Atul Kavthekar: Yes, Josh, I guess, the punchline of this is that we suspected there may be some cushion that was larger than necessary. We had the opportunity to go back and actually study the numbers now that they have the run out, and that’s indeed what we are finding with the data. So, the process now is really, and again, just to remind you and everyone else, we don’t necessarily set these amounts and book the amounts and determine the amounts to book. We have a third-party actuary that does that. And so right now, we’ve begun to corroborate all that analysis with that third-party actuary. And then part of that is going to be agreeing on what is a reasonable and appropriate amount of cushion to be entering into. And so that’s something we’ll work on over the next — hopefully, the next quarter, but certainly over the next two quarters.
Josh Raskin: Makes sense. All right. Thanks.
Sherif Abdou: Thank you.
Operator: The next question comes from David Larsen of BTIG. Please go ahead.
Jenny Shen: Hi, this is Jenny Shen, on for Dave Larsen. I’ll just echo my peers and say my congrats to both Sherif and Aric. So, on the first question, EBITDA came in below our model. I was just — wanted to ask what gives you guys the confidence to reaffirm the full year guidance? And can you talk about a little more about your visibility into that EBITDA? And how should we expect EBITDA to trend throughout the year?
Atul Kavthekar: Yes, Jenny, those are great questions. So, let me — this is Atul. Let me just hit on a couple of things. I think when we think — when we talked about the rebate recognition, that is strictly a timing issue. We had anticipated that, that was going to be recognized in the quarter and it’s just not going to be recognized until later in the year. So, we’re not questioning it. It’s just an issue a set of timing. But the other components that I think are really the key drivers here is really around the cost reduction and the efficiencies of the business and the utilization as it relates to medical expense management. Many, many initiatives are in place, a lot of them are gaining traction, and we haven’t even seen the full effect of those yet.
We will, over the remainder of the year. And then — as I mentioned, we talked about the sweeps. We had an initial opportunity to start recognize them because we were able to predict them. I think we will continue to develop that further and work with our auditors, but those are all fundamental things that give us confidence in the outlook, and this is all outside of any potential adjustment with regards to the reserve. I hope that answers your question.
Jenny Shen: Yes, that’s very helpful. And just a quick follow-up. I appreciate the detail on the 90% persistent live. Just can you remind us again what kind of greater visibility that gives you guys their margin profile? Any additional color there would be helpful. Thanks.
Amir Bacchus: Hi Jenny, this is Amir. So, yes. Obviously, the more persistent the life is, the more we can help to manage the chronic care of that patient, right. So if indeed, we see patients coming in at one year, okay, that’s fine. But when they start to go into the two years and three years, then with greater persistency, we have much better opportunity not only to have gained their trust, but to help them manage the significant chronic diseases that we see every day, whether it being COPD, congestive heart failure, diabetes, renal disease, et cetera. So, it’s building that relationship that takes time with our care management teams, especially on those high-risk rising risk patient populations to work directly with our clinicians to maximize their care and or their outcomes.
So, that’s why that persistency is always so important to us. And I’m sure you’ve seen data as we’ve looked at it before. And those cohort analysis as we look at patients who have been with us for a certain period of time, we see significant reductions in the overall medical expense.
Jenny Shen: Got it. That’s helpful. Thank you.
Operator: Our next question comes from Gary Taylor of TD Cowen. Please go ahead.
Gary Taylor: Hi, good afternoon. I want to make sure I understood a couple of the numbers. First, on the Part D, the $8 million rebate you expected. It doesn’t sound like that was typically recognized in the first quarter. Was that — would you recognize those rebates in the first quarter historically?
Atul Kavthekar: We did not historically recognize them in the quarter. We sort of followed the same pattern that we had. Our anticipation was that they were going to be recognized in the first quarter. That’s something we’re going to work on with the auditors going forward policy and documentation. This is Atul, by the way.
Gary Taylor: Got it. So, had you recognized those and EBITDA would have been like negative 12%, that would have been more in line with what you thought the quarter would look like?
Atul Kavthekar: Correct. That is correct.
