Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 02, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-40537 | |
Entity Registrant Name | NEUEHEALTH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4991296 | |
Entity Address, Address Line One | 9250 NW 36th St | |
Entity Address, Address Line Two | Suite 420 | |
Entity Address, City or Town | Doral | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33178 | |
City Area Code | 612 | |
Local Phone Number | 238-1321 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | NEUE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,224,541 | |
Entity Central Index Key | 0001671284 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 112,762 | $ 87,299 |
Short-term investments | 0 | 6,265 |
Accounts receivable, net of allowance of $10,358 and $14,023, respectively | 39,938 | 39,084 |
ACO REACH performance year receivable | 646,627 | 115,878 |
Current assets of discontinued operations (Note 15) | 149,352 | 822,570 |
Prepaids and other current assets | 25,786 | 17,831 |
Total current assets | 974,465 | 1,088,927 |
Other assets: | ||
Property, equipment and capitalized software, net | 12,650 | 14,499 |
Intangible assets, net | 90,345 | 93,238 |
Other non-current assets | 27,668 | 28,816 |
Total other assets | 130,663 | 136,553 |
Total assets | 1,105,128 | 1,225,480 |
Current liabilities: | ||
Medical costs payable | 157,601 | 157,903 |
Accounts payable | 6,263 | 11,841 |
Short-term borrowings | 0 | 303,947 |
ACO REACH performance year obligation | 529,657 | 0 |
Current liabilities of discontinued operations (Note 15) | 345,048 | 699,758 |
Risk share payable to deconsolidated entity | 123,981 | 123,981 |
Warrant liability | 11,899 | 13,971 |
Other current liabilities | 85,101 | 79,856 |
Total current liabilities | 1,259,550 | 1,391,257 |
Long-term borrowings | 66,400 | 66,400 |
Other liabilities | 21,212 | 22,441 |
Total liabilities | 1,347,162 | 1,480,098 |
Commitments and contingencies (Note 10) | ||
Redeemable noncontrolling interests | 98,761 | 88,908 |
Redeemable Series A and B preferred stock | 920,417 | 920,417 |
Shareholders’ equity (deficit): | ||
Common stock, $0.0000 par value; $3,000,000 shares authorized in 2024 and 2023; $8,225 and $8,054 shares issued and outstanding in 2024 and 2023, respectively | 1 | 1 |
Additional paid-in capital | 3,074,654 | 3,056,027 |
Accumulated deficit | (4,323,763) | (4,307,849) |
Accumulated other comprehensive loss | (104) | (122) |
Treasury Stock, at cost, $32 shares at March 31, 2024, and December 31, 2023, respectively | (12,000) | (12,000) |
Total shareholders’ equity (deficit) | (1,261,212) | (1,263,943) |
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | 1,105,128 | 1,225,480 |
Redeemable Series A preferred stock | ||
Current liabilities: | ||
Redeemable Series A and B preferred stock | 747,481 | 747,481 |
Redeemable Series B preferred stock | ||
Current liabilities: | ||
Redeemable Series A and B preferred stock | $ 172,936 | $ 172,936 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts receivable, allowance for credit loss | $ 10,358 | $ 14,023 |
Redeemable preferred stock, shares outstanding (in shares) | 925,000 | 925,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued (in shares) | 8,224,541 | 8,053,576 |
Common stock, shares outstanding (in shares) | 8,224,541 | 8,053,576 |
Treasury stock, at cost (in shares) | 31,526 | 31,526 |
Series A preferred stock dividend accrued | ||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, shares authorized (in shares) | 750,000 | 750,000 |
Redeemable preferred stock, shares issued (in shares) | 750,000 | 750,000 |
Redeemable preferred stock, shares outstanding (in shares) | 750,000 | 750,000 |
Series B preferred stock dividend accrued | ||
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, shares authorized (in shares) | 175,000 | 175,000 |
Redeemable preferred stock, shares issued (in shares) | 175,000 | 175,000 |
Redeemable preferred stock, shares outstanding (in shares) | 175,000 | 175,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Revenue: | |||
ACO REACH revenue | $ 171,811,000 | $ 239,807,000 | |
Investment income | 203,000 | 8,000 | |
Total revenue | 245,095,000 | 300,550,000 | |
Operating expenses: | |||
Medical costs | 196,874,000 | 260,120,000 | |
Operating costs | 66,822,000 | 79,518,000 | |
Bad debt expense | (3,000) | 0 | |
Restructuring charges | (58,000) | 301,000 | |
Depreciation and amortization | 4,562,000 | 5,483,000 | |
Total operating expenses | 268,197,000 | 345,422,000 | |
Operating loss | (23,102,000) | (44,872,000) | |
Interest expense | 2,930,000 | 7,787,000 | |
Warrant income | (2,072,000) | 0 | |
Gain on troubled debt restructuring | (30,311,000) | 0 | |
Income (loss) from continuing operations before income taxes | 6,351,000 | (52,659,000) | |
Income tax expense | 663,000 | 1,259,000 | |
Net income (loss) from continuing operations | 5,688,000 | (53,918,000) | |
Loss from discontinued operations, net of tax (Note 15) | (9,865,000) | (115,543,000) | |
Net Loss | (4,177,000) | (169,461,000) | |
Net income from continuing operations attributable to noncontrolling interests | (11,737,000) | (5,550,000) | |
Net loss attributable to NeueHealth, Inc. common shareholders | $ (28,518,000) | $ (186,905,000) | |
Basic and diluted loss per share attributable to NeueHealth, Inc. common shareholders | |||
Continuing operations, basic (in dollars per share) | $ (2.31) | $ (9.04) | |
Continuing operations, diluted (in dollars per share) | (2.31) | (9.04) | |
Discontinued operations, basic (in dollars per share) | (1.22) | (14.64) | |
Discontinued operations, diluted (in dollars per share) | (1.22) | (14.64) | |
Basic loss per share (in dollars per share) | (3.53) | (23.68) | |
Diluted loss per share (in dollars per share) | $ (3.53) | $ (23.68) | |
Basic weighted-average common shares outstanding (in shares) | [1] | 8,079 | 7,894 |
Diluted weighted-average common shares outstanding (in shares) | [1] | 8,079 | 7,894 |
Series A preferred stock dividend accrued | |||
Operating expenses: | |||
Series A and B preferred stock dividend accrued | $ (10,294,000) | $ (9,714,000) | |
Series B preferred stock dividend accrued | |||
Operating expenses: | |||
Series A and B preferred stock dividend accrued | (2,310,000) | (2,180,000) | |
Capitated revenue | |||
Revenue: | |||
Revenue | 61,466,000 | 49,548,000 | |
Service revenue | |||
Revenue: | |||
Revenue | $ 11,615,000 | $ 11,187,000 | |
[1] *Shares have been retroactively adjusted to reflect the decreased number of shares resulting from a 1 for 80 reverse stock split effective May 22, 2023. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Loss) (Parenthetical) | 3 Months Ended | |
May 22, 2023 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Reverse stock splits (in shares) | 0.0125 | 0.0125 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (4,177) | $ (169,461) |
Other comprehensive income: | ||
Unrealized investment holding gains arising during the year, net of tax of $0 and $0, respectively | 20 | 1,303 |
Less: reclassification adjustments for investment (losses) gains, net of tax of $0 and $0, respectively | 2 | (890) |
Other comprehensive income | 18 | 2,193 |
Comprehensive loss | (4,159) | (167,268) |
Comprehensive loss attributable to noncontrolling interests | (11,737) | (5,550) |
Comprehensive loss attributable to NeueHealth, Inc. common shareholders | $ (15,896) | $ (172,818) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized investment holding (losses) gains arising during the year, tax | $ 0 | $ 0 |
Reclassification adjustments for investment gains, tax | $ 0 | $ 0 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | |
Beginning balance (in shares) at Dec. 31, 2022 | 925,000 | ||||||
Beginning balance at Dec. 31, 2022 | $ 920,417 | ||||||
Ending balance (in shares) at Mar. 31, 2023 | 925,000 | ||||||
Ending balance at Mar. 31, 2023 | $ 920,417 | ||||||
Beginning balance (in shares) at Dec. 31, 2022 | [1] | 7,878,000 | |||||
Beginning balance at Dec. 31, 2022 | (200,490) | $ 1 | $ 2,972,333 | $ (3,156,395) | $ (4,429) | $ (12,000) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (175,011) | (175,011) | |||||
Issuance of common stock (in shares) | [1] | 74,000 | |||||
Issuance of common stock | 1 | 1 | |||||
Share-based compensation | 33,320 | 33,320 | |||||
Other comprehensive loss | 2,193 | 2,193 | |||||
Ending balance (in shares) at Mar. 31, 2023 | [1] | 7,952,000 | |||||
Ending balance at Mar. 31, 2023 | $ (339,987) | $ 1 | 3,005,654 | (3,331,406) | (2,236) | (12,000) | |
Beginning balance (in shares) at Dec. 31, 2023 | 925,000 | ||||||
Beginning balance at Dec. 31, 2023 | $ 920,417 | ||||||
Ending balance (in shares) at Mar. 31, 2024 | 925,000 | ||||||
Ending balance at Mar. 31, 2024 | $ 920,417 | ||||||
Beginning balance (in shares) at Dec. 31, 2023 | 8,053,576 | 8,054,000 | |||||
Beginning balance at Dec. 31, 2023 | $ (1,263,943) | $ 1 | 3,056,027 | (4,307,849) | (122) | (12,000) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (15,914) | (15,914) | |||||
Issuance of common stock (in shares) | 171,000 | ||||||
Issuance of common stock | 0 | ||||||
Share-based compensation | 18,627 | 18,627 | |||||
Other comprehensive loss | $ 18 | 18 | |||||
Ending balance (in shares) at Mar. 31, 2024 | 8,224,541 | 8,225,000 | |||||
Ending balance at Mar. 31, 2024 | $ (1,261,212) | $ 1 | $ 3,074,654 | $ (4,323,763) | $ (104) | $ (12,000) | |
[1] *Shares have been retroactively adjusted to reflect the decreased number of shares resulting from a 1 for 80 reverse stock split |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders’ Equity (Deficit) (Parenthetical) | 3 Months Ended | |
May 22, 2023 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Reverse stock splits (in shares) | 0.0125 | 0.0125 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||
Net loss | $ (4,177,000) | $ (169,461,000) | $ (1,300,000,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 4,562,000 | 9,891,000 | |
Share-based compensation | 18,627,000 | 33,320,000 | |
Deferred income taxes | 0 | 436,000 | |
Warrant expense | (2,072,000) | 0 | |
Gain on troubled debt restructuring | (30,311,000) | 0 | |
Net accretion of investments | (34,000) | (4,581,000) | |
Loss on disposal of property, equipment, and capitalized software | 245,000 | 1,299,000 | |
Other, net | 2,000 | 475,000 | |
Changes in assets and liabilities, net of acquired assets and liabilities: | |||
Accounts receivable | (850,000) | (43,409,000) | |
ACO REACH performance year receivable | (530,749,000) | (783,703,000) | |
Other assets | (3,507,000) | 22,448,000 | |
Medical cost payable | (13,263,000) | (423,459,000) | |
Risk adjustment payable | (11,224,000) | 4,153,000 | |
Accounts payable and other liabilities | (5,612,000) | (119,416,000) | |
Unearned revenue | (11,000) | 137,563,000 | |
ACO Reach performance year obligation | 529,657,000 | 719,420,000 | |
Net cash used in operating activities | (48,717,000) | (615,024,000) | |
Cash flows from investing activities: | |||
Purchases of investments | 0 | (2,880,000) | |
Proceeds from sales, paydowns, and maturities of investments | 2,321,000 | 690,161,000 | |
Purchases of property and equipment | (64,000) | (1,863,000) | |
Proceeds from sale of business, net | 196,130,000 | 1,370,000 | |
Net cash provided by investing activities | 198,387,000 | 686,788,000 | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 0 | 1,000 | |
Repayments of short-term borrowings | (273,636,000) | 0 | |
Distributions to noncontrolling interest holders | (1,884,000) | (1,805,000) | |
Net cash used in financing activities | (275,520,000) | (1,804,000) | |
Net (decrease) increase in cash and cash equivalents | (125,850,000) | 69,960,000 | |
Cash and cash equivalents of continuing and discontinued operations – beginning of year | 375,280,000 | 1,932,290,000 | 1,932,290,000 |
Cash and cash equivalents of continuing and discontinued operations – end of period | 249,430,000 | 2,002,250,000 | $ 375,280,000 |
Supplemental disclosures of cash flow information: | |||
Changes in unrealized (loss) gain on available-for-sale securities in OCI | 18,000 | 2,193,000 | |
Cash paid for interest | $ 3,587,000 | $ 7,157,000 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Organization: NeueHealth, Inc. and subsidiaries (collectively, “NeueHealth,” “we,” “our,” “us,” or the “Company”) was founded in 2015 to transform healthcare. NeueHealth is a value-driven, consumer-centric healthcare company committed to making high-quality, coordinated healthcare accessible and affordable to all populations. We believe we can reduce the friction and current lack of coordination in today’s healthcare system by uniquely aligning the interests of payors and providers to enable a seamless, consumer-centric healthcare experience that drives value for all. We have two market facing segments: NeueCare and NeueSolutions. NeueCare is our value-driven care delivery business that manages risk in partnership with external payors and serves all populations across The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (“ACA”) Marketplace, Medicare, and Medicaid. NeueSolutions is our provider enablement business that includes a suite of technology, services, and clinical care solutions that empower providers to thrive in performance-based arrangements. Basis of Presentation: The condensed consolidated financial statements include the accounts of NeueHealth, Inc. and all subsidiaries and controlled companies. All intercompany balances and transactions are eliminated upon consolidation. The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our audited consolidated financial statements, unless the information contained in those disclosures materially changed or is required by GAAP. As such, the condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023 included in our Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The accompanying condensed consolidated financial statements include all normal recurring adjustments necessary for fair presentation of the interim financial statements. Sale of California Medicare Advantage Business: On June 30, 2023, the Company entered into a definitive agreement with Molina to sell its California Medicare Advantage business to Molina Healthcare, Inc. (“Molina”) , which consisted of Universal Care, Inc. d/b/a Brand New Day, a California corporation (“BND”) and Central Health Plan of California, Inc., a California corporation (“CHP”) (the “Molina Purchase Agreement”) . Effective as of January 1, 2024, the Molina Purchase Agreement transaction was consummated for an aggregate purchase price of $500.0 million subject to certain contingencies and Tangible Net Equity (“TNE”) adjustments . Upon completion of the sale, the Bright HealthCare reporting unit of our discontinued operations was no longer included in our operations. Refer to Note 15 Discontinued Operations for discussion of the transaction. Debt Payoff: On December 27, 2023, we entered into an agreement regarding our revolving credit agreement with JPMorgan Chase Bank, N.A. (the “Agent”) and a syndicate of banks (the “2021 Credit Agreement”) providing that, upon closing of the sale of our California Medicare Advantage business, and payments for debt and interest of $274.6 million to the Agent and $24.1 million to the issuers of letters of credit outstanding under the 2021 Credit Agreement, all liabilities of the Company under the 2021 Credit Agreement would be terminated (other than those under the outstanding letters of credit that remained outstanding thereafter) (collectively, the “Termination”). These amounts were paid on January 2, 2024, and on that date the Termination occurred. We evaluated this amendment to the 2021 Credit Agreement in accordance with ASC 470-60 Troubled Debt Restructuring and ASC 470-50 Debt - Modification and Extinguishments . The evaluation for troubled debt restructuring includes assessing both qualitative and quantitative factors such as whether the creditor granted a concession and if the Company is experiencing financial difficulties. Our quantitative analysis consisted of comparing the cash paid as part of the Payoff Condition to the total amount of outstanding indebtedness immediately prior to the payoff. Given the Company is experiencing financial difficulties and the lenders granted a concession by accepting total payments of $298.6 million for the remaining balance of the principal and interest due, we accounted for the transaction as a troubled debt restructuring and recognized a total gain of $30.3 million from the debt settlement. Use of Estimates: The preparation of our condensed consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Our most significant estimates include medical costs payable, provider risk share arrangements, third-party payor risk share arrangements, and valuation and impairment of intangible assets. Actual results could differ from these estimate s. Going Concern: The condensed consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a history of operating losses, and we generated a net loss of $4.2 million for the quarter ended March 31, 2024 , and a net loss of $1.3 billion for the year ended December 31, 2023. Additionally, the Company experienced negative operating cash flows primarily related to our discontinued Bright HealthCare – Commercial segment for the quarter ended March 31, 2024 and in the preceding year ended December 31, 2023. Certain of the Company’s insurance subsidiaries have material obligations remaining related to the commercial insurance risk adjustment program. The subsidiaries entered into repayment agreements with the Centers for Medicare & Medicaid Services’ (“CMS”) with respect to the unpaid obligations in September 2023. The amount owed under the repayment agreements is due March 15, 2025 and bears interest at a rate of 11.5% per annum. In the first quarter of 2024, the Company paid down $11.2 million of risk adjustment principal, leaving $279.9 million as the remaining risk adjustment liability as of March 31, 2024 . We consummated the sale of our California Medicare Advantage business in January 2024, resulting in net proceeds of $31.6 million after debt and interest repayment of $274.6 million , cash collateralization of existing letters of credit of $24.1 million , contingent consideration of $110.0 million , estimated net equity adjustment of $57.3 million , and other transaction related fees. Further, as described in Note 5, Borrowings and Common Stock Warrants , in April 2024 the Company entered into an amendment to our existing 2023 Credit Agreement, which allows the Company to borrow an additional $30.0 million under the agreement. As of the date of this Quarterly Report on Form 10-Q’s filing, an additional $20.0 million has been borrowed under this amendment, with $10.0 million left available to be borrowed. Cash and investment balances held at regulated insurance entities are subject to regulatory restrictions and can only be accessed through dividends declared to the non-regulated parent company or through reimbursements from administrative services agreements with the parent company. The regulated legal entities are required to hold certain minimum levels of risk-based capital and surplus to meet regulatory requirements. As noted further in Note 15, Discontinued Operations , we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. In certain of our other regulated insurance legal entities, we hold surplus levels of risk-based capital, and as we complete the wind-down exercise related to these entities over the next two years, we expect to recapture through dividends and final liquidation actions the remaining cash positions of these entities. In February and March of 2024, we obtained approval in three states to execute a total of $28.2 million of dividends, of which $13.2 million was paid to the parent in March 2024 and $15.0 million was paid to the parent in April 2024 and immediately contributed to its insurance subsidiaries in deficit positions. We believe that the existing cash, investments, and available liquidity will not be sufficient to satisfy our anticipated cash requirements for the next twelve months following the date the condensed consolidated financial statements contained in this Form 10-Q are issued, for items such as IFP risk adjustment payables, medical cost payables, any remaining obligation to the deconsolidated entity, and other liabilities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In response to these conditions, management continues to implement a restructuring plan to reduce capital needs and our operating expenses in the future to drive positive operating cash flow and increase liquidity. Additionally, the Company is actively engaged with the Board of Directors and outside advisors to evaluate additional financing. In addition, the Company may not fully collect the contingent consideration associated with the sale of the California Medicare Advantage business or be able to obtain additional liquidity on acceptable terms, as both of these matters will be subject to market conditions that are not fully within the Company’s control. The Company will be unable to satisfy its obligations unless it obtains additional liquidity or takes other management actions. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Operating Costs: Our operating costs, by functional classification for the three months ended March 31, 2024 and 2023, are as follows (in thousands) : Three Months Ended March 31, 2024 2023 Compensation and fringe benefits $ 48,136 $ 58,624 Professional fees 6,500 5,848 Technology expenses 3,517 6,153 General and administrative expenses 7,700 7,457 Other operating expenses 969 1,436 Total operating costs $ 66,822 $ 79,518 Recently Issued and Adopted Accounting Pronouncements: There are no accounting pronouncements that were recently issued and not yet adopted or adopted since our audited consolidated financial statements were issued that had, or are expected to have, a material impact on our consolidated financial position, results of operations, or cash flows. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In October 2022, we announced our decision to further focus our business on our Fully Aligned Care Model, our NeueCare and NeueSolutions segments, and that we will no longer offer commercial plans through Bright HealthCare, or Medicare Advantage products outside of California in 2023. As a result of these strategic changes, we announced and have taken actions to restructure the Company’s workforce and reduce expenses based on our updated business model. Restructuring charges by reportable segment and corporate for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 NeueCare NeueSolutions Corporate & Eliminations Total Employee termination benefits $ — $ — $ (58) $ (58) Long-lived asset impairments — — — — Contract termination and other costs — — — — Total continuing operations $ — $ — $ (58) $ (58) Three Months Ended March 31, 2023 NeueCare NeueSolutions Corporate & Eliminations Total Employee termination benefits $ — $ — $ (766) $ (766) Long-lived asset impairments — — 880 880 Contract termination and other costs — — 187 187 Total continuing operations $ — $ — $ 301 $ 301 The $0.9 million of long-lived asset impairments is the result of a lease abandonment for one of our corporate office locations during the three months ended March 31, 2023. Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 were as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 8,389 $ — $ 8,389 Net charges (58) — (58) Cash payments (2,400) — (2,400) Balance at March 31, 2024 $ 5,931 $ — $ 5,931 Employee termination benefits are recorded within Other current liabilities while contract termination costs are recorded within Accounts payable. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS The gross carrying value and accumulated amortization for definite-lived intangible assets were as follows (in thousand s) : March 31, 2024 December 31, 2023 Gross Carrying Accumulated Amortization Gross Carrying Accumulated Amortization Customer relationships $ 80,021 $ 28,231 $ 80,021 $ 26,144 Trade names 48,361 9,806 48,361 9,000 Total $ 128,382 $ 38,037 $ 128,382 $ 35,144 For the three months ended March 31, 2024 and 2023, there were no impairments of the definite-lived intangible assets. We are continuously evaluating whether events or changes in circumstances indicate that an intangible asset may not be recoverable including an adverse change in the extent in which an intangible asset is used, our market capitalization, macroeconomic trends, and other events and uncertainties. Negative trends in these factors could result in a non-cash charge for impairment to intangible assets in a future period. Amortization expense relating to intangible assets for the three months ended March 31, 2024 and 2023 was $2.9 million and $2.9 million, respectively. Estimated amortization expense relating to intangible assets for the remainder of 2024 and for each of the next five full years ending December 31 is as follows (in thousand s) : 2024 (April-December) $ 8,681 2025 $ 11,574 2026 $ 11,574 2027 $ 11,574 2028 $ 10,295 2029 $ 10,295 |
