Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001832466 | |
Entity Registrant Name | ALIGNMENT HEALTHCARE, INC. | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ALHC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-40295 | |
Entity Tax Identification Number | 46-5596242 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 1100 W. Town and Country Road | |
Entity Address, Address Line Two | Suite 1600 | |
Entity Address, City or Town | Orange | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92868 | |
City Area Code | 844 | |
Local Phone Number | 310-2247 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 187,256,693 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 448,835 | $ 466,600 |
Accounts receivable (less allowance for credit losses of $119 at March 31, 2022 and $111 at December 31, 2021, respectively) | 84,527 | 58,512 |
Prepaid expenses and other current assets | 32,829 | 27,747 |
Total current assets | 566,191 | 552,859 |
Property and equipment, net | 31,747 | 30,358 |
Right of use asset, net | 7,354 | 7,853 |
Goodwill and intangible assets, net | 36,345 | 35,116 |
Other assets | 4,977 | 4,709 |
Total assets | 646,614 | 630,895 |
Current Liabilities: | ||
Medical expenses payable | 154,963 | 125,886 |
Accounts payable and accrued expenses | 16,443 | 17,431 |
Accrued compensation | 23,564 | 23,928 |
Total current liabilities | 194,970 | 167,245 |
Long-term debt, net of debt issuance costs | 152,256 | 150,620 |
Long-term portion of lease liabilities | 6,103 | 6,975 |
Total liabilities | 353,329 | 324,840 |
Commitments and Contingencies (Note 12) | ||
Stockholders' Equity: | ||
Preferred stock, $.001 par value; 100,000,000 and 0 shares authorized as of March 31, 2022 and December 31, 2021 respectively; no shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $.001 par value; 1,000,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 187,414,057 and 187,193,613 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 187 | 187 |
Additional Paid in Capital | 916,594 | 888,547 |
Accumulated deficit | (623,511) | (582,694) |
Total Alignment Healthcare, Inc. stockholders' equity | 293,270 | 306,040 |
Noncontrolling interest | 15 | 15 |
Total stockholders' equity | 293,285 | 306,055 |
Total liabilities and stockholders' equity | $ 646,614 | $ 630,895 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 119 | $ 111 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 187,414,057 | 187,193,613 |
Common stock, shares outstanding | 187,414,057 | 187,193,613 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Earned premiums | $ 345,292 | $ 267,000 |
Other | 234 | 82 |
Total revenues | $ 345,526 | $ 267,082 |
Revenue, Product and Service [Extensible List] | us-gaap:FinancialServiceMember | us-gaap:FinancialServiceMember |
Expenses: | ||
Medical expenses | $ 303,758 | $ 251,095 |
Selling, general, and administrative expenses | 74,293 | 64,914 |
Depreciation and amortization | 3,950 | 3,737 |
Total expenses | 382,001 | 319,746 |
Loss from operations | (36,475) | (52,664) |
Other expenses: | ||
Interest expense | 4,401 | 4,248 |
Other (income) expenses | (59) | (38) |
Total other expenses | 4,342 | 4,210 |
Loss before income taxes | (40,817) | (56,874) |
Provision for income taxes | 0 | 0 |
Net income (loss) attributable to Alignment Healthcare, Inc. | $ (40,817) | $ (56,874) |
Total weighted-average common shares outstanding - basic and diluted | 178,874,192 | 154,432,027 |
Net loss per share - basic and diluted | $ (0.23) | $ (0.37) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | |
Beginning Balance at Dec. 31, 2020 | [1] | $ 30,611 | $ 164 | $ 417,855 | $ (387,408) | $ 0 |
Beginning Balance, Shares at Dec. 31, 2020 | [1] | 164,063,787 | ||||
Net loss attributable to Alignment Healthcare, Inc. | (56,874) | $ 0 | 0 | (56,874) | 0 | |
Issuance of common stock, net of issuance costs | 361,601 | $ 22 | 361,579 | 0 | 0 | |
Issuance of common stock, net of issuance costs, Shares | 21,700,000 | |||||
Issuance of common stock to third-party business partners | 6,480 | $ 1 | 6,479 | 0 | 0 | |
Issuance of common stock to third-party business partners, Shares | 573,782 | |||||
Issuance of common stock to stock appreication rights holders | 11,510 | $ 1 | 11,509 | 0 | 0 | |
Issuance of common stock to stock appreication rights holders, Shares | 936,213 | |||||
Equity-based compensation | 2,398 | $ 0 | 2,398 | 0 | 0 | |
Equity repurchase | (1,474) | 0 | 1,474 | 0 | 0 | |
Ending Balance at Mar. 31, 2021 | 354,252 | $ 188 | 798,346 | (444,282) | 0 | |
Ending Balance, Shares at Mar. 31, 2021 | 187,273,782 | |||||
Beginning Balance at Dec. 31, 2021 | $ 306,055 | $ 187 | 888,547 | (582,694) | 15 | |
Beginning Balance, Shares at Dec. 31, 2021 | 187,193,613 | 187,193,613 | ||||
Net loss attributable to Alignment Healthcare, Inc. | $ (40,817) | $ 0 | 0 | (40,817) | 0 | |
Issuance of common stock upon vesting of restricted stock units | 383,508 | |||||
Forfeitures | 0 | $ 0 | 0 | 0 | 0 | |
Forfeitures, shares | (163,064) | |||||
Equity-based compensation | 28,047 | 28,047 | 0 | 0 | ||
Ending Balance at Mar. 31, 2022 | $ 293,285 | $ 187 | $ 916,594 | $ (623,511) | $ 15 | |
Ending Balance, Shares at Mar. 31, 2022 | 187,414,057 | 187,414,057 | ||||
[1] | The consolidated balances as of December 31, 2020 were derived from the audited consolidated financial statements as of that date and were retroactively adjusted, including shares and per share amounts, as a result of the Reorganization. See Note 1 to the condensed consolidated financial statements for additional details. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - IPO $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / shares | |
Stock price (in dollars per share) | $ / shares | $ 18 |
Common stock issuance costs | $ | $ 28,999 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net loss | $ (40,817) | $ (56,874) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Provision for credit loss | 53 | 8 |
Depreciation and amortization | 3,993 | 3,789 |
Amortization-debt issuance costs and investment discount | 566 | 550 |
Payment-in-kind interest | 1,070 | 1,015 |
Equity-based compensation and common stock payments | 28,047 | 20,388 |
Non-cash lease expense | 715 | 648 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (26,050) | (9,326) |
Prepaid expenses and other current assets | (5,079) | (9,547) |
Other assets | (167) | (6) |
Medical expenses payable | 29,077 | 16,069 |
Accounts payable and accrued expenses | (1,656) | (298) |
Accrued compensation | (364) | (3,691) |
Lease liabilities | (1,026) | (832) |
Net cash used in operating activities | (11,638) | (38,107) |
Investing Activities: | ||
Purchase of business, net of cash received | (1,113) | 0 |
Purchase of investments | (850) | (750) |
Sale of investments | 750 | 750 |
Acquisition of property and equipment | (4,914) | (4,446) |
Net cash used in investing activities | (6,127) | (4,446) |
Financing Activities: | ||
Equity repurchase | 0 | (1,474) |
Issuance of common stock | 0 | 390,600 |
Common stock issuance costs | 0 | (25,467) |
Net cash provided by financing activities | 0 | 363,659 |
Net increase (decrease) in cash | (17,765) | 321,106 |
Cash and restricted cash at beginning of period | 468,350 | 207,811 |
Cash and restricted cash at end of period | 450,585 | 528,917 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,758 | 2,682 |
Supplemental non-cash investing and financing activities: | ||
Acquisition of property in accounts payable | 331 | 474 |
Purchase of business in accounts payable | 240 | 0 |
Common stock issuance costs included in accounts payable and accrued expenses | 0 | 3,532 |
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows: | ||
Cash | 448,835 | 528,417 |
Restricted cash in other assets | 1,750 | 500 |
Total | $ 450,585 | $ 528,917 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organizat ion Alignment Healthcare, Inc. (collectively, “we” or “us” or “our” or the “Company”), formerly, Alignment Healthcare Holdings, LLC, is a next generation, consumer-centric health care platform that is purpose-built to provide seniors with high quality, affordable care with a vastly improved consumer experience. Enabled by our innovative technology and care delivery model, the Company focuses on improving outcomes in the Medicare Advantage sector. The Company’s operations primarily consist of Medicare Advantage Plans in the states of California, North Carolina, Nevada, and Arizona. Reorganization We historically operated as a Delaware limited liability company under the name Alignment Healthcare Holdings, LLC. On March 17, 2021, Alignment Healthcare Holdings, LLC converted to a Delaware corporation pursuant to a statutory conversion and we changed our name to Alignment Healthcare, Inc. for purposes of completing an initial public offering ("IPO") ("the Reorganization"). As part of the Reorganization, Alignment Healthcare Partners, LP ("the Parent"), the sole unitholder of Alignment Healthcare Holdings, LLC, exchanged its membership units for our common stock and became the sole holder of our shares of common stock. Prior to the closing of the IPO, the Parent merged with and into the Company with Alignment Healthcare, Inc. surviving the merger. The membership units that were owned by the Parent prior to the Reorganization were converted to our common stock using an approximately 1 to 260 common stock split . All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted, where applicable, for all periods presented to give effect to the common stock split and exchange ratio applied in connection with the Reorganization. As a result, we reclassified the capital contributions associated with the issuance of the membership units to additional paid-in capital and common stock using a par value of $ 0.001 for all periods presented within the condensed consolidated financial statements. Initial Public Offering On March 25, 2021, our Registration Statement on Form S-1 for the initial public offering of 27,200,000 shares of common stock was declared effective by the Securities and Exchange Commission. Our common stock began trading on March 26, 2021 on the Nasdaq Global Select Market under the ticker symbol “ALHC." We completed an IPO through issuing and selling 21,700,000 shares of common stock and certain stockholders selling 5,500,000 shares of common stock, in each case at a price of $ 18.00 per share. We received proceeds of $ 361,589 after deducting underwriting discounts and commissions of $ 24,389 and deferred offering costs of $ 4,622 . Deferred direct offering costs were capitalized and consisted of fees and expenses incurred in connection with the sale of our common stock in the IPO, including legal, accounting, printing and other offering related costs. Upon completion of the IPO, these deferred offering costs were reclassified from prepaid and other current assets to stockholders' equity and recorded against the net proceeds from the offering. On April 6, 2021, pursuant to a partial exercise of the underwriters' over-allotment option, certain selling stockholders sold an additional 3,314,216 shares of common stock at the IPO price. The Company did not receive any proceeds from the sale of shares of common stock by the selling stockholders in the IPO. On November 18, 2021, certain selling stockholders, including certain of our principal stockholders, sold an additional 9,200,000 shares of our common stock. The Company did no t sell any shares and did not receive any proceeds from the sale of shares by the selling stockholders. We incurred $ 1,045 in transaction costs in connection with this offering. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of the Company, our subsidiaries, and three immaterial variable interest entities in which we are the primary beneficiary. All intercompany transactions have been eliminated in consolidation. Noncontrolling interest is presented within the equity section of the condensed consolidated balance sheets. We have no components of other comprehensive income (loss), and accordingly, comprehensive income (loss) is the same as the net income (loss) for all periods presented. Subsequent to the issuance of the consolidated financial statements for the year ended December 31, 2021 we determined that $ 7,838 reflected in the accumulated deficit beginning balance as of January 1, 2019 should have been reflected as additional paid-in capital. As such, the balances at January 1, 2021 in the Consolidated Statement of Stockholders' Equity were corrected resulting in an increase in accumulated deficit and additional paid-in capital for the corresponding amount. Management has concluded that the correction is not material to the previously issued consolidated financial statements. Use of Estimates The preparation of the condensed consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements. Our significant estimates include, but are not limited to, the determination of medical expenses payable; the impact of risk adjustment provisions related to our Medicare contracts; collectability of receivables; right of use (“ROU”) assets and lease liabilities valuation; valuation of related impairment recognition of long-lived assets, including goodwill and intangible assets; equity-based compensation expense; and contingent liabilities. Estimates and judgments are based upon historical information and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates and the impact of any change in estimates is included in earnings in the period in which the estimate is adjusted. Segments We have determined that our chief executive officer is the chief operating decision maker (“CODM”) who regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating financial performance. We operate and manage the business as one reporting and one operating segment, which is to provide healthcare services to our seniors. Factors used in determining the reportable segment include the nature of operating activities, our organizational and reporting structure, and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. All of our assets are located in the United States. