Kevin Wirges : Thanks, Carlos. And good morning. As discussed in our third quarter call, since 2021, we have grown rapidly in membership, consolidated health plan contracts from acquisitions and added a significant number of new contracts. Our fourth quarter results reflect additional prior-year developments or PYDs primarily related to updated data arising from these integrations. We have established a regular cadence of service fund reporting with most payers and continued to refine our data flows to mitigate these types of impacts in the future. In the fourth quarter, revenues and adjusted EBITDA were negatively impacted by a combination of prior-year developments, increased medical and flex card utilization and a provision for adverse deviation which we treat as an explicit reserve separate from PYD.
As a reminder: We do not add back prior-year developments or reserves through adjusted EBITDA but disclose them to provide color on the annual performance of our business. Additionally, Q4 GAAP net income was impacted by $369 million of non-cash goodwill impairment. In the fourth quarter, adjusted EBITDA was impacted in part by approximately $21 million of net unfavorable PYDs. Over half was related to updated historical data from two MSO Medicare plans, while the remainder was due to final sweep accruals related to our membership in our centers. We also booked $15 million of reserves for adverse deviation that are intended to absorb potential future unexpected changes in revenues or external provider costs. For the full year 2023, adjusted EBITDA was negative $63 million, including unfavorable impacts of $42 million of total PYD and the $15 million of reserves for adverse deviation.
This also includes $23 million of de novo losses, which were slightly favorable to our guidance of approximately $25 million in losses. Reported 2023 revenue was $751 million, including $45 million of headwinds from PYD and $5 million from reserves, putting us toward the lower end of our latest guidance range. Total medical expense ratio in 2023 was 91.5% and includes approximately 780 basis points from PYD and reserves. MSO members, which have higher MER than our center numbers, had 450 basis points of impact. In addition, we estimate year-over-year increases in benefit card expenses drove about 400 basis points of unfavorability in MER. Finally, MER was further impacted by Medicaid redeterminations, which have caused the average Medicaid acuity to normalize faster than expected toward higher pre-COVID levels.
To share some recent trends within our center population. We saw elevated hospitalizations in December continue into January which is typically the height of the flu season in South Florida. However, inpatient admissions had shorter average lengths of stay. And January ED visits also moderated month-over-month. While early, we are cautiously optimistic the seasonal peak is behind us and continue to ramp our clinical programs and better manage avoidable admissions. Looking back. Our challenges in 2023 have been more about the things we had less control over, namely the timeliness, adequacy and accuracy of data from newer health plan contracts; Medicaid redeterminations; and flex card utilization. In particular, we believe the impact of flex card exceeded $30 million of medical expenses in 2023, nearly tripling from 2022.
While these benefits are likely to stay in some form, we do not expect them to increase at the rate they’ve grown in the past two years. And we have developed plans designed to mitigate duplicative costs at our centers and more closely review our service funds for potentially improper flex card expenses. More generally, these developments have reaffirmed to us the importance of strong relationships in our business. With our legacy health plans, we have a good history of alignment and a common view toward the long-term benefits of our high-touch model. With our new payer partners, we couldn’t be more excited to embark on that same journey. With any partner, our efforts are most successful when our payers equip us with the right data, tools and access; and share in the upfront investments needed to manage risk.
Along those lines, we expect some of the structural changes Carlos mentioned may entail refocusing resources on payers most aligned with our strategy. We have done a significant amount of analysis to understand the unit economics of each health plan contract. As you might imagine, some are more favorable than others. We’re planning to thoughtfully consider actions where the costs to manage a plan outweigh the financial benefits to the company. Because the outcome of these processes is uncertain, we believe it is premature to give precise guidance for 2024. In aggregate, our plan is designed to put CareMax on better footing in 2025, which we think will mark a favorable inflection point in revenue and adjusted EBITDA. We believe headwinds in 2024 regional benchmarks for our core markets will abate or even flip to tailwinds next year.
And we believe 2024-star ratings for our core plans follow a net improvement compared to 2023, which should favorably impact revenues in 2025. As Carlos mentioned, we drew the remaining $60 million of DDTL in Q4 and ended the year with approximately $66 million of cash. Looking ahead, we are in active strategic discussions to maximize the value of certain assets, which may help generate further liquidity to bridge the company to the MSSP payment later this year and to 2025. In closing. The management team, Carlos and I are deeply appreciative of our team members for their steadfast support and shared vision toward accountable care. We are committed to taking the actions we believe necessary to reposition CareMax for future success. We look forward to connecting with you and updating you on our future developments.
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