaid | 14,500 | 60,856 | |
Provider incentive payable | 0 | 310 | |
Claims adjustment expense liability | 2,382 | 46,490 | |
Incurred but not reported (IBNR) | 14,999 | 583,565 | |
Total medical costs payable | 31,881 | 691,221 | |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Claims unpaid | 33,826 | 41,188 | |
Provider incentive payable | 40,704 | 40,907 | |
Claims adjustment expense liability | 5,167 | 6,732 | |
Incurred but not reported (IBNR) | 192,441 | 201,469 | |
Total medical costs payable | $ 272,138 | $ 290,296 | $ 244,534 |
DISCONTINUED OPERATIONS - Schedule of Components of Medical Costs Payable (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Incurred related to: | |||
Current year | $ 997,687 | $ 665,145 | |
Prior year | (1,105) | (2,173) | |
Total incurred | 996,582 | 662,972 | |
Paid related to: | |||
Current year | 839,772 | 549,108 | |
Prior year | 114,929 | 4,607 | |
Total paid | 954,701 | 553,715 | |
Acquired claims liabilities | 0 | 0 | |
Medical costs payable | 157,903 | 116,021 | $ 6,764 |
Discontinued Operations | California Medicare Advantage Business | |||
Paid related to: | |||
Medical costs payable | 272,138 | ||
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | |||
Incurred related to: | |||
Current year | 1,593,709 | 1,471,297 | |
Prior year | 26,573 | 6,244 | |
Total incurred | 1,620,282 | 1,477,541 | |
Paid related to: | |||
Current year | 1,333,531 | 1,182,291 | |
Prior year | 304,909 | 249,488 | |
Total paid | 1,638,440 | 1,431,779 | |
Acquired claims liabilities | 0 | 0 | |
Medical costs payable | $ 272,138 | $ 290,296 | $ 244,534 |
DISCONTINUED OPERATIONS - Total Claims Payable Plus Expected Development on Reported Claims (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total Incurred but Not Reported Liabilities Plus Expected Development on Reported Claims | $ 155,536 | $ 104,788 | |
Total medical costs payable | 157,903 | 116,021 | $ 6,764 |
Discontinued Operations | California Medicare Advantage Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 4,413,304 | ||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 4,136,872 | ||
Net outstanding liabilities | 276,432 | ||
Reinsurance recoverable on unpaid claims | (4,294) | ||
Total medical costs payable | 272,138 | ||
Discontinued Operations | California Medicare Advantage Business | 2021 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 1,321,798 | 1,319,581 | 1,313,337 |
Total Incurred but Not Reported Liabilities Plus Expected Development on Reported Claims | 860 | ||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 1,320,938 | 1,270,444 | $ 1,071,736 |
Discontinued Operations | California Medicare Advantage Business | 2022 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 1,497,797 | 1,472,587 | |
Total Incurred but Not Reported Liabilities Plus Expected Development on Reported Claims | 11,961 | ||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 1,485,836 | $ 1,232,941 | |
Discontinued Operations | California Medicare Advantage Business | 2023 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Incurred claims and allocated claim adjustment expenses, net of reinsurance | 1,593,709 | ||
Total Incurred but Not Reported Liabilities Plus Expected Development on Reported Claims | 263,611 | ||
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance | 1,330,098 | ||
Discontinued Operations | California Medicare Advantage Business | Prior To 2021 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
All outstanding liabilities before 2021, net of reinsurance | $ 0 |
DISCONTINUED OPERATIONS - Schedule of Property Plant and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | $ 22,692 | $ 31,173 |
Less accumulated depreciation | (8,193) | (9,875) |
Property, equipment, and capitalized software, net | 14,499 | 21,298 |
Depreciation expense | 6,600 | 9,100 |
Software | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | 14,215 | 20,961 |