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our current assets and current liabilities approximate fair value because of the short-term nature of these financial instruments. Financial instruments measured at fair value on a recurring basis were based upon a three-tier hierarchy as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities Level 2 - Other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date The fair value of cash and restricted cash was determined based on Level 1 inputs. The fair value of US Treasury bills and certificate of deposits, which were included in other assets in the condensed consolidated balance sheets, was determined based on Level 2 inputs. There were no assets or liabilities measured at fair value using Level 3 inputs for the three months ended March 31, 2022 and 2021. Our long-term debt was reported at carrying value. Revenue and Accounts Receivable Earned premium revenue consisted of premium revenue and capitation revenue for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended 2022 2021 Premium $ 330,878 $ 264,713 Capitation 14,414 2,287 $ 345,292 $ 267,000 Premium revenue is derived monthly from the federal government based on our contract with the Centers for Medicare and Medicaid Services (“CMS”). In accordance with this arrangement, we assume the responsibility for the outcomes and the economic risk of funding our members’ health care, supplemental benefits and related administration costs. We recognize premium revenue in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The monthly reimbursement includes a fixed payment per member per month (“PMPM”), which is adjusted based on certain risk factors derived from medical diagnoses and conditions of our members. The adjustments are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the estimated ultimate premium. Premiums are also recorded net of estimated uncollectible amounts and retroactive membership adjustments. Capitation revenue consists primarily of capitated fees for medical care services provided by us under arrangements with third-party payors and from CMS related to our Direct Contracting Entities ("DCE"). Under those arrangements with third-party payors, we receive a PMPM payment for a defined member population, and we are responsible for providing health care services to the member population over the contract period. We are solely responsible for the cost of health care services related to the member population and in some cases, we are financially responsible for the supplemental benefits provided by us to the members. We act as a principal in arranging for and controlling the services provided by our provider network and we are at risk for arranging and providing health care services. The premium and capitation payments we receive monthly from CMS for our members are determined from our annual bid or similarly from third-party payors under our capitation arrangement. These payments represent revenues for providing health care coverage, including Medicare Part D benefits. Under the Medicare Part D program, our members and the members of the third-party payors receive standard drug benefits. We may also provide enhanced benefits at our own expense. We recognize premium or capitation revenue for providing this insurance coverage in the month that members are entitled to receive health care services and any premium or capitation collected in advance is deferred. Our CMS payment related to Medicare Part D is subject to risk sharing through the Medicare Part D risk corridor provisions. On April 1, 2021, we launched two DCEs that participate in the CMS Innovation’s Direct Contracting Model. CMS serves as the claim adjudicator for institutional and specialists care, and directly pays for such fee for service claims. The DCEs are responsible for the cost of health care services related to the patient population attributed to the DCE by participating in 100% savings/losses via the risk share model and in some cases, are financially responsible for the supplemental benefits provided to the patients. The DCEs act as a principal in arranging for and controlling services provided directly by its contracts with primary care physicians, as well as services provided by preferred institutional care providers and specialists. Capitation payments for the DCE program are determined from an annual benchmark established by CMS. These payments, that are adjusted for variable considerations, represent revenue for providing health care service, including primary care as well as institutional and specialist care. The DCEs recognize capitation revenue for providing these services in the period in which the performance obligations are satisfied by transferring services to the members. Revenue recognized by the DCEs for the three months ended March 31, 2022 was $ 12,302 . Revenue Adjustments Payments by CMS to health plans are determined via a competitive bidding process with CMS and are based upon the cost of care in a local market and the average utilization of services by the member enrolled. These payments are subject to periodic adjustments under CMS’ “risk adjustment model,” which compensates health plans based on the health severity and certain demographic factors of each individual member. Members diagnosed with certain conditions are paid at a higher monthly payment than members who are healthier. Under this risk adjustment model, CMS calculates the risk adjustment payment using diagnosis data from hospital inpatient, hospital outpatient, and physician treatment settings. The Company and health care providers collect, capture, and submit the necessary and available diagnosis data to CMS within prescribed deadlines. Both premium and capitation revenues (including Medicare Part D) are subject to adjustments under the risk adjustment model. Throughout the year, we estimate risk adjustment payments based upon the diagnosis data submitted and expected to be submitted to CMS. Those estimated risk adjustment payments are recorded as an adjustment to premium and capitation revenue. Our risk adjustment data is also subject to review by the government, including audit by regulators. Our recognized premium revenue for our Medicare Advantage Plans in California, North Carolina, Nevada, and Arizona are each subject to a minimum annual medical loss ratio (“MLR”) of 85 %. The MLR represents medical costs as a percentage of premium revenue. The Code of Federal Regulations define what constitutes medical costs and premium revenue, including certain additional expenses related to improving the quality of care provided, and to exclude certain taxes and fees, in each case as permitted or required by CMS and applicable regulatory requirements. If the minimum MLR is not met, we are required to remit a portion of the premiums back to the federal government. The amount remitted, if any, is recognized as an adjustment to premium revenues in the condensed consolidated statements of operations. There were no amounts payable for the MLR as of March 31, 2022 and December 31, 2021, respectively. Medicare Part D payments are also subject to a federal risk corridor program, which limits a health plan’s overall losses or profit if actual spending for basic Medicare Part D benefits is much higher or lower than what was anticipated. Risk corridor is recorded within premium revenue. The risk corridor provisions compare costs targeted in our bids or third-party payors’ bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS or third-party payors making additional payments to us or require us to refund a portion of the premiums we received. We estimate and recognize an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our condensed consolidated balance sheet based on the timing of expected settlement. Variable consideration estimates related to DCE contract revenue are based on the most likely outcome method and that a significant reversal in the amount of cumulative revenue recognized would not occur. Receivables, including risk adjusted premium due from the government or through third-party payors, pharmacy rebates, and other receivables, are shown net of allowances for credit losses and retroactive membership adjustments. Property and Equipment—Net Depreciation expense is computed using the straight-line method generally based on the following estimated useful lives: Description Estimated Service Lives (years) Computer and equipment 5 Office equipment and furniture 5 - 7 Software 3 - 5 Leasehold improvements 15 (or lease term, if shorter) Depreciation expense related to property and equipment used to service our members or at our clinics are included within medical expenses in the condensed consolidated statements of operations. Medical Expenses Medical expenses include claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses, internal care delivery expenses and various other costs incurred to provide health insurance coverage and care to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided. We have contracts with a network of hospitals, physicians, and other providers and compensate those providers and ancillary organizations based on contractual arrangements or CMS Medicare compensation guidelines. We pay these contracting providers either through fee-for-service arrangement in which the provider is paid negotiated rates for specific services provided or a capitation payment, which represent monthly contractual fees disbursed for each member regardless of medical services provided to the member. We are responsible for the entirety of the cost of health care services related to the member population, in addition to supplemental benefits provided by us to our seniors. We also record claims expenses related to our institutional and specialist care related to our DCE program with CMS as we act as the principal in the transaction. Capitation-related expenses are recorded on an accrual basis during the coverage period. Expenses related to fee-for-service contracts are recorded in the period in which the related services are dispensed. Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in accounts receivable in the condensed consolidated balance sheets. Medical Expenses Payable Medical expenses payable includes estimates of our obligations for medical care services that have been rendered on behalf of our members and the members of the Third-Party Payors, but for which claims have either not yet been received or processed, loss adjustment expense reserve for the expected costs of settling these claims, and for liabilities related to physician, hospital, and other medical cost disputes. We develop estimates for medical expenses incurred but not yet paid (“IBNP”) which includes an estimate for claims incurred but not reported (“IBNR”) and a payable for adjudicated claims. IBNR is estimated using an actuarial process that is consistently applied and centrally controlled. Medical expenses payable also includes an estimate for the costs necessary to process unpaid claims at the end of each period. We estimate IBNR liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors, such as cost trends and completion factors that are assessed based on historical data for payment patterns, product mix, seasonality, utilization of health care services, and other relevant factors. Each period, we re-examine previously established IBNR estimates based on actual claim submissions and other changes in facts and circumstances. As the IBNR estimates recorded in prior periods develop, we adjust the amount of the estimates and include the changes in estimates in medical expenses in the period in which the change is identified. Actuarial Standards of Practice generally require that the IBNP estimates be adequate to cover obligations under moderately adverse conditions. Moderately adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of estimate. In many situations, the claims amount ultimately settled will be different than the estimate that satisfies the Actuarial Standards of Practice. We include in our IBNP an estimate for medical claims liability under moderately adverse conditions, which represents the risk of adverse deviation of the estimates in our actuarial method of reserving. We believe that medical expenses payable is adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events. Therefore, the actual liability could differ materially from the amounts provided. We reassess the profitability of contracts for providing coverage to members when current operating results or forecasts indicate probable future losses. A premium deficiency reserve is established in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceed related future premiums under contracts without consideration of investment income. