Adam Ron: Hi, thanks for the question. You’ve talked in the past about how your claims visibility is lower than some of the managed care companies and they came out a couple of your larger competitors, which make up a large percentage of your membership and they had varying degrees of views on what utilization was and what their margin expectations for 2024 were versus their initial expectations. And so have you looked at that? And for example, CBS revised down their margin [expectation] (ph). But they looked at that and looked at your own book of business with them and kind of like run and outs on why, like what the downside scenario would be if they’re right about potentially having margin compression. Like just how do you look at whatever data they had given you when you comprise your 2024 guidance, then the margin commentary that they’re getting now? And how can you be confident in your outlook if they’re kind of losing visibility on theirs? Thanks.
Steve Sell: Yes, thanks for the question, Adam. So as I outlined sort of — for Jailendra, we are looking at a series of utilization data points that give us comfort as it relates to where we landed on Q1 at a 9.1% trend. We do receive updated real-time indicators in terms of census data from all of our payers. And so we can see what that has looked like as we progress from January even through April. We do have claims data for our most complete payers through January and February that gives us data points around that. And then we have ongoing dialogue. What we’re sharing with you is a composite across all of those payers and booking a trend that’s up above 9%, which gives us comfort even given some of the encouragement from those indicators.
Adam Ron: I’m sorry, that 9% number. Like how does that compare to what you put into the guidance you gave like some numbers when you initially gave the 2024 guidance. But can you remind us what those assumptions were and how the 9.1% is tracking against it? Thanks.
Steve Sell: So in terms of our guide for the year, we had a 6.6% full year trend. We had our Q1 trend that was in the upper 9% range. And so 9.1% is below that. That is reflected on some of the improvements we’ve seen from the payer results that have helped to drive that. So that’s really the difference that we’ve seen across that time.
Tim Bensley: And I think, Steve, as you said before, we do have probably a little bit better data right now to drive that number. So obviously, as we close the books we are looking at, as Steve said. And Adam, I think this gets to your primary question, too. We have relatively complete data for the first 1.5 months to 2 months for our two largest payers. So that helps us understand exactly where their costs are going and as Steve said, we have significantly improved coverage on both third-party data around in-patient utilization as well as a really good sense of data that we get from the payers themselves. And the last thing is, I think certainly where we’ve booked Q1 where we have essentially closed Q1 from a utilization standpoint, I think it’s pretty much in-line with what we’ve heard kind of balanced across all the large payers that have reported. So we feel like that 9.1% right in-line.
Operator: Our next question comes from Sean Dodge at RBC. Please go ahead.
Sean Dodge: Yeah, thanks. Steve, the strategic exit you mentioned in Q2, how — mechanically, how do those work? Does your financial responsibility for those members end at Q2? Or is there a longer unwind period? And then — can you quantify how much those exits are expected to benefit medical margin or EBITDA for the full year?
Steve Sell: So sure, Sean. Thanks for the question. So both of the exits that I talked about, whether it is from the group MA contract is effective June 30, and that ends our responsibility from an expense perspective for that. And then the payer contracts in this year two market are effective in Q2 and will be completed by the time that we end the quarter. So there is no further run out from those. We’ve worked very closely with the payers and with our physician partners to make sure that there is continuity of care. The totality of the economic benefits across the series of payer arrangements that I talked about is north of $10 million. So it more than offsets the negative PYD that we talked about in Q1.
Tim Bensley: Yes, Steve. Just to make sure Sean understand the question is. The only thing I would add is our — we’re responsible for the performance up through those dates, right? So there is of course, we won’t have complete visibility to claim data, et cetera, through that date, and we’ll go through the normal runout period and the normal ultimate settlement for our performance during those days, but we’re not responsible for performance in any way after the dates of the exit.
Sean Dodge: Okay. That’s good. And just to make sure I’m clear. I know you said the renegotiations of the payer contracts were included in guidance or originally contemplated in the guidance. Are these exits were these also included? Or would these be incremental to that?
Steve Sell: So the only piece, Sean that was included in the initial guidance was the increase as a percentage of premium for those markets we talked about on the last call. The retroactive relief and then the group MA contract in this year two market, contract exits are incremental. And so those have been added into the guidance that we provided for the year, the updated guide.
Sean Dodge: All right. Thank you again. Operator The next question comes from Jack Slevin from Jefferies. Please go ahead.
Jack Slevin: Hi, thanks for taking my question. I wanted to take a look at some of the 2025 class and maybe just take a step back on that. So I guess a couple of levers you can pull there to make sure things come out nicely. Obviously, staying disciplined on the number of lives is one, and it seems to be the case in terms of how you’re guiding the number of memberships that comes on for the year. Maybe looking at the markets, is there anything you can glean in terms of payer contract overlap with some of your existing large payers based on the geographies you’re entering that, that will give you a better sense that visibility on cost trend and overall performance should track nicely for that 2025 class?
