Medical Claims and Related Payables

12 Months Ended

Dec. 31, 2023


NOTE 9. Medical Claims and Related Payables

Medical claims and related payables include estimates for amounts owed for claims incurred for services provided to members by various providers. Changes in amounts reported for medical claims related to prior years result from claims being paid at amounts different than originally estimated. Liabilities are continually reviewed and re-estimated as information regarding actual claim payments becomes known. This information is compared to the originally established liability at year end. The following table presents the components of changes in medical claims and related payables (in thousands):


	December 31,
	2023		2022		2021
Medical claims and related payables, beginning of the year	$	339,749	$	239,014	$	164,161
Components of incurred costs related to:
Current year	3,956,873		2,084,009		1,351,495
Prior years	51,785		9,851		5,832
Discontinued operations - current year	263,215		303,365		294,877
Discontinued operations - prior years	7,008		2,607		(5,409)
	4,278,881		2,399,832		1,646,795
Claims paid related to:
Current year	(3,237,050)		(1,792,303)		(1,164,903)
Prior years	(344,269)		(200,668)		(90,776)
Discontinued operations - current year	(263,215)		(258,733)		(252,736)
Discontinued operations - prior years	(51,025)		(47,393)		(63,527)
	(3,895,559)		(2,299,097)		(1,571,942)
Medical claims and related payables, end of the year	$	723,071	$	339,749	$	239,014

Beginning and ending balances of medical claims and related payables disclosed above for December 31, 2022, include $44.1 million and $45.9 million, respectively, that are presented as current liabilities held for sale and discontinued operations. Beginning and ending balances of medical claims and related payables disclosed above for December 31, 2021, include $67.0 million and $44.1 million, respectively, that are presented as current liabilities held for

sale and discontinued operations. As of December 31, 2021, medical claims and related payables also include $0.2 million, respectively, of claims liabilities associated with certain divested California businesses for which the Company has retained the liability for claims incurred prior to the date of divestiture. Ending balance of medical claims and related payables disclosed above for December 31, 2023 and 2022, includes $14.7 million and $7.0 million (includes $1.8 million related to discontinued operations), respectively, that is recoverable from other parties under risk sharing arrangements and is presented as prepaid expenses and other current assets, net in the consolidated balance sheets.

During 2023, the Company experienced an increase in medical claims expenses attributable to higher-than-expected utilization. The increase in medical service utilization trends became visible during the fourth quarter as a result of additional updated information provided by the Company’s payors. For the three months ended December 31, 2023, the Company recognized $1.16 billion of medical claims expense.