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with the method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. Part D Subsidies We also receive advance payments each month from CMS related to Catastrophic Reinsurance, Coverage Gap Discount, and the Low-Income Member Cost Sharing Subsidy (“Subsidies”). Reinsurance subsidies represent funding from CMS for our portion of prescription drug costs, which exceed the member’s out-of-pocket threshold or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Additionally, the Health Care Reform Law mandates consumer discounts of 75 % on brand-name prescription drugs for Part D plan participants in the coverage gap. The majority of the discounts are funded by the pharmaceutical manufacturers, while we fund a smaller portion and administer the application of the total discount. These Subsidies represent cost reimbursements under the Medicare Part D program and are recorded as deposits or payables. These Subsidies received in excess of, or less than, actual subsidized benefits paid are refundable to or recoverable from CMS through an annual reconciliation process following the end of the contract year. Shared Risk Reserve Arrangements We established a fund (also referred to as “a pool”) for risk and profit-sharing with various independent physician associations (“IPAs”). The pool enables us and our IPAs to share in the financial responsibility and/or upside associated with providing covered medical expenses to our members. The risk pool is based on a contractually agreed upon medical budget, typically based upon a percentage of revenue. If actual medical expenses are less than the budgeted amount, this results in a surplus. Conversely, if actual medical expenses are greater than the budgeted amount, this results in a deficit. We will distribute the surplus, or a portion thereof, to each IPA based upon contractual terms. Deficits are charged to shared risk providers’ risk pool as per the contractual term and evaluated for collectability at each reporting period. We record risk-sharing receivables and payables on a gross basis on the condensed consolidated balance sheet. Throughout the year, we evaluate expected losses on risk-sharing receivables and record the resulting expected losses to the reserve. We systematically build and release reserves based on adequacy and its assessment of expected losses on a monthly basis. Credit loss associated with risk share deficit receivables are recorded within medical expense in the condensed consolidated statements of operations. As of March 31, 2022 and December 31, 2021, we recorded a valuation allowance for all of the risk-sharing receivable balance due to collection risk related to the balance. The risk-sharing payable is included within medical expenses payable on the condensed consolidated balance sheet. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash deposits and restricted investments with financial institutions. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to certain limits. At March 31, 2022 and December 31, 2021, t here was $ 447,711 and $ 465,824 , respectively, in excess of FDIC-insured limits. Equity-Based Compensation Equity-based compensation expense is measured and recognized based on the grant date fair value of the awards. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant date fair value of Restricted Stock Units (“RSUs”) and Restricted Stock Awards (“RSAs”) is estimated based on the fair value of our underlying common stock. The Black-Scholes option pricing model requires the use of highly subjective assumptions, including the award’s expected term, the fair value of the underlying common stock, the expected volatility of the price of the common stock, risk-free interest rates, and the expected dividend yield of the common stock. The assumptions used to determine the fair value of the stock-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. The expected term represents the period the stock-based awards are expected to be outstanding. As we do not have sufficient historical experience for determining the expected term of the stock option awards granted, we utilize the simplified method available under U.S. GAAP. As we do not have a substantial trading history, volatility assumptions were developed using a combination of the Company's historical volatility and the historical volatilities of a set of peer companies, adjusted for debt-equity leverage. Equity-based compensation expense for awards with service-based vesting only is recognized on a graded vesting schedule over the requisite service period of the awards, which is generally four years . We account for forfeitures as they occur. Equity-based compensation is recorded within selling, general and administrative expenses, and medical expenses based on the function of the applicable employee and non-employee. Noncontrolling interest Noncontrolling interest represents the portion of equity ownership in a subsidiary that is not attributable to Alignment Healthcare, Inc. The noncontrolling interest in a subsidiary is initially recognized at estimated fair value on April 1, 2021 and is presented within total equity in the Company's condensed consolidated balance sheets. There was no net loss attributable to the noncontrolling interest for the three months ended March 31, 2022 and 2021 as the Company was responsible for 100% of the net loss in the first year of operations of that subsidiary. Net Loss per Share Net loss per share is calculated based on net loss attributable to Alignment Healthcare, Inc.'s shareholders. The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 Numerator: Net loss attributable to common stockholders $ ( 40,817 ) $ ( 56,874 ) Denominator: Total weighted-average common shares outstanding - 187,091,570 165,611,120 Less: Restricted shares of common stock 8,217,378 11,179,093 Total weighted-average common shares outstanding, 178,874,192 154,432,027 Net loss per share: Net loss per share - basic and diluted $ ( 0.23 ) $ ( 0.37 ) Basic net loss per share is the same as diluted net loss per share for certain periods presented as the inclusion of all potentially dilutive shares would have been anti-dilutive. In addition to the restricted shares of common stock, we also excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share as of March 31, 2022 and 2021: March 31, 2022 2021 Stock options 11,925,082 11,123,391 Restricted stock units 4,284,230 1,517,000 Total 16,209,312 12,640,391 Recent Accounting Pronouncements Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial position or results of operations upon adoption. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 3. Fair Value US Treasury bills and certificate of deposits are reported at amortized costs which is equivalent to fair value. The following tables present the carrying value and fair value of these financial instruments as of March 31, 2022 and December 31, 2021: March 31, 2022 Fair Value Carrying Level 1 Level 2 Level 3 US Treasury bills $ 1,375 $ — $ 1,375 $ — Certificate of deposits 1,172 — 1,172 — Total $ 2,547 $ — $ 2,547 $ — December 31, 2021 Fair Value Carrying Level 1 Level 2 Level 3 US Treasury bills $ 1,375 $ — $ 1,375 $ — Certificate of deposits 1,071 — 1,071 — Total $ 2,446 $ — $ 2,446 $ — The carrying value of long-term debt represents the outstanding balance, net of unamortized debt issuance costs. As of March 31, 2022, the carrying value and fair value of our long-term debt was $ 152,256 and $ 153,669 , res pectively. As of December 31, 2021, the carrying value and fair value of our long-term debt was $ 150,620 and $ 154,367 , respectively. The fair value of our long-term debt is classified as a Level 3 financial instrument because certain inputs used to determine its fair value are not observable. The fair value was estimated using a discounted cash flow (“DCF”) methodology. The discount rate used in the DCF model was estimated based on a synthetic credit rating analysis for us, and a screening of market data to identify market yields of instruments within the range of identified credit ratings and with otherwise similar features. Our nonfinancial assets and liabilities, which include goodwill, intangible assets, property, and equipment, are not required to be measured at fair value on a recurring basis. However, on a periodic basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, we assess these assets for impairment. No such impairment resulted during the three months ended March 31, 2022 and 2021. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable | 4. Accounts Receivable Accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, Government receivables $ 36,575 $ 19,685 Pharmacy rebate receivables 43,931 34,376 Other receivables 4,140 4,562 Total accounts receivable 84,646 58,623 Allowance for credit losses ( 119 ) ( 111 ) Accounts receivable, net $ 84,527 $ 58,512 The allowance for expected credit losses for accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due. However, when available evidence reasonably supports an assumption that future economic conditions will differ from current and historical payment collections, an adjustment is reflected in the allowance for expected credit losses. We record pharmacy rebates and other receivables based on contractual terms and expected collections and our estimation process for contractual allowances for such balances generally results in an allowance for balances outstanding greater than 90 days or if expected credit risks are known. Receivables and any associated allowance are written off only when all collection attempts have failed and such amounts are determined unrecoverable. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted. Because substantially all of our receivable amounts are readily determinable and a large portion of our creditors are governmental authorities, our allowance for credit losses is insignificant. We recorded credit loss related to accounts receivable of $ 53 and $ 8 during the three months ended March 31, 2022 and 2021, respectively. The amounts were recorded in selling general, and administrative expenses in the condensed consolidated statements of operations. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, Computers and equipment $ 9,530 $ 9,164 Office equipment and furniture 4,438 4,416 Software 103,050 98,031 Leasehold improvements 6,196 6,196 Construction in progress 596 753 Subtotal 123,810 118,560 Less accumulated depreciation ( 92,063 ) ( 88,202 ) Property and equipment-net $ 31,747 $ 30,358 Depreciation expense for the three months ended March 31, 2022 and 2021 was $ 3,896 and $ 3,707 , respectively, of which $ 43 and $ 52 , respectively, were included in medical expenses. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Intangible assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, 2022 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Life Goodwill $ 30,629 $ — $ 30,629 — License (indefinite lived) 4,917 — 4,917 — Plan member relationships 2,700 2,393 307 9 years Other 1,050 558 492 2 - 10 years $ 39,296 $ 2,951 $ 36,345 December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Life Goodwill $ 29,303 $ — $ 29,303 — License (indefinite lived) 4,917 — 4,917 — Plan member relationships 2,700 2,311 389 9 years Other 1,050 543 507 2 - 10 years $ 37,970 $ 2,854 $ 35,116 Amortization expense relating to intangible assets for the three months ended March 31, 2022 and 2021, was $ 97 and $ 82 , respectively. Estimated amortization expense relating to intangible assets for each of the next five years ending December 31, is as follows: Remainder of 2022 $ 289 2023 226 2024 82 2025 60 2026 60 Thereafter 82 $ 799 There were no impairment charges related to goodwill and intangible assets for the three months ended March 31, 2022 and 2021. |
Medical Expenses Payable
Medical Expenses Payable | 3 Months Ended |
Mar. 31, 2022 | |
Insurance [Abstract] | |