Leasehold improvements | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | 7,366 | 9,182 |
Discontinued Operations | California Medicare Advantage Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | 22,847 | 29,650 |
Less accumulated depreciation | (4,893) | (8,352) |
Property, equipment, and capitalized software, net | 17,954 | 21,298 |
Depreciation expense | 700 | 3,200 |
Discontinued Operations | California Medicare Advantage Business | Software | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | 22,521 | 29,039 |
Discontinued Operations | California Medicare Advantage Business | Leasehold improvements | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | 288 | 403 |
Discontinued Operations | California Medicare Advantage Business | Medical and other equipment | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross property, equipment, and capitalized software | $ 38 | $ 208 |
DISCONTINUED OPERATIONS - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Operating lease ROU assets | $ 26,765 | $ 30,521 |
Total reported lease liability | 29,523 | 33,548 |
Discontinued Operations | California Medicare Advantage Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Operating lease ROU assets | 492 | 8,545 |
Total reported lease liability | $ 8,983 | $ 12,563 |
DISCONTINUED OPERATIONS - Schedule of Supplemental Cash Flow and Non cash Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Operating cash flows from operating leases | $ 15,765 | $ 14,013 |
ROU assets obtained in exchange for new lease liabilities | $ 2,910 | $ 7,417 |
Weighted-average remaining lease term (in years) | 4 years 9 months 18 days | 5 years 3 months 18 days |
Weighted-average discount rate | 6.00% | 6.00% |
Discontinued Operations | California Medicare Advantage Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Operating cash flows from operating leases | $ 7,499 | $ 6,372 |
ROU assets obtained in exchange for new lease liabilities | $ 0 | $ 0 |
Weighted-average remaining lease term (in years) | 3 years 8 months 12 days | 4 years 2 months 12 days |
Weighted-average discount rate | 6.00% | 6.00% |
SUBSEQUENT EVENTS (Details) - Discontinued Operations - California Medicare Advantage Business - USD ($) $ in Millions |
Jan. 01, 2024 |
Dec. 13, 2023 |
Dec. 12, 2023 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Total purchase considerations | $ 500.0 | $ 600.0 | |
Subsequent Events | |||
Subsequent Event [Line Items] | |||
Total purchase considerations | $ 500.0 |
CONDENSED FINANCIAL INFORMATION - Condensed Balance Sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
||
---|---|---|---|---|---|
Assets | |||||
Cash and cash equivalents | $ 87,299 | $ 217,006 | |||
Short-term investments | 6,265 | 869 | |||
Total assets | 1,225,480 | 4,665,052 | |||
Current liabilities: | |||||
Short-term borrowings | 303,947 | 303,947 | |||
Other current liabilities | 79,856 | 97,241 | |||
Total current liabilities | 1,391,257 | 3,693,159 | |||
Long-term borrowings | 66,400 | 0 | |||
Total liabilities | 1,480,098 | 3,725,367 | |||
Commitments and contingencies (Note 14) | |||||
Redeemable | 920,417 | 920,417 | $ 0 | ||
Shareholders’ equity (deficit): | |||||
Common stock, $0.0001 par value; 3,000,000,000 shares authorized in 2023 and 2022; 8,053,576 and 7,878,394 shares issued and outstanding in 2023 and 2022*, respectively | [1] | 1 | 1 | ||
Additional paid-in capital | 3,056,027 | 2,972,333 | |||
Retained earnings (deficit) | (4,307,849) | (3,156,395) | |||
Treasury stock, at cost, 31,526 shares at December 31, 2023 and 2022 | (12,000) | (12,000) | |||
Total shareholders’ equity (deficit) | (1,263,943) | (200,490) | $ 1,145,120 | ||
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | 1,225,480 | 4,665,052 | |||
Series A Preferred Stock | |||||
Current liabilities: | |||||
Redeemable | 747,481 | 747,481 | |||
