- Earnings call transcript Q3 2022

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Operator

Hello and welcome to today's Bright Health Group Third Quarter 2022 Earnings Call. My name is Bailey, and I'll be your moderator for today's call. [Operator Instructions]. I would now like to pass the conference over to your host Stephen Hagan, Investor Relations Director. Please go ahead when you're ready.

Stephen Hagan

morning. Good Bright quarter to call. earnings Group's Health welcome XXXX third conference And question-and-answer Health Bright will prepared A follow Group's session remarks.

CEO, Health As being a Cathy President Smith. Bright Administrative recorded. is and and Group's Leading the and reminder, call today Officer, this Chief Mike Mikan, call CFO are

differ call risks turn our release the of company's XXXX, in issued conference accessed we Mikan. Executive this November to Investor information. morning on and statements company's actual securities investors.brighthealthgroup.com. available Before the measures. statements non-GAAP I laws. Officer, we is and this measures This are Exchange remind amounts forward-looking from over Relations uncertainties we Commission, statements found Except cause quarter law, forward-looking Group, materially Relations by page SEC. Chief the reports our on release subject at you presented no to to is the call Investor website. and now the file this Risk begin, the contain or in Form to earnings reports XX, of from will dated under periodic Factors A in GAAP available of as X-K to risks that experience These and the page and results could reference any of we description A required uncertainties press that update can on reconciliation Bright that non-GAAP the undertake revise to company's present which be or including current Mike want that, the may we historical U.S. federal expectations. Information the or Securities may contained with Health third with obligation file the and in the we will be some also call With

Mike Mikan

our business, remarks joining to you third the I'll on we provide turn Group's last to update then earnings XXXX on the quarter call Good open Thank I'll my thank go you, and details everyone, with over Bright strategic call. our Stephen. results. for Health announced morning, And over comments quarter third month. additional Cathy

As going a through Group Bright organization, an significant Health is evolution.

at one right us Bright focused we are At making Group, Health our core, on on mission. that focused However, together. keeps its healthcare

continues for model built that we to by the financing and healthcare at belief with local be the all connecting resources Our best can the on consumers. outcomes lower deliver delivery cost care, a of better aligning in

care and efficient business value to for our to focused model customers our in Our we on affiliate call last we for aging largest health and populations underserved with And will in so care leverage external month, to model payer way us delivering the evolved the shareholders. partners our continue fully markets more be do a and country. allows that On capital care driven aligned affordable healthcare in continuing providers. announced

to the that value on the model been company. of continue will advancing since We build start we've the driven care

our We continuing center to financial commitment to more targets keep taking to are underway move on this well XXXX. front and to while delivering focused in the for steps model

Our overall businesses. with that been year the far our in has line and our quarter performance continued this across third in so expectations,

in to efforts achieve the cost Our and saving our remained utilization quarter. continue management target medical cost stable third

ratio. on our the are end and full medical the to lower forecasts. in lowering costs Based medical our Our as year year-to-date, performance expectations our risk for strong a for we to the with forecasts, adjustment remains balanced the year adjusted guidance range top medical of risk expense our remainder our cost revisions are finish line of with

confidence Advantage the EBITDA detail, adjusted Medicare target basis. discuss gives and And the strong in for also EBITDA in guidance We an profitability adjusted narrower us range forecast. on results on our greater will our XXXX our based MCR as in NeueHealth have positively businesses revised Cathy

that our we and a more business update a shareholders announced capital model join raise capital focused For last couldn't strengthening month call our strategic position. anyone from existing

focused will model that support and strengthened business through our capital profitability. business position our the We more expect

business REACH model means Bright focused grow no health external continuing offer our payers or will government California. XXXX plans the family care longer health business the and more to will Medicare be Our that and with focusing partnerships our program. Health NeueHealth advantage outside through of plans ACO for on we individual And

our care Medicare provider expect the our and with We populations. largest the NeueHealth deliver in California, market Florida plan to aligned for partners and time performing care business expand And underserved fully consumers Advantage scaled the And In differentiated consumer have across a management risk state. together the and delivery and we continues partners. aging over high footprint to and have results. ageing affiliate with we Medicare our Texas, underserved care bearing our serving model a built health business key marketplace and

our ACO business, remains track with to the expectations continue grow also REACH will We our which year. for on

to including in begun of gross implementing to have achieve cost impacts adjust to plans We margin many the our employees. and XXXX order our operating our restructuring structure expense targets,