MEDICAL COSTS PAYABLE
MEDICAL COSTS PAYABLE | 3 Months Ended |
Mar. 31, 2024 | |
Insurance [Abstract] | |
MEDICAL COSTS PAYABLE | MEDICAL COSTS PAYABLE The following table shows the components of the change in medical costs payable for the three months ended March 31, 2024 and 2023 (in thousand s) : March 31, 2024 2023 Medical costs payable - January 1 $ 157,903 $ 116,021 Incurred related to: Current year 201,420 254,782 Prior year (4,546) 2,806 Total incurred 196,874 257,588 Paid related to: Current year 87,372 90,768 Prior year 109,804 95,660 Total paid 197,176 186,428 Medical costs payable - March 31 $ 157,601 $ 187,181 Medical costs payable attributable to prior years decreased by $4.5 million and increased by $2.8 million for the three months ended March 31, 2024 and 2023, respectively. Medical costs payable estimates are adjusted as additional information regarding claims becomes known; there were no significant changes to estimation methodologies during the periods. The table below details the components making up the medical costs payable as of March 31, 2024 and December 31, 2023 (in thou sand s) : March 31, 2024 December 31, 2023 Provider incentive payable 42,366 2,367 Incurred but not reported (IBNR) 115,235 155,536 Total medical costs payable $ 157,601 $ 157,903 |
BORROWINGS AND COMMON STOCK WAR
BORROWINGS AND COMMON STOCK WARRANTS | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
BORROWINGS AND COMMON STOCK WARRANTS | BORROWINGS AND COMMON STOCK WARRANTS Short-term Borrowings and Troubled Debt Restructuring: In March 2021, we entered into a $350.0 million revolving credit agreement with JPMorgan Chase Bank, N.A. and a syndicate of banks, which was set to mature on February 28, 2024. On December 27, 2023, we entered into an agreement regarding our 2021 Credit Agreement with the Agent providing that upon closing of the sale of our California Medicare Advantage business, and payments of $274.6 million to the Agent and $24.1 million to the issuers of letters of credit outstanding under the 2021 Credit Agreement, all liabilities of the Company under the 2021 Credit Agreement would be terminated (other than those under the outstanding letters of credit that remained outstanding thereafter) (collectively, the “Termination”). These amounts were paid on January 2, 2024, and on that date the Termination occurred and we had no outstanding borrowings under the 2021 Credit Agreement. As of March 31, 2024 and December 31, 2023 we had $0.0 million and $303.9 million, respectively, borrowed under the 2021 Credit Agreement at a weighted-average effective annual interest rate of 10.07%. As of March 31, 2024, the letters of credit outstanding under the 2021 Credit Agreement with a principal balance of $22.9 million are collateralized at 105% of the principal balance and reported as restricted cash included in cash and cash equivalents on the Condensed Consolidated Balance Sheet. Upon occurrence of the Termination, we recognized a gain on troubled debt restructuring of $30.3 million. For the three months ended March 31, 2024, the gain on troubled debt restructuring resulted in a decrease of basic and diluted loss per share of $3.75. There was no gain on troubled debt restructuring for the three months ended March 31, 2023 . Long-term Borrowings: On August 4, 2023, the Company entered into a credit agreement (as amended, supplemented, restated or otherwise modified from time to time, the “2023 Credit Agreement”), among the Company, NEA 18 Venture Growth Equity, L.P. (“NEA”) and the lenders from time to time party thereto (together with NEA and each of their respective successors and assigns, the “Lenders”), to provide for a credit facility pursuant to which, among other things, the lenders have provided $60.0 million delayed draw term loan commitments, which matures on December 31, 2025. On October 2, 2023, the Company, NEA, as the existing lender (the “Existing Lender”), and California State Teachers’ Retirement System, as an incremental lender (“the New Lender”) entered into an amendment (“Incremental Amendment No. 1”) to the 2023 Credit Agreement to provide for a term loan commitment increase in an aggregate principal amount of $6.4 million by the New Lender under the 2023 Credit Agreement. Loans under Incremental Amendment No. 1 have the same terms as loans under the original term loan commitments provided by the Existing Lender. As of March 31, 2024 and December 31, 2023, we had $66.4 million borrowed under the 2023 Credit Agreement at a weighted-average effective interest rate of 15.00%. On April 8, 2024, the Company and NEA, New Enterprise Associates 17, L.P., New Enterprise Associates 16, L.P. and New Enterprise Associates 15, L.P. (collectively, the “NEA Lenders”) entered into an amendment (“Incremental Amendment No. 2”) to the 2023 Credit Agreement (as amended to date the “Amended 2023 Credit Agreement”) to provide for a term loan commitment increase in an aggregate principal amount of up to $30.0 million by the NEA Lenders under the Amended 2023 Agreement. Loans under Incremental Amendment No. 2 have the same terms as loans under the original term loan commitments provided by NEA. Subsequent to March 31, 2024, we borrowed an additional $20.0 million under the 2023 Credit Agreement. Common Stock Warrants: On August 4, 2023, we entered into a warrantholders agreement (the “NEA Warrantholders Agreement”) with NEA 18 Venture Growth Equity, L.P. and the lenders from time-to-time party thereto, setting forth the rights and obligations of the Company and the lenders as holders of the warrants to acquire shares of Common Stock at an exercise price of $0.01 per share, and providing for the issuance of warrants. We established a warrant liability of $25.1 million on this date, representing the 1.7 million warrants available to be issued under the NEA Warrantholders Agreement at a fair market value of $15.12 (closing share price on August 4th, 2023 minus the $0.01 exercise price); the warrant liability is reported within Other current liabilities. The warrants do not contain any exercise contingencies and expire on the fifth anniversary of the first closing date. On October 2, 2023, we entered into a warrantholders agreement (the “CalSTRS Warrantholders Agreement” and together with the “NEA Warrantholders Agreement,” the “Warrantholders Agreements”) with the New Lender, setting forth the rights and obligations of the Company and the lenders as holders of the warrants to acquire shares of Common Stock at an exercise price of $0.01 per share, and providing for the issuance of warrants. We increased the warrant liability by $1.0 million on this date, representing the 0.2 million warrants available to be issued under the CalSTRS Warrantholders Agreement at a fair market value of $5.80 (closing share price on October 2, 2023 minus the $0.01 exercise price). The warrants do not contain any exercise contingencies and expire on the fifth anniversary of the first closing date. We account for our common stock warrants at the time of inception as derivatives, utilizing ASC 815 Derivatives and Hedging , by recording a liability equal to the warrants’ fair market value that is marked to market at the end of each period. Per the terms of the Warrantholders Agreements, the market value is calculated as the ending stock price less the $0.01 exercise price. As we draw on the available funds, warrants are issued; warrants will remain classified as a liability and be fair valued each period until they are exercised by the warrantholder. Upon exercise, we relieve the associated liability into additional paid in capital at the fair value of the warrants on the date of exercise, classifying the exercised warrants as equity. Fair Value Balance at January 1, 2024 $ 13,971 Newly executed Warrantholders Agreement — Change in fair value of outstanding warrants (2,072) Balance at March 31, 2024 $ 11,899 As of March 31, 2024 no issued warrants have been exercised and no warrants remain available to be issued under the Warrantholders Agreements. For the three months ended March 31, 2024, Warrant income was $2.1 million. There was no equivalent liability and activity at March 31, 2023 and for the three months then ended. On April 8, 2024, the Company and the NEA Lenders entered into a warrantholders agreement setting forth the rights and obligations of the Company and the NEA Lenders as holders of the warrants to acquire up to 1,113,563 shares of Common Stock at an exercise price of $0.01 per share, and providing for the issuance of warrants. As of March 31, 2024, no warrant liability has been established pursuant to this agreement. The Company classifies its warrant liability as Level 2 fair value because they are valued using observable, unadjusted quoted prices in active markets. See Note 15, Discontinued Operations for the full definition of Level 1, Level 2, and Level 3 fair values. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION 2016 Incentive Plan The Company adopted its 2016 Stock Incentive Plan (the “2016 Incentive Plan”) in March 2016. The 2016 Incentive Plan allowed for the Company to grant stock options, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”) to certain employees, consultants and non-employee directors. The 2016 Incentive Plan was initially adopted on March 25, 2016, and most recently amended in December 2020. Following the effectiveness of our 2021 Omnibus Plan (the “2021 Incentive Plan”), no further awards will be granted under the 2016 Incentive Plan. However, all outstanding awards granted under the 2016 Incentive Plan will continue to be governed by the existing terms of the 2016 Incentive Plan and the applicable award agreements. 2021 Incentive Plan The 2021 Incentive Plan was adopted by our Board of Directors on May 21, 2021 and approved by our stockholders on May 25, 2021 and June 5, 2021. The 2021 Incentive Plan allows the Company to grant stock options, RSAs, RSUs, stock appreciation rights, other equity-based awards, and cash-based incentive awards to certain employees, consultants and non-employee directors. The 2021 Incentive Plan was most recently amended in May 2024. As of March 31, 2024 there are 2.1 million shares of common stock authorized for issuance under the 2021 Incentive Plan and a total of 1.0 million shares of common stock were available for future issuance under the 2021 Incentive Plan. Share-Based Compensation Expense We recognized share-based compensation expense of $18.6 million and $33.3 million for the three months ended March 31, 2024 and 2023, respectively, which is included in operating costs in the Condensed Consolidated Statements of Income (Loss). Stock Options The Board of Directors, or the Compensation and Human Capital Committee of the Board of Directors, as applicable, determines the exercise price, vesting periods and expiration date at the time of the grant. Stock options granted prior to the third quarter of 2021 generally vest 25% at one year from the grant date, then ratably over the next 36 months with continuous employee service. Stock options granted after the beginning of the third quarter of 2021 generally vest ratably over three years. Option grants generally expire 10 years from the date of grant. There were no options granted during the three months ended March 31, 2024. The activity for stock options for the three months ended March 31, 2024 is as follows (in thousand s, except exercise price, weighted average contractual life, and aggregate intrinsic value) : Shares Weighted Average Weighted Average Aggregate Outstanding at January 1, 2024 633 $ 138.33 5.2 $ 213 Granted — — Exercised — — Forfeited (3) 175.02 Expired (16) 213.84 Outstanding at March 31, 2024 614 $ 136.12 4.3 $ 171 We recognized share-based compensation expense related to stock options of $6.8 million for the three months ended March 31, 2024, which is included in operating costs in the Condensed Consolidated Statements of Income (Loss). At March 31, 2024, there was $20.4 million of unrecognized compensation expense related to stock options that is expected to be recognized over a weighted-average period of 0.9 years. Restricted Stock Units RSUs represent the right to receive shares of our common stock at a specified date in the future and generally vest over a three-year period, except for Board of Director grants which generally vest one year from the date of grant. The fair value of RSUs is determined based on the closing market price of our common stock on the date of grant. The followin g table summarizes RSU award activity for the three months ended March 31, 2024 (in thousands, except weighted average grant date fair value) : Number of RSUs Weighted Average Grant Date Fair Value Unvested RSUs at January 1, 2024 776 $ 53.32 Granted — — Vested (171) 49.00 Forfeited (30) 46.91 Unvested RSUs at March 31, 2024 575 $ 54.94 We recognized share-based compensation expense related to RSUs of $5.5 million for the three months ended March 31, 2024, which is included in operating costs in the Condensed Consolidated Statements of Income (Loss). As of March 31, 2024, there was $18.0 million of unrecognized compensation expense related to the RSU grants, which is expected to be recognized over a weighted-average period of 1.1 years. Performance-based Restricted Stock Units (“PSUs”) In connection with our initial public offering, our Board of Directors approved the grant of PSUs to members of our executive leadership team. The grant encompassed a total of 183,750 PSUs, separated into four equal tranches, each of which are eligible to vest based on the achievement of predetermined stock price goals and a minimum service period of 3.0 years. The fair value of the PSUs was determined using a Monte-Carlo simulation. The following table summarizes PSU award activity for the three months ended March 31, 2024 (in thousands, except weighted average grant date fair value) : Number of PSUs Weighted Average Grant Date Fair Value Unvested PSUs at January 1, 2024 131 $ 744.00 Granted — — Forfeited (13) 744.02 Unvested PSUs at March 31, 2024 118 $ 744.01 We recognized share-based compensation expense related to PSUs of $6.3 million for the three months ended March 31, 2024, which is included in operating costs in the Condensed Consolidated Statements of Income (Loss). At March 31, 2024, there was $5.4 million of unrecognized compensation expense related to the PSU grant, which is expected to be recognized over a weighted-average period of 0.2 years. |
REDEEMABLE CONVERTIBLE PREFERRE
REDEEMABLE CONVERTIBLE PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2024 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK | REDEEMABLE CONVERTIBLE PREFERRED STOCK Pursuant to the Certificate of Designations designating the shares of our Series A Convertible Perpetual Preferred Stock and the Certificate of Designations designating the shares of our Series B Convertible Perpetual Preferred Stock (collectively, the “Preferred Stock”) each of which we filed with the Secretary of State of the State of Delaware (together, the “Certificate of Designations”), the Preferred Stock ranks senior to our shares of common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Preferred Stock is convertible into common stock and is entitled to an initial liquidation preference, in each case subject to certain limitations outlined in the Certificates of Designations. Series A Convertible Preferred Stock On January 3, 2022, we issued 750,000 shares of Series A Preferred Stock, par value $0.0001 per share, for an aggregate purchase price of $750.0 million, or $1,000 per share. The Series A Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Preferred Stock has an initial liquidation preference of $1,000 per share, which shall increase by accumulated quarterly dividends that are not paid in cash (“compounded dividends”). Holders of the Series A Preferred Stock are entitled to a dividend at the rate of 5.0% per annum, accruing daily and payable quarterly in arrears and subject to certain adjustments, as set forth in the Certificate of Designations. Dividends will be payable in cash, by increasing the amount of liquidation preference (compounded dividends) with respect to a share of Series A Preferred Stock, or any combination thereof, at the sole discretion of the Company. The Series A Preferred Stock had accrued compounded dividends of $88.3 million and $78.0 million as of March 31, 2024 and December 31, 2023, respectively. The Series A Preferred Stock will be convertible at the option of the holders into (I) the number of shares of common stock equal to the quotient of (a) the sum of (x) the liquidation preference (reflecting increases for compounded dividends) plus (y) the accrued dividends with respect to each share of Series A Preferred Stock as of the applicable conversion date divided by (b) the conversion price (initially approximately $364.00 per share and approximately $283.19 per share subsequent to the issuance of all warrants prior to the three months ended March 31, 2024) as of the applicable conversion date plus (II) cash in lieu of fractional shares, subject to certain anti‑dilution adjustments. At any time after January 3, 2025, if the closing price per share of Common Stock on the New York Stock Exchange was greater than 175% of the then effective Conversion Price for (x) each of at least twenty (20) trading days in any period of thirty (30) consecutive trading days and (y) the last trading day immediately before the Company provides the holders with notice of its election to convert all of the Series A Preferred Stock into the relevant number of shares of common stock, the Company may elect to convert all of the Series A Preferred Stock into the relevant number of shares of common stock. Under the Certificate of Designations, holders of the Series A Preferred Stock are entitled to vote with the holders of the common stock on an as‑converted basis, solely with respect to (i) a change of control transaction (to the extent such change of control transaction is submitted to a vote of the holders of the common stock) or (ii) the issuance of capital stock by the Company in connection with an acquisition by the Company (to the extent such issuance is submitted to a vote of the holders of the common stock), subject to certain restrictions. Holders of the Series A Preferred Stock are entitled to a separate class vote with respect to, among other things, amendments to the Company’s organizational documents that have an adverse effect on the Series A Preferred Stock, authorizations or issuances by the Company of securities that are senior to the Series A Preferred Stock, increases or decreases in the number of authorized shares of Preferred Stock, and issuances of shares of the Series A Preferred Stock after January 3, 2022. At any time following January 3, 2027, the Company may redeem all of the Series A Preferred Stock for a per share amount in cash equal to: (i) the sum of (A) the liquidation preference (reflecting increases for compounded dividends) thereof plus (B) all accrued dividends as of the applicable redemption date, multiplied by (ii) (A) 105% if the redemption occurs at any time prior to January 3, 2029 and (B) 100% if the redemption occurs at any time on or after January 3, 2029. Upon certain change of control events involving the Company, the holders of the Series A Preferred Stock may, at such holder’s election, convert their shares of Series A Preferred Stock into common stock at the then‑current conversion price or require the Company to purchase all or a portion of such holder’s shares of Preferred Stock that have not been so converted at a purchase price per share of Preferred Stock, payable in cash, equal to the greater of (I) (A) if the change of control effective date occurs at any time prior to January 3, 2029, the product of 105% multiplied by the sum of (x) the liquidation preference of such share of Series A Preferred Stock (reflecting increases for compounded dividends) plus (y) the accrued dividends in respect of