Series B Preferred Stock | |||||
Current liabilities: | |||||
Redeemable | 172,936 | 172,936 | |||
Parent Company | |||||
Assets | |||||
Cash and cash equivalents | 1,540 | 335 | |||
Short-term investments | 0 | 1,619 | |||
Investment in subsidiaries | 36,879 | 1,037,067 | |||
Prepaids and other assets | 1,008 | 73 | |||
Total assets | 39,427 | 1,039,094 | |||
Current liabilities: | |||||
Short-term borrowings | 303,947 | 303,947 | |||
Total current liabilities | 316,431 | 314,738 | |||
Long-term borrowings | 66,400 | 0 | |||
Total liabilities | 382,831 | 314,738 | |||
Commitments and contingencies (Note 14) | |||||
Shareholders’ equity (deficit): | |||||
Common stock, $0.0001 par value; 3,000,000,000 shares authorized in 2023 and 2022; 8,053,576 and 7,878,394 shares issued and outstanding in 2023 and 2022*, respectively | 1 | 1 | |||
Additional paid-in capital | 3,056,027 | 2,972,333 | |||
Retained earnings (deficit) | (4,307,849) | (3,156,395) | |||
Treasury stock, at cost, 31,526 shares at December 31, 2023 and 2022 | (12,000) | (12,000) | |||
Total shareholders’ equity (deficit) | (1,263,821) | (196,061) | |||
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | 39,427 | 1,039,094 | |||
Parent Company | Series A Preferred Stock | |||||
Current liabilities: | |||||
Redeemable | 747,481 | 747,481 | |||
Parent Company | Series B Preferred Stock | |||||
Current liabilities: | |||||
Redeemable | 172,936 | 172,936 | |||
Parent Company | Related-party | |||||
Current liabilities: | |||||
Other current liabilities | 8,564 | 4,527 | |||
Parent Company | Unaffiliated | |||||
Current liabilities: | |||||
Other current liabilities | $ 3,920 | $ 6,264 | |||
|
CONDENSED FINANCIAL INFORMATION - Condensed Balance Sheets Additional Information (Details) - $ / shares |
Dec. 31, 2023 |
May 19, 2023 |
Dec. 31, 2022 |
Jan. 03, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|---|
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Redeemable preferred stock, shares outstanding (in shares) | 925,000 | 925,000 | 0 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 | |||
Common stock, shares issued (in shares) | 8,053,576 | 7,878,394 | |||
Common stock, shares outstanding (in shares) | 8,053,576 | 7,878,394 | |||
Treasury stock, common, shares (in shares) | 31,526 | 31,526 | |||
Series A Preferred Stock | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Redeemable preferred stock, shares authorized (in shares) | 750,000 | 750,000 | |||
Redeemable preferred stock, shares outstanding (in shares) | 750,000 | 750,000 | |||
Redeemable preferred stock, shares issued (in shares) | 750,000 | 750,000 | |||
Series B Preferred Stock | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Redeemable preferred stock, shares authorized (in shares) | 175,000 | 175,000 | |||
Redeemable preferred stock, shares outstanding (in shares) | 175,000 | 175,000 | |||
Redeemable preferred stock, shares issued (in shares) | 175,000 | 175,000 | |||
Parent Company | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 | |||
Common stock, shares issued (in shares) | 8,053,576 | 7,878,394 | |||
Common stock, shares outstanding (in shares) | 8,053,576 | 7,878,394 | |||
Parent Company | Series A Preferred Stock | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Redeemable preferred stock, shares authorized (in shares) | 750,000 | 750,000 | |||
Redeemable preferred stock, shares outstanding (in shares) | 750,000 | 750,000 | |||
Redeemable preferred stock, shares issued (in shares) | 750,000 | 750,000 | |||
Parent Company | Series B Preferred Stock | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Redeemable preferred stock, shares authorized (in shares) | 175,000 | 175,000 | |||
Redeemable preferred stock, shares outstanding (in shares) | 175,000 | 175,000 | |||
Redeemable preferred stock, shares issued (in shares) | 175,000 | 175,000 |
