Steve Sell: Yes. Thanks for the question, Jack. So we have been very conscious in our growth strategy to make sure that we are really bringing in very strong groups. These groups are comprising four states, three of which are ones where we have current infrastructure, existing payer contracts, existing teams that we can leverage around that. So in Kentucky, in Minnesota and North Carolina, we’re going to be able to leverage that, which should help as these groups start out. I think we believe their performance is going to be in-line with kind of historically where we’ve started our year-one markets even given the environment in which we’re operating around that. And then we are adding one new state, which is Illinois, in which we’d be standing up new infrastructure and new contracts. So from that perspective, I think three existing states should give us the ability and pattern recognition to have solid year one performance.
Jack Slevin: Got it. That’s helpful color. And then one more follow-up. Just maybe bifurcating between the overall book of business you have and that 2025 class. Can you give some numbers around how AWV completion is tracking year-to-date versus prior years or versus historical trends? Thanks.
Steve Sell: So our — the work that we’re doing in terms of supporting our PCPs, the orientation work, the work that I talked about with our medical directors has elevated our performance both around from an AWV perspective and an assessment perspective. Those are the fundamentals that really help us identify our most complex patients and enroll them in clinical programs. We have seen nice step-ups for instance, in our enrollment in our palliative programs as we started to progress, which ultimately should end up reducing inpatient expense and [ADK] (ph). So we’ve seen, as an example, in the markets in which we’ve executed that, we’ve seen about a 15% to 20% improvement in terms of enrollment within our palliative programs. We have 15,000 care plans that have been developed around complex patients as a result of this work. So I think we are progressing nicely, and we’re seeing a step-up year-over-year.
Jack Slevin: Got it. Thanks again.
Operator: Our next question is from George Hill at Deutsche Bank. Please go ahead.
Unidentified Analyst: Yeah, hi. It’s [indiscernible] on for George. Thanks for taking the question. Can you provide a little bit more color on the impact of the final [rate] (ph) versus your expectation, and what are the ways to offset the shortfall? Thank you.
Steve Sell: So as I — thanks for the question. As I said in my prepared remarks, we were obviously disappointed around the final notice. I think though, what it has done is sort of reinforced the value that we’re providing, we are seeing it in terms of some of the payer economic arrangements that have drived improved performance in 2024. We believe that will carry into 2025. We’ve seen it in terms of the interest from groups who are wanting to join agilon as reflected in the class of 2025. So I think our focusing really on our fundamentals is what’s going to help us drive our performance and be able to manage through well. We also are working very closely with our payer partners around what their final bids will look like because that obviously flows through to us as well. Operator Our next question comes from Andrew Mok at Barclays. Please go ahead.
Unidentified Analyst: This is [indiscernible] on for Andrew. Back on the topic of contract exits in the second quarter as well as any additional contract changes this year or in 2025. What are the key characteristics you’re evaluating in making those changes? Other certain member or market types that aren’t working? Or is it more a product of benefit structure?
Steve Sell: So thanks for the question. I mean first, I’ll say, any of these decisions we make, we are doing in concert and doing it together with our partners. As I laid out relative to this year two-plus market, the factors that we saw there that ultimately led us to this decision was higher utilization, payer benefit design changes, both in ’23 and in ’24. The final notice for ’25 that, in particular, was particularly challenging for that geography, and then the TBC limits that are in place on a go-forward basis and what that looked like in terms of a multiyear progression for that market. And so all of that working in concert with our payer partners led us to make the decision that we did in terms of winding down those operations.
We do not see that situation in any of our other markets today. And if anything, you’re seeing additional groups want to join us, and we’re growing within existing geographies, like I just laid out with the Class of 25 in Minnesota and Kentucky and North Carolina.
Unidentified Analyst: Great. That’s helpful. And a quick follow-up. What percentage of your contracts today carve out supplemental benefits? Thank you.
Steve Sell: So our current contracts today, we have supplemental benefit requirements for all of them for 2024. What we have been able to negotiate is additional percentage of premiums, like I talked about in terms of multiple markets and multiple payers where we’ve been able to do that. In other cases, we’ve been able to sort of capitate or cap our exposure in terms of what the total expense could be associated with those. That is part of what we are laying out for 2025 in these negotiations with our payer partners. So it is an element of that renewal strategy that I talked about.
Unidentified Analyst: Great. Thank you.
Operator: Our next question is from Elizabeth Anderson from Evercore ISI. Please go ahead.
Sameer Patel: This is Sameer Patel on for Elizabeth Anderson. Maybe just following up on that question. Could you talk about sort of the receptivity you’re getting from payers regarding, let’s call it, different arrangements around supplementals, whether it be a carve-out, whether it be like sort of a corridor cap on exposure. I know that’s a 2025 thing, but sort of has there been appetite from your conversations with payers?
Steve Sell: There has been receptivity. I think that it’s not just a ’25 thing. In ’24, we’ve been able to get incremental percentage of premium associated with those supplemental benefits. So it’s already started this year in a couple of markets. I think as you look to ’25, there is receptivity around it. I think there’s – it is a macro discussion with them on how do you grow into our network and how do we have a long-term sustainable value-based care partnership. And so there is multiple elements, supplement of benefits is one of them. Part D is another one of them, particularly with the impact of the IRA as you start in 2025. And so what their final bids look like in terms of the adjustments they are making as part of that factor back into it. So again, I think the value that we’re providing and the interest from these payers in terms of expanding has only grown. And you can see in our results for ’24, and that’s reflected in the discussions for 2025.