such share of Series A Preferred Stock as of the change of control purchase date and (B) if the change of control effective date occurs on or after January 3, 2029, the sum of (x) the liquidation preference (reflecting increases for compounded dividends) of such share of Series A Preferred Stock plus (y) the accrued dividends in respect of such share of Series A Preferred Stock as of the change of control purchase date and (II) the consideration that would have been payable in connection with such change of control if such share of Series A Preferred Stock had been converted into Common Stock immediately prior to the change of control. Series B Convertible Preferred Stock On October 17, 2022, we issued 175,000 shares of Series B Preferred Stock, par value $0.0001 per share, for an aggregate purchase price of $175.0 million, or $1,000 per share. The Series B Preferred Stock ranks senior to the shares of the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The Preferred Stock has an initial liquidation preference of $1,000 per share, which shall increase by compounded dividends. Holders of the Series B Preferred Stock are entitled to a dividend at the rate of 5.0% per annum, accruing daily and payable quarterly in arrears and subject to certain adjustments, as set forth in the Certificate of Designations. Dividends will be payable in cash, by increasing the amount of liquidation preference (compounded dividends) with respect to a share of Series B Preferred Stock, or any combination thereof, at the sole discretion of the Company. The Series B Preferred Stock had accrued compounded dividends of $13.1 million and $10.8 million as of March 31, 2024 and December 31, 2023, respectively. The Series B Preferred Stock will be convertible at the option of the holders into (I) the number of shares of common stock equal to the quotient of (a) the sum of (x) the liquidation preference (reflecting increases for compounded dividends) plus (y) the accrued dividends with respect to each share of Series B Preferred Stock as of the applicable conversion date divided by (b) the conversion price (initially approximately $113.60 per share and approximately $98.68 per share subsequent to the issuance of all warrants prior to the three months ended March 31, 2024) as of the applicable conversion date plus (II) cash in lieu of fractional shares, subject to certain anti‑dilution adjustments. At any time after October 17, 2025, if the closing price per share of common stock on the NYSE was greater than 287% of the then effective Conversion Price for (x) each of at least twenty (20) trading days in any period of thirty (30) consecutive trading days and (y) the last trading day immediately before the Company provides the holders with notice of its election to convert all of the Series B Preferred Stock into the relevant number of shares of common stock, the Company may elect to convert all of the Series B Preferred Stock into the relevant number of shares of common stock. Under the Certificate of Designations, holders of the Series B Preferred Stock are entitled to vote with the holders of the common stock on an as‑converted basis, solely with respect to (i) a change of control transaction (to the extent such change of control transaction is submitted to a vote of the holders of the common stock) or (ii) the issuance of capital stock by the Company in connection with an acquisition by the Company (to the extent such issuance is submitted to a vote of the holders of the common stock), subject to certain restrictions. Holders of the Series B Preferred Stock are entitled to a separate class vote with respect to, among other things, amendments to the Company’s organizational documents that have an adverse effect on the Series B Preferred Stock, authorizations or issuances by the Company of securities that are senior to the Series B Preferred Stock, increases or decreases in the number of authorized shares of Preferred Stock, and issuances of shares of the Series B Preferred Stock after October 17, 2022. At any time following October 17, 2027, the Company may redeem all of the Series B Preferred Stock for a per share amount in cash equal to: (i) the sum of (A) the liquidation preference (reflecting increases for compounded dividends) thereof plus (B) all accrued dividends as of the applicable redemption date, multiplied by (ii) (A) 105% if the redemption occurs at any time prior to October 17, 2029 and (B) 100% if the redemption occurs at any time on or after October 17, 2029. Upon certain change of control events involving the Company, the holders of the Series B Preferred Stock may, at such holder’s election, convert their shares of Series B Preferred Stock into common stock at the then‑current conversion price or require the Company to purchase all or a portion of such holder’s shares of Preferred Stock that have not been so converted at a purchase price per share of Preferred Stock, payable in cash, equal to the greater of (I) (A) if the change of control effective date occurs at any time prior to October 17, 2029, the product of 105% multiplied by the sum of (x) the liquidation preference of such share of Series B Preferred Stock (reflecting increases for compounded dividends) plus (y) the accrued dividends in respect of such share of Series B Preferred Stock as of the change of control purchase date and (B) if the change of control effective date occurs on or after October 17, 2029, the sum of (x) the liquidation preference (reflecting increases for compounded dividends) of such share of Series B Preferred Stock plus (y) the accrued dividends in respect of such share of Series B Preferred Stock as of the change of control purchase date and (II) the consideration that would have been payable in connection with such change of control if such share of Series B Preferred Stock had been converted into common stock immediately prior to the change of control. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the three months ended March 31 (in thousands, except for per share amounts) : Three Months Ended 2024 2023 Loss from continuing operations, net noncontrolling interests and accrued preferred stock dividends $ (18,653) $ (71,362) Loss from discontinued operations (9,865) (115,543) Net loss attributable to NeueHealth, Inc. common shareholders $ (28,518) $ (186,905) Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted 8,079 7,894 Basic and diluted loss per share attributable to NeueHealth, Inc. common shareholders Continuing operations $ (2.31) $ (9.04) Discontinued operations $ (1.22) $ (14.64) Net loss per share attributable to common stockholders, basic and diluted $ (3.53) $ (23.68) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three months ended March 31 (in thousa nd s) : Three Months Ended 2024 2023 Redeemable convertible preferred stock (as converted to common stock) 4,867 4,031 Issued and outstanding common stock warrants 1,834 — Stock options to purchase common stock 614 771 Restricted stock units 575 999 Total 7,890 5,801 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal proceedings: In the normal course of business, we could be involved in various legal proceedings such as, but not limited to, the following: lawsuits alleging negligence in care or general liability, violation of regulatory bodies’ rules and regulations, or violation of federal and/or state laws. On January 6, 2022, a putative securities class action lawsuit was filed against us and certain of our officers and directors in the Eastern District of New York. The case is captioned Marquez v. Bright Health Group, Inc. et al., 1:22-cv-00101 (E.D.N.Y.). The lawsuit alleges, among other things, that we made materially false and misleading statements regarding our business, operations, and compliance policies, which in turn adversely affected our stock price. An amended complaint was filed on June 24, 2022, which expands on the allegations in the original complaint and alleges a putative class period of June 24, 2021 through March 1, 2022. The amended complaint also adds as defendants the underwriters of our initial public offering. The Company has served a motion to dismiss the amended complaint, which has not yet been ruled on by the court. We are vigorously defending the Company in the above actions, but there can be no assurance that we will be successful in any defense. Based on our assessment of the facts underlying the claims and the degree to which we intend to defend the Company in these matters, the amount or range of reasonably possible losses, if any, cannot be estimated. We have not accrued for any potential loss as of March 31, 2024 and December 31, 2023 for these actions. Other commitments: As of March 31, 2024 , we had letters of credit unrelated to the 2021 Credit Agreement of $7.6 million, as well as surety bonds of $19.7 million. On our Condensed Consolidated Balance Sheets, $50.0 million of the cash and cash equivalents is restricted as collateral to our undrawn letters of credit and surety bonds. |
SEGMENTS AND GEOGRAPHIC INFORMA
SEGMENTS AND GEOGRAPHIC INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENTS AND GEOGRAPHIC INFORMATION | SEGMENTS AND GEOGRAPHIC INFORMATION Factors used to determine our reportable segments include the nature of operating activities, economic characteristics, existence of separate senior management teams and the type of information used by the Company’s Chief Operating Decision Maker (“CODM”) to evaluate its results of operations. We have identified two operating segments within our continuing operations based on our primary product and service offerings: NeueCare and NeueSolutions. The NeueCare and NeueSolutions segments were new starting in the second quarter of 2023 and were formerly reported together within the aggregated Consumer Care segment. The updates to our reportable segments conform with the Company’s CODM’s view of our ongoing operations. NeueCare and NeueSolutions, which make up o ur value-driven Consumer Care business that manages risk in partnership with external payors, aim to significantly reduce the friction and current lack of coordination between payors by delivering on our Fully Aligned Care Model with multiple payors. The following is a description of the types of products and services from which the two reportable segments of our continuing operations derive their revenues: NeueCare: Provides care services in our clinics with wrap around care management and care coordination activities for those members where we take full or partial risk. As of March 31, 2024, NeueCare provides virtual and in-person clinical care through its 73 owned primary care clinics within an integrated care delivery system. Through these risk-bearing clinics and our affiliated network of care providers, our NeueCare segment serves approximately 360,000 consumers. NeueCare customers include external payors, third party administrators, affiliated providers and direct-to-government programs. NeueSolutions: Our provider enablement business that facilitates care coordination activities through the use of population health tools including technology, data analytics, care and utilization management, and clinical solutions and care teams to support patients. As of March 31, 2024, NeueSolutions has approximately 45,000 members attributed to its REACH ACO’s and 109,000 enablement services lives representing members attributed to NeueHealth by provider partner groups that are outside of the NeueHealth owned network. The Company’s accounting policies for reportable segment operations are consistent with those described in Note 2, Summary of Significant Accounting Policies, in our 2023 Form 10-K. We utilize operating income (loss) before income taxes as the profitability metric for our reportable segments. The following tables present the reportable segment financial information for the three months ended March 31, 2024 and 2023 (in thousands) : Three Months Ended March 31, 2024 NeueCare NeueSolutions Corporate & Eliminations Consolidated Capitated revenue $ 61,466 $ — $ — $ 61,466 ACO REACH revenue — 171,811 — 171,811 Service revenue 9,530 2,085 — 11,615 Investment income — — 203 203 Total unaffiliated revenue 70,996 173,896 203 245,095 Affiliated revenue 2,627 — (2,627) — Total segment revenue 73,623 173,896 (2,424) 245,095 Operating income (loss) 9,812 (2,932) (29,982) (23,102) Depreciation and amortization 3,786 — 776 4,562 Bad debt expense — (3) — (3) Restructuring charges — — (58) (58) Three Months Ended March 31, 2023 Care Delivery Care Solutions Corporate & Eliminations Consolidated Capitated revenue $ 49,548 $ — $ — $ 49,548 ACO REACH revenue — 239,807 — 239,807 Service revenue 10,936 251 — 11,187 Investment income (loss) — — 8 8 Total unaffiliated revenue 60,484 240,058 8 300,550 Affiliated revenue 2,195 — (2,195) — Total segment revenue 62,679 240,058 (2,187) 300,550 Operating income (loss) 6,636 (1,509) (49,999) (44,872) Depreciation and amortization 3,132 — 2,351 5,483 Restructuring charges — — 301 301 For all periods presented, all of our long-lived assets were located in the United States, and all revenues were earned in the United States. We do not include asset information by reportable segment in the reporting provided to the CODM. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax was an expense of $0.7 million and $1.3 million for the three months ended March 31, 2024 and 2023, respectively. The impact from income taxes varies from the federal statutory rate of 21.0% due to state income taxes, changes in the valuation allowance for deferred tax assets and adjustments for permanent differences. For the three months ended March 31, 2024, the expense largely relates to estimated state income taxes attributable to income earned in separate filing states without state net operating loss carryforwards. For the three months ended March 31, 2023, the expense largely relates to amortization of originating goodwill from asset acquisitions and estimated state income taxes attributable to income earned in separate filing states without state net operating loss carryforwards. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTEREST | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTEREST | REDEEMABLE NONCONTROLLING INTEREST Redeemable noncontrolling interests in our subsidiaries whose redemption is outside of our control are classified as temporary equity. The following t able provides details of our redeemable noncontrolling interest activity for the three months ended March 31, 2024 and 2023 (in thousands) : 2024 2023 Balance at January 1 $ 88,908 $ 219,758 Earnings attributable to noncontrolling interest 4,227 1,421 Distribution to noncontrolling interest holders (1,884) (1,805) Measurement adjustment 7,510 4,129 Balance at March 31 $ 98,761 $ 223,503 |
ACO REACH
ACO REACH | 3 Months Ended |
Mar. 31, 2024 | |
Direct Contracting [Abstract] | |
ACO REACH | ACO REACH We participate in the CMS ACO REACH Model with three REACH ACOs participating through the global risk arrangement and assuming full risk for the total cost of care of aligned beneficiaries. As part of our participation in the ACO REACH Model, we are guaranteeing the performance of our care network of participating and preferred providers. The intention of the ACO REACH Model is to enhance the quality of care for Medicare FFS beneficiaries while reducing the administrative burden, supporting a focus on complex, chronically ill patients, and encouraging physician organizations that have not typically participated in Medicare FFS programs to serve Medicare FFS beneficiaries. Key components of the financial agreement for the ACO REACH Model include: • Performance Year Benchmark: The target amount for Medicare expenditures on covered services (Medicare Part A and B) furnished to a REACH ACO’s aligned beneficiaries during a performance year. The Performance Year Benchmark will be compared to the REACH ACO’s performance year expenditures. This comparison will be used to calculate shared savings and shared losses. The Performance Year Benchmark is established at the beginning of the performance year utilizing prospective trend estimates and is subject to retrospective trend adjustments, if warranted, before the Financial Reconciliation. • Risk-Sharing Arrangements: Used in determining the percent of savings and losses that REACH ACOs are eligible to receive as shared savings or may be required to repay as shared losses. • Financial Reconciliation: The process by which CMS determines shared savings or shared losses by comparing the calculated total benchmark expenditures for a given REACH ACO’s aligned population to the actual expenditures of that REACH ACO’s aligned beneficiaries over the course of a performance year that includes various risk-mitigation options such as stop-loss reinsurance and risk corridors. • Risk-Mitigation Options: Two of our REACH ACOs elected to participate in a “stop-loss arrangement” for the current and prior performance year offered by CMS, while one REACH ACO has elected third-party coverage. The “stop-loss arrangement” and third-party coverage are designed to reduce the financial uncertainty associated with high-cost expenditures of individual beneficiaries. Additionally, CMS has created a mandatory risk corridor program that allocates the REACH ACO’s shared savings and losses in bands of percentage thresholds, after a deviation of greater than 25.0% of the Performance Year Benchmark. Performance Guarantees Through our participation in the ACO REACH Model, we determined that our arrangements with the providers of our REACH ACO beneficiaries require us to guarantee their performance to CMS. At the beginning of the performance year, we recognized the ACO REACH estimated performance year obligation and receivable for the duration of the performance year. This receivable and obligation are measured at an amount equivalent to the estimated Performance Year Benchmark per CMS that is representative of the expected Medicare expenditures for beneficiaries aligned to our REACH ACOs. As we fulfill our obligation, we amortize the guarantee on a straight-line basis for the amount that represents the completed portion of the performance obligation. The receivable is reduced as we receive payments from CMS for in-network claims or receive CMS reporting detailing out-of-network claims paid by CMS on behalf of our aligned beneficiaries. At the end of each reporting period, we estimate both in-network claims and out-of-network claims incurred by beneficiaries aligned to our REACH ACOs but not yet reported and record a reserve for the estimated amount which is included in medical costs payable on the Condensed Consolidated Balance Sheets. For each performance year, the final consideration due to the REACH ACOs by CMS (shared savings) or the consideration due to CMS by the REACH ACOs (shared loss) is reconciled in the year following the performance year. On a periodic basis CMS adjusts the estimated Performance Year Benchmark based upon revised trend assumptions and changes in attributed membership. CMS will also estimate the shared savings or loss for the REACH ACO on a quarterly basis based upon the estimated Performance Year Benchmark, changes to membership, payments made to the REACH ACO for in-network claims, out-of-network claims paid on behalf of the REACH ACO and various other assumptions including incurred but not reported reserves. The estimated Performance Year Benchmark is our best estimate of our obligation as we are unable to estimate the potential shared savings or loss due to the “stop-loss arrangement”, risk corridor components of the agreement, and a number of variables including but not limited to risk ratings and benchmark trends that could have an inestimable impact on estimated future payments. The tables below include the financial statement impacts of the performance guarantee at March 31, 2024 and December 31, 2023 and for the three-month periods ended March 31, 2024 and 2023 ( in thousands ): March 31, 2024 December 31, 2023 ACO REACH performance year receivable (1) $ 646,627 $ 115,878 ACO REACH performance year obligation 529,657 — (1) As of March 31, 2024, we estimate there to be in-network and out-of-network claims incurred by beneficiaries aligned to our REACH ACOs but not reported of $110.9 million related to performance year 2024 and $4.3 million related to performance year 2023; this is included in medical costs payable on the Condensed Consolidated Balance Sheets. Three Months Ended March 31, 2024 2023 Amortization of ACO REACH performance year receivable (1) $ 175,460 $ 175,523 Amortization of ACO REACH performance year obligation 176,552 239,807 ACO REACH revenue (2) 171,811 239,807 (1) The amortization of the ACO REACH performance year receivable includes $111.3 million and $84.3 million related to the amortization of the prior year receivable for the three months ended March 31, 2024 and 2023, respectively. (2) ACO REACH revenue is inclusive of $4.7 million relating to the 2023 performance year. For the three months ended March 31, 2024 and 2023, respectively, there is $0.3 million and $0.3 million reported within ACO REACH revenue on the Condensed Consolidated Statements of Income (Loss), that is related to our NeueCare clinics that are participating providers within our REACH ACOs. This revenue is presented gross in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts With Customers (“ASC 606”) . |
DECONSOLIDATION OF BRIGHT HEALT
