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DISCONTINUED OPERATIONS (Tables)
 3 Months Ended
Mar. 31, 2025
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.

Cash and cash equivalents$60,560 
Prepaids and other current assets1,522 
Risk share receivable123,981 
Total Assets$186,063 
Accounts payable$135 
Medical costs payable3,283 
Other current liabilities1,523 
Risk adjustment payable89,638 
Total Liabilities94,579 
APIC204,753 
Accumulated Deficit(113,269)
Total Equity91,484 
Total Liabilities and Equity$186,063 
The financial results of discontinued operations by major line item were as follows (in thousands):

Three Months Ended
March 31,
20252024
Revenue:
Premium revenue$(322)$(215)
Investment income942 1,568 
Total revenue from discontinued operations620 1,353 
Operating expenses:
Medical costs(1,203)(3,759)
Operating costs2,004 6,206 
Total operating expenses from discontinued operations801 2,447 
Operating loss from discontinued operations(181)(1,094)
Interest expense9,251 8,765 
Loss from discontinued operations before income taxes(9,432)(9,859)
Income tax (benefit) expense(22)6 
Net loss from discontinued operations$(9,410)$(9,865)


The following table presents cash flows from operating and investing activities for discontinued operations for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,
20252024
Cash used in operating activities - discontinued operations$(16,868)$(37,958)
Cash provided by investing activities - discontinued operations61,130 198,451 
Supplemental disclosure of cash flow information:
Cash paid for interest$33$2,628
Assets and liabilities of discontinued operations were as follows (in thousands):

March 31, 2025December 31, 2024
TotalTotal
Assets
Current assets:
Cash and cash equivalents$86,729 $102,110 
Short-term investments7,526 7,533 
Consideration due from Molina— 61,139 
Prepaids and other current assets212 2,224 
Current assets of discontinued operations94,467 173,006 
Total assets of discontinued operations$94,467 $173,006 
Liabilities
Current liabilities:
Medical costs payable$2,046 $7,031 
Accounts payable5,232 9,052 
Risk adjustment payable271,839 276,835 
Other current liabilities56,064 51,733 
Current liabilities of discontinued operations335,181 344,651 
Total liabilities of discontinued operations$335,181 $344,651 
The following is a summary of our investment securities (in thousands):
March 31, 2025
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Carrying
Value
Cash equivalents$70,207 $— $— $70,207 
Held to maturity:
U.S. government and agency obligations7,426 — — 7,426 
Corporate obligations100 — — 100 
Total held-to-maturity securities7,526 — — 7,526 
Total investments$77,733 $— $— $77,733 

December 31, 2024
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Carrying
Value
Cash equivalents$82,043 $6 $— $82,049 
Held to maturity:
U.S. government and agency obligations7,430 — — 7,430 
Corporate obligations103 — — 103 
Total held-to-maturity securities7,533 — — 7,533 
Total investments$89,576 $6 $— $89,582 
Schedule of Disposal Group, Including Discontinued Operation, Contingent Consideration
The Consolidation and Adjustment Escrow review has been completed and $61.1 million was released from escrow to the Company on March 17, 2025. The remaining purchase price consideration subject to contingencies and adjustments as of March 31, 2025 is as follows (in thousands):

Indemnity Escrow Amount (1)
10,000 
Total consideration subject to contingencies at closing$10,000 

(1) For 18 months post-closing date, the Company will indemnify Molina against and are liable to Molina for any and all losses incurred by Molina resulting from breach or inaccuracy of warranties and representations made, breach or failure to perform any covenant of the Molina Purchase Agreement, among others. As the Indemnity Escrow Amount is subject to these conditions for 18 months post close, the Company will only recognize this amount in the fair value of consideration
received at the point those 18 months have passed, on July 1, 2025. The amount recognized will be that equal to the $10.0 million Indemnity Escrow Amount less any agreed upon or finally adjudicated losses as of July 1, 2025.
Schedule of Gain or Loss in Sale of Disposal Groups Including Discontinued Operations
At the time of the sale, our investment in the California MA business was calculated as follows (in thousands):

Total assets (1)
$647,254 
Total liabilities(323,038)
Investment in California MA Business$324,216 

Refer to Note 19 of the 2024 Form 10-K for discussion of the gain on sale recorded in the fourth quarter of 2024. As of March 31, 2024, the company recorded no gain or loss associated with the sale of the California Medicare Advantage business (in thousands):

Sale price of California MA Business$500,000 
Less: Portion of sale price subject to contingencies(167,326)
Less: Investment in California MA Business(324,216)
Less: Transactions costs contingent on closing of sale(8,458)
Gain or loss on sale of California MA Business$— 
Schedule of Restructuring Charges
Restructuring charges within our discontinued operations for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended
March 31,
20252024
Employee termination benefits$— $129 
Long-lived asset impairments— — 
Contract termination and other costs— (508)
Total discontinued operations restructuring charges$— $(379)
Schedule of Restructuring Accrual Activity Recorded by Major Type
Restructuring accrual activity recorded by major type as of and for the three months ended March 31 was as follows (in thousands):

Employee Termination BenefitsContract Termination CostsTotal
Balance at January 1, 2025$171 $5,000 $5,171 
Net charges— — — 
Cash payments(51)(5,000)(5,051)
Balance at March 31, 2025$120 $— $120 

Employee Termination BenefitsContract Termination CostsTotal
Balance at January 1, 2024$2,867 $22,492 $25,359 
Net charges129 (508)(379)
Cash payments(1,485)(6,495)(7,980)
Balance at March 31, 2024$1,511 $15,489 $17,000 
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 three months ended March 31, 2025 and 2024 (in thousands):

March 31,
20252024
Medical costs payable - January 1$124,360 $157,903 
Incurred related to:
Current year158,317 201,420 
Prior year2,577 (4,546)
Total incurred160,894 196,874 
Paid related to:
Current year76,691 87,372 
Prior year94,713 109,804 
Total paid171,404 197,176 
Medical costs payable - March 31$113,850 $157,601 
The table below details the components making up the medical costs payable as of March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025December 31, 2024
Claims unpaid$2,489 $638 
Payables due to CMS (1)
22,858 17,846 
Provider incentive payable13,468 15,985 
Incurred but not reported (IBNR)75,035 89,891 
Total medical costs payable$113,850 $124,360 

(1)     Payables due to CMS primarily relate to out-of-network claims the Company is required to pay as a result of our ACO REACH Care Partner, Babylon, filing for bankruptcy.
The table below details the components making up the medical costs payable within current liabilities of discontinued operations (in thousands):
Bright HealthCare - Commercial
March 31, 2025December 31, 2024
Claims unpaid
$1,881 $5,760 
Incurred but not reported (IBNR)
165 1,271 
Total medical costs payable of discontinued operations
$2,046 $7,031