So I just want to make sure we’re leaving everyone with the impression we are taking significant pricing action in order to deliver these results. We will continue to evaluate the trends and to the degree they get better, that provides some more opportunity. We will work hard to optimize within the bids and themselves to make smart decisions such that we maximize the impact and maintain a really compelling value proposition still for consumers on a go forward basis. But we think with a reasonable set of assumptions and the dynamics in play, the six to 10 is really bumping up against what you can do in the absence of something changing between now and when we would submit pricing that we could incorporate.
Bruce Broussard: And Gary, I just want to reemphasize something here that we also are very active in looking at a trend offset and we have a lot of activity going in the organization around that and we are oriented to how can we set a number of these things through both clinical actions and then also just the proper insurance that people are using the healthcare system most efficiently.
Susan Diamond: And Gary, I think that’s why, as Josh asked Bruce earlier, we do think it’s probably a couple years of recovery to get back to the margin profile just because of the inherent limitations and expectation that the rate environment won’t fully cover trend and that has to be addressed as well.
Gary Taylor: Got it, makes sense. Thank you.
Operator: Our next question comes from the line of Sarah James with Cantor Fitzgerald.
Sarah James: Thank you. I was hoping you could give us more color on your claims clarity. So you made some comments earlier about waiting for more November claims clarity, and that sounds a little bit slower than I typically think of the industry getting 60% of the 30 day claims and 80% of the 60 day claims. So how much clarity do you guys have on November and December? Was there any kind of slowdown this year? And as you think about that going forward, there’s some regulatory changes coming around, having to do prior authorization in 72-hours or make decisions in 72-hours. Is there a potential that that could have an impact on your claims clarity when that goes into effect in 2026?
Susan Diamond: Hi Sarah. Sure, I’ll try to answer those. So, in terms of claims, as we’ve always said, we had more visibility real time to inpatient utilization from the authorization data that we receive in more real time. We’re dependent on claims data to understand the unit cost of those inpatient events and get more details on some of the underlying admitting condition data and other things to understand the acuity and the level of treatment and intervention. On the non-inpatient side while we do receive authorization data for some of our service categories like outpatient surgical, it is not sufficiently high to be credible, and we’ve made improvement over the years, but I think it’s in the order magnitude, approaching 60% of those events.
But we have demonstrated through analysis that is not sufficiently credible to base your claim estimate off of. So we will certainly look at it as an input. But for those categories, we are very much relying on completion factor models based on paid claim progression. I will say we certainly while we don’t rely on the most recent 60 day paid claim data, we certainly do look at it. And in fact, for the month of December, we did see very high levels of paid claims for dates of service for December, which would be atypical in light of what we saw. We did step up to an assumption that some of that will result in higher costs. That was primarily in the physician cost category. So we’ve accounted that for that in our year end estimates, and that’s where we’ll just have to see, as those claims do more fully mature, how that develops, but did our best to make sure that we were using all of the readily available information to base our year end reserves.
On utilization management as you said, there are changes anticipated for 2024. We knew that at the time of pricing. We did have an expectation as a result of those changes that we will see a larger number of inpatient authorizations approved where in the old model they may have been downgraded, say to an ER or observation event, or denied for medical necessity. So we do anticipate a meaningful impact to inpatient utilization trends as a result of that. And that was accounted for in our initial pricing and our initial thinking and targets for 2024. We will have pretty good visibility in near real time to how those utilization management outcomes from the initial assessment are holding up versus our expectations. The piece I will say will take a little bit longer to assess is do we see any subsequent change in provider appeals or ultimate uphold rates?
Those will take a little bit more time. Again, we’ve used our best judgment and data to make some assumptions about that, but that I will say will take probably throughout the first half of the year to understand if there are any unanticipated changes to those appeal and ultimate uphold rates. And we’ll certainly keep you guys informed if we see any variances.
Sarah James: Thank you.
Operator: I’m showing no further questions.
Bruce Broussard: Okay, well, I’ll close out the call here. And as I started the call, we are disappointed in the update provided today. And as I said many times, we take our commitment serious and — will continue to work hard on behalf of our investors. I do want to first just continue to reemphasize that although the near term impacts of the higher utilization are disappointing, our confidence in the long-term attractiveness of this sector and our position with it has not changed one bit. I do want to say thank you for both your time today and our 65,000 employees for their dedication and support for our business and individuals we serve. So thank you and have a wonderful day.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