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS | DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS On November 29, 2023, BHIC-Texas (the “Deconsolidated Entity”) was placed into liquidation and the Texas Department of Insurance was appointed as receiver. The Deconsolidated Entity’s financial results are included in the Company’s consolidated results through November 28, 2023, the day prior to the date of the receivership. However, under ASC 810, consolidation of a majority-owned subsidiary is precluded where control of the subsidiary does not rest with the majority owners. Once the Texas Department of Insurance was appointed as receiver of BHIC-Texas we concluded the Company no longer controlled the subsidiary, and we deconsolidated BHIC-Texas as of that date. The deconsolidation of BHIC-Texas resulted in certain related party balances that had previously been eliminated upon consolidation to become liabilities of the Company. In 2022, BHIC-Texas entered into a risk share contract with a different NeueHealth affiliate, whereby losses incurred at BHIC-Texas over a specified medical loss ratio target were transferred from BHIC-Texas to the affiliated entity. On November 29, 2023 the accrued loss of BHIC-Texas related to the risk share contract was $124.0 million. Upon deconsolidation of BHIC-Texas, this liability is required to be recorded as risk share payable to deconsolidated entity on the Consolidated Balance Sheet. The corresponding receivable on BHIC-Texas was included in our carrying value evaluation described below. The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership. Cash and cash equivalents $ 60,560 Prepaids and other current assets 1,522 Risk Share Receivable 123,981 Total Assets $ 186,063 Accounts payable 135 Medical costs payable 3,283 Other current liabilities 1,523 Risk adjustment payable 89,638 Total Liabilities $ 94,579 Additional paid in capital 204,753 Accumulated deficit (113,269) Total Equity $ 91,484 Total Liabilities and Equity $ 186,063 Under ASC 810, Consolidatio n , this loss of control would likely trigger a gain or loss for the parent as the parent would remeasure its retained noncontrolling investment at fair value. Upon deconsolidation, the Company valued its investment in BHIC-Texas to be $91.5 million , which is equivalent to the Deconsolidated Entity's carrying value. Upon valuing the investment in BHIC-Texas we assessed the current expected credit loss associated with the underlying receivables; as a result of our analysis we recorded a full valuation allowance on the investment due to uncertainties related to the collection of the risk share receivable. In April 2023, we announced that we were exploring strategic alternatives for our California Medicare Advantage business, the Bright HealthCare reporting segment, with the focus on a potential sale. At that time, we met the criteria for “held for sale,” in accordance with ASC 205-20. This represents a strategic shift that will have a material impact on our business and financial results. As such, we have reflected amounts relating to Bright HealthCare as a disposal group as part of discontinued operations. On June 30, 2023, the Company entered into the Molina Purchase Agreement to sell its California Medicare Advantage business, which consisted of BND and CHP. On December 13, 2023, the Company, Molina, Bright Health Company of California, Inc. (“BHCC”), CHP, and BND amended the Molina Purchase Agreement, pursuant to which , the parties agreed to amend the total purchase consideration to $500.0 million subject to certain contingencies and TNE adjustments. The transaction was consummated on January 1, 2024. In October 2022, we announced that we will no longer offer commercial plans through our Bright HealthCare - Commercial segment in 2023. As a result, we exited the Commercial marketplace effective December 31, 2022. We determined this exit represented a strategic shift that will have a material impact on our business and financial results that requires presentation as discontinued operations. While we are no longer offering plans in the Commercial marketplace as of December 31, 2022, we will continue to have involvement in the states where we formerly operated in, as we support run out activities of medical claims incurred in the 2022 plan year and perform other activities necessary to wind down our operations in each state. We are substantially complete with medical claim payments as of the end of 2023, and we will continue to make remaining medical claim payments and payments towards the remaining risk adjustment obligations through 2024 and early 2025. Our discontinued operations are also inclusive of our DocSquad business that was sold in March 2023; this is presented within the column labeled Other in the tables below. The discontinued operations presentation has been retrospectively applied to all prior periods presented. The financial results of discontinued operations by major line item for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 Bright HealthCare - Commercial Revenue: Premium revenue $ (215) Investment income 1,568 Total revenue from discontinued operations 1,353 Operating expenses: Medical costs (3,759) Operating costs 6,585 Restructuring charges (379) Total operating expenses from discontinued operations 2,447 Operating loss from discontinued operations (1,094) Interest expense 8,765 Loss from discontinued operations before income taxes (9,859) Income tax expense (benefit) 6 Net loss from discontinued operations $ (9,865) Three Months Ended March 31, 2023 Bright HealthCare - Commercial Bright HealthCare Other Total Revenue: Premium revenue $ 766 453,317 $ — $ 454,083 Service revenue 30 — 2,383 2,413 Investment income 20,891 38 — 20,929 Total revenue from discontinued operations 21,687 453,355 2,383 477,425 Operating expenses: Medical costs 46,014 428,725 — 474,739 Operating costs 47,478 56,339 2,049 105,866 Restructuring charges 7,956 — — 7,956 Depreciation and amortization — 4,407 — 4,407 Total operating expenses from discontinued operations 101,448 489,471 2,049 592,968 Operating loss from discontinued operations (79,761) (36,116) 334 (115,543) Interest expense — — — — Loss from discontinued operations before income taxes (79,761) (36,116) 334 (115,543) Income tax expense (benefit) — — — — Net loss from discontinued operations $ (79,761) $ (36,116) $ 334 $ (115,543) The following table presents cash flows from operating and investing activities for discontinued operations for the three months ended March 31, 2024 (in thousands) : Cash used in operating activities - discontinued operations $ (37,958) Cash provided by investing activities - discontinued operations 198,451 Assets and liabilities of discontinued operations were as follows (in thousands) : March 31, 2024 Bright HealthCare - Commercial Assets Current assets: Cash and cash equivalents $ 136,668 Short-term investments 6,995 Accounts receivable, net of allowance 1,427 Prepaids and other current assets 4,262 Current assets of discontinued operations 149,352 Total assets of discontinued operations $ 149,352 Liabilities Current liabilities: Medical costs payable $ 15,781 Accounts payable 19,616 Risk adjustment payable 279,922 Other current liabilities 29,729 Current liabilities of discontinued operations 345,048 Total liabilities of discontinued operations $ 345,048 December 31, 2023 Bright HealthCare - Commercial Bright HealthCare Total Assets Current assets: Cash and cash equivalents $ 159,769 $ 128,212 $ 287,981 Short-term investments 9,163 20,218 29,381 Accounts receivable, net of allowance 1,430 51,929 53,359 Prepaids and other current assets 7,838 114,532 122,370 Property, equipment and capitalized software, net — 17,954 17,954 Intangible assets, net — 138,982 138,982 Goodwill — 172,543 172,543 Current assets of discontinued operations 178,200 644,370 822,570 Total assets of discontinued operations $ 178,200 $ 644,370 $ 822,570 Liabilities Current liabilities: Medical costs payable $ 31,881 $ 272,138 $ 304,019 Accounts payable 25,648 7,719 33,367 Risk adjustment payable 291,146 — 291,146 Other current liabilities 28,045 43,181 71,226 Current liabilities of discontinued operations 376,720 323,038 699,758 Total liabilities of discontinued operations $ 376,720 $ 323,038 $ 699,758 California Medicare Advantage Sale: On June 30, 2023, the Company entered into a definitive agreement with Molina to sell its California Medicare Advantage business, which consisted of BND and CHP, for total purchase consideration of $600.0 million, subject to regulatory approval and other closing conditions. Subsequently, o n December 13, 2023 we announced that we entered an amendment (the “Amendment”) with Molina which reduced the purchase price of our California Medicare Advantage business from $600.0 million to $500.0 million. The $500.0 million purchase price includes $167.3 million of purchase price adjustments subject to contingencies and TNE adjustments (in thousands) : Consolidation and Adjustment Escrow Amount (1) $ 100,000 TNE deficit at closing (2) 57,326 Indemnity Escrow Amount (3) 10,000 Total consideration subject to contingencies $ 167,326 (1) Contingent upon either (i) Molina obtaining regulatory approval of the consolidation of BND into CHP or (ii) receipt by BND of a Part D Summary Rating for its Part D operations for contract year 2025 of at least 3 Stars from CMS. If this contingency is successful, it is payable in November 2024 net of any TNE deficit deterioration and subject to certain other purchase price adjustments as described further in the Amendment. (2) Amount by which minimum required TNE exceeds estimated TNE as of December 31, 2023. To the extent the TNE deficit improves on a restated basis by the cutoff date of June 30, 2024, Molina will owe the Company for that difference, payable in November 2024. To the extent the TNE deficit worsens on a restated basis by the time of the cutoff date, such difference will be deducted from Consolidation and Adjustment Escrow Amount. If the conditions around the Consolidation and Adjustment Escrow Amount are not satisfied, Molina would retain the Consolidation and Adjustment Escrow Amount in satisfaction of any TNE deficit deterioration. (3) For 18 months post-closing date, the Company will indemnify Molina against and are liable to Molina for any and all losses incurred by Molina resulting from breach or inaccuracy of warranties and representations made, breach or failure to perform any covenant of the Molina Purchase Agreement, among others. As the Indemnity Escrow Amount is subject to these conditions for 18 months post close, the Company will only recognize this amount in the fair value of consideration received at the point those 18 months have passed, on July 1, 2025. The amount recognized will be that equal to the $10.0 million Indemnity Escrow amount less any agreed upon or finally adjudicated losses as of July 1, 2025 As the conditions surrounding collection of total consideration and contingencies are largely outside of the Company’s control, we have not recorded any contingent consideration receivable as of March 31, 2024. At the time of the sale, our investment in the California MA business was calculated as follows (in thousands) : Total assets (1) $ 647,254 Total liabilities (323,038) Investment in California MA Business $ 324,216 (1) Total assets of the California MA business at the time of the sale are inclusive of $2.9 million unsettled intercompany receivable that was eliminated at consolidation. NeueHealth has recorded the corresponding payable within other current liabilities of our continuing operations as of March 31, 2024 . The company recorded no gain or loss associated with the sale of the California Medicare Advantage business (in thousands) : Sale price of California MA Business $ 500,000 Less: Portion of sale price subject to contingencies (167,326) Less: Investment in California MA Business (324,216) Less: Transactions costs contingent on closing of sale (8,458) Gain or loss on sale of California MA Business $ — Upon the close of the sale, we ceased having a controlling financial interest over BND and CHP and have not retained any investments in the former subsidiaries. Molina is not a related party and subsequent to the close of the sale BND and CHP are no longer considered related parties to the Company. In connection with the sale, Molina and the Company are each providing customary transition services during 2024. Revenue Recognition: We record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by the U.S. Department of Health and Human Services (“HHS”), which could result in future payments applicable to benefit years. Restructuring Charges: As a result of the strategic changes, we announced and have taken actions to restructure the Company’s workforce and reduce expenses based on our updated business model. Restructuring charges within our discontinued operations for the three months ended March 31, 2024 and 2023 were as follows (in thousands) : Three Months Ended March 31, 2024 2023 Employee termination benefits $ 129 $ 2,965 Long-lived asset impairments — 100 Contract termination and other costs (508) 4,891 Total discontinued operations restructuring charges $ (379) $ 7,956 Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 was as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 2,867 $ 22,492 $ 25,359 Net charges 129 (508) (379) Cash payments (1,485) (6,495) (7,980) Balance at March 31, 2024 $ 1,511 $ 15,489 $ 17,000 Employee termination benefits are recorded within Other current liabilities of discontinued operations while contract termination costs are recorded within Accounts payable of discontinued operations. Fixed Maturity Securities: Available-for-sale securities within our discontinued operations are reported at fair value as of March 31, 2024 and December 31, 2023. Held-to-maturity securities are reported at amortized cost as of March 31, 2024 and December 31, 2023. The following is a summary of our investment securities (in thousands) : March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 106,536 $ — $ (5) $ 106,531 Held to maturity: U.S. government and agency obligations 6,878 — — 6,878 Corporate obligations 117 — — 117 Total held-to-maturity securities 6,995 — — 6,995 Total investments $ 113,531 $ — $ (5) $ 113,526 December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 150,939 $ — $ — $ 150,939 Available for sale: U.S. government and agency obligations 1,557 — (100) 1,457 Corporate obligations 615 — (11) 604 Certificates of deposit 19,653 — — 19,653 Mortgage-backed securities 951 — (63) 888 Total available-for-sale securities 22,776 — (174) 22,602 Held to maturity: U.S. government and agency obligations 6,503 1 (59) 6,445 Certificates of deposit 334 — — 334 Total held-to-maturity securities 6,837 1 (59) 6,779 Total investments $ 180,552 $ 1 $ (233) $ 180,320 We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. At each reporting period, we evaluate securities for impairment when the fair value of the investment is less than its amortized cost. We evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. Fair Value Measurements: Certain assets and liabilities are measured at fair value in the condensed consolidated financial statements or have fair values disclosed in the notes to the condensed consolidated financial statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP. Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets or quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument see Note 19 to the audited consolidated financial statements included in our 2023 Form 10-K. As of March 31, 2024, investments and cash equivalents within our discontinued operations were comprised of $111.1 million and $2.4 million with fair value measurements of Level 1 and Level 2, respectively. As of December 31, 2023, the investments and cash equivalents within our discontinued operations were comprised of $157.8 million and $22.6 million with fair value measurements of Level 1 and Level 2, respectively. Medical Costs Payable: The table below details the components making up the medical costs payable within current liabilities of discontinued operations (in thousands) : Bright HealthCare - Commercial March 31, 2024 December 31, 2023 Claims unpaid $ 10,775 $ 14,500 Claims adjustment expense liability 229 2,382 Incurred but not reported (IBNR) 4,777 14,999 Total medical costs payable of discontinued operations $ 15,781 $ 31,881 Risk Adjustment: In September 2023, our insurance subsidiaries in Colorado, Florida, Illinois and Texas entered into repayment agreements with CMS with respect to the unpaid amount of their risk adjustment obligations for an aggregate amount of $380.2 million (the "Repayment Agreements"). The amount owed under the Repayment Agreements is due 18 months from September 15, 2023 (the date the first installment payment was made under the Repayment Agreements) and bears interest at a rate of 11.5% per annum. Our risk adjustment payable liability was $279.9 million and $291.1 million as of March 31, 2024 and December 31, 2023, respectively. Restricted Capital and Surplus: Our regulated insurance legal entities are required by statute to meet and maintain a minimum level of capital as stated in applicable state regulations, such as risk-based capital requirements. These balances are monitored regularly to ensure compliance with these regulations. For the period ended March 31, 2024 , we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS On November 29, 2023, BHIC-Texas (the “Deconsolidated Entity”) was placed into liquidation and the Texas Department of Insurance was appointed as receiver. The Deconsolidated Entity’s financial results are included in the Company’s consolidated results through November 28, 2023, the day prior to the date of the receivership. However, under ASC 810, consolidation of a majority-owned subsidiary is precluded where control of the subsidiary does not rest with the majority owners. Once the Texas Department of Insurance was appointed as receiver of BHIC-Texas we concluded the Company no longer controlled the subsidiary, and we deconsolidated BHIC-Texas as of that date. The deconsolidation of BHIC-Texas resulted in certain related party balances that had previously been eliminated upon consolidation to become liabilities of the Company. In 2022, BHIC-Texas entered into a risk share contract with a different NeueHealth affiliate, whereby losses incurred at BHIC-Texas over a specified medical loss ratio target were transferred from BHIC-Texas to the affiliated entity. On November 29, 2023 the accrued loss of BHIC-Texas related to the risk share contract was $124.0 million. Upon deconsolidation of BHIC-Texas, this liability is required to be recorded as risk share payable to deconsolidated entity on the Consolidated Balance Sheet. The corresponding receivable on BHIC-Texas was included in our carrying value evaluation described below. The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership. Cash and cash equivalents $ 60,560 Prepaids and other current assets 1,522 Risk Share Receivable 123,981 Total Assets $ 186,063 Accounts payable 135 Medical costs payable 3,283 Other current liabilities 1,523 Risk adjustment payable 89,638 Total Liabilities $ 94,579 Additional paid in capital 204,753 Accumulated deficit (113,269) Total Equity $ 91,484 Total Liabilities and Equity $ 186,063 Under ASC 810, Consolidatio n , this loss of control would likely trigger a gain or loss for the parent as the parent would remeasure its retained noncontrolling investment at fair value. Upon deconsolidation, the Company valued its investment in BHIC-Texas to be $91.5 million , which is equivalent to the Deconsolidated Entity's carrying value. Upon valuing the investment in BHIC-Texas we assessed the current expected credit loss associated with the underlying receivables; as a result of our analysis we recorded a full valuation allowance on the investment due to uncertainties related to the collection of the risk share receivable. In April 2023, we announced that we were exploring strategic alternatives for our California Medicare Advantage business, the Bright HealthCare reporting segment, with the focus on a potential sale. At that time, we met the criteria for “held for sale,” in accordance with ASC 205-20. This represents a strategic shift that will have a material impact on our business and financial results. As such, we have reflected amounts relating to Bright HealthCare as a disposal group as part of discontinued operations. On June 30, 2023, the Company entered into the Molina Purchase Agreement to sell its California Medicare Advantage business, which consisted of BND and CHP. On December 13, 2023, the Company, Molina, Bright Health Company of California, Inc. (“BHCC”), CHP, and BND amended the Molina Purchase Agreement, pursuant to which , the parties agreed to amend the total purchase consideration to $500.0 million subject to certain contingencies and TNE adjustments. The transaction was consummated on January 1, 2024. In October 2022, we announced that we will no longer offer commercial plans through our Bright HealthCare - Commercial segment in 2023. As a result, we exited the Commercial marketplace effective December 31, 2022. We determined this exit represented a strategic shift that will have a material impact on our business and financial results that requires presentation as discontinued operations. While we are no longer offering plans in the Commercial marketplace as of December 31, 2022, we will continue to have involvement in the states where we formerly operated in, as we support run out activities of medical claims incurred in the 2022 plan year and perform other activities necessary to wind down our operations in each state. We are substantially complete with medical claim payments as of the end of 2023, and we will continue to make remaining medical claim payments and payments towards the remaining risk adjustment obligations through 2024 and early 2025. Our discontinued operations are also inclusive of our DocSquad business that was sold in March 2023; this is presented within the column labeled Other in the tables below. The discontinued operations presentation has been retrospectively applied to all prior periods presented. The financial results of discontinued operations by major line item for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 Bright HealthCare - Commercial Revenue: Premium revenue $ (215) Investment income 1,568 Total revenue from discontinued operations 1,353 Operating expenses: Medical costs (3,759) Operating costs 6,585 Restructuring charges (379) Total operating expenses from discontinued operations 2,447 Operating loss from discontinued operations (1,094) Interest expense 8,765 Loss from discontinued operations before income taxes (9,859) Income tax expense (benefit) 6 Net loss from discontinued operations $ (9,865) Three Months Ended March 31, 2023 Bright HealthCare - Commercial Bright HealthCare Other Total Revenue: Premium revenue $ 766 453,317 $ — $ 454,083 Service revenue 30 — 2,383 2,413 Investment income 20,891 38 — 20,929 Total revenue from discontinued operations 21,687 453,355 2,383 477,425 Operating expenses: Medical costs 46,014 428,725 — 474,739 Operating costs 47,478 56,339 2,049 105,866 Restructuring charges 7,956 — — 7,956 Depreciation and amortization — 4,407 — 4,407 Total operating expenses from discontinued operations 101,448 489,471 2,049 592,968 Operating loss from discontinued operations (79,761) (36,116) 334 (115,543) Interest expense — — — — Loss from discontinued operations before income taxes (79,761) (36,116) 334 (115,543) Income tax expense (benefit) — — — — Net loss from