of to We line the course run the the the out year through marketplace steps expenses adjust business will milestones the continue take in to of and with our in period. end over

are model. populations exiting marketplace underserved are and core, our insurance fully serving our at we through on aging aligned ACA the focused While business we care

driven Both demonstrated our see align differentiated in payer and and strong and we where best We businesses of healthcare heath our best financing you connect we tailwinds heart population. new Advantage businesses outcomes. and the performance business significant This have believe attractive this align you serving are And expanding local get at when are demonstrated model. with provider Medicare have our markets that relationships. opportunities care, resources the and is for to the with of delivery growth value continue the and

hand capital Cathy to next EBITDA for both updated it to term adjusted year manage the our enterprise third building now expect to profitability over while our and We reach long well as over I'll go quarter performance growth. businesses as outlook. to efficient

Cathy Smith

$XX Bright XX% which the modest million, third of and [indiscernible] update grew organic was HealthCare The quarter million Healthcare our a impacted our revenue ended revenue on second and states. XXX,XXX due compared year-over-year to revenues revenue NeueHealth solid XX% HealthCare We quarter XX% up were $X.X consumers, and and prior outlook. increased and segment the Thank million everyone. Bright to Consolidated Bright the a in million costs, with on provide third in approximately million good increase our And XXXX ISP adjustment XXXX $XXX over QX. review to revision to $XXX XXX,XXX year-to-date baseline. Advantage in grew revenue million medical payable year. performance in offset sheet results, marketplace adjustment $XXX adjustment Health quarter basis. a the negatively to value you, forecast by year-over-year entirely enrollment payable as from risk year-to-date reflects than quarter Bright as which commercial start forecast Mike. risk billion and QX. go then year-over-year true on consumers the increased well more balance up risk payable X Advantage Group commercial consolidated Medicare across $XXX continued more with commercial a year-to-date morning a than over NeueHealth Medicare I'll

third was we XXXX. in third our down XX.X% and of MTR quarter medical risk of the XXX in QX quarter line QX, XXXX to impact the from saw from in remain ratio to costs GAAP points expectations increased XXX due approximately added the XXXX XXXX. and the level Underlying the third to true MTR basis from our basis adjustment quarter expected seasonality. at and medical enterprise third quarter enterprise utilization points typical in year-to-date second cost table quarter with XXX% Our The our up to

$XX.X assets XXXX, impairment in of losses a were equity adjusted Our goodwill also in to quarter the a and million of factors. among adjusted strategic the by recognized exclude market quarter. gains excludes, and million million driven other impairment mark third securities intangible primarily QX, hold, which loss EBITDA investment macro which and $XX.X was EBITDA $X.X million, $XX.X we loss on a things

Our we going premium million of adjusted a on a we now balance have the EBITDA benefit release and from quarter. fourth reserve and remaining into saw the the the PDR expenses booked in million quarter operating previously deficiency $XX a $XX

the Given risk and the moving results for I best to cost pieces medical costs year-to-date indication ratio within the as point would a medical year, the adjustment of trends.

XX performance, points year-to-date, MCR in adjustment MCR Our impacts in reflects recognize care success year. also net year, the would business in also this improvement QX medical MCR year-to-date additional continues performance last we by adjustment strong booked XXXX impacts recognizing in XXXX and the basis management we fully the variable increase to year-to-date our earlier second for year-over-year remind well the would the comparing basis medical the of reported of points this by you When and enterprise that operational up lower. third as includes improved DCE DCE is comparison up at the as XX% MCR a of revenue cost each XXXX at impacted buy offset XXX the a aligned The be the we're given MCR the driving impact to year, risk XXX MCR medical understate quarter and a true our model. our partially costs, Without which basis I cost points. and to MCR. performance XXXX year-to-date, our initiatives our believe looking MCR XXXX that XXXX quarter XX.X% risk keynotes in true

contributing adjustments. costs XXX XX.X% second a basis points in points XXX made COVID our year-over-year impact and of $XX a Medicare future business representing in and XX% COVID in quarter, of create we adjustment third costs on as impact in management. expected cost gives favorable the true risk QX QX and year-to-date. and for the third the quarter the COVID adjustments the The confidence medical XXX cost with XX.X% included year-to-date, a The MCR the impact The remain XXXX. business will million the net which points the forecasts MCR and quarter next respectively. third was business, in improvement is $XXX given meaningful is medical quarter. of be period XX which commercial costs year-to-date prior commercial of profitable the performing were MCR. adjustment Third XXX assumptions in improvement outlook MCR contribution performance up The million our the Advantage of This XX and year. XXXX XX.X%, to solid to approximately us commercial added more EBITDA of approximately performance premium was and commercial medical year-to-date from pricing the from basis line for basis points the and net MCR $X Advantage The the from Both performance, basis the XXXX that year-to-date Medicare lower million risk are points positive adjusted and in in includes expectations basis prudent from businesses reflective our of up quarter

