ORGANIZATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION AND BASIS OF PRESENTATION

Organization: NeueHealth, 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 segments: NeueCare and NeueSolutions. 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.

Basis of Presentation: The condensed consolidated financial statements include the accounts of NeueHealth, Inc. and all subsidiaries and controlled companies. All intercompany balances and transactions are eliminated upon consolidation. The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our audited consolidated financial statements, unless the information contained in those disclosures materially changed or is required by GAAP. As such, the condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2024 included in our Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”). The accompanying condensed consolidated financial statements include all normal recurring adjustments necessary for fair presentation of the interim financial statements.

Medicare Shared Savings Program: Beginning January 1, 2025 our NeueSolutions reporting segment began participating in the Centers for Medicare & Medicaid Services’ (“CMS”) Medicare Shared Savings Program (“MSSP”). As part of our MSSP participation we have elected a July 1, 2025 start date to begin participating in the ACO Primary Care Flex Model (“ACO PC Flex Model”) payment mechanism, a test initiative within the MSSP.

The MSSP was created to promote accountability and improve coordination of care for Medicare beneficiaries. For each ACO participating in the MSSP, CMS develops a benchmark for savings to be achieved by each ACO. An ACO that meets the MSSP’s quality performance standards will be eligible to receive a share of the savings to the extent its assigned beneficiary medical expenditures are below the medical expenditure benchmark provided by CMS. A Minimum Savings Rate (“MSR”) must be achieved before the ACO can receive a share of the savings. Once the MSR is surpassed, all the savings below the benchmark provided by CMS will be shared at a certain percentage with the ACO. The MSR varies depending on the number of beneficiaries assigned to the ACO. The ACO PC Flex Model is a five-year voluntary model test within the MSSP that shifts payment for primary care away from fee-for-service (“FFS”) payments to monthly Prospective Primary Care (“PPC”) payments.

Our MSSP Aligned Beneficiaries will receive services from physicians and other medical service providers, both in-network and out-of-network. CMS continues to pay participants and preferred providers on a FFS basis for Medicare-covered services provided to MSSP Aligned Beneficiaries. The Company continues to bear partial risk on all Medicare expenditures (both in-network and out-of-network), excluding drug expenditures covered by Medicare Part D, based on a budgetary benchmark established with CMS. Due to the partial risk profile, we apply net revenue recognition in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts With Customers (“ASC 606”). We have elected to participate in the ENHANCED risk track of the MSSP, which makes us eligible to receive the surplus (“shared savings”) or liable for the deficit (“shared losses”) according to the budgetary benchmark established by CMS. Our shared savings or shared losses will be determined annually after the performance year reconciliation with CMS. We recognize shared savings revenue under the MSSP only when amounts are measurable and enforceable and it is unlikely significant reversal will occur, typically upon notification from CMS upon meeting savings benchmarks. Revenue is recorded net of any amounts payable to our provider partners. We recognize shared losses under the MSSP when the amount is probable and estimable.

We recognize MSSP revenue within capitated revenue in the condensed consolidated statements of income (loss). For the three months ended March 31, 2025 and 2024 there was no MSSP revenue recognized.

NEA Merger Agreement: On December 23, 2024, NeueHealth entered into the NEA Merger Agreement with NH Holdings 2025, Inc., a Delaware corporation (“Parent”), pursuant to which, and subject to the conditions set forth therein, the Company will become a wholly owned subsidiary of Parent (the “NEA Merger”). Parent is indirectly controlled by private investment funds affiliated with New Enterprise Associates, Inc.

The completion of the NEA Merger is subject to the fulfillment or waiver of certain customary mutual closing conditions, including (a) the adoption of the NEA Merger Agreement by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Company Common Stock and Company Preferred Stock (voting on an as-converted basis), voting together as a single class, that are entitled to vote thereon (the “Company Stockholder Approval”), (b) the absence of any law or order prohibiting, enjoining or making illegal the consummation of the NEA Merger and (c) all specified regulatory filings and approvals required in connection with the transactions contemplated by the NEA Merger Agreement having been made or received, as applicable. The obligation of each party to consummate the NEA Merger is also subject to the fulfillment or waiver of certain customary unilateral closing conditions, including the other party’s (or parties’) representations and warranties being true and correct (subject to certain customary materiality qualifiers) and the other party (or parties) having performed in all material respects its (or their) obligations under the NEA Merger Agreement. The obligation of each of Parent and Merger Sub to consummate the NEA Merger is additionally conditioned upon there not having been imposed any Burdensome Condition (as defined in the NEA Merger Agreement) in connection with the receipt of the regulatory approvals required in connection with the transactions contemplated by the NEA Merger Agreement.

On May 7, 2025, we obtained the Company Stockholder Approval of the NEA Merger Agreement. The remaining required closing conditions have yet to be obtained, and there is no assurance that all of them will be obtained.

Use of Estimates: The preparation of our condensed consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Our most significant estimates include medical costs payable, provider risk share arrangements, third-party payor risk share arrangements, and valuation and impairment of intangible assets. Actual results could differ from these estimates.

Going Concern: The condensed 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 generating net losses, and for the three months ended March 31, 2025 we generated a net loss of $10.8 million. Additionally, the Company experienced negative operating cash flows for the three months ended March 31, 2025. Certain of the Company’s insurance subsidiaries have material risk adjustment program obligations remaining related to the Company’s discontinued commercial insurance business, totaling $271.8 million, as noted further in Note 14, Discontinued Operations.

On March 13, 2025, the insurance subsidiaries entered into modified Repayment Agreements (the “Modified Repayment Agreements”) with CMS, with respect to the unpaid obligations, which as a result are due September 15, 2026.

As described in Note 4, Borrowings and Common Stock Warrants, in June 2024, we entered into a loan and security agreement with Hercules Capital, Inc. for term loans in an aggregate principal amount of up to $150.0 million. We drew $30.0 million of this facility in June 2024. Access to the remaining tranches of this facility is subject to several terms and conditions outside of management’s control.

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 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 14, 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, we expect to recapture through dividends and final liquidation actions the remaining cash positions of these entities.

We believe that the existing cash and investments will not be sufficient to satisfy our anticipated cash requirements for the next twelve months following the date the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q are issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

In response to these conditions, management continues to implement plans to drive positive operating cash flow and achieve the requirements in the existing debt agreements to access additional liquidity. However, the Company may not fully collect the remaining $10.0 million of indemnity-related contingent consideration associated with the sale of the California Medicare Advantage business, may not be able to access other tranches of the loan and security agreement with Hercules Capital, Inc., and may not be able to recapture through dividends additional cash from its regulated insurance entities, as these matters are all subject to conditions that are not fully within the Company’s control.

Given these plans are subject to conditions that are not fully within the Company’s control, the Company forecasts that it will be unable to satisfy its 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: There are no accounting pronouncements that were recently issued and not yet adopted or adopted since our audited consolidated financial statements were issued that had, or are expected to have, a material impact on our consolidated financial position, results of operations, or cash flows.