discontinued operations $ (79,761) $ (36,116) $ 334 $ (115,543) The following table presents cash flows from operating and investing activities for discontinued operations for the three months ended March 31, 2024 (in thousands) : Cash used in operating activities - discontinued operations $ (37,958) Cash provided by investing activities - discontinued operations 198,451 Assets and liabilities of discontinued operations were as follows (in thousands) : March 31, 2024 Bright HealthCare - Commercial Assets Current assets: Cash and cash equivalents $ 136,668 Short-term investments 6,995 Accounts receivable, net of allowance 1,427 Prepaids and other current assets 4,262 Current assets of discontinued operations 149,352 Total assets of discontinued operations $ 149,352 Liabilities Current liabilities: Medical costs payable $ 15,781 Accounts payable 19,616 Risk adjustment payable 279,922 Other current liabilities 29,729 Current liabilities of discontinued operations 345,048 Total liabilities of discontinued operations $ 345,048 December 31, 2023 Bright HealthCare - Commercial Bright HealthCare Total Assets Current assets: Cash and cash equivalents $ 159,769 $ 128,212 $ 287,981 Short-term investments 9,163 20,218 29,381 Accounts receivable, net of allowance 1,430 51,929 53,359 Prepaids and other current assets 7,838 114,532 122,370 Property, equipment and capitalized software, net — 17,954 17,954 Intangible assets, net — 138,982 138,982 Goodwill — 172,543 172,543 Current assets of discontinued operations 178,200 644,370 822,570 Total assets of discontinued operations $ 178,200 $ 644,370 $ 822,570 Liabilities Current liabilities: Medical costs payable $ 31,881 $ 272,138 $ 304,019 Accounts payable 25,648 7,719 33,367 Risk adjustment payable 291,146 — 291,146 Other current liabilities 28,045 43,181 71,226 Current liabilities of discontinued operations 376,720 323,038 699,758 Total liabilities of discontinued operations $ 376,720 $ 323,038 $ 699,758 California Medicare Advantage Sale: On June 30, 2023, the Company entered into a definitive agreement with Molina to sell its California Medicare Advantage business, which consisted of BND and CHP, for total purchase consideration of $600.0 million, subject to regulatory approval and other closing conditions. Subsequently, o n December 13, 2023 we announced that we entered an amendment (the “Amendment”) with Molina which reduced the purchase price of our California Medicare Advantage business from $600.0 million to $500.0 million. The $500.0 million purchase price includes $167.3 million of purchase price adjustments subject to contingencies and TNE adjustments (in thousands) : Consolidation and Adjustment Escrow Amount (1) $ 100,000 TNE deficit at closing (2) 57,326 Indemnity Escrow Amount (3) 10,000 Total consideration subject to contingencies $ 167,326 (1) Contingent upon either (i) Molina obtaining regulatory approval of the consolidation of BND into CHP or (ii) receipt by BND of a Part D Summary Rating for its Part D operations for contract year 2025 of at least 3 Stars from CMS. If this contingency is successful, it is payable in November 2024 net of any TNE deficit deterioration and subject to certain other purchase price adjustments as described further in the Amendment. (2) Amount by which minimum required TNE exceeds estimated TNE as of December 31, 2023. To the extent the TNE deficit improves on a restated basis by the cutoff date of June 30, 2024, Molina will owe the Company for that difference, payable in November 2024. To the extent the TNE deficit worsens on a restated basis by the time of the cutoff date, such difference will be deducted from Consolidation and Adjustment Escrow Amount. If the conditions around the Consolidation and Adjustment Escrow Amount are not satisfied, Molina would retain the Consolidation and Adjustment Escrow Amount in satisfaction of any TNE deficit deterioration. (3) For 18 months post-closing date, the Company will indemnify Molina against and are liable to Molina for any and all losses incurred by Molina resulting from breach or inaccuracy of warranties and representations made, breach or failure to perform any covenant of the Molina Purchase Agreement, among others. As the Indemnity Escrow Amount is subject to these conditions for 18 months post close, the Company will only recognize this amount in the fair value of consideration received at the point those 18 months have passed, on July 1, 2025. The amount recognized will be that equal to the $10.0 million Indemnity Escrow amount less any agreed upon or finally adjudicated losses as of July 1, 2025 As the conditions surrounding collection of total consideration and contingencies are largely outside of the Company’s control, we have not recorded any contingent consideration receivable as of March 31, 2024. At the time of the sale, our investment in the California MA business was calculated as follows (in thousands) : Total assets (1) $ 647,254 Total liabilities (323,038) Investment in California MA Business $ 324,216 (1) Total assets of the California MA business at the time of the sale are inclusive of $2.9 million unsettled intercompany receivable that was eliminated at consolidation. NeueHealth has recorded the corresponding payable within other current liabilities of our continuing operations as of March 31, 2024 . The company recorded no gain or loss associated with the sale of the California Medicare Advantage business (in thousands) : Sale price of California MA Business $ 500,000 Less: Portion of sale price subject to contingencies (167,326) Less: Investment in California MA Business (324,216) Less: Transactions costs contingent on closing of sale (8,458) Gain or loss on sale of California MA Business $ — Upon the close of the sale, we ceased having a controlling financial interest over BND and CHP and have not retained any investments in the former subsidiaries. Molina is not a related party and subsequent to the close of the sale BND and CHP are no longer considered related parties to the Company. In connection with the sale, Molina and the Company are each providing customary transition services during 2024. Revenue Recognition: We record adjustments for changes to the risk adjustment balances for individual policies in premium revenue. The risk adjustment program adjusts premiums based on the demographic factors and health status of each consumer as derived from current-year medical diagnoses as reported throughout the year. Under the risk adjustment program, a risk score is assigned to each covered consumer to determine an average risk score at the individual and small-group level by legal entity in a particular market in a state. Additionally, an average risk score is determined for the entire subject population for each market in each state. Settlements are determined on a net basis by legal entity and state and are made in the middle of the year following the end of the contract year. Each health insurance issuer’s average risk score is compared to the state’s average risk score. Risk adjustment is subject to audit by the U.S. Department of Health and Human Services (“HHS”), which could result in future payments applicable to benefit years. Restructuring Charges: As a result of the strategic changes, we announced and have taken actions to restructure the Company’s workforce and reduce expenses based on our updated business model. Restructuring charges within our discontinued operations for the three months ended March 31, 2024 and 2023 were as follows (in thousands) : Three Months Ended March 31, 2024 2023 Employee termination benefits $ 129 $ 2,965 Long-lived asset impairments — 100 Contract termination and other costs (508) 4,891 Total discontinued operations restructuring charges $ (379) $ 7,956 Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 was as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 2,867 $ 22,492 $ 25,359 Net charges 129 (508) (379) Cash payments (1,485) (6,495) (7,980) Balance at March 31, 2024 $ 1,511 $ 15,489 $ 17,000 Employee termination benefits are recorded within Other current liabilities of discontinued operations while contract termination costs are recorded within Accounts payable of discontinued operations. Fixed Maturity Securities: Available-for-sale securities within our discontinued operations are reported at fair value as of March 31, 2024 and December 31, 2023. Held-to-maturity securities are reported at amortized cost as of March 31, 2024 and December 31, 2023. The following is a summary of our investment securities (in thousands) : March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 106,536 $ — $ (5) $ 106,531 Held to maturity: U.S. government and agency obligations 6,878 — — 6,878 Corporate obligations 117 — — 117 Total held-to-maturity securities 6,995 — — 6,995 Total investments $ 113,531 $ — $ (5) $ 113,526 December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 150,939 $ — $ — $ 150,939 Available for sale: U.S. government and agency obligations 1,557 — (100) 1,457 Corporate obligations 615 — (11) 604 Certificates of deposit 19,653 — — 19,653 Mortgage-backed securities 951 — (63) 888 Total available-for-sale securities 22,776 — (174) 22,602 Held to maturity: U.S. government and agency obligations 6,503 1 (59) 6,445 Certificates of deposit 334 — — 334 Total held-to-maturity securities 6,837 1 (59) 6,779 Total investments $ 180,552 $ 1 $ (233) $ 180,320 We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. At each reporting period, we evaluate securities for impairment when the fair value of the investment is less than its amortized cost. We evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. Fair Value Measurements: Certain assets and liabilities are measured at fair value in the condensed consolidated financial statements or have fair values disclosed in the notes to the condensed consolidated financial statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP. Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets or quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument see Note 19 to the audited consolidated financial statements included in our 2023 Form 10-K. As of March 31, 2024, investments and cash equivalents within our discontinued operations were comprised of $111.1 million and $2.4 million with fair value measurements of Level 1 and Level 2, respectively. As of December 31, 2023, the investments and cash equivalents within our discontinued operations were comprised of $157.8 million and $22.6 million with fair value measurements of Level 1 and Level 2, respectively. Medical Costs Payable: The table below details the components making up the medical costs payable within current liabilities of discontinued operations (in thousands) : Bright HealthCare - Commercial March 31, 2024 December 31, 2023 Claims unpaid $ 10,775 $ 14,500 Claims adjustment expense liability 229 2,382 Incurred but not reported (IBNR) 4,777 14,999 Total medical costs payable of discontinued operations $ 15,781 $ 31,881 Risk Adjustment: In September 2023, our insurance subsidiaries in Colorado, Florida, Illinois and Texas entered into repayment agreements with CMS with respect to the unpaid amount of their risk adjustment obligations for an aggregate amount of $380.2 million (the "Repayment Agreements"). The amount owed under the Repayment Agreements is due 18 months from September 15, 2023 (the date the first installment payment was made under the Repayment Agreements) and bears interest at a rate of 11.5% per annum. Our risk adjustment payable liability was $279.9 million and $291.1 million as of March 31, 2024 and December 31, 2023, respectively. Restricted Capital and Surplus: Our regulated insurance legal entities are required by statute to meet and maintain a minimum level of capital as stated in applicable state regulations, such as risk-based capital requirements. These balances are monitored regularly to ensure compliance with these regulations. For the period ended March 31, 2024 , we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 8, 2024, the Company and the NEA Lenders entered into Incremental Amendment No. 2 to the 2023 Credit Agreement, dated as of August 4, 2023, between the Company and NEA 18 to provide for a term loan commitment increase in an aggregate principal amount of up to $30.0 million by the NEA Lenders under the 2023 Credit Agreement. Loans under Incremental Amendment No. 2 have the same terms as loans under the original term loan commitments provided by NEA 18. In connection with Incremental Amendment No. 2, on April 8, 2024, the Company and the NEA Lenders entered into a warrantholders agreement setting forth the rights and obligations of the Company and the NEA Lenders as holders of Warrants, and providing for the issuance of the Warrants to purchase up to 1,113,563 shares of Common Stock. See Note 5, Borrowings and Common Stock Warrants , for additional information regarding the 2023 Credit Agreement, Incremental Amendment No.2 and the Warrantholders Agreement. Subsequent to March 31, 2024, we borrowed an additional $20.0 million under the 2023 Credit Agreement and issued a total of 742,375 warrants. On May 2, 2024, our stockholders approved an amendment to our 2021 Incentive Plan to authorize an additional 2,275,000 shares of our common stock to be issued under the 2021 Incentive Plan. After such approval, we granted 2.4 million RSUs; 1.6 million will vest three years from the start of the vesting period that began on October 11, 2023 and 0.9 million will vest ratably over a three-year period that began on March 11, 2024. We have evaluated the events and transactions that have occurred through the date at which the condensed consolidated financial statements were issued. Except as stated above, no additional events or transactions have occurred that may require adjustment to the condensed consolidated financial statements or disclosure. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation: The condensed consolidated financial statements include the accounts of NeueHealth, Inc. and all subsidiaries and controlled companies. All intercompany balances and transactions are eliminated upon consolidation. The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our audited consolidated financial statements, unless the information contained in those disclosures materially changed or is required by GAAP. As such, the condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023 included in our Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The accompanying condensed consolidated financial statements include all normal recurring adjustments necessary for fair presentation of the interim financial statements. |
Sale of California Medicare Advantage Business | Sale of California Medicare Advantage Business: On June 30, 2023, the Company entered into a definitive agreement with Molina to sell its California Medicare Advantage business to Molina Healthcare, Inc. (“Molina”) , which consisted of Universal Care, Inc. d/b/a Brand New Day, a California corporation (“BND”) and Central Health Plan of California, Inc., a California corporation (“CHP”) (the “Molina Purchase Agreement”) . Effective as of January 1, 2024, the Molina Purchase Agreement transaction was consummated for an aggregate purchase price of $500.0 million subject to certain contingencies and Tangible Net Equity (“TNE”) adjustments . Upon completion of the sale, the Bright HealthCare reporting unit of our discontinued operations was no longer included in our operations. Refer to Note 15 Discontinued Operations for discussion of the transaction. |
Use of Estimates | Use of Estimates: The preparation of our condensed consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Our most significant estimates include medical costs payable, provider risk share arrangements, third-party payor risk share arrangements, and valuation and impairment of intangible assets. Actual results could differ from these estimate |
Going Concern | Going Concern: The condensed consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a history of operating losses, and we generated a net loss of $4.2 million for the quarter ended March 31, 2024 , and a net loss of $1.3 billion for the year ended December 31, 2023. Additionally, the Company experienced negative operating cash flows primarily related to our discontinued Bright HealthCare – Commercial segment for the quarter ended March 31, 2024 and in the preceding year ended December 31, 2023. Certain of the Company’s insurance subsidiaries have material obligations remaining related to the commercial insurance risk adjustment program. The subsidiaries entered into repayment agreements with the Centers for Medicare & Medicaid Services’ (“CMS”) with respect to the unpaid obligations in September 2023. The amount owed under the repayment agreements is due March 15, 2025 and bears interest at a rate of 11.5% per annum. In the first quarter of 2024, the Company paid down $11.2 million of risk adjustment principal, leaving $279.9 million as the remaining risk adjustment liability as of March 31, 2024 . We consummated the sale of our California Medicare Advantage business in January 2024, resulting in net proceeds of $31.6 million after debt and interest repayment of $274.6 million , cash collateralization of existing letters of credit of $24.1 million , contingent consideration of $110.0 million , estimated net equity adjustment of $57.3 million , and other transaction related fees. Further, as described in Note 5, Borrowings and Common Stock Warrants , in April 2024 the Company entered into an amendment to our existing 2023 Credit Agreement, which allows the Company to borrow an additional $30.0 million under the agreement. As of the date of this Quarterly Report on Form 10-Q’s filing, an additional $20.0 million has been borrowed under this amendment, with $10.0 million left available to be borrowed. Cash and investment balances held at regulated insurance entities are subject to regulatory restrictions and can only be accessed through dividends declared to the non-regulated parent company or through reimbursements from administrative services agreements with the parent company. The regulated legal entities are required to hold certain minimum levels of risk-based capital and surplus to meet regulatory requirements. As noted further in Note 15, Discontinued Operations , we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. In certain of our other regulated insurance legal entities, we hold surplus levels of risk-based capital, and as we complete the wind-down exercise related to these entities over the next two years, we expect to recapture through dividends and final liquidation actions the remaining cash positions of these entities. In February and March of 2024, we obtained approval in three states to execute a total of $28.2 million of dividends, of which $13.2 million was paid to the parent in March 2024 and $15.0 million was paid to the parent in April 2024 and immediately contributed to its insurance subsidiaries in deficit positions. We believe that the existing cash, investments, and available liquidity will not be sufficient to satisfy our anticipated cash requirements for the next twelve months following the date the condensed consolidated financial statements contained in this Form 10-Q are issued, for items such as IFP risk adjustment payables, medical cost payables, any remaining obligation to the deconsolidated entity, and other liabilities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In response to these conditions, management continues to implement a restructuring plan to reduce capital needs and our operating expenses in the future to drive positive operating cash flow and increase liquidity. Additionally, the Company is actively engaged with the Board of Directors and outside advisors to evaluate additional financing. In addition, the Company may not fully collect the contingent consideration associated with the sale of the California Medicare Advantage business or be able to obtain additional liquidity on acceptable terms, as both of these matters will be subject to market conditions that are not fully within the Company’s control. The Company will be unable to satisfy its obligations unless it obtains additional liquidity or takes other management actions. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements: There are no accounting pronouncements that were recently issued and not yet adopted or adopted since our audited consolidated financial statements were issued that had, or are expected to have, a material impact on our consolidated financial position, results of operations, or cash flows. |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Operating Costs by Functional Classification | Operating Costs: Our operating costs, by functional classification for the three months ended March 31, 2024 and 2023, are as follows (in thousands) : Three Months Ended March 31, 2024 2023 Compensation and fringe benefits $ 48,136 $ 58,624 Professional fees 6,500 5,848 Technology expenses 3,517 6,153 General and administrative expenses 7,700 7,457 Other operating expenses 969 1,436 Total operating costs $ 66,822 $ 79,518 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | Restructuring charges by reportable segment and corporate for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 NeueCare NeueSolutions Corporate & Eliminations Total Employee termination benefits $ — $ — $ (58) $ (58) Long-lived asset impairments — — — — Contract termination and other costs — — — — Total continuing operations $ — $ — $ (58) $ (58) Three Months Ended March 31, 2023 NeueCare NeueSolutions Corporate & Eliminations Total Employee termination benefits $ — $ — $ (766) $ (766) Long-lived asset impairments — — 880 880 Contract termination and other costs — — 187 187 Total continuing operations $ — $ — $ 301 $ 301 Restructuring charges within our discontinued operations for the three months ended March 31, 2024 and 2023 were as follows (in thousands) : Three Months Ended March 31, 2024 2023 Employee termination benefits $ 129 $ 2,965 Long-lived asset impairments — 100 Contract termination and other costs (508) 4,891 Total discontinued operations restructuring charges $ (379) $ 7,956 |
