Related-Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related-Party Transactions

Related-Party Transactions

Equity Method Investments

During the years ended December 31, 2023, 2022, and 2021, AHM recognized approximately $16.7 million, $21.2 million, and $18.7 million, respectively, in management fee income, from LMA. On August 31, 2023, the management service agreement between LMA’s IPA and AHM was terminated. LMA is accounted for under the equity method based on 25% equity ownership interest held by APC (see Note 6 — “Investments in Other Entities”).

During the years ended December 31, 2023, 2022 and 2021, APC paid approximately $2.7 million, $2.7 million and $2.4 million, respectively, to Pacific Medical Imaging and Oncology Center, Inc. (“PMIOC”) for provider services. APC and PMIOC have an Ancillary Service Contract together whereby PMIOC provides covered services on behalf of APC to enrollees of the plans of APC. PMIOC is accounted for under the equity method based on 40% equity ownership interest held by APC (see Note 6 — “Investments in Other Entities”).

During the year ended December 31, 2023, the Company paid approximately $1.1 million, to James Song, M.D., a Professional Corporation (“Song PC”) for provider services. Song PC is accounted for under the equity method accounting based on 25% equity ownership interest held by a subsidiary of the Company (see Note 6 — “Investments in Other Entities”).

Astrana Board Members and Officers

During the years ended December 31, 2023, 2022 and 2021, AHM recognized approximately $2.1 million, $1.8 million and $1.6 million, respectively, in management fee income from Arroyo Vista Family Health Center (“Arroyo Vista”). Arroyo Vista’s chief executive officer is a member of the Company’s board of directors. The Company has a managed service agreement with Arroyo Vista.

During the years ended December 31, 2023 2022 and 2021, the Company paid approximately $0.3 million, $0.3 million and $0.4 million respectively, to Arroyo Vista for services as a provider. The Company has provider contracts with Arroyo Vista.

For the year ended December 31, 2023, the Company recognized $14.1 million in operating lease right-of-use assets and $14.5 million in operating lease liabilities from certain lease agreements with properties that were spun-off as part of the Spin-Off. The chief executive officer of the real estate business managing these properties is also a member of the Company’s board of directors. Refer to Note 1 — “Description of Business” to the consolidated financial statements for information on the Spin-Off.

During the years ended December 31, 2023, 2022 and 2021, APC paid approximately $0.3 million, $0.6 million and $0.7 million, respectively, to Advanced Diagnostic Surgery Center for services as a provider. Advanced Diagnostic Surgery Center shares common ownership with certain board members of Astrana. The Company has provider contracts with Advanced Diagnostic Surgery Center.

During the years ended December 31, 2023, 2022 and 2021, APC recognized approximately $0.6 million, $0.6 million and $0.6 million respectively, in rental income from Advanced Diagnostic Surgery Center. Advanced Diagnostic Surgery Center is leasing from a property that is a component of Excluded Assets. The property was spun-off on December 26, 2023, as part of the Spin-Off. Refer to Note 1 — “Description of Business” to the consolidated financial statements for information on the Spin-Off.

During the years ended December 31, 2023, 2022 and 2021, APC paid approximately $10,000, $0.6 million and $2.0 million respectively, to Fulgent Genetics, Inc. for services as a provider. One of the Company’s board members is a board member of Fulgent Genetics, Inc. The Company has provider contracts with Fulgent Genetics, Inc.

During the year ended December 31, 2023, the Company incurred approximately $1.3 million in expenses payable to Third Way Health for call center services. One of Astrana’s officers is a board member of Third Way Health in 2023.

During the years ended December 31, 2023, 2022 and 2021, the Company paid approximately $2.6 million, $1.9 million and $1.3 million, respectively, to Sunny Village Care Center for services as a provider. Sunny Village Care Center shares common ownership with certain Astrana board members and officers. The Company has provider contracts with Sunny Village Care Center.

During the years ended December 31, 2023 and 2022, APC recognized approximately $1.1 million and $0.3 million, respectively, in rental income from Sunny Village Care Center. Sunny Village Care Center is leasing from a property that is a component of Excluded Assets. The property was spun-off on December 26, 2023 as part of the Spin-Off. Refer to Note 1 — “Description of Business” to the consolidated financial statements for information on the Spin-Off.