Turning XX,XXX from to HealthCare, increased Value Medicare to care payer XXX,XXX approximately external direct approximately value from across contracting, XXX,XXX including Advantage. patients Bright other marketplace NeueHealth. based XX,XXX based this relationships XX,XXX pan from by quarter and

revenue NeueHealth managing true for in adjustment REACH line ratio year-to-date the and number XX.X% positioning million, contracting, was quarter across QX. on to well of solid as be we to lives, NeueHealth full recognized expectations. quarter adjusted expect performing direct lives, and NeueHealth Third $XXX including flows direct now lives EBITDA risk and XXXX. the to Bright up the management, direct cost NeueHealth contracting approximately in adjustment XXXX our smaller a utilization lives, driving business medical care to is external from the well impacts a profitable. contracting, estimates in a with to year In the for care growing through the perform capitated ACO that for as at continues benchmark care external well in Healthcare transition the

balance our to sheet. Turning

million over and classified As XXXX, term. equity of XX, including short in $XXX cash investment and equivalents had September in $XX million in liquidity, $XXX is passive we million non regulated

and investments cash held additional We long by or $X.X our have over subsidiaries. of regulated insurance term short billion

our was credit end in as direct drawn million the $XX facility fully the $XXX letter QX business. support million of contracting when Our of to credit factoring of committed

exit preferred subsequent in of to Series profitability. our we run closed risk from $XXX subsidiary noted at the the regulated update our pending support the issuance and the on currently quarter, expected non our call, of liquidity that claims through our from XXXX, our of approval. are Also, of business XX, expect we October to regulated million strategic as capital million business, stock convertible, $XXX preferred sale based on marketplace As in release nearly announced insurance combined perpetual the we regulatory the and out end $XXX million B on stock proceeds

and to We year. at million The regulated middle parent next $XXX begin capital non XXXX positively capital position in fully funded to our expect this to year the significantly outlooks. strengthened morning, this MCR believe we earnings of has we liquidity starting plus our EBITDA capital adjusted that profitability. release $XXX in full revised a and million release the we In this nearly are in surplus

continue we operations, updated for our but work expect quarter how consistent now. through are fourth We to guidance will which report providing will discontinued we prior include with results, reporting

the when provided we to today. additional provide guidance QX We information performance expect our report to bridge to

our the low and on on current of We DCE the are for enterprise risk adjustment prior guidance based to benchmark. revenue views billion, revising $X.X XXXX range end our approximately our be

have medical guidance, to our now range the high to XX%. end and our cost For at enterprise expect ratio be of of improved MCR the in we XX%

the have year XXXX point trends investment $XXX expects our We a guidance excludes EBITDA MCR this as prior revised any million between intangibles the and goodwill now adjusted based positively mark-to-market the impairments adjusted to in the our guidance losses, in and from adjustment. consistent on of again also QX. $XXX range midpoint and would which recognized well with utilization of impact million, as We point risk full gains EBITDA loss and and ranges to and

is us to our predictability narrow this continue We year. this the as we we to targets year. the greater visibility And in on deliver guidance range set our allowing for have business increased

for MCR impairment expect full guidance, improvement meaningful end of Bright and year commercial On operating again Medicare combining and is For Similar member members to HealthCare year cost segments. approximately restructuring expect million XXXX, we X we segment a year billion the segments, an Advantage than is changes would lower. basis, Medicare ratio expected enterprise year-over-year. forecast charges, forecast for be taking year Full reporting costs XX% a Advantage of excluding greater on our full our of our and which no to NeueHealth and midpoint to are Bright approximately be DCE MCR range. Healthcare the the into to with benchmark. to move Bright $X.X XXXX risk providing Healthcare MCR the adjustment But longer the guidance revenue commercial account