Schedule of Restructuring Accrual | Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 were as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 8,389 $ — $ 8,389 Net charges (58) — (58) Cash payments (2,400) — (2,400) Balance at March 31, 2024 $ 5,931 $ — $ 5,931 Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 was as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 2,867 $ 22,492 $ 25,359 Net charges 129 (508) (379) Cash payments (1,485) (6,495) (7,980) Balance at March 31, 2024 $ 1,511 $ 15,489 $ 17,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The gross carrying value and accumulated amortization for definite-lived intangible assets were as follows (in thousand s) : March 31, 2024 December 31, 2023 Gross Carrying Accumulated Amortization Gross Carrying Accumulated Amortization Customer relationships $ 80,021 $ 28,231 $ 80,021 $ 26,144 Trade names 48,361 9,806 48,361 9,000 Total $ 128,382 $ 38,037 $ 128,382 $ 35,144 |
Schedule of Estimated Amortization Expense Relating to Intangible Assets | Estimated amortization expense relating to intangible assets for the remainder of 2024 and for each of the next five full years ending December 31 is as follows (in thousand s) : 2024 (April-December) $ 8,681 2025 $ 11,574 2026 $ 11,574 2027 $ 11,574 2028 $ 10,295 2029 $ 10,295 |
MEDICAL COSTS PAYABLE (Tables)
MEDICAL COSTS PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Insurance [Abstract] | |
Schedule of Medical Costs Payable | The following table shows the components of the change in medical costs payable for the three months ended March 31, 2024 and 2023 (in thousand s) : March 31, 2024 2023 Medical costs payable - January 1 $ 157,903 $ 116,021 Incurred related to: Current year 201,420 254,782 Prior year (4,546) 2,806 Total incurred 196,874 257,588 Paid related to: Current year 87,372 90,768 Prior year 109,804 95,660 Total paid 197,176 186,428 Medical costs payable - March 31 $ 157,601 $ 187,181 The table below details the components making up the medical costs payable as of March 31, 2024 and December 31, 2023 (in thou sand s) : March 31, 2024 December 31, 2023 Provider incentive payable 42,366 2,367 Incurred but not reported (IBNR) 115,235 155,536 Total medical costs payable $ 157,601 $ 157,903 table below details the components making up the medical costs payable within current liabilities of discontinued operations (in thousands) : Bright HealthCare - Commercial March 31, 2024 December 31, 2023 Claims unpaid $ 10,775 $ 14,500 Claims adjustment expense liability 229 2,382 Incurred but not reported (IBNR) 4,777 14,999 Total medical costs payable of discontinued operations $ 15,781 $ 31,881 |
BORROWINGS AND COMMON STOCK W_2
BORROWINGS AND COMMON STOCK WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Common Stock Warrants | We account for our common stock warrants at the time of inception as derivatives, utilizing ASC 815 Derivatives and Hedging , by recording a liability equal to the warrants’ fair market value that is marked to market at the end of each period. Per the terms of the Warrantholders Agreements, the market value is calculated as the ending stock price less the $0.01 exercise price. As we draw on the available funds, warrants are issued; warrants will remain classified as a liability and be fair valued each period until they are exercised by the warrantholder. Upon exercise, we relieve the associated liability into additional paid in capital at the fair value of the warrants on the date of exercise, classifying the exercised warrants as equity. Fair Value Balance at January 1, 2024 $ 13,971 Newly executed Warrantholders Agreement — Change in fair value of outstanding warrants (2,072) Balance at March 31, 2024 $ 11,899 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Arrangement, Option, Activity | The activity for stock options for the three months ended March 31, 2024 is as follows (in thousand s, except exercise price, weighted average contractual life, and aggregate intrinsic value) : Shares Weighted Average Weighted Average Aggregate Outstanding at January 1, 2024 633 $ 138.33 5.2 $ 213 Granted — — Exercised — — Forfeited (3) 175.02 Expired (16) 213.84 Outstanding at March 31, 2024 614 $ 136.12 4.3 $ 171 |
Schedule of Share-based Payment Arrangement, Restricted Stock Unit, Activity | The followin g table summarizes RSU award activity for the three months ended March 31, 2024 (in thousands, except weighted average grant date fair value) : Number of RSUs Weighted Average Grant Date Fair Value Unvested RSUs at January 1, 2024 776 $ 53.32 Granted — — Vested (171) 49.00 Forfeited (30) 46.91 Unvested RSUs at March 31, 2024 575 $ 54.94 |
Schedule of Share-based Payment Arrangement, Performance Shares, Activity | The following table summarizes PSU award activity for the three months ended March 31, 2024 (in thousands, except weighted average grant date fair value) : Number of PSUs Weighted Average Grant Date Fair Value Unvested PSUs at January 1, 2024 131 $ 744.00 Granted — — Forfeited (13) 744.02 Unvested PSUs at March 31, 2024 118 $ 744.01 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the three months ended March 31 (in thousands, except for per share amounts) : Three Months Ended 2024 2023 Loss from continuing operations, net noncontrolling interests and accrued preferred stock dividends $ (18,653) $ (71,362) Loss from discontinued operations (9,865) (115,543) Net loss attributable to NeueHealth, Inc. common shareholders $ (28,518) $ (186,905) Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted 8,079 7,894 Basic and diluted loss per share attributable to NeueHealth, Inc. common shareholders Continuing operations $ (2.31) $ (9.04) Discontinued operations $ (1.22) $ (14.64) Net loss per share attributable to common stockholders, basic and diluted $ (3.53) $ (23.68) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three months ended March 31 (in thousa nd s) : Three Months Ended 2024 2023 Redeemable convertible preferred stock (as converted to common stock) 4,867 4,031 Issued and outstanding common stock warrants 1,834 — Stock options to purchase common stock 614 771 Restricted stock units 575 999 Total 7,890 5,801 |
SEGMENTS AND GEOGRAPHIC INFOR_2
SEGMENTS AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Financial Information | The following tables present the reportable segment financial information for the three months ended March 31, 2024 and 2023 (in thousands) : Three Months Ended March 31, 2024 NeueCare NeueSolutions Corporate & Eliminations Consolidated Capitated revenue $ 61,466 $ — $ — $ 61,466 ACO REACH revenue — 171,811 — 171,811 Service revenue 9,530 2,085 — 11,615 Investment income — — 203 203 Total unaffiliated revenue 70,996 173,896 203 245,095 Affiliated revenue 2,627 — (2,627) — Total segment revenue 73,623 173,896 (2,424) 245,095 Operating income (loss) 9,812 (2,932) (29,982) (23,102) Depreciation and amortization 3,786 — 776 4,562 Bad debt expense — (3) — (3) Restructuring charges — — (58) (58) Three Months Ended March 31, 2023 Care Delivery Care Solutions Corporate & Eliminations Consolidated Capitated revenue $ 49,548 $ — $ — $ 49,548 ACO REACH revenue — 239,807 — 239,807 Service revenue 10,936 251 — 11,187 Investment income (loss) — — 8 8 Total unaffiliated revenue 60,484 240,058 8 300,550 Affiliated revenue 2,195 — (2,195) — Total segment revenue 62,679 240,058 (2,187) 300,550 Operating income (loss) 6,636 (1,509) (49,999) (44,872) Depreciation and amortization 3,132 — 2,351 5,483 Restructuring charges — — 301 301 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTEREST (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Schedule of Redeemable Noncontrolling Interest | The following t able provides details of our redeemable noncontrolling interest activity for the three months ended March 31, 2024 and 2023 (in thousands) : 2024 2023 Balance at January 1 $ 88,908 $ 219,758 Earnings attributable to noncontrolling interest 4,227 1,421 Distribution to noncontrolling interest holders (1,884) (1,805) Measurement adjustment 7,510 4,129 Balance at March 31 $ 98,761 $ 223,503 |
ACO REACH (Tables)
ACO REACH (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Direct Contracting [Abstract] | |
Schedule Of Performance Guarantees | The tables below include the financial statement impacts of the performance guarantee at March 31, 2024 and December 31, 2023 and for the three-month periods ended March 31, 2024 and 2023 ( in thousands ): March 31, 2024 December 31, 2023 ACO REACH performance year receivable (1) $ 646,627 $ 115,878 ACO REACH performance year obligation 529,657 — (1) As of March 31, 2024, we estimate there to be in-network and out-of-network claims incurred by beneficiaries aligned to our REACH ACOs but not reported of $110.9 million related to performance year 2024 and $4.3 million related to performance year 2023; this is included in medical costs payable on the Condensed Consolidated Balance Sheets. Three Months Ended March 31, 2024 2023 Amortization of ACO REACH performance year receivable (1) $ 175,460 $ 175,523 Amortization of ACO REACH performance year obligation 176,552 239,807 ACO REACH revenue (2) 171,811 239,807 (1) The amortization of the ACO REACH performance year receivable includes $111.3 million and $84.3 million related to the amortization of the prior year receivable for the three months ended March 31, 2024 and 2023, respectively. (2) ACO REACH revenue is inclusive of $4.7 million relating to the 2023 performance year. |
DECONSOLIDATION OF BRIGHT HEA_2
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Balance Sheet of BHIC-Texas | The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership. Cash and cash equivalents $ 60,560 Prepaids and other current assets 1,522 Risk Share Receivable 123,981 Total Assets $ 186,063 Accounts payable 135 Medical costs payable 3,283 Other current liabilities 1,523 Risk adjustment payable 89,638 Total Liabilities $ 94,579 Additional paid in capital 204,753 Accumulated deficit (113,269) Total Equity $ 91,484 Total Liabilities and Equity $ 186,063 The financial results of discontinued operations by major line item for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 Bright HealthCare - Commercial Revenue: Premium revenue $ (215) Investment income 1,568 Total revenue from discontinued operations 1,353 Operating expenses: Medical costs (3,759) Operating costs 6,585 Restructuring charges (379) Total operating expenses from discontinued operations 2,447 Operating loss from discontinued operations (1,094) Interest expense 8,765 Loss from discontinued operations before income taxes (9,859) Income tax expense (benefit) 6 Net loss from discontinued operations $ (9,865) Three Months Ended March 31, 2023 Bright HealthCare - Commercial Bright HealthCare Other Total Revenue: Premium revenue $ 766 453,317 $ — $ 454,083 Service revenue 30 — 2,383 2,413 Investment income 20,891 38 — 20,929 Total revenue from discontinued operations 21,687 453,355 2,383 477,425 Operating expenses: Medical costs 46,014 428,725 — 474,739 Operating costs 47,478 56,339 2,049 105,866 Restructuring charges 7,956 — — 7,956 Depreciation and amortization — 4,407 — 4,407 Total operating expenses from discontinued operations 101,448 489,471 2,049 592,968 Operating loss from discontinued operations (79,761) (36,116) 334 (115,543) Interest expense — — — — Loss from discontinued operations before income taxes (79,761) (36,116) 334 (115,543) Income tax expense (benefit) — — — — Net loss from discontinued operations $ (79,761) $ (36,116) $ 334 $ (115,543) The following table presents cash flows from operating and investing activities for discontinued operations for the three months ended March 31, 2024 (in thousands) : Cash used in operating activities - discontinued operations $ (37,958) Cash provided by investing activities - discontinued operations 198,451 Assets and liabilities of discontinued operations were as follows (in thousands) : March 31, 2024 Bright HealthCare - Commercial Assets Current assets: Cash and cash equivalents $ 136,668 Short-term investments 6,995 Accounts receivable, net of allowance 1,427 Prepaids and other current assets 4,262 Current assets of discontinued operations 149,352 Total assets of discontinued operations $ 149,352 Liabilities Current liabilities: Medical costs payable $ 15,781 Accounts payable 19,616 Risk adjustment payable 279,922 Other current liabilities 29,729 Current liabilities of discontinued operations 345,048 Total liabilities of discontinued operations $ 345,048 December 31, 2023 Bright HealthCare - Commercial Bright HealthCare Total Assets Current assets: Cash and cash equivalents $ 159,769 $ 128,212 $ 287,981 Short-term investments 9,163 20,218 29,381 Accounts receivable, net of allowance 1,430 51,929 53,359 Prepaids and other current assets 7,838 114,532 122,370 Property, equipment and capitalized software, net — 17,954 17,954 Intangible assets, net — 138,982 138,982 Goodwill — 172,543 172,543 Current assets of discontinued operations 178,200 644,370 822,570 Total assets of discontinued operations $ 178,200 $ 644,370 $ 822,570 Liabilities Current liabilities: Medical costs payable $ 31,881 $ 272,138 $ 304,019 Accounts payable 25,648 7,719 33,367 Risk adjustment payable 291,146 — 291,146 Other current liabilities 28,045 43,181 71,226 Current liabilities of discontinued operations 376,720 323,038 699,758 Total liabilities of discontinued operations $ 376,720 $ 323,038 $ 699,758 (in thousands) : March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 106,536 $ — $ (5) $ 106,531 Held to maturity: U.S. government and agency obligations 6,878 — — 6,878 Corporate obligations 117 — — 117 Total held-to-maturity securities 6,995 — — 6,995 Total investments $ 113,531 $ — $ (5) $ 113,526 December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 150,939 $ — $ — $ 150,939 Available for sale: U.S. government and agency obligations 1,557 — (100) 1,457 Corporate obligations 615 — (11) 604 Certificates of deposit 19,653 — — 19,653 Mortgage-backed securities 951 — (63) 888 Total available-for-sale securities 22,776 — (174) 22,602 Held to maturity: U.S. government and agency obligations 6,503 1 (59) 6,445 Certificates of deposit 334 — — 334 Total held-to-maturity securities 6,837 1 (59) 6,779 Total investments $ 180,552 $ 1 $ (233) $ 180,320 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The table below presents the balance sheet of BHIC-Texas on November 29, 2023, the date the Deconsolidated Entity was placed into receivership. Cash and cash equivalents $ 60,560 Prepaids and other current assets 1,522 Risk Share Receivable 123,981 Total Assets $ 186,063 Accounts payable 135 Medical costs payable 3,283 Other current liabilities 1,523 Risk adjustment payable 89,638 Total Liabilities $ 94,579 Additional paid in capital 204,753 Accumulated deficit (113,269) Total Equity $ 91,484 Total Liabilities and Equity $ 186,063 The financial results of discontinued operations by major line item for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 Bright HealthCare - Commercial Revenue: Premium revenue $ (215) Investment income 1,568 Total revenue from discontinued operations 1,353 Operating expenses: Medical costs (3,759) Operating costs 6,585 Restructuring charges (379) Total operating expenses from discontinued operations 2,447 Operating loss from discontinued operations (1,094) Interest expense 8,765 Loss from discontinued operations before income taxes (9,859) Income tax expense (benefit) 6 Net loss from discontinued operations $ (9,865) Three Months Ended March 31, 2023 Bright HealthCare - Commercial Bright HealthCare Other Total Revenue: Premium revenue $ 766 453,317 $ — $ 454,083 Service revenue 30 — 2,383 2,413 Investment income 20,891 38 — 20,929 Total revenue from discontinued operations 21,687 453,355 2,383 477,425 Operating expenses: Medical costs 46,014 428,725 — 474,739 Operating costs 47,478 56,339 2,049 105,866 Restructuring charges 7,956 — — 7,956 Depreciation and amortization — 4,407 — 4,407 Total operating expenses from discontinued operations 101,448 489,471 2,049 592,968 Operating loss from discontinued operations (79,761) (36,116) 334 (115,543) Interest expense — — — — Loss from discontinued operations before income taxes (79,761) (36,116) 334 (115,543) Income tax expense (benefit) — — — — Net loss from discontinued operations $ (79,761) $ (36,116) $ 334 $ (115,543) The following table presents cash flows from operating and investing activities for discontinued operations for the three months ended March 31, 2024 (in thousands) : Cash used in operating activities - discontinued operations $ (37,958) Cash provided by investing activities - discontinued operations 198,451 Assets and liabilities of discontinued operations were as follows (in thousands) : March 31, 2024 Bright HealthCare - Commercial Assets Current assets: Cash and cash equivalents $ 136,668 Short-term investments 6,995 Accounts receivable, net of allowance 1,427 Prepaids and other current assets 4,262 Current assets of discontinued operations 149,352 Total assets of discontinued operations $ 149,352 Liabilities Current liabilities: Medical costs payable $ 15,781 Accounts payable 19,616 Risk adjustment payable 279,922 Other current liabilities 29,729 Current liabilities of discontinued operations 345,048 Total liabilities of discontinued operations $ 345,048 December 31, 2023 Bright HealthCare - Commercial Bright HealthCare Total Assets Current assets: Cash and cash equivalents $ 159,769 $ 128,212 $ 287,981 Short-term investments 9,163 20,218 29,381 Accounts receivable, net of allowance 1,430 51,929 53,359 Prepaids and other current assets 7,838 114,532 122,370 Property, equipment and capitalized software, net — 17,954 17,954 Intangible assets, net — 138,982 138,982 Goodwill — 172,543 172,543 Current assets of discontinued operations 178,200 644,370 822,570 Total assets of discontinued operations $ 178,200 $ 644,370 $ 822,570 Liabilities Current liabilities: Medical costs payable $ 31,881 $ 272,138 $ 304,019 Accounts payable 25,648 7,719 33,367 Risk adjustment payable 291,146 — 291,146 Other current liabilities 28,045 43,181 71,226 Current liabilities of discontinued operations 376,720 323,038 699,758 Total liabilities of discontinued operations $ 376,720 $ 323,038 $ 699,758 (in thousands) : March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 106,536 $ — $ (5) $ 106,531 Held to maturity: U.S. government and agency obligations 6,878 — — 6,878 Corporate obligations 117 — — 117 Total held-to-maturity securities 6,995 — — 6,995 Total investments $ 113,531 $ — $ (5) $ 113,526 December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Cash equivalents $ 150,939 $ — $ — $ 150,939 Available for sale: U.S. government and agency obligations 1,557 — (100) 1,457 Corporate obligations 615 — (11) 604 Certificates of deposit 19,653 — — 19,653 Mortgage-backed securities 951 — (63) 888 Total available-for-sale securities 22,776 — (174) 22,602 Held to maturity: U.S. government and agency obligations 6,503 1 (59) 6,445 Certificates of deposit 334 — — 334 Total held-to-maturity securities 6,837 1 (59) 6,779 Total investments $ 180,552 $ 1 $ (233) $ 180,320 |
Schedule of Purchase Price Adjustments | The $500.0 million purchase price includes $167.3 million of purchase price adjustments subject to contingencies and TNE adjustments (in thousands) : Consolidation and Adjustment Escrow Amount (1) $ 100,000 TNE deficit at closing (2) 57,326 Indemnity Escrow Amount (3) 10,000 Total consideration subject to contingencies $ 167,326 (1) Contingent upon either (i) Molina obtaining regulatory approval of the consolidation of BND into CHP or (ii) receipt by BND of a Part D Summary Rating for its Part D operations for contract year 2025 of at least 3 Stars from CMS. If this contingency is successful, it is payable in November 2024 net of any TNE deficit deterioration and subject to certain other purchase price adjustments as described further in the Amendment. (2) Amount by which minimum required TNE exceeds estimated TNE as of December 31, 2023. To the extent the TNE deficit improves on a restated basis by the cutoff date of June 30, 2024, Molina will owe the Company for that difference, payable in November 2024. To the extent the TNE deficit worsens on a restated basis by the time of the cutoff date, such difference will be deducted from Consolidation and Adjustment Escrow Amount. If the conditions around the Consolidation and Adjustment Escrow Amount are not satisfied, Molina would retain the Consolidation and Adjustment Escrow Amount in satisfaction of any TNE deficit deterioration. (3) For 18 months post-closing date, the Company will indemnify Molina against and are liable to Molina for any and all losses incurred by Molina resulting from breach or inaccuracy of warranties and representations made, breach or failure to perform any covenant of the Molina Purchase Agreement, among others. As the Indemnity Escrow Amount is subject to these conditions for 18 months post close, the Company will only recognize this amount in the fair value of consideration received at the point those 18 months have passed, on July 1, 2025. The amount recognized will be that equal to the $10.0 million Indemnity Escrow amount less any agreed upon or finally adjudicated losses as of July 1, 2025 |
Schedule of Investment and Sale of Business | At the time of the sale, our investment in the California MA business was calculated as follows (in thousands) : Total assets (1) $ 647,254 Total liabilities (323,038) Investment in California MA Business $ 324,216 (1) Total assets of the California MA business at the time of the sale are inclusive of $2.9 million unsettled intercompany receivable that was eliminated at consolidation. NeueHealth has recorded the corresponding payable within other current liabilities of our continuing operations as of March 31, 2024 . The company recorded no gain or loss associated with the sale of the California Medicare Advantage business (in thousands) : Sale price of California MA Business $ 500,000 Less: Portion of sale price subject to contingencies (167,326) Less: Investment in California MA Business (324,216) Less: Transactions costs contingent on closing of sale (8,458) Gain or loss on sale of California MA Business $ — |
Schedule of Restructuring Charges | Restructuring charges by reportable segment and corporate for the periods ended March 31 were as follows (in thousands) : Three Months Ended March 31, 2024 NeueCare NeueSolutions Corporate & Eliminations Total Employee termination benefits $ — $ — $ (58) $ (58) Long-lived asset impairments — — — — Contract termination and other costs — — — — Total continuing operations $ — $ — $ (58) $ (58) Three Months Ended March 31, 2023 NeueCare NeueSolutions Corporate & Eliminations Total Employee termination benefits $ — $ — $ (766) $ (766) Long-lived asset impairments — — 880 880 Contract termination and other costs — — 187 187 Total continuing operations $ — $ — $ 301 $ 301 Restructuring charges within our discontinued operations for the three months ended March 31, 2024 and 2023 were as follows (in thousands) : Three Months Ended March 31, 2024 2023 Employee termination benefits $ 129 $ 2,965 Long-lived asset impairments — 100 Contract termination and other costs (508) 4,891 Total discontinued operations restructuring charges $ (379) $ 7,956 |