Medical Expenses Payable | 7. Medical Expenses Payable The following table is a detail of medical expenses payable as of March 31, 2022 and December 31, 2021: March 31, December 31, Claims incurred but not paid $ 84,883 $ 77,073 Capitation payable, risk-sharing payable, and other 70,080 48,813 $ 154,963 $ 125,886 Each period, we re-examine previously established outstanding claims reserve estimates based on actual claims submissions and other changes in facts and circumstances. As more complete claim information becomes available, we adjust the amount of the estimates and include the changes in estimates in claim costs in the period in which the change is identified. Substantially, all of the total claims paid by us are known and settled within the first year from the date of service, and substantially, all remaining claim amounts are paid within a three-year period. The following table presents components of the change in medical expenses payable as of March 31, 2022 and 2021: March 31, March 31, Claims incurred but not paid - beginning balance $ 77,073 $ 82,391 Incurred related to: Current year 103,625 83,223 Prior years ( 9,521 ) ( 3,745 ) Total incurred, net of reinsurance 94,104 79,478 Payments related to: Current year 37,626 22,746 Prior years 48,668 57,786 Total payments, net of reinsurance 86,294 80,532 Claims incurred but not paid - ending balance 84,883 81,337 Other medical expenses payable 70,080 47,336 Total medical expenses payable $ 154,963 $ 128,673 In March 2020, the COVID-19 outbreak was declared a pandemic. The COVID-19 virus disproportionately impacts older adults, especially those with chronic illnesses, which describes many of the seniors we serve. For the three months ended March 31, 2021, we experienced higher claims costs due to COVID-19 related inpatient admissions. However, for the remainder of 2021 we saw a decline in COVID-related utilization (compared to the first quarter) as vaccination rates improved across our senior population. The Delta and Omicron variants caused a rebound in COVID-related inpatient utilization during the second half of 2021 and first quarter of 2022, however, the increase in utilization did not reach first quarter of 2021 levels. While COVID had a less significant impact on the first quarter of 2022 medical expense relative to our first quarter of 2021 medical expense, we remain cautious of the potential impact of the COVID-19 in the future. The ultimate impact of COVID-19 to us and our financial condition is presently unknown and we continue to monitor the impact of COVID-19 on our claims reserve estimate. We re-examine previously established outstanding claims reserve estimates based on actual claims submissions and other changes in facts and circumstances. We recognized a favorable prior year development, excluding provision for adverse deviation, of $ 5,875 for the three months ended March 31, 2022. The favorable prior year development was primarily due to better than expected claims recoveries and actual claims expense being less than expected. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 8. Long-Term Debt Long-term debt is recorded at carrying value in the condensed consolidated balance sheets. The carrying value of long-term debt outstanding, net of unamortized debt issuance costs, consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, Long-term debt $ 155,182 $ 154,112 Less unamortized debt issuance costs ( 2,926 ) ( 3,492 ) Long-term debt-net of amortization 152,256 150,620 Less current portion of long-term debt — — Long-term debt - net of current portion $ 152,256 $ 150,620 As of March 31, 2022, the total long-term debt balanc e of $ 155,182 included the principal balance of $ 135,000 , the initial commitment fee of $ 6,750 , and the payment-in-kind interest on the principal balance of $ 13,093 . The payment-in-kind interest on the principal balance is also subject to the commitment fee which was $ 339 as of March 31, 2022. This amount was also included in the long-term debt balance. The term loan matures in June 2023 , at which time the full balance of the term loan, including the commitment fee and the payment-in-kind balance, will be due. In addition, the term loan includes financial covenants regarding the maintenance of minimum liquidity of $ 6,000 of operating cash, as defined, on a consolidated basis, at least $ 10,000 in its cash accounts on a daily basis and minimum consolidated revenue amounts. The term loan also contains certain nonfinancial covenants. As of March 31, 2022 and December 31, 2021, we were in compliance with all financial and nonfinancial covenants. The term loan was entered into by our wholly owned subsidiary and is also guaranteed by certain of our wholly owned subsidiaries and collateralized by all unrestricted assets of our subsidiaries . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes There was no income tax expense for the three months ended March 31, 2022 and 2021. We have cumulative NOLs as of March 31, 2022 and December 31, 2021. Given the history of losses, and after consideration for the risk associated with estimates of future taxable income, we established a full valuation allowance against net deferred tax assets at December 31, 2021 and 2020. As a result of the Tax Cuts and Jobs Act (“TCJA”), the federal NOLs generated in 2018 through 2020 will be carried forward indefinitely and are limited to an 80 % deduction of taxable income. The 80% limitation is not applicable to NOLs generated before 2018. An exception to the TCJA federal NOL modification applies to nonlife insurance companies (e.g., Alignment Health Plan Inc.). Alignment Health Plan Inc.’s NOL treatment is the same as those NOLs generated in tax years 2017 and prior. Additionally, an “ownership change” as defined under Section 382 of the Internal Revenue Code, could potentially limit the ability to utilize certain tax attributes including the Company’s substantial NOLs. Ownership change is generally defined as any significant change in ownership of more than 50% of its stock over a three-year testing period. If, as a result of current or future transactions involving our common stock, we undergo cumulative ownership changes which exceed 50% over the testing period, our ability to utilize our NOL carryforwards would be subject to additional limitations under IRC Section 382. We continue to monitor changes in ownership with respect to these income tax provisions. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | 10. Equity-Based Compensation Equity Awards Stock options Stock options generally vest 25 % annually over four years and generally expire 10 years from the date of the grant. The 2021 Equity Incentive Plan provides that stock option grants will be made at no less than the estimated fair value of common stock at the date of the grant. The following is a summary of the stock option transactions as of and for the three months ended March 31, 2022: Stock Options Outstanding (amounts in thousands, except shares and per share amount) Shares Subject to Options Outstanding Weighted- Average Exercise Price per Option Weighted- Average Remaining Contractual Terms (in years) Aggregate Intrinsic Value Balances as of December 31, 2021 10,938,521 $ 18.02 $ 9.17 $ — Options granted 1,269,156 8.95 Options exercised — — Options forfeited / expired ( 282,595 ) 18.02 Balances as of March 31, 2022 11,925,082 17.05 9.03 2,896 Vested and Exercisable as of March 31, 2022 ( 2,633,227 ) 18.00 8.92 — Aggregate intrinsic value represents the difference between the exercise price of the option and the closing price of our common stock. The aggregate intrinsic value of options exercised for the three months ended March 31, 2022 and 2021 was $ 0 . The fair value of options granted during the three months ended March 31, 2022 and 2021 was $ 5,114 and $ 83,982 , respectively. The weighted-average assumptions used to determine the fair value of stock options granted during the periods presented were as follows: Three Months Ended March 31, 2022 2021 Expected term (in years) (1) 6.25 6.25 Expected volatility (2) 39.5 % - 44.5 % 41.7 % Risk-free interest rate (3) 1.4 % - 1.8 % 1.1 % Dividend yield (4) 0.0 % 0.0 % (1) An estimated expected life of 6.25 years before exercise was used based on the midpoint of the vesting date and the full contractual term (known as the simplified method). We do not have sufficient history of exercise for similar awards. (2) The expected volatility for new options granted was estimated based on the historical daily price changes of our peer companies’ common stock over the most recent period equal to the expected term of the option, adjusted for debt-equity leverage. (3) The risk-free interest rate for period equal to the expected term of the option was based on the rate of treasury securities with the same term as the option as of the grant date. (4) An expected dividend yield of 0 % was used because we have not historically paid dividends. Restricted Stock Awards Our outstanding RSAs that were granted following the IPO generally vest 25 % annually over four years . RSAs converted from Pre-IPO awards generally vest on the later of the fourth anniversary of the original vesting commencement date or 50 % annually on the first and second anniversary of the IPO (see “Pre-IPO Equity” and "Modifications" sections below for details). The following is a summary of RSA transactions for the three months ended March 31, 2022: Restricted Shares Weighted-Average Grant Date Fair Value Unvested and outstanding as of December 31, 2021 8,613,780 $ 10.32 Vested ( 2,148,391 ) 15.80 Forfeited ( 163,064 ) 3.69 Unvested and outstanding as of March 31, 2022 6,302,325 8.63 Restricted Stock Units Restricted stock units ("RSU") generally vest 25 % annually over four years . The following is a summary of RSU transactions for the three months ended March 31, 2022: Restricted Stock Units Weighted-Average Grant Date Fair Value Unvested and outstanding as of December 31, 2021 1,662,282 $ 18.54 Granted 3,064,412 9.15 Vested (1) ( 406,176 ) 18.54 Cancelled/forfeited ( 36,288 ) 18.01 Unvested and outstanding as of March 31, 2022 4,284,230 11.83 (1) Includes 22,668 shares that vested, but the issuance and delivery of the shares was deferred Equity-Based Compensation Expense Total equity-based compensation expense was presented on the statement of operations as follows: Three Months Ended March 31, (amounts in thousands) 2022 2021 Selling, general and administrative expenses $ 24,926 $ 25,221 Medical expenses 3,121 6,566 Total equity-based compensation expense $ 28,047 $ 31,787 As of March 31, 2022, there was $ 111,906 in unrecognized compensation expense related to all non-vested awards (RSAs, options and RSUs) that will be recognized over the weighted-average period of 1.96 years. |
Regulatory Requirements and Res
Regulatory Requirements and Restricted Funds | 3 Months Ended |
Mar. 31, 2022 | |
Regulated Operations [Abstract] | |
Regulatory Requirements and Restricted Funds | 11. Regulatory Requirements and Restricted Funds Our health plans or risk-bearing entities are required to maintain minimum capital requirements prescribed by various regulatory authorities in each of the states in which it operates. Risk-Based Capital Regulatory The National Association of Insurance Commissioners has adopted rules, which, if implemented by the states, set minimum capitalization requirements for insurance companies, HMOs, and other entities bearing risk for health care coverage. The requirements take the form of risk-based capital (“RBC”) rules, which may vary from state to state. Certain states in which our health plans or risk bearing entities operate in have adopted the RBC rules. Our health plans or risk-bearing entities were in compliance with the minimum capital requirements for all periods presented. Tangible Net Equity Our health plan in California is required to comply with the tangible net equity (“TNE”) requirements. The required amount is the larger of: (1) $ 1,000 ; (2) 2 % of the first $ 150,000 of annualized premium revenue, plus 1 % of annualized premium revenue in excess of $150,000; or (3) 8 % of the first $150,000 of annualized health care expenditures, except for those paid on a capitated or managed hospital payment basis, plus 4 % of the annualized health care expenditures in excess of $150,000, except those paid on a capitated or managed hospital payment basis, plus 4 % of annualized hospital expenditures paid on a managed hospital payment basis. We were in compliance with the TNE requirement for all periods presented. We have the ability to provide additional capital to each of our health plans or risk-bearing entities when necessary to ensure that the RBC and TNE requirements are met. Certain states regulate the payment of dividends, loans, or other cash transfers from our regulated subsidiaries to our non-regulated subsidiaries and parent company. Such payments may require approval by state regulatory authorities and are limited based on certain financial criteria, such as the entity’s level of statutory income and statutory capital and surplus, or the entity’s level of tangible net equity or net worth, amongst other measures. These regulations vary by state. We were in compliance with the RBC and TNE requirements as of March 31, 2022 and December 31, 2021. Restricted Assets Pursuant to the regulations governing our subsidiaries, we maintain certain deposits required by the government authorities in the form of certificate of deposits and Treasury bills as protection in the event of insolvency. The use of funds from these investments is limited as required by regulation in the various states in which we operate, or as needed in the event of insolvency. Therefore, these deposits are reported within other assets on the condensed consolidated balance sheets. We hold these assets until maturity, at which time these assets will renew or are invested in a similar type of investment instrument. Given the regulatory requirements, we expect to hold these investments for long-term. As a result, we do not expect the value of these investments to decline significantly due to a sudden change in market interest rates. These investments are carried at amortized cost, which approximates fair value. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings We record a liability and accrue the costs for a loss when an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings. While the liability and accrued costs reflect our best estimate, the actual amounts may materially be different. We may be involved in various litigation matters in the ordinary course of business. In the opinion of management, the ultimate resolution of legal proceedings is not expected to have a material adverse effect on the condensed consolidated financial statements. Amounts accrued for legal proceedings were no t material as of March 31, 2022 and December 31, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of the Company, our subsidiaries, and three immaterial variable interest entities in which we are the primary beneficiary. All intercompany transactions have been eliminated in consolidation. Noncontrolling interest is presented within the equity section of the condensed consolidated balance sheets. We have no components of other comprehensive income (loss), and accordingly, comprehensive income (loss) is the same as the net income (loss) for all periods presented. Subsequent to the issuance of the consolidated financial statements for the year ended December 31, 2021 we determined that $ 7,838 reflected in the accumulated deficit beginning balance as of January 1, 2019 should have been reflected as additional paid-in capital. As such, the balances at January 1, 2021 in the Consolidated Statement of Stockholders' Equity were corrected resulting in an increase in accumulated deficit and additional paid-in capital for the corresponding amount. Management has concluded that the correction is not material to the previously issued consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements. Our significant estimates include, but are not limited to, the determination of medical expenses payable; the impact of risk adjustment provisions related to our Medicare contracts; collectability of receivables; right of use (“ROU”) assets and lease liabilities valuation; valuation of related impairment recognition of long-lived assets, including goodwill and intangible assets; equity-based compensation expense; and contingent liabilities. Estimates and judgments are based upon historical information and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates and the impact of any change in estimates is included in earnings in the period in which the estimate is adjusted. |
Segments | Segments We have determined that our chief executive officer is the chief operating decision maker (“CODM”) who regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating financial performance. We operate and manage the business as one reporting and one operating segment, which is to provide healthcare services to our seniors. Factors used in determining the reportable segment include the nature of operating activities, our organizational and reporting structure, and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. All of our assets are located in the United States. |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our current assets and current liabilities approximate fair value because of the short-term nature of these financial instruments. Financial instruments measured at fair value on a recurring basis were based upon a three-tier hierarchy as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities Level 2 - Other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date The fair value of cash and restricted cash was determined based on Level 1 inputs. The fair value of US Treasury bills and certificate of deposits, which were included in other assets in the condensed consolidated balance sheets, was determined based on Level 2 inputs. There were no assets or liabilities measured at fair value using Level 3 inputs for the three months ended March 31, 2022 and 2021. Our long-term debt was reported at carrying value. |
Revenue and Accounts Receivable | Revenue and Accounts Receivable Earned premium revenue consisted of premium revenue and capitation revenue for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended 2022 2021 Premium $ 330,878 $ 264,713 Capitation 14,414 2,287 $ 345,292 $ 267,000 Premium revenue is derived monthly from the federal government based on our contract with the Centers for Medicare and Medicaid Services (“CMS”). In accordance with this arrangement, we assume the responsibility for the outcomes and the economic risk of funding our members’ health care, supplemental benefits and related administration costs. We recognize premium revenue in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The monthly reimbursement includes a fixed payment per member per month (“PMPM”), which is adjusted based on certain risk factors derived from medical diagnoses and conditions of our members. The adjustments are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the estimated ultimate premium. Premiums are also recorded net of estimated uncollectible amounts and retroactive membership adjustments. Capitation revenue consists primarily of capitated fees for medical care services provided by us under arrangements with third-party payors and from CMS related to our Direct Contracting Entities ("DCE"). Under those arrangements with third-party payors, we receive a PMPM payment for a defined member population, and we are responsible for providing health care services to the member population over the contract period. We are solely responsible for the cost of health care services related to the member population and in some cases, we are financially responsible for the supplemental benefits provided by us to the members. We act as a principal in arranging for and controlling the services provided by our provider network and we are at risk for arranging and providing health care services. The premium and capitation payments we receive monthly from CMS for our members are determined from our annual bid or similarly from third-party payors under our capitation arrangement. These payments represent revenues for providing health care coverage, including Medicare Part D benefits. Under the Medicare Part D program, our members and the members of the third-party payors receive standard drug benefits. We may also provide enhanced benefits at our own expense. We recognize premium or capitation revenue for providing this insurance coverage in the month that members are entitled to receive health care services and any premium or capitation collected in advance is deferred. Our CMS payment related to Medicare Part D is subject to risk sharing through the Medicare Part D risk corridor provisions. On April 1, 2021, we launched two DCEs that participate in the CMS Innovation’s Direct Contracting Model. CMS serves as the claim adjudicator for institutional and specialists care, and directly pays for such fee for service claims. The DCEs are responsible for the cost of health care services related to the patient population attributed to the DCE by participating in 100% savings/losses via the risk share model and in some cases, are financially responsible for the supplemental benefits provided to the patients. The DCEs act as a principal in arranging for and controlling services provided directly by its contracts with primary care physicians, as well as services provided by preferred institutional care providers and specialists. Capitation payments for the DCE program are determined from an annual benchmark established by CMS. These payments, that are adjusted for variable considerations, represent revenue for providing health care service, including primary care as well as institutional and specialist care. The DCEs recognize capitation revenue for providing these services in the period in which the performance obligations are satisfied by transferring services to the members. Revenue recognized by the DCEs for the three months ended March 31, 2022 was $ 12,302 . |
Revenue Adjustments | Revenue Adjustments Payments by CMS to health plans are determined via a competitive bidding process with CMS and are based upon the cost of care in a local market and the average utilization of services by the member enrolled. These payments are subject to periodic adjustments under CMS’ “risk adjustment model,” which compensates health plans based on the health severity and certain demographic factors of each individual member. Members diagnosed with certain conditions are paid at a higher monthly payment than members who are healthier. Under this risk adjustment model, CMS calculates the risk adjustment payment using diagnosis data from hospital inpatient, hospital outpatient, and physician treatment settings. The Company and health care providers collect, capture, and submit the necessary and available diagnosis data to CMS within prescribed deadlines. Both premium and capitation revenues (including Medicare Part D) are subject to adjustments under the risk adjustment model. Throughout the year, we estimate risk adjustment payments based upon the diagnosis data submitted and expected to be submitted to CMS. Those estimated risk adjustment payments are recorded as an adjustment to premium and capitation revenue. Our risk adjustment data is also subject to review by the government, including audit by regulators. Our recognized premium revenue for our Medicare Advantage Plans in California, North Carolina, Nevada, and Arizona are each subject to a minimum annual medical loss ratio (“MLR”) of 85 %. The MLR represents medical costs as a percentage of premium revenue. The Code of Federal Regulations define what constitutes medical costs and premium revenue, including certain additional expenses related to improving the quality of care provided, and to exclude certain taxes and fees, in each case as permitted or required by CMS and applicable regulatory requirements. If the minimum MLR is not met, we are required to remit a portion of the premiums back to the federal government. The amount remitted, if any, is recognized as an adjustment to premium revenues in the condensed consolidated statements of operations. There were no amounts payable for the MLR as of March 31, 2022 and December 31, 2021, respectively. Medicare Part D payments are also subject to a federal risk corridor program, which limits a health plan’s overall losses or profit if actual spending for basic Medicare Part D benefits is much higher or lower than what was anticipated. Risk corridor is recorded within premium revenue. The risk corridor provisions compare costs targeted in our bids or third-party payors’ bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS or third-party payors making additional payments to us or require us to refund a portion of the premiums we received. We estimate and recognize an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our condensed consolidated balance sheet based on the timing of expected settlement. Variable consideration estimates related to DCE contract revenue are based on the most likely outcome method and that a significant reversal in the amount of cumulative revenue recognized would not occur. Receivables, including risk adjusted premium due from the government or through third-party payors, pharmacy rebates, and other receivables, are shown net of allowances for credit losses and retroactive membership adjustments. |
Property and Equipment—Net | Property and Equipment—Net Depreciation expense is computed using the straight-line method generally based on the following estimated useful lives: Description Estimated Service Lives (years) Computer and equipment 5 Office equipment and furniture 5 - 7 Software 3 - 5 Leasehold improvements 15 (or lease term, if shorter) Depreciation expense related to property and equipment used to service our members or at our clinics are included within medical expenses in the condensed consolidated statements of operations. |