$X.X elimination intercompany billion. estimate expected Our revenue is approximately

to during to XX,XXX NeueHealth average expect XX,XXX the be DCE. year XXX,XXX We value including based patients from over care

million. expect sources. update contribution continue financial from expectations. and XXXX XX% we NeueHealth We to of initial contracting metrics approximately month, generated direct call approximately revenue from external revenue strategic our $XXX This includes last of On provided a

are as by XXXX. medical see we than caravans and cost our our improvement morning forecasting expectations This relative to We greater for ratio our expect membership in be enterprise progress modest guidance are mix to revenue XXXX impact. billion $X in continued our offset is adjusting to XXXX business medic a

patients care XX,XXX. be commercial NeueHealth based between We expect value continue to and to XX,XXX

be prior Reflecting greater of results now now XX,XXX members of ACO from enrollment Advantage exclusively end XXXX on California year that business forecast. XXXX enrollment XXX,XXX. focused Medicare we ahead will to annual up end early than the REACH be is XXXX numbers and our market approximately are our XXXX period of to for expected expect expectations. be While MA year

our compared XX.X% focused between are for operating we in other operating and more an and reduce XX% expect to expense taking XXXX We XXXX XX.X% approximately to expenses. ratio expectation actions in our reflecting business

is our achieve MCR will operating EBITDA the from and that view expected plus expense forecast our support profitability. adjusted revenue, to contribution forecast Our services we

model business and growth. predictability for the well-positioned gross and efficient result margin will our in capital XXXX revenue more in is in expect focused greater We

guidance provide to more January. expect We detailed in

shareholders call to the I country. to turn Mike, support. amazing I the for our Health Before I back our their want appreciate Bright continued And across team thank

Now, comments. here's my for some final Mike

Mike Mikan

consumers and We're taking we supporting encouraged and Thank stable care positive are so March, California. results. and to business utilization, have Texas performance and With needs into on fully back We're We're Florida, actions delivering EBITDA through the our against guidance on unmet far improved set of model you, Cathy. aging underserved by strategic MCR year. focusing in the the this we're in the XXXX. that serving aligned profitability accelerate adjusted clinical

external care Texas XX% largest Some are we markets U.S. with call large costs and markets NeueHealth, in that of population number manage In the business's Florida attract payer in home. and the were arrangements growing of health aging significant based value confident growth opportunities. of ability a will partners to

metrics medical utilization HealthCare for value results external Our NeueHealth Bright differentiated members both and key is and on costs driven driving payers. lower for model performance strong with and care

will Advantage compared a differentiated consumers in the and serving on categories. competitors model ACO to serving Medicare continue focus Medicaid, patient to commercial We marketplace, specific REACH;

for service partners And us and government growing care for with Medicare our underserved ACO ACO is long We traditional allows and serving populations and value looks arrangements. to working term more seniors taking the Medicare leverage to well-positioned new see our support throughout value REACH risks based fee as REACH to U.S. expertise Our business in beneficiaries based and opportunity care in shift value Advantage large technology groups a arrangements business care California. physician Medicare based our already lives. on

year-to-date from substantial which have business in our progress deliver XXXX. XXXX. continued made growth, to shown ahead growth have forward Medicare tailwind pricing AEP additional in have improvements solid of will we the will going further in operational operational into and benefits in business performance. expect Advantage We believe our combine improvements XXXX, early expectations We organic And results with

our and profitability MCR supports business forecasted structure Our current EBITDA year. cost for MA our already adjusted next

local for we're future. the It's care, ability best to model. get to the value This continue believe the of of drive the in the worth portfolio and profitable and differentiated offerings, and serve growth platform its delivery you that when XXXX that you heart of align and outcomes, at about demonstrated out balanced connect with our repeating resources as best and we have value financing a and sustainable business driven Looking to excited our healthcare is

are acknowledge we very I we the our time While to for a excited future, challenging changes are team is making. the given that this significant want for

you I the fortunate amazing team I very privilege the dedicated with company. To help you've foundation to professionals to want what have thank this are have that done day. to team, build a of of to work We every amazing our for

believe Operator, to make the continue healthcare We will question. we take right together. let's first

Operator

Instructions] first Thank line you. comes the Our [Operator go Nathan from Goldman question Sachs. ahead. of today from Rich Please

Your line is now open.