Schedule of Restructuring Accrual | Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 were as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 8,389 $ — $ 8,389 Net charges (58) — (58) Cash payments (2,400) — (2,400) Balance at March 31, 2024 $ 5,931 $ — $ 5,931 Restructuring accrual activity recorded by major type for the three months ended March 31, 2024 was as follows (in thousands) : Employee Termination Benefits Contract Termination Costs Total Balance at January 1, 2024 $ 2,867 $ 22,492 $ 25,359 Net charges 129 (508) (379) Cash payments (1,485) (6,495) (7,980) Balance at March 31, 2024 $ 1,511 $ 15,489 $ 17,000 |
Schedule of Medical Costs Payable | The following table shows the components of the change in medical costs payable for the three months ended March 31, 2024 and 2023 (in thousand s) : March 31, 2024 2023 Medical costs payable - January 1 $ 157,903 $ 116,021 Incurred related to: Current year 201,420 254,782 Prior year (4,546) 2,806 Total incurred 196,874 257,588 Paid related to: Current year 87,372 90,768 Prior year 109,804 95,660 Total paid 197,176 186,428 Medical costs payable - March 31 $ 157,601 $ 187,181 The table below details the components making up the medical costs payable as of March 31, 2024 and December 31, 2023 (in thou sand s) : March 31, 2024 December 31, 2023 Provider incentive payable 42,366 2,367 Incurred but not reported (IBNR) 115,235 155,536 Total medical costs payable $ 157,601 $ 157,903 table below details the components making up the medical costs payable within current liabilities of discontinued operations (in thousands) : Bright HealthCare - Commercial March 31, 2024 December 31, 2023 Claims unpaid $ 10,775 $ 14,500 Claims adjustment expense liability 229 2,382 Incurred but not reported (IBNR) 4,777 14,999 Total medical costs payable of discontinued operations $ 15,781 $ 31,881 |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION - Narrative (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 27, 2023 USD ($) | May 10, 2024 USD ($) | Apr. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Feb. 29, 2024 USD ($) | Jan. 31, 2024 USD ($) | Sep. 30, 2023 USD ($) | Mar. 31, 2024 USD ($) state | Mar. 31, 2024 USD ($) business | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Apr. 08, 2024 USD ($) | Jan. 01, 2024 USD ($) | Dec. 13, 2023 USD ($) | Oct. 02, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Number of market facing business | business | 2 | |||||||||||||||
Repayment of debt loans outstanding | $ 298,600,000 | |||||||||||||||
Gain on troubled debt restructuring | 30,311,000 | $ 0 | ||||||||||||||
Net loss | (4,177,000) | $ (169,461,000) | $ (1,300,000,000) | |||||||||||||
Centers for Medicare & Medicaid Services | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Interest rate | 11.50% | |||||||||||||||
Cash settlement | $ (11,200,000) | |||||||||||||||
Repayment aggregate amount | $ 380,200,000 | |||||||||||||||
Centers for Medicare & Medicaid Services | Parent Company | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Repayment aggregate amount | 279,900,000 | $ 279,900,000 | 279,900,000 | |||||||||||||
Revolving Credit Facility | Line of Credit | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Letter of credit principal balance | 7,600,000 | $ 7,600,000 | $ 7,600,000 | |||||||||||||
Revolving Credit Facility | Debt and interest repayment | Letter of Credit | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Repayments of debt and interest | $ 274,600,000 | |||||||||||||||
Secured Debt | Line of Credit | Delayed Draw Term Loan | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Term loan commitment increase in an aggregate principal amount | $ 6,400,000 | |||||||||||||||
Secured Debt | Line of Credit | Delayed Draw Term Loan | Subsequent Event | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Term loan commitment increase in an aggregate principal amount | $ 30,000,000 | |||||||||||||||
Additional short-term borrowings | $ 20,000,000 | |||||||||||||||
Letter of credit principal balance | $ 10,000,000 | |||||||||||||||
Discontinued Operations | California Medicare Advantage Business | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Total consideration | $ 500,000,000 | $ 500,000,000 | $ 600,000,000 | |||||||||||||
Cash collateralization of existing letters | $ (24,100,000) | |||||||||||||||
Net proceeds of after debt repayment | 31,600,000 | |||||||||||||||
Contingent consideration | $ 110,000,000 | |||||||||||||||
Total consideration subject to contingencies | 167,326,000 | |||||||||||||||
Wind-down period | 2 years | |||||||||||||||
Number of approving states | state | 3 | |||||||||||||||
Approved dividends | $ 28,200,000 | |||||||||||||||
Dividends paid | $ 13,200,000 | |||||||||||||||
Discontinued Operations | California Medicare Advantage Business | TNE Closing Deficit | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Total consideration subject to contingencies | $ 57,300,000 | $ 57,326,000 | ||||||||||||||
Discontinued Operations | California Medicare Advantage Business | Subsequent Event | ||||||||||||||||
Organization and Basis of Presentation [Line Items] | ||||||||||||||||
Dividends paid | $ 15,000,000 |
ORGANIZATION AND BASIS OF PRE_5
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Operating Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Compensation and fringe benefits | $ 48,136 | $ 58,624 |
Professional fees | 6,500 | 5,848 |
Technology expenses | 3,517 | 6,153 |
General and administrative expenses | 7,700 | 7,457 |
Other operating expenses | 969 | 1,436 |
Operating costs | $ 66,822 | $ 79,518 |
RESTRUCTURING CHARGES - Schedul
RESTRUCTURING CHARGES - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | $ (58) | $ (766) |
Long-lived asset impairments | 0 | 880 |
Contract termination and other costs | 0 | 187 |
Total restructuring charges | (58) | 301 |
NeueCare | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | 0 | 0 |
Long-lived asset impairments | 0 | 0 |
Contract termination and other costs | 0 | 0 |
Total restructuring charges | 0 | 0 |
NeueSolutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | 0 | 0 |
Long-lived asset impairments | 0 | 0 |
Contract termination and other costs | 0 | 0 |
Total restructuring charges | 0 | 0 |
Corporate & Eliminations | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee termination benefits | (58) | (766) |
Long-lived asset impairments | 0 | 880 |
Contract termination and other costs | 0 | 187 |
Total restructuring charges | $ (58) | $ 301 |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) lease | |
Restructuring and Related Activities [Abstract] | ||
Long-lived asset impairments | $ | $ 0 | $ 880 |
Abandonment of operating leases | lease | 1 |
RESTRUCTURING CHARGES - Sched_2
RESTRUCTURING CHARGES - Schedule of Restructuring Reserve by Type of Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 8,389 |
Net charges | (58) |
Cash payments | (2,400) |
Ending Balance | 5,931 |
Employee Termination Benefits | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 8,389 |
Net charges | (58) |
Cash payments | (2,400) |
Ending Balance | 5,931 |
Contract Termination Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0 |
Net charges | 0 |
Cash payments | 0 |
Ending Balance | $ 0 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Definite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 128,382 | $ 128,382 |
Accumulated Amortization | 38,037 | 35,144 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 80,021 | 80,021 |
Accumulated Amortization | 28,231 | 26,144 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 48,361 | 48,361 |
Accumulated Amortization | $ 9,806 | $ 9,000 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment of intangible assets | $ 0 | $ 0 |
Amortization of intangible assets | $ 2,900,000 | $ 2,900,000 |
INTANGIBLE ASSETS - Schedule _2
INTANGIBLE ASSETS - Schedule of Intangible Asset Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 (April-December) | $ 8,681 |
2025 | 11,574 |
2026 | 11,574 |
2027 | 11,574 |
2028 | 10,295 |
2029 | $ 10,295 |
MEDICAL COSTS PAYABLE - Change
MEDICAL COSTS PAYABLE - Change in Medical Costs Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Medical costs payable, beginning balance | $ 157,903 | $ 116,021 |
Incurred related to: | ||
Current year | 201,420 | 254,782 |
Prior year | (4,546) | 2,806 |
Total incurred | 196,874 | 257,588 |
Paid related to: | ||
Current year | 87,372 | 90,768 |
Prior year | 109,804 | 95,660 |
Total paid | 197,176 | 186,428 |
Medical costs payable, ending balance | $ 157,601 | $ 187,181 |
MEDICAL COSTS PAYABLE - Narrati
MEDICAL COSTS PAYABLE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Insurance [Abstract] | ||
Medical costs payable, increase (decrease) to prior years | $ (4.5) | $ 2.8 |
MEDICAL COSTS PAYABLE - Compone
MEDICAL COSTS PAYABLE - Components of Medical Costs Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Insurance [Abstract] | ||||
Provider incentive payable | $ 42,366 | $ 2,367 | ||
Incurred but not reported (IBNR) | 115,235 | 155,536 | ||
Total medical costs payable | $ 157,601 | $ 157,903 | $ 187,181 | $ 116,021 |
BORROWINGS AND COMMON STOCK W_3
BORROWINGS AND COMMON STOCK WARRANTS - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Dec. 27, 2023 | Oct. 02, 2023 | Aug. 04, 2023 | May 10, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Apr. 08, 2024 | Jan. 02, 2024 | Mar. 31, 2021 | |
Line of Credit Facility [Line Items] | ||||||||||
Short-term borrowings | $ 0 | $ 303,947,000 | ||||||||
Gain on troubled debt restructuring | $ 30,311,000 | $ 0 | ||||||||
Troubled debt restructuring, decrease of basic loss per share (In dollars per share) | $ (3.75) | |||||||||
Troubled debt restructuring, decrease of diluted loss per share (In dollars per share) | $ (3.75) | |||||||||
Warrant liability | $ 11,899,000 | 13,971,000 | ||||||||
Warrant income | (2,072,000) | $ 0 | ||||||||
Warrantholders Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Warrant liability | $ 25,100,000 | |||||||||
Warrant available to be issued (in shares) | 1,700,000 | |||||||||
Fair market value per share (in dollars per share) | $ 15.12 | |||||||||
Warrant income | (2,072,000) | |||||||||
CalSTRS Warrants | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Warrant liability | $ 1,000,000 | |||||||||
Warrant available to be issued (in shares) | 200,000 | |||||||||
Fair market value per share (in dollars per share) | $ 5.80 | |||||||||
Subsequent Event | Warrantholders Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.01 | |||||||||
Warrant available to be issued (in shares) | 1,113,563 | |||||||||
Revolving Credit Facility | Line of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility | $ 350,000,000 | |||||||||
Short-term borrowings | $ 0 | 303,900,000 | ||||||||
Effective annual interest rate | 10.07% | |||||||||
Revolving Credit Facility | Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Letters of credit outstanding | $ 22,900,000 | |||||||||
Letter of credit outstanding cash amount percentage | 105% | |||||||||
Revolving Credit Facility | Letter of Credit | Debt and interest repayment | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Repayments of lines of credit | $ 274,600,000 | |||||||||
Short-term borrowings | $ 0 | |||||||||
Secured Debt | Line of Credit | Delayed Draw Term Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility | $ 60,000,000 | |||||||||
Short-term borrowings | $ 66,400,000 | $ 66,400,000 | ||||||||
Effective annual interest rate | 15% | 15% | ||||||||
Term loan commitment increase in an aggregate principal amount | $ 6,400,000 | |||||||||
Secured Debt | Line of Credit | Delayed Draw Term Loan | Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan commitment increase in an aggregate principal amount | $ 30,000,000 | |||||||||
Additional short-term borrowings | $ 20,000,000 |
BORROWINGS AND COMMON STOCK W_4
BORROWINGS AND COMMON STOCK WARRANTS - Common Stock Warrants (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class Of Warrants [Roll Forward] | ||
Change in fair value of outstanding warrants | $ (2,072) | $ 0 |
Warrantholders Agreement | ||
Class Of Warrants [Roll Forward] | ||
Beginning balance | 13,971 | |
Newly executed Warrantholders Agreement | 0 | |
Change in fair value of outstanding warrants | (2,072) | |
Ending balance | $ 11,899 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 USD ($) vestingTranche shares | Mar. 31, 2023 USD ($) | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for future issuance (in shares) | shares | 2,100,000 | ||
Number of shares available for grant (in shares) | shares | 1,000,000 | ||
Share-based compensation expense | $ | $ 18.6 | $ 33.3 | |
Granted (in shares) | shares | 0 | ||
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ | $ 6.8 | ||
Vesting period | 3 years | ||
Option grants expiration | 10 years | ||
Granted (in shares) | shares | 0 | ||
Unrecognized compensation expense | $ | $ 20.4 | ||
Unrecognized compensation expense, weighted average recognition period | 10 months 24 days | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ | $ 5.5 | ||
Vesting period | 3 years | ||
Unrecognized compensation expense, weighted average recognition period | 1 year 1 month 6 days | ||
Unrecognized compensation expense, other than options | $ | $ 18 | ||
Granted (in shares) | shares | 0 | ||
Restricted stock units | Board of Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
PSU's | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ | $ 6.3 | ||
Unrecognized compensation expense, weighted average recognition period | 2 months 12 days | ||
Unrecognized compensation expense, other than options | $ | $ 5.4 | ||
Granted (in shares) | shares | 0 | ||
PSU's | IPO | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | shares | 183,750 | ||
Number of vesting tranches | vestingTranche | 4 | ||
Service period | 3 years | ||
Tranche One | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting | 25% | ||
Vesting period | 1 year | ||
Tranche Two | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 36 months |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Shares | ||
Beginning balance (in shares) | 633 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (3) | |
Expired (in shares) | (16) | |
Ending balance (in shares) | 614 | 633 |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 138.33 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 175.02 | |
Expired (in dollars per share) | 213.84 | |
Ending balance (in dollars per share) | $ 136.12 | $ 138.33 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted Average Remaining Contractual Life (In Years) | 4 years 3 months 18 days | 5 years 2 months 12 days |
Aggregate Intrinsic Value | $ 171 | $ 213 |
SHARE-BASED COMPENSATION - Sc_2
SHARE-BASED COMPENSATION - Schedule of RSU and PSU Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted stock units | |
Number of Awards | |
Beginning balance (in shares) | shares | 776 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (171) |
Forfeited (in shares) | shares | (30) |
Ending balance (in shares) | shares | 575 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 53.32 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 49 |
Forfeited (in dollars per share) | $ / shares | 46.91 |
Ending balance (in dollars per share) | $ / shares | $ 54.94 |
PSU's | |
Number of Awards | |
Beginning balance (in shares) | shares | 131 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | (13) |
Ending balance (in shares) | shares | 118 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 744 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 744.02 |
Ending balance (in dollars per share) | $ / shares | $ 744.01 |
REDEEMABLE CONVERTIBLE PREFER_2
REDEEMABLE CONVERTIBLE PREFERRED STOCK (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Oct. 17, 2022 USD ($) tradingDay $ / shares shares | Jan. 03, 2022 USD ($) tradingDay $ / shares shares | Mar. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) $ / shares | |
Series A preferred stock dividend accrued | ||||
Class of Stock [Line Items] | ||||
Issuance of preferred stock (in shares) | shares | 750,000 | |||
Convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Issuance of preferred stock | $ | $ 750 | |||
Redemption price (in dollars per share) | $ 1,000 | |||
Temporary equity, liquidation preference (in dollars per share) | $ 1,000 | |||
Dividend rate | 5% | |||
Accretion to redemption value | $ | $ 88.3 | $ 78 | ||
Conversion price (in dollars per share) | $ 364 | $ 283.19 | ||
Temporary equity, conversion threshold, volume weighted average price of common stock percentage | 175% | |||
Number of threshold trading days | tradingDay | 20 | |||
Number of consecutive trading days | tradingDay | 30 | |||
Multiplier for accrued and unpaid dividends, before seventh anniversary | 105% | |||
Multiplier for accrued and unpaid dividends, after seventh anniversary | 100% | |||
Liquidation preference | 105% | |||
Series B preferred stock dividend accrued | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Temporary equity, liquidation preference (in dollars per share) | $ 1,000 | |||
Dividend rate | 5% | |||
Accretion to redemption value | $ | $ 13.1 | $ 10.8 | ||
Conversion price (in dollars per share) | $ 113.60 | $ 98.68 | ||
Temporary equity, conversion threshold, volume weighted average price of common stock percentage | 287% | |||
Number of threshold trading days | tradingDay | 20 | |||
Number of consecutive trading days | tradingDay | 30 | |||
Multiplier for accrued and unpaid dividends, before seventh anniversary | 105% | |||
Multiplier for accrued and unpaid dividends, after seventh anniversary | 100% | |||
Liquidation preference | 105% | |||
Number of shares issued (in shares) | shares | 175,000 | |||
Preferred stock, par value (in dollars per share) | $ 0.0001 | |||
Proceeds from sale of stock | $ | $ 175 | |||
Price per share of stock (in dollars per share) | $ 1,000 |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of Net Loss Per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Earnings Per Share [Abstract] | |||
Loss from continuing operations, net noncontrolling interests and accrued preferred stock dividends | $ (18,653) | $ (71,362) | |
Loss from discontinued operations | (9,865) | (115,543) | |
Net loss attributable to NeueHealth, Inc. common shareholders | $ (28,518) | $ (186,905) | |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic (in shares) | [1] | 8,079 | 7,894 |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted (in shares) | [1] | 8,079 | 7,894 |
Basic and diluted loss per share attributable to NeueHealth, Inc. common shareholders | |||
Continuing operations, basic (in dollars per share) | $ (2.31) | $ (9.04) | |
Continuing operations, diluted (in dollars per share) | (2.31) | (9.04) | |
Discontinued operations, basic (in dollars per share) | (1.22) | (14.64) | |
Discontinued operations, diluted (in dollars per share) | (1.22) | (14.64) | |
Basic loss per share (in dollars per share) | (3.53) | (23.68) | |
Diluted loss per share (in dollars per share) | $ (3.53) | $ (23.68) | |
[1] *Shares have been retroactively adjusted to reflect the decreased number of shares resulting from a 1 for 80 reverse stock split effective May 22, 2023. |
NET LOSS PER SHARE - Schedule_2
NET LOSS PER SHARE - Schedule of Antidilutive Securities Excluded From Net Loss Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 7,890 | 5,801 |
Redeemable convertible preferred stock (as converted to common stock) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 4,867 | 4,031 |
Issued and outstanding common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 1,834 | 0 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 614 | 771 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share (in shares) | 575 | 999 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Loss Contingencies [Line Items] | |
Restricted Cash | $ 50 |
Revolving Credit Facility | Line of Credit | |
Loss Contingencies [Line Items] | |
Letter of credit principal balance | 7.6 |
Revolving Credit Facility | Line of Credit | Surety Bond | |
Loss Contingencies [Line Items] | |
Surety bonds | $ 19.7 |
SEGMENTS AND GEOGRAPHIC INFOR_3
SEGMENTS AND GEOGRAPHIC INFORMATION - Narrative (Details) member in Thousands, consumer in Thousands | 3 Months Ended |
Mar. 31, 2024 consumer member primaryCareClinic segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of reportable segments | segment | 2 |
NeueCare | |
Segment Reporting Information [Line Items] | |
Number of primary care clinics | primaryCareClinic | 73 |
Number of individuals served | consumer | 360 |
NeueSolutions | REACH ACO | |
Segment Reporting Information [Line Items] | |
Number of individuals served | member | 45 |
NeueSolutions | Enablement Services | |
Segment Reporting Information [Line Items] | |
Number of individuals served | member | 109 |
SEGMENTS AND GEOGRAPHIC INFOR_4
SEGMENTS AND GEOGRAPHIC INFORMATION - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | $ 171,811 | $ 239,807 |
Investment income | 203 | 8 |
Total revenue | 245,095 | 300,550 |
Operating income (loss) | (23,102) | (44,872) |
Depreciation and amortization | 4,562 | 5,483 |
Bad debt expense | (3) | 0 |
Restructuring charges | (58) | 301 |
Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 245,095 | 300,550 |
Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 61,466 | 49,548 |
Service revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 11,615 | 11,187 |
Corporate & Eliminations | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 0 | 0 |
Investment income | 203 | 8 |
Total revenue | (2,424) | (2,187) |
Operating income (loss) | (29,982) | (49,999) |
Depreciation and amortization | 776 | 2,351 |
Bad debt expense | 0 | |
Restructuring charges | (58) | 301 |
Corporate & Eliminations | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 203 | 8 |
Corporate & Eliminations | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | (2,627) | (2,195) |
Corporate & Eliminations | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Corporate & Eliminations | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
NeueCare | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 300 | 300 |