CONDENSED FINANCIAL INFORMATION - Condensed Statements of Income (Loss) and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Condensed Income Statements, Captions [Line Items] | ||
Investment income | $ 86 | $ (55,429) |
Total revenue | 1,160,802 | 751,163 |
Operating costs | 287,138 | 354,436 |
Total operating expenses | 1,737,798 | 1,119,919 |
Interest expense | 38,203 | 12,822 |
Warrant expense | 13,971 | 0 |
Income tax expense (benefit) | (1,428) | 3,664 |
Net loss | (1,265,808) | (1,359,880) |
Unrealized investment holding (losses) gains | 1,762 | (5,267) |
Less: reclassification adjustments for investment (losses) gains | (2,545) | (4,173) |
Other comprehensive (loss) income | 4,307 | (1,094) |
Comprehensive loss | (1,261,501) | (1,360,974) |
Parent Company | ||
Condensed Income Statements, Captions [Line Items] | ||
Investment income | 53 | (36) |
Total revenue | 53 | (36) |
Operating costs | 84,296 | 112,867 |
Total operating expenses | 84,296 | 112,867 |
Interest expense | 38,158 | 12,822 |
Warrant expense | 13,971 | 0 |
Loss before income taxes and equity in net loss of subsidiaries | (136,372) | (125,725) |
Income tax expense (benefit) | 891 | 43 |
Loss before equity in net loss of subsidiaries | (137,263) | (125,768) |
Equity in net loss of subsidiaries | (1,014,191) | (1,329,776) |
Net loss | (1,151,454) | (1,455,544) |
Unrealized investment holding (losses) gains | 1,762 | (5,267) |
Less: reclassification adjustments for investment (losses) gains | (2,545) | (4,173) |
Other comprehensive (loss) income | 4,307 | (1,094) |
Comprehensive loss | $ (1,147,147) | $ (1,456,638) |
CONDENSED FINANCIAL INFORMATION - Condensed Statements of Cash Flow (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | $ (2,726,546) | $ 234,466 |
Cash flows from investing activities: | ||
Purchases of investments | (837,074) | (1,457,444) |
Proceeds from sales, paydown, and maturities of investments | 1,960,283 | 1,055,479 |
Business acquisitions, net of cash acquired | 0 | (310) |
Net cash provided by (used in) investing activities | 1,119,630 | (429,723) |
Cash flows from financing activities: | ||
Proceeds from issuance of preferred stock | 0 | 920,417 |
Proceeds from issuance of common stock | 0 | 1,315 |
Proceeds from short-term borrowings | 0 | 303,947 |
Repayments of short-term borrowings | 0 | (155,000) |
Proceeds from long-term borrowings | 66,400 | 0 |
Net cash provided by financing activities | 49,906 | 1,066,368 |
Net increase (decrease) in cash and cash equivalents | (1,557,010) | 871,111 |
Cash and cash equivalents of continuing and discontinued operations– beginning of year | 1,932,290 | 1,061,179 |
Cash and cash equivalents of continuing and discontinued operations– end of year | 375,280 | 1,932,290 |
Parent Company | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (52,816) | (5,910) |
Cash flows from investing activities: | ||
Purchases of investments | 0 | (500) |
Proceeds from sales, paydown, and maturities of investments | 1,619 | 0 |
Capital contributions to operating subsidiaries | (13,998) | (1,064,595) |
Business acquisitions, net of cash acquired | 0 | (310) |
Net cash provided by (used in) investing activities | (12,379) | (1,065,405) |
Cash flows from financing activities: | ||
Proceeds from issuance of preferred stock | 0 | 920,417 |
Proceeds from issuance of common stock | 0 | 1,315 |
Proceeds from short-term borrowings | 0 | 303,947 |
Repayments of short-term borrowings | 0 | (155,000) |
Proceeds from long-term borrowings | 66,400 | 0 |
Net cash provided by financing activities | 66,400 | 1,070,679 |
Net increase (decrease) in cash and cash equivalents | 1,205 | (636) |
Cash and cash equivalents of continuing and discontinued operations– beginning of year | 335 | 971 |
Cash and cash equivalents of continuing and discontinued operations– end of year | $ 1,540 | $ 335 |
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