So the takeaway from the Q1 call was minimal progress in 4-star off that 2.7% baseline. What we’re saying today is with additional view of HEDIS and CAHPS and some degree of sort of case mix, that there’s a little bit more pressure in that 4-star. Again, it’s too early to say because we don’t have cut points, but we want to be very transparent, and we used very conservative assumptions. This does not impact 2024, right, because we already know the revenue for 2024, but it certainly was an input as we looked at 2024 bid construction, relative to what we thought about in terms of 2025, 2026 and sort of the multiyear performance targets for the Medicare book. And again, important to note that we are seeing really solid underlying improvement in the program and really taking a chapter by chapter approach to moving up all of our underperforming contracts into that 3.5 star band, which is where we start to get important economics.
Drew pointed this out on the Q1 call as well that there’s — folks know the economics associated with the 4-star, but there’s a 3% to 6% economic lift that comes with moving into that 3.5 star band. And when you combine that with the profile of largely or heavily dual-based population, those economics actually work very well relative to the performance we’re looking for.
Drew Asher: And Michael, on the 1.4% composite forecasted rate that we laid out at Investor Day in December of ’22, that would have partially reflected our view at the time of what we thought might be necessary for acuity adjustments. But the reason I say partially is because you’ll remember, we basically pulled forward sort of a lot of the forecasting for the next couple of years of acuity as we got into the first quarter of 2023. So what we know now would push that number up, but there’s also a counterbalance to that as we continue to perform well, especially in states with paybacks, where we’re forecasting for 2023 sort of the calendar year of 2023 to be in paybacks to the tune of about $1.3 billion in Medicaid. That would be a counterbalance to that because states ultimately adjust the rates by looking at the pool of participants in Medicaid and their positioning in risk corridor payback.
So it’s sort of a stale number at this point, but those are two factors that would push and pull up that number.
Operator: And our next question today comes from Sarah James at Cantor Fitzgerald.
Sarah James : I was wondering if you could quantify what the redetermination impact was in the quarter? And then if we’re thinking about the sort of April and May cohort, especially April is coming up towards the end of their 90- to 120-day response period, and I know you guys only have a couple of states in that cohort. But could you talk a little bit about what sort of information you get? Do you know who is responding of your members? And have you gotten any information on what a success rate looks like for that April cohort?
Drew Asher: Yes, Sarah, on the question about the impact, you can look at the sort of the membership progression. We’re down 263,000 members from 3/31/23 in Medicaid, and that’s sort of right on track with what we expected in terms of the impact. And then on what we can look at — so it’s a good question. I’m looking at each of those monthly cohorts independently, but we could actually see sort of the members boomeranging back at a much higher rate with April because, to your point, we’re a few months out from that incurred month as opposed to July, which would be a lower number because there’s still some runway there for members to boomerang back. But so far, that month is in the 20s in terms of percentage of members who lost eligibility that have now regained it without — importantly, 85% of which without any break in coverage period.