Restructuring charges | 0 | 0 |
NeueCare | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 0 | |
Investment income | 0 | |
Total revenue | 73,623 | |
Operating income (loss) | 9,812 | |
Depreciation and amortization | 3,786 | |
Bad debt expense | 0 | |
Restructuring charges | 0 | |
NeueCare | Operating Segments | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 70,996 | |
NeueCare | Operating Segments | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 2,627 | |
NeueCare | Operating Segments | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 61,466 | |
NeueCare | Operating Segments | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,530 | |
NeueSolutions | ||
Segment Reporting Information [Line Items] | ||
Restructuring charges | 0 | 0 |
NeueSolutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 171,811 | |
Investment income | 0 | |
Total revenue | 173,896 | |
Operating income (loss) | (2,932) | |
Depreciation and amortization | 0 | |
Bad debt expense | (3) | |
Restructuring charges | 0 | |
NeueSolutions | Operating Segments | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 173,896 | |
NeueSolutions | Operating Segments | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | |
NeueSolutions | Operating Segments | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | |
NeueSolutions | Operating Segments | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 2,085 | |
Care Delivery | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 0 | |
Investment income | 0 | |
Total revenue | 62,679 | |
Operating income (loss) | 6,636 | |
Depreciation and amortization | 3,132 | |
Restructuring charges | 0 | |
Care Delivery | Operating Segments | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 60,484 | |
Care Delivery | Operating Segments | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 2,195 | |
Care Delivery | Operating Segments | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 49,548 | |
Care Delivery | Operating Segments | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 10,936 | |
Care Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | 239,807 | |
Investment income | 0 | |
Total revenue | 240,058 | |
Operating income (loss) | (1,509) | |
Depreciation and amortization | 0 | |
Restructuring charges | 0 | |
Care Solutions | Operating Segments | Total unaffiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 240,058 | |
Care Solutions | Operating Segments | Affiliated revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | |
Care Solutions | Operating Segments | Capitated revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | |
Care Solutions | Operating Segments | Service revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 251 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 663 | $ 1,259 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTEREST (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 88,908 | $ 219,758 |
Earnings attributable to noncontrolling interest | 4,227 | 1,421 |
Distribution to noncontrolling interest holders | (1,884) | (1,805) |
Measurement adjustment | 7,510 | 4,129 |
Ending balance | $ 98,761 | $ 223,503 |
ACO REACH - Narrative (Details)
ACO REACH - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) directContractingEntity | Mar. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of direct contracting arrangements | 3 | |
Number of entities elected to participate in stop-loss arrangement | 2 | |
Number of entities elected to third-party coverage | 1 | |
Threshold of performance year benchmark | 25% | |
ACO REACH revenue | $ | $ 171,811 | $ 239,807 |
NeueCare | ||
Segment Reporting Information [Line Items] | ||
ACO REACH revenue | $ | $ 300 | $ 300 |
ACO REACH - Schedule Of Perform
ACO REACH - Schedule Of Performance Guarantees (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Direct Contracting [Abstract] | |||
ACO REACH performance year receivable | $ 646,627 | $ 115,878 | |
ACO REACH performance year obligation | 529,657 | 0 | |
In-network claims | 110,900 | ||
Out-of-network claims | $ 4,300 | ||
Amortization of ACO REACH performance year receivable | 175,460 | $ 175,523 | |
Amortization of ACO REACH performance year obligation | 176,552 | 239,807 | |
ACO REACH revenue | 171,811 | 239,807 | |
Amortization of ACO REACH prior year receivable | 111,300 | $ 84,300 | |
ACO REACH revenue from prior performance year | $ (4,700) |
DECONSOLIDATION OF BRIGHT HEA_3
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Nov. 29, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | |||||
Risk Share Receivable | $ 646,627 | $ 115,878 | |||
Total stockholder's equity | $ (1,261,212) | $ (1,263,943) | $ (339,987) | $ (200,490) | |
BHIC-Texas | |||||
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | |||||
Risk Share Receivable | $ 123,981 | ||||
Total stockholder's equity | $ 91,484 |
DECONSOLIDATION OF BRIGHT HEA_4
DECONSOLIDATION OF BRIGHT HEALTHCARE INSURANCE COMPANY OF TEXAS - Schedule of Balance Sheet of BHIC-Texas (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Nov. 29, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | |||||
Cash and cash equivalents | $ 112,762 | $ 87,299 | |||
Prepaids and other current assets | 25,786 | 17,831 | |||
Risk Share Receivable | 646,627 | 115,878 | |||
Total current assets | 974,465 | 1,088,927 | |||
Accounts payable | 6,263 | 11,841 | |||
Medical costs payable | 157,601 | 157,903 | $ 187,181 | $ 116,021 | |
Other current liabilities | 85,101 | 79,856 | |||
Total liabilities | 1,347,162 | 1,480,098 | |||
Additional paid-in capital | 3,074,654 | 3,056,027 | |||
Accumulated deficit | (4,323,763) | (4,307,849) | |||
Total shareholders’ equity (deficit) | (1,261,212) | (1,263,943) | $ (339,987) | $ (200,490) | |
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | $ 1,105,128 | $ 1,225,480 | |||
BHIC-Texas | |||||
Deconsolidation Of Bright Healthcare Insurance Company Of Texas [Line Items] | |||||
Cash and cash equivalents | $ 60,560 | ||||
Prepaids and other current assets | 1,522 | ||||
Risk Share Receivable | 123,981 | ||||
Total current assets | 186,063 | ||||
Accounts payable | 135 | ||||
Medical costs payable | 3,283 | ||||
Other current liabilities | 1,523 | ||||
Risk adjustment payable | 89,638 | ||||
Total liabilities | 94,579 | ||||
Additional paid-in capital | 204,753 | ||||
Accumulated deficit | (113,269) | ||||
Total shareholders’ equity (deficit) | 91,484 | ||||
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) | $ 186,063 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Statement of Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating expenses: | ||
Net loss from discontinued operations | $ (9,865) | $ (115,543) |
Discontinued Operations | California Medicare Advantage Business | ||
Revenue: | ||
Premium revenue | 454,083 | |
Service revenue | 2,413 | |
Investment income | 20,929 | |
Total revenue from discontinued operations | 477,425 | |
Operating expenses: | ||
Medical costs | 474,739 | |
Operating costs | 105,866 | |
Restructuring charges | 7,956 | |
Depreciation and amortization | 4,407 | |
Total operating expenses from discontinued operations | 592,968 | |
Operating loss from discontinued operations | (115,543) | |
Interest expense | 0 | |
Loss from discontinued operations before income taxes | (115,543) | |
Income tax expense (benefit) | 0 | |
Net loss from discontinued operations | (115,543) | |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare - Commercial | ||
Revenue: | ||
Premium revenue | (215) | 766 |
Service revenue | 30 | |
Investment income | 1,568 | 20,891 |
Total revenue from discontinued operations | 1,353 | 21,687 |
Operating expenses: | ||
Medical costs | (3,759) | 46,014 |
Operating costs | 6,585 | 47,478 |
Restructuring charges | (379) | 7,956 |
Depreciation and amortization | 0 | |
Total operating expenses from discontinued operations | 2,447 | 101,448 |
Operating loss from discontinued operations | (1,094) | (79,761) |
Interest expense | 8,765 | 0 |
Loss from discontinued operations before income taxes | (9,859) | (79,761) |
Income tax expense (benefit) | 6 | 0 |
Net loss from discontinued operations | $ (9,865) | (79,761) |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | ||
Revenue: | ||
Premium revenue | 453,317 | |
Service revenue | 0 | |
Investment income | 38 | |
Total revenue from discontinued operations | 453,355 | |
Operating expenses: | ||
Medical costs | 428,725 | |
Operating costs | 56,339 | |
Restructuring charges | 0 | |
Depreciation and amortization | 4,407 | |
Total operating expenses from discontinued operations | 489,471 | |
Operating loss from discontinued operations | (36,116) | |
Interest expense | 0 | |
Loss from discontinued operations before income taxes | (36,116) | |
Income tax expense (benefit) | 0 | |
Net loss from discontinued operations | (36,116) | |
Discontinued Operations | California Medicare Advantage Business | Other | ||
Revenue: | ||
Premium revenue | 0 | |
Service revenue | 2,383 | |
Investment income | 0 | |
Total revenue from discontinued operations | 2,383 | |
Operating expenses: | ||
Medical costs | 0 | |
Operating costs | 2,049 | |
Restructuring charges | 0 | |
Depreciation and amortization | 0 | |
Total operating expenses from discontinued operations | 2,049 | |
Operating loss from discontinued operations | 334 | |
Interest expense | 0 | |
Loss from discontinued operations before income taxes | 334 | |
Income tax expense (benefit) | 0 | |
Net loss from discontinued operations | $ 334 |
DISCONTINUED OPERATIONS - Sch_2
DISCONTINUED OPERATIONS - Schedule of Cash Flows From Operating and Investing Activities for Discontinued Operations (Details) - Discontinued Operations - California Medicare Advantage Business $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash used in operating activities - discontinued operations | $ (37,958) |
Cash provided by investing activities - discontinued operations | $ 198,451 |
DISCONTINUED OPERATIONS - Sch_3
DISCONTINUED OPERATIONS - Schedule of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Jan. 01, 2024 | Dec. 31, 2023 |
Current assets: | |||
Current assets of discontinued operations (Note 15) | $ 149,352 | $ 822,570 | |
Current liabilities: | |||
Current liabilities of discontinued operations | 345,048 | 699,758 | |
Discontinued Operations | California Medicare Advantage Business | |||
Current assets: | |||
Cash and cash equivalents | 287,981 | ||
Short-term investments | 29,381 | ||
Accounts receivable, net of allowance | 53,359 | ||
Prepaids and other current assets | 122,370 | ||
Property, equipment and capitalized software, net | 17,954 | ||
Intangible assets, net | 138,982 | ||
Goodwill | 172,543 | ||
Current assets of discontinued operations (Note 15) | 822,570 | ||
Total assets of discontinued operations | $ 647,254 | ||
Current liabilities: | |||
Medical costs payable | 304,019 | ||
Accounts payable | 33,367 | ||
Risk adjustment payable | 291,146 | ||
Other current liabilities | 71,226 | ||
Current liabilities of discontinued operations | 699,758 | ||
Total liabilities of discontinued operations | $ 323,038 | 699,758 | |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare - Commercial | |||
Current assets: | |||
Cash and cash equivalents | 136,668 | 159,769 | |
Short-term investments | 6,995 | 9,163 | |
Accounts receivable, net of allowance | 1,427 | 1,430 | |
Prepaids and other current assets | 4,262 | 7,838 | |
Property, equipment and capitalized software, net | 0 | ||
Intangible assets, net | 0 | ||
Goodwill | 0 | ||
Current assets of discontinued operations (Note 15) | 149,352 | 178,200 | |
Total assets of discontinued operations | 149,352 | ||
Current liabilities: | |||
Medical costs payable | 15,781 | 31,881 | |
Accounts payable | 19,616 | 25,648 | |
Risk adjustment payable | 279,922 | 291,146 | |
Other current liabilities | 29,729 | 28,045 | |
Current liabilities of discontinued operations | 345,048 | ||
Total liabilities of discontinued operations | $ 345,048 | 376,720 | |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare | |||
Current assets: | |||
Cash and cash equivalents | 128,212 | ||
Short-term investments | 20,218 | ||
Accounts receivable, net of allowance | 51,929 | ||
Prepaids and other current assets | 114,532 | ||
Property, equipment and capitalized software, net | 17,954 | ||
Intangible assets, net | 138,982 | ||
Goodwill | 172,543 | ||
Current assets of discontinued operations (Note 15) | 644,370 | ||
Current liabilities: | |||
Medical costs payable | 272,138 | ||
Accounts payable | 7,719 | ||
Risk adjustment payable | 0 | ||
Other current liabilities | 43,181 | ||
Total liabilities of discontinued operations | $ 323,038 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | |||||
Sep. 30, 2023 | Mar. 31, 2024 | Jan. 01, 2024 | Dec. 31, 2023 | Dec. 13, 2023 | Jun. 30, 2023 | |
Centers for Medicare & Medicaid Services | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Repayment aggregate amount | $ 380,200 | |||||
Repayment period | 18 months | |||||
Interest rate | 11.50% | |||||
Discontinued Operations | California Medicare Advantage Business | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total consideration | $ 500,000 | $ 500,000 | $ 600,000 | |||
Total consideration subject to contingencies | 167,326 | |||||
Risk adjustment payable | $ 291,146 | |||||
Total assets of discontinued operations | 647,254 | |||||
Discontinued Operations | California Medicare Advantage Business | Corporate & Eliminations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total assets of discontinued operations | $ 2,900 | |||||
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare - Commercial | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Risk adjustment payable | $ 279,922 | 291,146 | ||||
Total assets of discontinued operations | 149,352 | |||||
Discontinued Operations | Bright HealthCare - Commercial | Level 1 | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash, cash equivalents, and short-term investments | 111,100 | 157,800 | ||||
Discontinued Operations | Bright HealthCare - Commercial | Level 2 | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash, cash equivalents, and short-term investments | $ 2,400 | $ 22,600 |
DISCONTINUED OPERATIONS - Sch_4
DISCONTINUED OPERATIONS - Schedule of Purchase Price Adjustments (Details) - Discontinued Operations - California Medicare Advantage Business - USD ($) $ in Thousands | Jan. 01, 2024 | Dec. 31, 2023 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total consideration subject to contingencies | $ 167,326 | |
Indemnification period | 18 months | |
Consolidation and Adjustment Escrow Amount | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total consideration subject to contingencies | $ 100,000 | |
TNE Closing Deficit | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total consideration subject to contingencies | 57,326 | $ 57,300 |
Indemnity Escrow Amount | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total consideration subject to contingencies | $ 10,000 |
DISCONTINUED OPERATIONS - Sch_5
DISCONTINUED OPERATIONS - Schedule of Investment on Sale of Business (Details) - Discontinued Operations - California Medicare Advantage Business - USD ($) $ in Thousands | Jan. 01, 2024 | Dec. 31, 2023 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets | $ 647,254 | |
Total liabilities | (323,038) | $ (699,758) |
Investment in California MA Business | 324,216 | |
Corporate & Eliminations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets | $ 2,900 |
DISCONTINUED OPERATIONS - Sch_6
DISCONTINUED OPERATIONS - Schedule of Gain or Loss on Sale of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Jan. 01, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 13, 2023 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain or loss on sale of California MA Business | $ (9,865) | $ (115,543) | |||
Discontinued Operations | California Medicare Advantage Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sale price of California MA Business | $ 500,000 | $ 500,000 | $ 600,000 | ||
Less: Portion of sale price subject to contingencies | (167,326) | ||||
Less: Investment in California MA Business | (324,216) | ||||
Less: Transactions costs contingent on closing of sale | (8,458) | ||||
Gain or loss on sale of California MA Business | $ 0 | ||||
Gain or loss on sale of California MA Business | $ (115,543) |
DISCONTINUED OPERATIONS - Sch_7
DISCONTINUED OPERATIONS - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Employee termination benefits | $ (58) | $ (766) |
Long-lived asset impairments | 0 | 880 |
Contract termination and other costs | $ 0 | $ 187 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income, Extensible Enumeration, Not Disclosed Flag | Total discontinued operations restructuring charges | Total discontinued operations restructuring charges |
Discontinued Operations | California Medicare Advantage Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Employee termination benefits | $ 129 | $ 2,965 |
Long-lived asset impairments | 0 | 100 |
Contract termination and other costs | (508) | 4,891 |
Total discontinued operations restructuring charges | $ (379) | $ 7,956 |
DISCONTINUED OPERATIONS - Sch_8
DISCONTINUED OPERATIONS - Schedule of Restructuring Reserve by Type of Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 8,389 | |
Net charges | (58) | $ 301 |
Cash payments | (2,400) | |
Ending Balance | 5,931 | |
California Medicare Advantage Business | Discontinued Operations | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 25,359 | |
Net charges | (379) | |
Cash payments | (7,980) | |
Ending Balance | 17,000 | |
Employee Termination Benefits | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 8,389 | |
Cash payments | (2,400) | |
Ending Balance | 5,931 | |
Employee Termination Benefits | California Medicare Advantage Business | Discontinued Operations | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 2,867 | |
Net charges | 129 | |
Cash payments | (1,485) | |
Ending Balance | 1,511 | |
Contract Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Cash payments | 0 | |
Ending Balance | 0 | |
Contract Termination Costs | California Medicare Advantage Business | Discontinued Operations | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 22,492 | |
Net charges | (508) | |
Cash payments | (6,495) | |
Ending Balance | $ 15,489 |
DISCONTINUED OPERATIONS - Sch_9
DISCONTINUED OPERATIONS - Schedule of Investment Securities (Details) - California Medicare Advantage Business - Discontinued Operations - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Cash equivalents, Amortized Cost | $ 106,536 | $ 150,939 |
Cash equivalents, Gross Unrealized Gains | 0 | 0 |
Cash equivalents, Gross Unrealized Losses | (5) | 0 |
Cash equivalents, Carrying Value | 106,531 | 150,939 |
Available for sale: | ||
Amortized Cost | 22,776 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (174) | |
Carrying Value | 22,602 | |
Held to maturity: | ||
Amortized Cost | 6,995 | 6,837 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 0 | (59) |
Carrying Value | 6,995 | 6,779 |
Total investments | ||
Amortized Cost | 113,531 | 180,552 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (5) | (233) |
Carrying Value | 113,526 | 180,320 |
Corporate obligations | ||
Available for sale: | ||
Amortized Cost | 615 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (11) | |
Carrying Value | 604 | |
Held to maturity: | ||
Amortized Cost | 117 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Carrying Value | 117 | |
U.S. government and agency obligations | ||
Available for sale: | ||
Amortized Cost | 1,557 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (100) | |
Carrying Value | 1,457 | |
Held to maturity: | ||
Amortized Cost | 6,878 | 6,503 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 0 | (59) |
Carrying Value | $ 6,878 | 6,445 |
Certificates of deposit | ||
Available for sale: | ||
Amortized Cost | 19,653 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Carrying Value | 19,653 | |
Held to maturity: | ||
Amortized Cost | 334 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Carrying Value | 334 | |
Mortgage-backed securities | ||
Available for sale: | ||
Amortized Cost | 951 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (63) | |
Carrying Value | $ 888 |
DISCONTINUED OPERATIONS - Sc_10
DISCONTINUED OPERATIONS - Schedule of Incurred Claims and Cumulative Paid Claims (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Incurred but not reported (IBNR) | $ 115,235 | $ 155,536 | ||
Total medical costs payable | 157,601 | 157,903 | $ 187,181 | $ 116,021 |
Discontinued Operations | California Medicare Advantage Business | Bright HealthCare - Commercial | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Claims unpaid | 10,775 | 14,500 | ||
Claims adjustment expense liability | 229 | 2,382 | ||
Incurred but not reported (IBNR) | 4,777 | 14,999 | ||
Total medical costs payable | $ 15,781 | $ 31,881 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
May 02, 2024 | May 10, 2024 | Mar. 31, 2024 | Apr. 08, 2024 | Oct. 02, 2023 | Aug. 04, 2023 | |
Restricted stock units | ||||||
Subsequent Event [Line Items] | ||||||
Granted (in shares) | 0 | |||||
Vesting period | 3 years | |||||
Warrantholders Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Warrant available to be issued (in shares) | 1,700,000 | |||||
Newly executed Warrantholders Agreement | $ 0 | |||||
Secured Debt | Delayed Draw Term Loan | Line of Credit | ||||||
Subsequent Event [Line Items] | ||||||
Term loan commitment increase in an aggregate principal amount | $ 6,400 | |||||
Subsequent Event | 2021 Incentive Plan | ||||||
Subsequent Event [Line Items] | ||||||
Shares authorized (in shares) | 2,275,000 | |||||
Subsequent Event | Restricted stock units | ||||||
Subsequent Event [Line Items] | ||||||
Granted (in shares) | 2,400,000 | |||||
Subsequent Event | Restricted stock units | Cliff | ||||||
Subsequent Event [Line Items] | ||||||
Granted (in shares) | 1,600,000 | |||||
Vesting period | 3 years | |||||
Subsequent Event | Restricted stock units | Ratably | ||||||
Subsequent Event [Line Items] | ||||||
Granted (in shares) | 900,000 | |||||
Vesting period | 3 years | |||||
Subsequent Event | Warrantholders Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Warrant available to be issued (in shares) | 1,113,563 | |||||
Warrants issued (in shares) | 742,375 | |||||
Subsequent Event | Secured Debt | Delayed Draw Term Loan | Line of Credit | ||||||
Subsequent Event [Line Items] | ||||||
Term loan commitment increase in an aggregate principal amount | $ 30,000 | |||||
Proceeds from Short-Term Debt | $ 20,000 |