Medical Expenses and Medical Expenses Payable | Medical Expenses Medical expenses include claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses, internal care delivery expenses and various other costs incurred to provide health insurance coverage and care to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided. We have contracts with a network of hospitals, physicians, and other providers and compensate those providers and ancillary organizations based on contractual arrangements or CMS Medicare compensation guidelines. We pay these contracting providers either through fee-for-service arrangement in which the provider is paid negotiated rates for specific services provided or a capitation payment, which represent monthly contractual fees disbursed for each member regardless of medical services provided to the member. We are responsible for the entirety of the cost of health care services related to the member population, in addition to supplemental benefits provided by us to our seniors. We also record claims expenses related to our institutional and specialist care related to our DCE program with CMS as we act as the principal in the transaction. Capitation-related expenses are recorded on an accrual basis during the coverage period. Expenses related to fee-for-service contracts are recorded in the period in which the related services are dispensed. Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in accounts receivable in the condensed consolidated balance sheets. Medical Expenses Payable Medical expenses payable includes estimates of our obligations for medical care services that have been rendered on behalf of our members and the members of the Third-Party Payors, but for which claims have either not yet been received or processed, loss adjustment expense reserve for the expected costs of settling these claims, and for liabilities related to physician, hospital, and other medical cost disputes. We develop estimates for medical expenses incurred but not yet paid (“IBNP”) which includes an estimate for claims incurred but not reported (“IBNR”) and a payable for adjudicated claims. IBNR is estimated using an actuarial process that is consistently applied and centrally controlled. Medical expenses payable also includes an estimate for the costs necessary to process unpaid claims at the end of each period. We estimate IBNR liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors, such as cost trends and completion factors that are assessed based on historical data for payment patterns, product mix, seasonality, utilization of health care services, and other relevant factors. Each period, we re-examine previously established IBNR estimates based on actual claim submissions and other changes in facts and circumstances. As the IBNR estimates recorded in prior periods develop, we adjust the amount of the estimates and include the changes in estimates in medical expenses in the period in which the change is identified. Actuarial Standards of Practice generally require that the IBNP estimates be adequate to cover obligations under moderately adverse conditions. Moderately adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of estimate. In many situations, the claims amount ultimately settled will be different than the estimate that satisfies the Actuarial Standards of Practice. We include in our IBNP an estimate for medical claims liability under moderately adverse conditions, which represents the risk of adverse deviation of the estimates in our actuarial method of reserving. We believe that medical expenses payable is adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events. Therefore, the actual liability could differ materially from the amounts provided. We reassess the profitability of contracts for providing coverage to members when current operating results or forecasts indicate probable future losses. A premium deficiency reserve is established in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceed related future premiums under contracts without consideration of investment income. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with the method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. |
Part D Subsidies | Part D Subsidies We also receive advance payments each month from CMS related to Catastrophic Reinsurance, Coverage Gap Discount, and the Low-Income Member Cost Sharing Subsidy (“Subsidies”). Reinsurance subsidies represent funding from CMS for our portion of prescription drug costs, which exceed the member’s out-of-pocket threshold or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Additionally, the Health Care Reform Law mandates consumer discounts of 75 % on brand-name prescription drugs for Part D plan participants in the coverage gap. The majority of the discounts are funded by the pharmaceutical manufacturers, while we fund a smaller portion and administer the application of the total discount. These Subsidies represent cost reimbursements under the Medicare Part D program and are recorded as deposits or payables. These Subsidies received in excess of, or less than, actual subsidized benefits paid are refundable to or recoverable from CMS through an annual reconciliation process following the end of the contract year. |
Shared Risk Reserve Arrangements | Shared Risk Reserve Arrangements We established a fund (also referred to as “a pool”) for risk and profit-sharing with various independent physician associations (“IPAs”). The pool enables us and our IPAs to share in the financial responsibility and/or upside associated with providing covered medical expenses to our members. The risk pool is based on a contractually agreed upon medical budget, typically based upon a percentage of revenue. If actual medical expenses are less than the budgeted amount, this results in a surplus. Conversely, if actual medical expenses are greater than the budgeted amount, this results in a deficit. We will distribute the surplus, or a portion thereof, to each IPA based upon contractual terms. Deficits are charged to shared risk providers’ risk pool as per the contractual term and evaluated for collectability at each reporting period. We record risk-sharing receivables and payables on a gross basis on the condensed consolidated balance sheet. Throughout the year, we evaluate expected losses on risk-sharing receivables and record the resulting expected losses to the reserve. We systematically build and release reserves based on adequacy and its assessment of expected losses on a monthly basis. Credit loss associated with risk share deficit receivables are recorded within medical expense in the condensed consolidated statements of operations. As of March 31, 2022 and December 31, 2021, we recorded a valuation allowance for all of the risk-sharing receivable balance due to collection risk related to the balance. The risk-sharing payable is included within medical expenses payable on the condensed consolidated balance sheet. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash deposits and restricted investments with financial institutions. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to certain limits. At March 31, 2022 and December 31, 2021, t here was $ 447,711 and $ 465,824 , respectively, in excess of FDIC-insured limits. |
Equity-Based Compensation | Equity-Based Compensation Equity-based compensation expense is measured and recognized based on the grant date fair value of the awards. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant date fair value of Restricted Stock Units (“RSUs”) and Restricted Stock Awards (“RSAs”) is estimated based on the fair value of our underlying common stock. The Black-Scholes option pricing model requires the use of highly subjective assumptions, including the award’s expected term, the fair value of the underlying common stock, the expected volatility of the price of the common stock, risk-free interest rates, and the expected dividend yield of the common stock. The assumptions used to determine the fair value of the stock-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. The expected term represents the period the stock-based awards are expected to be outstanding. As we do not have sufficient historical experience for determining the expected term of the stock option awards granted, we utilize the simplified method available under U.S. GAAP. As we do not have a substantial trading history, volatility assumptions were developed using a combination of the Company's historical volatility and the historical volatilities of a set of peer companies, adjusted for debt-equity leverage. Equity-based compensation expense for awards with service-based vesting only is recognized on a graded vesting schedule over the requisite service period of the awards, which is generally four years . We account for forfeitures as they occur. Equity-based compensation is recorded within selling, general and administrative expenses, and medical expenses based on the function of the applicable employee and non-employee. |
Noncontrolling Interest | Noncontrolling interest Noncontrolling interest represents the portion of equity ownership in a subsidiary that is not attributable to Alignment Healthcare, Inc. The noncontrolling interest in a subsidiary is initially recognized at estimated fair value on April 1, 2021 and is presented within total equity in the Company's condensed consolidated balance sheets. There was no net loss attributable to the noncontrolling interest for the three months ended March 31, 2022 and 2021 as the Company was responsible for 100% of the net loss in the first year of operations of that subsidiary. |
Net Income (Loss) per Share | Net Loss per Share Net loss per share is calculated based on net loss attributable to Alignment Healthcare, Inc.'s shareholders. The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 Numerator: Net loss attributable to common stockholders $ ( 40,817 ) $ ( 56,874 ) Denominator: Total weighted-average common shares outstanding - 187,091,570 165,611,120 Less: Restricted shares of common stock 8,217,378 11,179,093 Total weighted-average common shares outstanding, 178,874,192 154,432,027 Net loss per share: Net loss per share - basic and diluted $ ( 0.23 ) $ ( 0.37 ) Basic net loss per share is the same as diluted net loss per share for certain periods presented as the inclusion of all potentially dilutive shares would have been anti-dilutive. In addition to the restricted shares of common stock, we also excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share as of March 31, 2022 and 2021: March 31, 2022 2021 Stock options 11,925,082 11,123,391 Restricted stock units 4,284,230 1,517,000 Total 16,209,312 12,640,391 |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncements Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial position or results of operations upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Earned Revenue | Earned premium revenue consisted of premium revenue and capitation revenue for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended 2022 2021 Premium $ 330,878 $ 264,713 Capitation 14,414 2,287 $ 345,292 $ 267,000 |
Schedule of Property and Equipment Estimated Useful Lives | Depreciation expense is computed using the straight-line method generally based on the following estimated useful lives: Description Estimated Service Lives (years) Computer and equipment 5 Office equipment and furniture 5 - 7 Software 3 - 5 Leasehold improvements 15 (or lease term, if shorter) |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2022 and 2021: Three Months Ended 2022 2021 Numerator: Net loss attributable to common stockholders $ ( 40,817 ) $ ( 56,874 ) Denominator: Total weighted-average common shares outstanding - 187,091,570 165,611,120 Less: Restricted shares of common stock 8,217,378 11,179,093 Total weighted-average common shares outstanding, 178,874,192 154,432,027 Net loss per share: Net loss per share - basic and diluted $ ( 0.23 ) $ ( 0.37 ) |
