Justin Lake: Okay. And then just a couple of things on trend. One, can you tell us some of the breakdown here of what you’re seeing specifically, one of the companies is out there talking about in-patient then seeing some pickup in short stays even before the two midnight rule. What are you assuming for that? I don’t know if you gave an answer to that question that Lisa asked on the two midnight rules, specifically, what is the impact that you’re assuming there? Maybe you could tell us the pickup in short stays versus total admissions, how much pressure does that put on total admissions? And then lastly on ACO REACH, there’s been some discussion that CMS is seeing trend higher in the fourth quarter, and they’ve kind of talked to the ACO REACH plans about that.
Can you give us some numbers there in terms of how much trend CMS is reporting in the fee-for-service program in the fourth quarter versus what they’ve seen year-to-date to kind of maybe measure that pickup versus MA? Thanks, guys.
Steve Sell: Sure. So I’ll take the first one, and you take the ACO [technical difficulty]. So, Justin, in terms of trend, we are seeing some step up in terms of in-patient medical. It is in line with what we considered within that overall trend, and the two day rule is definitely contributing to that. But it’s still in line with what we’ve laid out for Q1 and within the full year. The other categories that we are seeing stepping up is the ones that we’ve talked about before, which is the surgeries principally in the outpatient side, but also seeing some in-patient surgery, a lot of that was in Q4, some may have been driven by exhausting maximum amount of pocket and some just sort of induced utilization around that. But also specialty cost and Part B drug.
Tim Bensley: Yeah, and just on the ACO REACH side, we are also seeing in our ACO REACH numbers an acceleration in claims expense in the fourth quarter, similar to what we’re seeing on the MA side. So that’s certainly coming through our numbers. The one thing that I think and part of your question is, that’s a little bit different in ACO REACHES. As those claims increase, that will actually go into the final calculation for the retro trend adjustment. So as overall Medicare fee-for-service claims are going up or costs are going up, the revenue will adjust up as well. And that’s allowed us from our perspective to pretty much hold and we’ve booked our final ACO REACH close pretty much in line with where we had guided.
Steve Sell: The full year national ACO REACH, Justin is at 6.8% and our performance came in at 2.7%. So we beat that national benchmark by 410 basis points.
Tim Bensley: That 6.8% on the national trend is pretty similar to what we’re seeing for the full year on the MA side. So it’s what I was referring to.
Justin Lake: And was there a pickup there in the fourth quarter? Did CMS come to you and say we’re revising that number up?
Tim Bensley: CMS doesn’t come to us and say that. They just give us the claims data and they give us the Medicare fee-for-service reference population data on a monthly basis.
Justin Lake: Okay. I’ll follow-up offline. Thanks, guys.
Operator:
Steve Sell: Thanks, Justin.
Operator: Thank you. We now have a question from Ryan Daniels with William Blair.
Ryan Daniels: Yeah, guys. Thanks for taking the questions. Let me start with a big picture one, just on your relationship with your managed care payers. Given some of the headwinds you’re seeing, I know you’ve talked about getting better data feeds and maybe restructuring some of the contracts. One of your peers today actually moved down the risk adjustment or risk scale, I should say, to do some partial risk and move away from full capitation. I’m curious if you’ve debated internally if that’s a strategy you’d consider pursuing or if you’re just going to kind of stick with it through the storm here, given the trends you see longer-term in the business and the cohorts?
Steve Sell: Yeah, Ryan. No, listen, I really appreciate the question, and we obviously are in a volatile environment, as we’ve talked about. I think we believe the future is value based care and full risk value-based care. I think we building a differentiated model and it made significant investments at the market and the platform to make that a reality. And I think we’ve got lots of data points like the one I just shared on ACO REACH or locally with our payers that we can outperform that fee-for-service environment. But specifically to your question, I think we’re in this transition period in terms of MA funding and plan bids and we’re doing it against a backdrop of an elevated utilization environment. And so what we’re doing is, we’re actively tuning our payer economics and our risk sharing.
We’re doing that two ways. One is in terms of an increased percentage of premium for capitated business that we’ve got and we’ve been able to have some success around that. We’ve got more conversations actively going. And the second is reducing our exposure for elements that are really out of our control. So supplemental benefits, star scores outside of the ones that we control around that or just aggressive bid that lead to far higher utilization assumptions than were laid out from an actuarial perspective. And so that tuning, Ryan gets reflected in a variety of ways. But I think that’s the way we’re looking at it. I think our payers are looking for us to do more. We’re just looking for an economic and a risk sharing arrangement that sort of balances the environment.
Ryan Daniels: It makes sense and super helpful color. And then I’m curious based on that commentary especially about reducing your exposure to things that are outside of your control, which I think is noteworthy, how receptive are the payers to this? Do they kind of appreciate that yeah you shouldn’t be penalized for these things that you can’t control and we’re looking for you for other value adds so that they’re willing to negotiate? And how big of a piece of your book of MA business has gone through that level of negotiation? Thanks.
