Parth Mehrotra: Yes. Thanks, Andrew. So, obviously, if you look at the implied lives that are not capitated, you can – if we hadn’t had that contract paused, you can imply that we would’ve been closer to the mid to high end of our original guidance, even on Practice Collections. Obviously, the reason for pausing that contract was preserving the earnings power and given the situation, the unique situation in that one particular contract, it’s not impacted our bottom-line results. And that was the objective here. So, again, you can see the topline impact is not resulting in any bottom-line metric. And with the momentum we’ve had, had it not been for that, we would’ve been at the high end of that guidance as well.
Operator: Thank you. Our next question comes from David Larsen from BTIG.
David Larsen: Hi. Congrats on the good quarter. Can you maybe talk a little bit about the nature of the conversations that you’re having with the health plans? Are they willing and ready and happy and able to get into risk deals? Sometimes they want to avoid risk deals. Are you seeing more success on the Medicare or Medicaid side? And then just any thoughts around the CMS proposed rule for 2024, there’s going to be some headwinds for the conversion factor, but an increase in risk. Just any color there would be helpful. Thank you.
Parth Mehrotra: Yes, thanks, Dave. So, in general, look, we work really closely with all of our health plan partners. It’s a longer-term discussion than a very immediate discussion. We look at different risk pools. We look at density of lives, density of duals, and decide when to dial up risk. Look, our approach has been to be very prudent. We can’t be more explicit than have a slide in our earnings call with the subheading that says it’s called risk for a reason. Our philosophy has been to have very close alignment both with the payer partner as well as our physicians. Having all three entities participate in that risk, we think that leads to better aligned outcomes, and we’ll continue to follow the same philosophy. Obviously, there can be in a period of time where everybody’s chasing MA utilization – sorry, MA attribution.
You can have population growth or attributed lives growth, which can be a little bit unnatural if everybody’s chasing that from the payer side, and we are downstream from the payer. So, we try to avoid adverse selection and things of that nature. So, having that alignment is very important. So, I think we continue to have those discussions in each one of our States. We’ll thoughtfully move into risk. We really like the CMS MSSP program, as you noted. It’s a big part of our business. CMS takes about 25% share of the shared savings in the enhanced track. And I think most of the changes that they’ve proposed further will spend in the program and will be favorable in general to us around the assignment process, whether it’s the benchmark risk adjustment methodology, quality reporting, and then potentially the ability for ACOs like us to take more risk than the enhanced track.
I would say, though, these will – the financial impact will likely be more gradual than some one-time spike here as we’ve seen in the past with CMS adjusting the program. But we continue to think that this is one of the best, most broadly applicable value-based programs in the country, and we feel really good about it.
Operator: Thank you. Our next question is from Jessica Tassan from Piper Sandler.
Jessica Tassan: Hi, guys. Thanks for taking the question. So, I was hoping you could maybe talk a little bit about the performance of some of your more mature MSSP ACOs. And I’m specifically curious to know if ACOs like the Mid-Atlantic are still growing new providers and new lives nine years after inception, and kind of when an ACO is that sophisticated or mature, how do you think about bringing new providers into the fold without diluting the savings rate for existing providers? Thanks.
Parth Mehrotra: Yes, thanks for the question, Jess. Look, we’ve continued to grow all of our ACOs over the years. We continue to add new providers even in mature markets like Mid-Atlantic. There are a lot of late adopters. We see a lot of momentum. We still, despite being in this market for more than eight or nine years, have pretty low market share relatively. We barely approach double-digits, even in mature markets with very large medical groups. And I think that speaks to the strength of this business model, where the TAM is really large for us, and we continue to get more attributed lives enter into increased list risk arrangements. So, moving from tracks 1, 2, 3 or A, B, C, as they were in the past, into more enhanced track, and then increase the savings rates.
So, I think you’re going to see a double whammy on the shared savings and the EBITDA progression on these ACOs. And our hope is to continue to keep delivering on that. Obviously, the more mature the markets, you start to see some stabilization of results. But we think we have a pretty good line of sight in the next few years to keep growing some of our ACOs and continuing to deliver.
Operator: Thank you. Our next question comes from Whit Mayo.