Schedule of Computation of Diluted Net Loss Per Share | In addition to the restricted shares of common stock, we also excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share as of March 31, 2022 and 2021: March 31, 2022 2021 Stock options 11,925,082 11,123,391 Restricted stock units 4,284,230 1,517,000 Total 16,209,312 12,640,391 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Value and Fair Value of Financial Instruments | US Treasury bills and certificate of deposits are reported at amortized costs which is equivalent to fair value. The following tables present the carrying value and fair value of these financial instruments as of March 31, 2022 and December 31, 2021: March 31, 2022 Fair Value Carrying Level 1 Level 2 Level 3 US Treasury bills $ 1,375 $ — $ 1,375 $ — Certificate of deposits 1,172 — 1,172 — Total $ 2,547 $ — $ 2,547 $ — December 31, 2021 Fair Value Carrying Level 1 Level 2 Level 3 US Treasury bills $ 1,375 $ — $ 1,375 $ — Certificate of deposits 1,071 — 1,071 — Total $ 2,446 $ — $ 2,446 $ — |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, Government receivables $ 36,575 $ 19,685 Pharmacy rebate receivables 43,931 34,376 Other receivables 4,140 4,562 Total accounts receivable 84,646 58,623 Allowance for credit losses ( 119 ) ( 111 ) Accounts receivable, net $ 84,527 $ 58,512 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, Computers and equipment $ 9,530 $ 9,164 Office equipment and furniture 4,438 4,416 Software 103,050 98,031 Leasehold improvements 6,196 6,196 Construction in progress 596 753 Subtotal 123,810 118,560 Less accumulated depreciation ( 92,063 ) ( 88,202 ) Property and equipment-net $ 31,747 $ 30,358 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, 2022 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Life Goodwill $ 30,629 $ — $ 30,629 — License (indefinite lived) 4,917 — 4,917 — Plan member relationships 2,700 2,393 307 9 years Other 1,050 558 492 2 - 10 years $ 39,296 $ 2,951 $ 36,345 December 31, 2021 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Life Goodwill $ 29,303 $ — $ 29,303 — License (indefinite lived) 4,917 — 4,917 — Plan member relationships 2,700 2,311 389 9 years Other 1,050 543 507 2 - 10 years $ 37,970 $ 2,854 $ 35,116 |
Schedule of Estimated Amortization Expense Related to Intangible Assets | Estimated amortization expense relating to intangible assets for each of the next five years ending December 31, is as follows: Remainder of 2022 $ 289 2023 226 2024 82 2025 60 2026 60 Thereafter 82 $ 799 |
Medical Expenses Payable (Table
Medical Expenses Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Insurance [Abstract] | |
Schedule of Medical Expenses Payable | The following table is a detail of medical expenses payable as of March 31, 2022 and December 31, 2021: March 31, December 31, Claims incurred but not paid $ 84,883 $ 77,073 Capitation payable, risk-sharing payable, and other 70,080 48,813 $ 154,963 $ 125,886 |
Components of Change in Medical Expenses Payable | The following table presents components of the change in medical expenses payable as of March 31, 2022 and 2021: March 31, March 31, Claims incurred but not paid - beginning balance $ 77,073 $ 82,391 Incurred related to: Current year 103,625 83,223 Prior years ( 9,521 ) ( 3,745 ) Total incurred, net of reinsurance 94,104 79,478 Payments related to: Current year 37,626 22,746 Prior years 48,668 57,786 Total payments, net of reinsurance 86,294 80,532 Claims incurred but not paid - ending balance 84,883 81,337 Other medical expenses payable 70,080 47,336 Total medical expenses payable $ 154,963 $ 128,673 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding, Net of Unamortized Debt Issuance Costs | Long-term debt is recorded at carrying value in the condensed consolidated balance sheets. The carrying value of long-term debt outstanding, net of unamortized debt issuance costs, consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, Long-term debt $ 155,182 $ 154,112 Less unamortized debt issuance costs ( 2,926 ) ( 3,492 ) Long-term debt-net of amortization 152,256 150,620 Less current portion of long-term debt — — Long-term debt - net of current portion $ 152,256 $ 150,620 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity Transactions | The following is a summary of the stock option transactions as of and for the three months ended March 31, 2022: Stock Options Outstanding (amounts in thousands, except shares and per share amount) Shares Subject to Options Outstanding Weighted- Average Exercise Price per Option Weighted- Average Remaining Contractual Terms (in years) Aggregate Intrinsic Value Balances as of December 31, 2021 10,938,521 $ 18.02 $ 9.17 $ — Options granted 1,269,156 8.95 Options exercised — — Options forfeited / expired ( 282,595 ) 18.02 Balances as of March 31, 2022 11,925,082 17.05 9.03 2,896 Vested and Exercisable as of March 31, 2022 ( 2,633,227 ) 18.00 8.92 — |
Schedule of Equity-Based Compensation Expense | equity-based compensation expense was presented on the statement of operations as follows: Three Months Ended March 31, (amounts in thousands) 2022 2021 Selling, general and administrative expenses $ 24,926 $ 25,221 Medical expenses 3,121 6,566 Total equity-based compensation expense $ 28,047 $ 31,787 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Weighted-Average Assumptions Used to Determine the Fair value of Stock Options Granted | The weighted-average assumptions used to determine the fair value of stock options granted during the periods presented were as follows: Three Months Ended March 31, 2022 2021 Expected term (in years) (1) 6.25 6.25 Expected volatility (2) 39.5 % - 44.5 % 41.7 % Risk-free interest rate (3) 1.4 % - 1.8 % 1.1 % Dividend yield (4) 0.0 % 0.0 % (1) An estimated expected life of 6.25 years before exercise was used based on the midpoint of the vesting date and the full contractual term (known as the simplified method). We do not have sufficient history of exercise for similar awards. (2) The expected volatility for new options granted was estimated based on the historical daily price changes of our peer companies’ common stock over the most recent period equal to the expected term of the option, adjusted for debt-equity leverage. (3) The risk-free interest rate for period equal to the expected term of the option was based on the rate of treasury securities with the same term as the option as of the grant date. (4) An expected dividend yield of 0 % was used because we have not historically paid dividends. |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Restricted Stock Transactions | The following is a summary of RSA transactions for the three months ended March 31, 2022: Restricted Shares Weighted-Average Grant Date Fair Value Unvested and outstanding as of December 31, 2021 8,613,780 $ 10.32 Vested ( 2,148,391 ) 15.80 Forfeited ( 163,064 ) 3.69 Unvested and outstanding as of March 31, 2022 6,302,325 8.63 |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Restricted Stock Transactions | The following is a summary of RSU transactions for the three months ended March 31, 2022: Restricted Stock Units Weighted-Average Grant Date Fair Value Unvested and outstanding as of December 31, 2021 1,662,282 $ 18.54 Granted 3,064,412 9.15 Vested (1) ( 406,176 ) 18.54 Cancelled/forfeited ( 36,288 ) 18.01 Unvested and outstanding as of March 31, 2022 4,284,230 11.83 (1) Includes 22,668 shares that vested, but the issuance and delivery of the shares was deferred |
Organization - Additional Infor
Organization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 18, 2021 | May 17, 2021 | Mar. 30, 2021 | Mar. 25, 2021 | Mar. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Subsidiary Sale Of Stock [Line Items] | |||||||
Issuance of common stock, net of issuance costs, Shares | 9,200,000 | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Proceeds from sale of stock, net | $ 0 | ||||||
Issuance of common stock, net of issuance costs | $ 1,045 | $ 361,601 | |||||
IPO | |||||||
Subsidiary Sale Of Stock [Line Items] | |||||||
Issuance of common stock, net of issuance costs, Shares | 21,700,000 | 27,200,000 | |||||
Common stock split | 1 to 260 common stock split | ||||||
Common stock, par value | $ 0.001 | ||||||
Number of shares sold (in shares) | 5,500,000 | ||||||
Stock price (in dollars per share) | $ 18 | $ 18 | |||||
Proceeds from sale of stock, net | $ 361,589 | ||||||
Underwriting discounts and commissions | 24,389 | ||||||
Deferred offering costs | $ 4,622 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($)EntitySegment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2018USD ($) | |
Accounting Policies [Line Items] | ||||
Number of consolidated variable interest entities | Entity | 3 | |||
Additional Paid in Capital, Common Stock | $ 7,838,000 | |||
Number of reporting segments | Segment | 1 | |||
Number of operating segments | Segment | 1 | |||
Assets, fair value disclosure | $ 2,547,000 | $ 2,446,000 | ||
Net loss attributable to noncontrolling interest | 0 | $ 0 | ||
Federal deposit insurance corporation premium expense | $ 447,711,000 | 465,824,000 | ||
Award requisite service period | 4 years | |||
Revenues | $ 345,292,000 | 267,000,000 | ||
Level 3 | ||||
Accounting Policies [Line Items] | ||||
Assets, fair value disclosure | 0 | 0 | 0 | |
Liabilities, fair value disclosure | 0 | $ 0 | ||
Directly from CMS | ||||
Accounting Policies [Line Items] | ||||
Revenues | 12,302,000 | |||
Medicare Advantage Plan | ||||
Accounting Policies [Line Items] | ||||
Minimum loss ratio amounts payable | $ 0 | $ 0 | ||
Percentage of consumer discounts on brand name | 75.00% | |||
Medicare Advantage Plan | Minimum | ||||
Accounting Policies [Line Items] | ||||
Loss ratio | 85.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Earned Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 345,292 | $ 267,000 |
Premium | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 330,878 | 264,713 |
Capitation | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 14,414 | $ 2,287 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Computer and equipment | |
Property Plant and Equipment [Line Items] | |
Estimated service lives (years) | 5 years |
Office equipment and furniture | Minimum | |
Property Plant and Equipment [Line Items] | |
Estimated service lives (years) | 5 years |
Office equipment and furniture | Maximum | |
Property Plant and Equipment [Line Items] | |
Estimated service lives (years) | 7 years |
Software | Minimum | |
Property Plant and Equipment [Line Items] | |
Estimated service lives (years) | 3 years |
Software | Maximum | |
Property Plant and Equipment [Line Items] | |
Estimated service lives (years) | 5 years |
Leasehold improvements | |
Property Plant and Equipment [Line Items] | |
Estimated service lives (years) | 15 (or lease term, if shorter) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss attributable to common stockholders | $ (40,817) | $ (56,874) |
Denominator: | ||
Total weighted-average common shares outstanding - basic and diluted | 187,091,570 | 165,611,120 |
Less: Restricted shares of common stock | 8,217,378 | 11,179,093 |
Total weighted-average common shares outstanding, net of restricted shares of common stock - basic and diluted | 178,874,192 | 154,432,027 |
Net loss per share: | ||
Net loss per share - basic and diluted | $ (0.23) | $ (0.37) |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Computation of Dilured Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Weighted Average Number of Shares Outstanding, Diluted | 16,209,312 | 12,640,391 |
Restricted Stock Units | ||
Weighted Average Number of Shares Outstanding, Diluted | 4,284,230 | 1,517,000 |
Stock Option | ||
Weighted Average Number of Shares Outstanding, Diluted | 11,925,082 | 11,123,391 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | $ 2,547 | $ 2,446 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 0 | 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 2,547 | 2,446 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 0 | 0 | $ 0 |
US Treasury Bills | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 1,375 | 1,375 | |
US Treasury Bills | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 0 | 0 | |
US Treasury Bills | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 1,375 | 1,375 | |
US Treasury Bills | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 0 | 0 | |
Certificate of Deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 1,172 | 1,071 | |
Certificate of Deposits | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 0 | 0 | |
Certificate of Deposits | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | 1,172 | 1,071 | |
Certificate of Deposits | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, fair value disclosure | $ 0 | $ 0 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |||
Long term debt carrying value | $ 152,256 | $ 150,620 | |
Long-term debt fair value | 153,669 | $ 154,367 | |
Asset Impairment Charges | $ 0 | $ 0 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Government receivables | $ 36,575 | $ 19,685 |
Pharmacy rebate receivables | 43,931 | 34,376 |
Other receivables | 4,140 | 4,562 |
Total accounts receivable | 84,646 | 58,623 |
Allowance for credit losses | (119) | (111) |
Accounts receivable, net | $ 84,527 | $ 58,512 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Credit loss related to accounts receivable | $ 53 | $ 8 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property Plant and Equipment [Line Items] | ||
Subtotal | $ 123,810 | $ 118,560 |
Less accumulated depreciation | (92,063) | (88,202) |
Property and equipment-net | 31,747 | 30,358 |
Computer and equipment | ||
Property Plant and Equipment [Line Items] | ||
Subtotal | 9,530 | 9,164 |
Office equipment and furniture | ||
Property Plant and Equipment [Line Items] | ||
Subtotal | 4,438 | 4,416 |
Software | ||
Property Plant and Equipment [Line Items] | ||
Subtotal | 103,050 | 98,031 |
Leasehold improvements | ||
Property Plant and Equipment [Line Items] | ||
Subtotal | 6,196 | 6,196 |
Construction in progress | ||
