Amir Bacchus : Yes. So David, this is Amir again. So a number of things. As I set up front, obviously, COVID and flu, that’s one of them. The Part B cost, which is a large bag, right, in the Part B cost deal with everything from what you see from whether it’s electric procedures and/or Part B drug utilization, all of those together led to elevated Part B costs that we saw towards the end of the year in December. So we can sit there and try to wrestle out as far as how many actual procedures versus admissions and things like that. We absolutely know we were elevated due to some of those things. But for us, it’s making sure that we can continue to evaluate under the changes that we see within health plans and what we can do, especially from the delegated standpoint, they have more control versus just somehow — some plans having more open referrals, to specialists without being able to do that prior authorization and evaluation.
So it is kind of a mixed bag. So you kind of see it’s not just one thing was Part B drugs or just outpatient or electric procedures. We definitely do know is, to some degree, from the COVID and flu combination that led to those things in December.
David Larsen : Okay. And then what are your expectations for revenue in 2024 on a PMPM basis, like in terms of health plans raising premiums, most of them, I think, are saying that they got to raise premiums significantly to account for the utilization and the RAF scores, like just thoughts there and then as well as the impact of coding and then perhaps your ability to capture more of the premium? Are there clauses in your contracts? I say, hey, if medical claims expenses are higher than expected, you can get more of the premium? Just any thoughts there would be great.
Sherif Abdou : So David, Sherif here. So we definitely are able to renegotiate a contract at any time. I mean no one can stop us from doing that. And most health plans understand the situation. But the example that I would like to share with you and the risk of analysts here that we were able to do any year in this past year and the prior year is to look at certain benefits and then limit our liability or exposure to the downside rep. For example, we noticed like most of other health plans that don’t benefit usage has been on the rise and increase. And we — as part of our DOFR or Division of Financial Responsibility to take risk on these ancillary services or benefits. So we went to the 2 largest health plans that we contract with, and we showed them the trend and we showed them the cost.
And we were able to flatten the liability and a cost to the prior year per member per month cost and anything above that was removed from our percentage of premium to the health plan percentage of premium. Same thing with the Flex cards, some health plans that increased the margin or the size of the benefit of the Flex Card, we were able to go to the health plan and says, we’re going to pay up until it was last year, whatever you increased this year was yours and help then agreed to that because they knew that they went there to acquire market share. So they were able to observe it. Does that answer your question?
David Larsen : It does. And then just one final one, and I’ll hop back in the queue. Thank you for being so patient with me here. I guess in the last 2 weeks of February and in the first 2 weeks of March, did you receive — I mean, I guess, you must have received additional data on December utilization, and that’s what drove the spike relative to expectations. Is that correct?
Sherif Abdou : That’s correct.
David Larsen : Okay. All right. So it takes at least, we’ll call it, 2.5 months or 90 days to get all the data, so if we’re thinking about January, like do you have all the data for January? Or are there still a couple of files you’re waiting for?
Sherif Abdou : So we have a lot of data for January, and you understand that it was never going to be complete until like 6 or 9 months down the road. However, we have enough indication to calculate the liability and IBNR and overall medical cost.
Operator: And our next question today comes from Ryan Daniels from William Blair.
Jack Senft: This is Jack Senft, on for Ryan Daniels. Most of my questions have been answered already, but I just wanted to go back to the medical margin. I mean it is expected to increase pretty substantially this year. So just kind of curious what the largest driver is here. Is it more of the material lives just starting to shine through versus like less new lives coming on? Or — is it really a majority coming from ACO REACH that could be additional upside. Just kind of curious if you can double-click on that again.
Amir Bacchus : Yes. Certainly, this is Amir again. So a couple of things. You’re absolutely right as far as the ACO REACH with the higher revenue, which is great, and we appreciate seeing that. However, as far as our number of lives that are persistent, yes, through this AEP, we actually had an even improved number of persistent lives even than previous years. So we’re actually looking at probably 92% persistency, which gives us, I should say, makes us more excited to achieve that medical margin because of that persistency. So because it’s been much better than last year, it gives us much more opportunity to continue to work with those patients to improve not only the documentation and understand their diagnosis burden, but at the same time, get them more plugged in, especially with their providers in the care model. And as we do that, we will see that margin increase to that margin that we described to the $230 million to $250 million range.
