Operating Segments

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Operating Segments

Operating Segments

The Corporation manages operations based on two reportable segments: Medicare Advantage and Direct Contracting. The reportable segments are distinguished based on the healthcare delivery business model. Its Medicare Advantage segment is an insurance business model that focuses on leveraging the Clover Assistant at the point of care. Its Direct Contracting segment is similar to a cost management and care coordination model accounted for as a performance guarantee, where Clover is responsible for coordinating care, managing costs, and providing support to providers and their DCE Beneficiaries through the use of Clover Assistant. These segment groupings are consistent with information used by the Chief Executive Officer, the Corporation’s chief operating decision maker, to assess performance and allocate resources. There are certain revenues and expenses that are attributable to clinical services and corporate overhead; these amounts are reported separately from reportable segments in the tables presenting segment results below.

The operations of the Corporation are organized into the following segments:

•Medicare Advantage Segment includes operations related to our MA plans, which generally provide access to a wide network of primary care providers, specialists, and hospitals.

•Direct Contracting Segment includes our operations relating to CMS’s DC Model, which provides options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries.

•Corporate/Other includes other clinical services not included in Medicare Advantage and Direct Contracting and all other corporate overhead. Clinical services is comprised of Clover Home Care and other clinical services that are offered to eligible beneficiaries.

The table below summarizes the Corporation’s results by operating segment:

	Medicare Advantage		Direct Contracting		Corporate/Other		Eliminations		Consolidated Total
Three Months Ended September 30, 2021	(in thousands)
Premiums earned, net (Net of ceded premiums of $120)	$	203,657	$	—	$	—	$	—	$	203,657
Direct Contracting revenue	—		222,647		—		—		222,647
Other income	80		—		24,967		(24,188)		859
Intersegment revenues	—		—		9,375		(9,375)		—
Net medical claims incurred	208,661		228,060		2,253		(2,552)		436,422
Gross (loss) profit	$	(4,924)	$	(5,413)	$	32,089	$	(31,011)	$	(9,259)
Total assets	$	347,535	$	260,142	$	887,089	$	(542,288)	$	952,478
	Medicare Advantage		Direct Contracting		Corporate/Other		Eliminations		Consolidated Total
Nine Months Ended September 30, 2021	(in thousands)
Premiums earned, net (Net of ceded premiums of $370)	$	598,390	$	—	$	—	$	—	$	598,390
Direct Contracting revenue	—		439,020		—		—		439,020
Other income	108		—		66,990		(64,548)		2,550
Intersegment revenues	—		—		33,130		(33,130)		—
Net medical claims incurred	640,624		469,972		5,273		(6,494)		1,109,375
Gross (loss) profit	$	(42,126)	$	(30,952)	$	94,847	$	(91,184)	$	(69,415)
Total assets	$	347,535	$	260,142	$	887,089	$	(542,288)	$	952,478

A reconciliation of the reportable segments’ gross loss to the net loss included in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021, is as follows:

	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	(in thousands)
Gross loss	$	(9,259)	$	(69,415)
Salaries and benefits	73,364		201,555
General and administrative expenses	45,749		129,983
Premium deficiency reserve (benefit)	20,761		48,661
Depreciation and amortization	120		398
Other expense	—		191
Change in fair value of warrants payable	(115,152)		(66,146)
Interest expense	413		2,817
Amortization of notes and securities discounts	13		13,681
Net loss	$	(34,527)	$	(400,555)