Property Plant and Equipment [Line Items] | ||
Subtotal | $ 596 | $ 753 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property Plant and Equipment [Line Items] | ||
Depreciation expense | $ 3,896 | $ 3,707 |
Medical Expenses | ||
Property Plant and Equipment [Line Items] | ||
Depreciation expense | $ 43 | $ 52 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Value | $ 39,296 | $ 37,970 |
Accumulated Amortization | 2,951 | 2,854 |
Finite Lived Intangible Assets Net | $ 36,345 | $ 35,116 |
Weighted Average Life | ||
Goodwill, Gross Carrying Value | $ 30,629 | $ 29,303 |
Goodwill, Accumulated Amortization | 0 | 0 |
Goodwill, Net Carrying Value | 30,629 | 29,303 |
License (indefinite lived) | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Value | 4,917 | 4,917 |
Accumulated Amortization | 0 | 0 |
Finite Lived Intangible Assets Net | $ 4,917 | $ 4,917 |
Weighted Average Life | ||
Plan Member Relationship | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Value | $ 2,700 | $ 2,700 |
Accumulated Amortization | 2,393 | 2,311 |
Finite Lived Intangible Assets Net | $ 307 | $ 389 |
Weighted Average Life | 9 years | 9 years |
Other | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Gross Carrying Value | $ 1,050 | $ 1,050 |
Accumulated Amortization | 558 | 543 |
Finite Lived Intangible Assets Net | $ 492 | $ 507 |
Other | Minimum | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted Average Life | 2 years | 2 years |
Other | Maximum | ||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Weighted Average Life | 10 years | 10 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets | $ 36,345 | $ 35,116 | |
Amortization expense | 97 | $ 82 | |
Impairment charges | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Estimated Amortization Expense Related to Intangible Assets (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 289 |
2023 | 226 |
2024 | 82 |
2025 | 60 |
2026 | 60 |
Thereafter | 82 |
Estimated Amortization Expense Related to Intangible Assets, Total | $ 799 |
Medical Expenses Payable - Sche
Medical Expenses Payable - Schedule of Medical Expenses Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Insurance [Abstract] | ||||
Claims incurred but not paid | $ 84,883 | $ 77,073 | $ 81,337 | $ 82,391 |
Capitation payable, risk-sharing payable, and other | 70,080 | 48,813 | ||
Total medical expenses payable | $ 154,963 | $ 125,886 | $ 128,673 |
Medical Expenses Payable - Comp
Medical Expenses Payable - Components of Change in Medical Expenses Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Insurance [Abstract] | |||
Claims incurred but not paid - beginning balance | $ 77,073 | $ 82,391 | |
Incurred related to: | |||
Current year | 103,625 | 83,223 | |
Prior years | (9,521) | (3,745) | |
Total incurred, net of reinsurance | 94,104 | 79,478 | |
Payments related to: | |||
Current year | 37,626 | 22,746 | |
Prior years | 48,668 | 57,786 | |
Total payments, net of reinsurance | 86,294 | 80,532 | |
Claims incurred but not paid - ending balance | 84,883 | 81,337 | |
Other medical expenses payable | 70,080 | 47,336 | |
Total medical expenses payable | $ 154,963 | $ 128,673 | $ 125,886 |
Medical Expenses Payable - Addi
Medical Expenses Payable - Additional Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Insurance [Abstract] | |
Claims reserve estimates, excluding provision | $ 5,875 |
Remaining claim amounts payment period | 3 years |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt Outstanding, Net of Unamortized Debt Issuance Costs (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Long-term debt | $ 155,182 | $ 154,112 |
Less unamortized debt issuance costs | (2,926) | (3,492) |
Long-term debt-net of amortization | 152,256 | 150,620 |
Less current potion of long-term debt | 0 | 0 |
Long-term debt - net of current portion | $ 152,256 | $ 150,620 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 155,182 | $ 154,112 |
Debt instrument principal outstanding | 135,000 | |
Commitment fee | 6,750 | |
Payment in kind interest on principal balance | 13,093 | |
Payment-in-kind interest on the principal balance, commitment fee. | $ 339 | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Term loan facility maturity date | Jun. 30, 2023 | |
Minimum liquidity balance on operating cash | $ 6,000 | |
Minimum liquidity balance on operating cash in cash account on daily basis | $ 10,000 | |
Debt description | The term loan was entered into by our wholly owned subsidiary and is also guaranteed by certain of our wholly owned subsidiaries and collateralized by all unrestricted assets of our subsidiaries |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Income tax expense | $ 0 | $ 0 |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Taxable income deduction limit percentage | 80.00% |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Aggregate intrinsic value, options exercised | $ 0 | $ 0 |
Options granted, fair value | $ 5,114 | $ 83,982 |
Stock Options | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Annual award vesting rights, percentage | 25.00% | |
Award vesting period | 4 years | |
Award expiration period | 10 years | |
Restricted Stock Awards | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Annual award vesting rights, percentage | 25.00% | |
Pre-IPO Awards Converted RSAs | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Annual award vesting rights, percentage | 50.00% | |
RSUs | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Annual award vesting rights, percentage | 25.00% | |
Award vesting period | 4 years | |
Non-vested awards RSAs, options and RSUs | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Share based compensation expense, unrecognized | $ 111,906 | |
Weighted average contractual term | 1 year 11 months 15 days |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Stock Option Activity Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | ||
Options outstanding, beginning balance | 10,938,521 | |
Options granted | 1,269,156 | |
Options exercised | 0 | |
Options forfeited / expired | (282,595) | |
Options outstanding, ending balance | 11,925,082 | 10,938,521 |
Options Outstanding, Vested and Exercisable | 2,633,227 | |
Weighted- Average Exercise Price, Vested and Exercisable | $ 18 | |
Weighted-average exercise price per option, beginning balance | 17.05 | $ 18.02 |
Weighted-average exercise price per option, options granted | 8.95 | |
Weighted-average exercise price per option, options exercised | 0 | |
Weighted-average exercise price per option, options forfeited / expired | 18.02 | |
Weighted-average exercise price per option, ending balance | $ 17.05 | $ 18.02 |
Weighted-average remaining contractual terms, outstanding | 9 years 10 days | 9 years 2 months 1 day |
Weighted-average remaining contractual terms, vested and expected to vest | 8 years 11 months 1 day | |
Aggregate intrinsic value, beginning balance | $ 0 | |
Aggregate intrinsic value, ending balance | 2,896 | $ 0 |
Aggregate intrinsic value, vested and expected to vest | $ 0 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Weighted-Average Assumptions Used to Determine the Fair Value of Stock Options Granted (Details) - Stock Options | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | [1] | 6 years 3 months | ||
Expected volatility | [2] | 41.70% | ||
Risk-free interest rate | [3] | 1.10% | ||
Dividend yield | 0.00% | 0.00% | [4] | |
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | [2] | 44.50% | ||
Risk-free interest rate | [3] | 1.80% | ||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | [2] | 39.50% | ||
Risk-free interest rate | [3] | 1.40% | ||
[1] | An estimated expected life of 6.25 years before exercise was used based on the midpoint of the vesting date and the full contractual term (known as the simplified method). We do not have sufficient history of exercise for similar awards. | |||
[2] | The expected volatility for new options granted was estimated based on the historical daily price changes of our peer companies’ common stock over the most recent period equal to the expected term of the option, adjusted for debt-equity leverage. | |||
[3] | The risk-free interest rate for period equal to the expected term of the option was based on the rate of treasury securities with the same term as the option as of the grant date. | |||
[4] | An expected dividend yield of 0 % was used because we have not historically paid dividends. |
Equity-Based Compensation - S_2
Equity-Based Compensation - Schedule of Weighted-Average Assumptions Used to Determine the Fair Value of Stock Options Granted (Parenthetical) (Details) - Stock Options | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | [2] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life | [1] | 6 years 3 months | ||
Dividend yield | 0.00% | 0.00% | ||
Post IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life | 6 years 3 months | |||
[1] | An estimated expected life of 6.25 years before exercise was used based on the midpoint of the vesting date and the full contractual term (known as the simplified method). We do not have sufficient history of exercise for similar awards. | |||
[2] | An expected dividend yield of 0 % was used because we have not historically paid dividends. |
Equity-Based Compensation - S_3
Equity-Based Compensation - Summary of RSAs Transactions (Details) - Restricted Stock Awards | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested and outstanding, beginning balance | shares | 8,613,780 |
Vested | shares | (2,148,391) |
Forfeited | shares | (163,064) |
Unvested and outstanding, ending balance | shares | 6,302,325 |
Weighted-average grant date fair value, beginning balance | $ / shares | $ 10.32 |
Weighted-average grant date fair value, vested | $ / shares | 15.80 |
Weighted-average grant date fair value, forfeited | $ / shares | 3.69 |
Weighted-average grant date fair value, ending balance | $ / shares | $ 8.63 |
Equity-Based Compensation - S_4
Equity-Based Compensation - Summary of RSUs Transactions (Details) - Restricted Stock Units | 3 Months Ended | |
Mar. 31, 2022$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested and outstanding, beginning balance | shares | 1,662,282 | |
Granted | shares | 3,064,412 | |
Vested | shares | (406,176) | [1] |
Cancelled/forfeited | shares | (36,288) | |
Unvested and outstanding, ending balance | shares | 4,284,230 | |
Weighted-average grant date fair value, beginning balance | $ / shares | $ 18.54 | |
Weighted-average grant date fair value, granted | $ / shares | 9.15 | |
Weighted-average grant date fair value, vested | $ / shares | 18.54 | [1] |
Weighted-average grant date fair value, Cancelled/forfeited | $ / shares | 18.01 | |
Weighted-average grant date fair value, ending balance | $ / shares | $ 11.83 | |
[1] | Includes 22,668 shares that vested, but the issuance and delivery of the shares was deferred |
Equity-Based Compensation - S_5
Equity-Based Compensation - Summary of RSUs Transactions (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Share-based Payment Arrangement [Abstract] | |
Number of deferred shares vested | 22,668 |
Equity-Based Compensation - S_6
Equity-Based Compensation - Schedule of Equity-based Compensation Expense on Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total equity-based compensation expense | $ 28,047 | $ 31,787 |
Selling, General and Administrative Expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total equity-based compensation expense | 24,926 | 25,221 |
Medical Expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total equity-based compensation expense | $ 3,121 | $ 6,566 |
Regulatory Requirements and R_2
Regulatory Requirements and Restricted Funds - Additional Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Regulated Operations [Abstract] | |
Disclosure of Tangible net equity requirement | The required amount is the larger of: (1) $1,000; (2) 2% of the first $150,000 of annualized premium revenue, plus 1% of annualized premium revenue in excess of $150,000; or (3) 8% of the first $150,000 of annualized health care expenditures, except for those paid on a capitated or managed hospital payment basis, plus 4% of the annualized health care expenditures in excess of $150,000, except those paid on a capitated or managed hospital payment basis, plus 4% of annualized hospital expenditures paid on a managed hospital payment basis. We were in compliance with the TNE requirement for all periods presented. |
Tangible net equity, required amount | $ 1,000 |
Annualized premium revenue, percentage | 2.00% |
Annualized premium revenue, excess amount, percentage | 1.00% |
Annualized health care expenditures, percentage | 8.00% |
Annualized health care expenditures, excess amount, percentage | 4.00% |
Tangible capital required for capital adequacy | $ 150,000 |
Annualized hospital expenditure paid percentage | 4.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additonal Information (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Amounts accrued for legal proceedings | $ 0 | $ 0 |