Nathan Rich

Thanks you morning. good and Maybe on from respect REACH a any that for or profitable to especially expect should and score the risk contracting revenue profitability profitability direct program year? standpoint, REACH it next then to with questions. this profitable transition the Are mind growth with ACO noted remain fund when thinking to about moving year, into ACO in XXXX. that you we cap considerations keep the there just starting it was Hi, in with of

Mike Mikan

discussed wouldn't we've any XXXX. for Anything change No, say for I what you're thinking?

Cathy Smith

team's Yes. benchmarks. year and running well Nathan profitable EBITDA got very that year. before, the ahead ACO into No. move affiliate this We're of partners are shared performing And REACH. that next providers for we've prepared we as And very great very,

we're it. I excited would about So think very we say

Nathan Rich

XX up your as year? got could year, of this seeing you modest modest, we utilization year just fourth and as I for then guess, year, normalization up kind any XX talk the your potential next are MLR range like anything and or of move that COVID could signs about follow versus think the into expectations quarter a get into thinking you for we are to maybe I Great, how I if on the of demand around the expectations of next you also into flu about in And market? pent improvement

Mike Mikan

MCR, because for business, is is of AEP we too know, expectation let's is senior kind MCR up for really I in with core much of know, our that three more you don't impact middle as components specific the our does set just and want into But DCE right managed respect got year detail you California, after we've guidance to Well, which us. booked the get in you expectation so enrollment XXXX know, start to on with the at MCR XX%. we'll get care the of and get build business course, the we're OEP, when

higher So risk arrangements then our care based and ratio, medical within got as NeueHealth. we've

the those we And deliver we with on believe be without the so lower growth but to business, going the improvement business, goes what say of to will vary, when year-to-date. next insurance improved is targets at than ACA and able the that with mix, depending there mix enrollment year. that away, MCR our on based that get DCE we're that's modest optimistic when ratio, the for impact to how of enterprise is which look coupled business, Medicare but them, Advantage that's out a you XXXX on our put We're going to on for you

utilization to In pent of year. we We've out seen demand throughout core our year-over-year terms and the medical haven't improved driver have outperformed up stable XXXX. a throughout was That initiatives performance met expectations cost seen very of have big are be of it. our really

mid down as year-over-year. talked IFP utilization about even seen So digits that we've to is haven't Medicare is single we than high that. really Advantage, higher

down numbers has we the And but know been the there remain season utilization expect quarter. flu that don't, of we expect that and fourth will, are out increased stable, throughout baked to into quarter. normal flu you our our what's into a for COVID fourth the we or year. so far and to reports So there if respect that's we With

Nathan Rich

you. Thank Great.

Operator

you. Thank

Please go Research. is your the open. question from Joshua Next ahead, comes today now of Raskin from line line Nephron

Joshua Raskin

how exit sort year maybe we change membership much don't if profitability, of year? totality, curious Healthcare I'd Hi, and is next need if in the maybe of EBITDA us Bright specifics related? for based the next just the some on wondering give of care was I then and morning. expectations part that's and thanks. that be value expectations, overview you expectation Good DCE others, NeueHealth versus

Mike Mikan

Well, question, I morning. Good appreciate the Josh.

that early, that we that's to the Obviously, year. [lives] So going away updated. optimistic growth we're the the get Josh prudent year-over-year. biggest make to want amount and guidance with of degradation this We'll external put at those models recapture that for We're insurance as more business going of year. out strong are out That's fair we we Healthcare next point, there can't marketplace, of to, our We're in we've a a value into business for remember we sure then this January get But ACA your outlook think second and based got XX,XXX now. to give I guidance lives. AEP question. book XX,XXX a of OEP. Bright from updated targeting

Cathy Smith

profitability, into is moving expectations shared performing DCE REACH there our ACO Josh, our as we've before, well. The current

be And continue serves to performing that And payer shared that next. NeueHealth way. earlier lies that. all continue party expected We as shared And year to Mike into are then of profitable expect to well. and just we this third third grow we to the

Mike Mikan

Yes. performing And Josh our NeueHealth payers this is strong, know, we're business of book year, external I our well external for and you partnerships. a mean,

excited but for outlook we're continued profitability the that XXXX, for So not into only XXXX. of business, about

Joshua Raskin

exchanges I'm year-to-date? what you health relative high the deductible maybe seasonal could in quarter implies that's is then you XQ to just the just that Can remind it? And guidance me of assuming I'm because for reasons as remind MLR and an the fourth plans you've got thinking me Okay. increase expectation for

