Apollo Medical Holdings, Inc. (NASDAQ:AMEH) Q2 2023 Earnings Call Transcript

Adam Ron: And then — sorry for all of these questions. But my last question would be — so I think one of the deals, IntraCare, I think it was — you mentioned 425 providers and 40,000 patients. And generally, I would think about it from PCP patient panel, like the 100s, if not over 1,000. And so wondering, one, why that’s below of a patient per provider. I’m not sure if it’s maybe like MA-only or something? And then second, if you could maybe help give context to what you think like between these 3 deals that you announced in the quarter, how many patients that should add to the total number of patients and if those are all risk live?

Brandon Sim: Sure. The 40,000 members are not all seniors. So you’re right in that the ratio of PCP to senior is probably a bit high, relatively speaking. But they’re not necessarily all Medicare Advantage patients. In aggregate — and I’m sorry, I got to move. If that wasn’t clear, just let me know. But in aggregate, we — it’s a little early to tell exactly how many patients and the exact mix between Medicaid, commercial and Medicare Advantage because our model does encompass and take on risk in all 3 areas. I would probably not want to venture a number at this point in time. But we do expect the revenue impact, I would say, to be in the 10s, if not higher of impact.

Operator: [Operator Instructions] Our next question is coming from Brooks O’Neil from Lake Street.

Brooks O’Neil: I’m just curious, I think Brandon mentioned in his prepared remarks, elevated risk adjustment payments. And I’m just curious if you could talk about what’s driving that, number one. Number two, is it — do you think the trend is sustainable into the end of the year and beyond?

Brandon Sim: So on the elevated risk score relative to last year, that drove some of the incremental outperformance for this quarter relative to the same quarter last year. That was related to our efforts in more accurately capturing the kind of conditions of our senior population which is something that we’ve been focused on as part of the operational and technological platform that we’ve been deploying into our provider offices over the last 12 to 24 months. As you all know, it takes quite a bit of time for risk adjustment payments to catch up with the actual act of coding the chronic condition. And so some of the results and uplift from the kind of platform we’ve deployed over the past couple of years are now starting to come to bear.

We also noted before that our aggregate RAF score for our senior population was quite low, under 1.0. And we believe that at the time that was inappropriately low relative to the actual acuity of the chronic conditions of the patients. And so we’re seeing some of that come into fruition in terms of these RAF payments.

Brooks O’Neil: But do you think you can probably keep seeing additional improvements as you implement your systems? Is that a fair way to characterize it?

Brandon Sim: I think related to the performance year with which these payments were related, I think that is actually it for that payment year. Of course, in future payment years we do think that there is future improvement to be had as we continue to roll out the platform to all of our providers.

Brooks O’Neil: Let me ask just one other one. I’m curious Jack was asking you about the Knox-Keene license and that’s a particular fascination of mine. I was hoping you might go just a little bit deeper in talking about not just the timing and the fact that you’re on pace. But just what exactly do you think the impact of having that license will be on your business in terms of what does it mean for your provider networks? What does it mean in terms of the premium or the dollar capture you can have on a per patient basis?