In November 2023, the Company entered into a three-year promissory note with Sunny Village Care Center as the borrower for a principal amount of $0.5 million. The loan balance is presented within long-term debt, net of current portion and deferred financing costs in the accompanying consolidated balance sheets.

During the year ended December 31, 2023, the Company incurred rent expense of approximately $0.1 million from First Commonwealth Property, LLC for office leases. First Commonwealth Property, LLC shares common ownership with certain board members of Astrana. The Company has lease arrangements with First Commonwealth Property, LLC.

During the year ended December 31, 2023, Astrana paid approximately $9.8 million, to purchase Astrana’s stock from certain board members. During the year ended December 31, 2022, APC paid approximately $9.3 million to purchase Astrana’s stock from a board member.

During the year ended December 31, 2021, AHM paid approximately $44,000 to an Astrana board member for consulting services. The Company did not incur any similar expenses for the years ended December 31, 2023 and 2022.

The Company has agreements with Health Source MSO Inc., a California corporation (“HSMSO”), Aurion Corporation (“Aurion”), and AHMC for services provided to the Company. One of the Company’s board members is an officer of AHMC, HSMSO, and Aurion. Aurion is also partially owned by one of the Company’s board members. Revenue with AHMC and HSMSO consists of capitation, risk pool, and miscellaneous fees and expenses consist of claims expense, management fees, and consulting fees.

The following table sets forth fees incurred and income received related to AHMC, HSMSO, and Aurion (in thousands):

	Year Ended December 31, 2023						Year Ended December 31, 2022
	AHMC		HSMSO		AURION		AHMC		HSMSO		AURION
Revenue	$	49,634	$	1,242	$	—	$	56,397	$	1,089	$	—
Expenses	20,000		822		300		21,810		1,554		300
Net	$	29,634	$	420	$	(300)	$	34,587	$	(465)	$	(300)

The Company and AHMC have a risk-sharing agreement with certain AHMC hospitals to share the surplus and deficits of each of the hospital pools. Under this agreement, during the years ended December 31, 2023, 2022 and 2021, the Company has recognized risk pool revenue of $43.8 million, $50.5 million and $60.1 million, respectively, of which $54.0 million and $58.7 million, remained outstanding as of December 31, 2023 and 2022, respectively.

APC Board Members

During the years ended December 31, 2023, 2022, and 2021, the Company paid an aggregate of approximately $23.1 million, $34.5 million, and $32.5 million, respectively, to board members for provider services which included approximately $4.2 million, $3.7 million and $3.4 million, respectively, to Astrana board members and officers who are also board members and officers of APC.

On November 6, 2023, the Company entered into a stock repurchase agreement with APC, pursuant to which the Company agreed to repurchase approximately $100.0 million, or 3,166,561 shares, of the Company’s common stock from APC. APC is a consolidated affiliate of the Company of which Dr. Thomas Lam, the Company’s Co-Chief Executive Officer and President and a director, is the Chief Executive Officer and Chief Financial Officer and a director and stockholder; Dr. Kenneth Sim, the Company’s Executive Chairman, is Chairman and a director and stockholder; and Dr. Albert Young, the Company’s Chief Administrative Officer, is Senor Executive Vice President and a stockholder. The Company’s Board of Directors and the Audit Committee of the Board of Directors approved the proposed repurchase.

In addition, affiliates wholly owned by the Company’s key personnel, are reported in the accompanying consolidated statements of income on a consolidated basis, together with the Company’s subsidiaries, and therefore, the Company does not separately disclose transactions between such affiliates and the Company’s subsidiaries as related-party transactions.

Intercompany Transactions

Because of corporate practice of medicine laws, the Company uses designated shareholder professional corporations, of which the sole shareholder is a member of the Company’s key personnel, to engage in certain transactions and make intercompany loans from time to time.

For equity method investments, loans receivable and line of credits from related parties, see Note 6 — “Investments in Other Entities,” and Note 7 — “Loans Receivable and Loan Receivable — Related Parties,” respectively.