Mike Mikan

fourth we of seasonality every really year. for deductible the see Yes. that quarter the wear the It's off

coming for and basis you the you on XXXX the loss costs, basis be this over them it on the points ratio So three improved year-to-date And right to year-over-year year. medical a more that COVID driving we've initiatives, was year. meaning the for bigger talked and between that's impact And improvement that COVID the last year in that the cost year-over-year adjustment much and was and factors track at COVID last year year that's QX continue risk year-to-date, we about this around for into quarter reprice what for fourth fact the and and mid Florida again, a which it driving that put then a risk improvement somewhere medical I year-over-year that take major really in medical basis in especially we XXXX our those would when to XXXX to is XX%, line when year-over-year XX%, say the seen, XXs, year-over-year three consideration. we're in expect in points we factors periods, what's into Josh somewhere guidance today. year-over-year Carolina which earlier with North improved reason adjustment, provided look normalized expecting to XXXX the we normalize us is That's for of

Joshua Raskin

right. All

So really of terms at about else in to adoptables, think just nothing uptick there.

Mike Mikan

No.

Joshua Raskin

Thank you.

Mike Mikan

Josh. Thanks,

Operator

Barclays. from next Thank line from ahead. question of go you. The Valiquette Steven the today Please comes

Your line is now open.

Steven Valiquette

morning, good thanks, Hi, everybody.

of your adjusted target of And still So talking EBITDA in the in just I of and profitability then and early EBITDA losses pattern for about Thanks. fourth guess year? of find I'm how the cadence for quarterly any be profitability XXXX but just next parse out 'XX many just about just the curious. to -- quarters half may too Is just trying my out it light to for too to quarter. talk trying EBITDA, it profitable next we sort first year the the early basis, will preliminary be in quarters of about

Mike Mikan

it's to specific. the Yes. appreciate get questions a that us I little early for even though

us indulge prepared we'll would that. January to you on you if and in be So update

it's preliminary the I So for appreciate too question. today, do but that

Steven Valiquette

Okay.

Cathy Smith

add will I to on that. Maybe

Steven Valiquette

Sorry go ahead.

Cathy Smith

Sorry Steve.

responses. that that on to that question to or add to Just

states cost pretty insurance California. we've the change we imagine, significant ACA exit in the our business than other as got you business in can As a MA structure other and the

will down change help well which structure for We the in are year-over-year pretty business underway cost quickly. plans cost that come that

Steven Valiquette

for quick basis. of lot as ahead the be quarterly to for to swings just Okay. as a a was NeueHealth margin tricky up NeueHealth. to but sort Maybe quarters well. profitable volatility. Thanks. remind 'XX, that be Josh's from to of are follow just There target not always NeueHealth And going are within of long on what's are But a you're that the the certain us on segment just maybe And standing continues quarter-to-quarter, going be model well. quarterly to somewhat there question, kind taken term

Mike Mikan

the let's volatility impacted through that the risk year, the book, to that that fact Florida Well, entered in is that principally, a or last it's Healthcare NeueHealth. on into by Healthcare we've volatility things quarter. and of flows talk the a impacted as Bright same by there capitated is is basis quarterly given through impact the basis the are Bright

that in from 'XX. volatility and the so the through that NeueHealth adjustment. 'XX, we we're And And adjustments in that in making saw we saw really Bright Healthcare risk comes

As understand over the business you as is go that I And performing for more see well to of us. mature, we expect in of Medicare book course, which become book really of time, our down. impact same that volatility business, we don't

volatility we'll term long So of we of see over January won't that in roll profit we out time, and targets and more Steven. that, all level targets as and get into

So update at we We'll will be more. you time. that more

Steven Valiquette

Got it.

Thanks. Okay. All right.

Operator

Thank Chase. ahead. from J.P. today of the Please Morgan you. Gill next Lisa from question comes go The line

Your is now open. line

Lisa Gill

taking Great, the question. thanks very much. And thanks for

'XX? what to some disenrollment? as are XXXX around of we idea accelerating have goes early Advantage. numbers you've Just in for stars about to with Mike, think to about that to talked California. far And of youplan the I you look that any one that, the good mitigate as then one start think some Do as really enrollment wanted secondly, on things Medicare do

Mike Mikan

Great.

Is go asking? Let what were disenrollment back ask to first, you that you the me MA. for about did

Lisa Gill

your for of MA. what's Yes. disenrollment That's anticipation

good for You as but as said California, just initial are disenrollment? initial in in what's expectation far your curious enrollments numbers coming go,

Mike Mikan

last we in believe years, net-net as of know, about The total. book over Medicare XX% couple in net is of it's grown the Advantage what Lisa, we've favorable. California, while our you But number business

see significant But opportunities the our partners. over grow business I part grown started to significantly business, of And will along into this growth. it's in years. the seen characterize continued growth which as we're will focused And nowhere that on we past. California with near prepare the the So because XXXX, we're the integrating XXXX, XXXX. way the work the that throughout of last We well it we're will several doing, we've state years care be in for earlier but we take as would that that's year. continue share, and really continue

So excited that. really we're about

high respected we've a that business. a of came but book so years, disenrollment. compared as pretty stable levels growth, disenrollment So to with XXXX of the couple far, In less AEP, over disenrollment, of last seen

But expect of disenrollment the hopefully I growth. year While won't that tell given And net, last over that it the the of can break answers net we've heavy we separately, your out first level not I years, couple seen we're question. growth. impact of seeing just you

Lisa Gill

XXXX? about my then into -- this can how XXXX going there And to mitigate that question do are was around think stars you was that mean other to I things

Mike Mikan

Yes.

book growth we or But that to don't with as So is we of mature, and year of level two seen. were an impacted some focus, change there's, done lot you, understand want it others technology of whole stars on impacted up a star front have the and build our of with performance our first the call relationships, of and on stars. the communication consumers. end our we that that were lot understand what excuse, serve focus company our we use course to significant longer deeper consumers And just we and scores on been importance as our like while and of on the caps business rating. we've the and of as work focused it's of a some We but growth we've that our really with the were reality, of a it rolled has

we're really be we star and in sight going plus with line we four believe at that's to least is four be of performance a target improved that, to and to achieved future. star our see the So believe in

Lisa Gill

Okay, great. Thank you.

Speaker

Thanks, Lisa.

Operator

Thank from Morgan Stanley. today next from you. ahead. The Hall the question line Please go of comes Michael

Your now line open. is

Michael Hall

Thank you guys.

capital quick include question fully non Cathy, facility? to million [$XXX] [XXX] a Just credit on the in position, regulated the cash just drawn

Cathy Smith

Yes.

on balance million $XXX on drawn the third But B. shortly million Michael. at had the the fully are And sheet Cert Series We we the then end the closed we facility. remember, $XXX thereafter quarter, of

aggregate early million back obviously, working So on regulators into starting risk million, we But with from after $XXX expect facility. based the are plus year beyond. also $XXX in capital we drawn fully next coming and remember,

Michael Hall

Got it.

capital lag wide out know pay work? or mentioned does inventory range claims middle typically believe, months like it out? but cash get that for run release, claims run claims update take quarter, I call million out. How is longer three I months, generally X of how for the much to [indiscernible] next a XX I to beginning then last So $XXX you think the months year, last to does

Mike Mikan

staged have capital quarter And of of going down end the the with time. be every we state membership range we're on early regulators we'll more vary the believe the We be different on working wind state will will. that has we But engaged that some as you states that's and That's be some by respect wind broader that and exit first if serve so why for period continued complete will we that insurance unclaimed, give regulators of today. time. proactive with to of will over XX%-ish release state tail because policy by of then be with or business, the a down to will course,

Michael Hall

it. light profitability And update, just in next the platform restructuring, technology one if strategic for Got more year. different push may I of

thought that earlier on changed the started plans just your this year any As rebuild or there? you

Mike Mikan

or affiliate doctor the has operate providers, be our patient And technology aligned the DCE, not the connecting employ we population do and that really manage tools is of a to record. affiliate able doctor our have patients in which core we like Well, changed. having the whole technology, whether own the what our to to enables which model, and we fully is for then care their

thinking about consider terms we're Medicare evolve that's core platform not how what especially to Advantage, In continue forward, that I that, our we going of our to but claim and differentiation. be

Our in differentiation of that we business. we changed go-forward with what on get detail is has will aligned in as enabling model. our we you care all not is again as January And really that and update more fully our

Michael Hall

you. Thank

Mike Mikan

Thanks Michael.

Operator

Thank you. The Please next question go today comes from the line of Kevin Fischbeck America. from ahead. Bank of

now Your line is open.

Kevin Fischbeck

operating next Thanks. would what different but how just go your guess wanted year-over-year costs Do improvement to numbers year. nice operating great. a the are guidance to just segment. Okay, by that Obviously cost it's is my forward? new I in if year this like were within you businesses much the progress look an happen see to like number only MA going that to have operating health needs ongoing you just for

Mike Mikan

be into what look want get yes, and MA the we our said it are core we in Well, you targets it because of will to MA we DCE if evolving, don't both with aggregate, believe and have and will, today. is cost DCE that will mix I that as as Bright I we the structure and that the from say it from believe that and we price the HealthCare. but of to impact shift away we they know profitable at ACA, the course we with I will manage you would of insurance NeueHealth because cohorts if business MCR

so if moving Medicaid. are marketplace there the or consumer versus Medicare And you're parts on the depending managing business

year. wouldn't core next profitable today premium into I targets structure that But at don't revenue at So want the MCR cost that. our had our of far the today be part along get we too to is

Kevin Fischbeck

how in keep get that's year. there XX% And going or much just business to you to in Are to from I in some move to what external, looks? about next Is XX% about point that membership like you about with some that guess, in of think think them? there network are the to Is far network way markets them? that those Okay. of internal to how the external plans as of only network then health with as XX% percentage way to you

Mike Mikan

Yes.

because our adding be early partners, excited which signing month, been last we've January. Of explicit we're the course, little level. and new much really with it's payer interest given we we'll announcement more external in a about this Again, have been,

better a ourselves set here's we're We're general doing to and within look how think we XX% perform we results we better a marketplace model, XX%, in can talked opportunity. service but in as why risk ahead in of of we're our of at will recapture, So that seeing well. you core strong than business, we've aligning we book of today Florida costs. believe as we much term, strong And medical of marketplace. fee think the performance, partners for terms integrated perform if significant Today, Florida, our with. that our it's we Texas we're than about, got And terms long in we adjusted

with proposition for partnership with value So payers. experience was a a NPS. That our we've consumer our high got great a great

about recency So don't of too But we're it. it's early I ahead given just get course, the announcement, to that. Kevin, about that will setup but really rest assured, detail, about of just forward. more core and of our want excited far that we talking our we're But be prospects we going a we're working in have with, here, partners be and excited

Kevin Fischbeck

Thanks.

Operator

line now question final from Please today Taylor from your Gary the The comes open. go you. ahead, Thank line is of Cowen.

Gary Taylor

when inventory Cathy, that can processing? is, question XQ catch you last Two were the us release working PDR I been One, systems, claims claims wanted quick that my know things. through Hi, to update quite there good on you've your again, didn't I I quarter other delays the in just catch year. in on some you morning. And ran it. then but

us quarter of to the on give any end quarter a this X-amount like prior expense moving to those the of Just how are third medical in So some of the give some way at yet dollars is there the the us year, versus claims kind stat inventories? you're year? through way update unprocessed

Mike Mikan

a Gary year, obviously quarter. more core Last the at It highlights took started least This claim Yes, up but we the mid had and significant can Cathy maybe later focus specifics, the year on in into us on can you of you amount give behind operationally. till I'll get know, detail business. follow we off fourth and of year the as it. on, get the going a is to Stephen activity of of we then

claims consistently of up process the XX% I the year. claims the a were January, we we the our year. in close and this quarter of processed We're stable that about fourth of beginning not kind the think beginning back. way even We environment throughout between at And year. caught last in to year. We're of

inventory have improves obviously our process, and So which our our predictability the claim been year. claim claim process stable claim all for receipts, year, our our

improved work last big began, then contributor the pleased really on really that. year to our late we're and and outcomes beginning talk so year of want been And this you with to that's That performance a into Cathy the PTR. of

Cathy Smith

quarter, And we end would the then XX the and million quarter. we remaining of as up you you come fourth we so XX set through said at going have into last for expect million this contract that when year, did PTR last we had that

Gary Taylor

Thank you.

Mike Mikan

the last Gary. I was that question. believe Thanks

In thanks. time forward thank So your in Health and to interest you everyone I Group. to We the updating again look Bright your January/ for today want February timeframe,

Operator

concludes Thank today's Thank you participation. you. This conference for call. all your

disconnect You may your now lines.

NeueHealth (NEUE) 9 Nov 222022 Q3 Earnings call transcript