CORRESP

LOGO

April 3, 2023

VIA EDGAR

Kristin Lochhead

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Industrial Applications and Services

100 F Street, N.E.

Washington, D.C. 20549-7010

Re:

agilon health, inc.

Form 10-K for the Fiscal Year Ended December 31, 2022

Filed March 1, 2023

File No. 001-40332

Dear Ms. Lochhead:

This letter sets forth the responses of agilon health, inc. (the “Company”) to the comments contained in your letter, dated March 21, 2023, relating to the above Form 10-K (the “Form 10-K”). The comments of the staff of the U.S. Securities and Exchange Commission (the “Staff”) are set forth in bold italicized text below, and the Registrant’s responses are set forth in plain text immediately following each comment.

Capitalized terms used but not defined herein have the meanings assigned to them in the Form 10-K.

Form 10-K for the Fiscal Year Ended December 31, 2022

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures, page 68

Your Adjusted EBITDA includes adjustments for geography entry costs and accruals for unasserted claims and contingent liabilities in this filing as well as in Exhibit 99.1 to your Form 8-K dated March 1, 2023. Tell us the nature of these costs and your consideration of whether these are normal, recurring, cash operating expenses necessary to operate your business. Refer to Question 100.01 of the staff’s Compliance & Disclosure Interpretations on Non-GAAP Financial Measures.

Response:

In response to the Staff’s comment, the Company respectfully advises the Staff that, in drafting the Form 10-K, it considered Questions 100.01 and 102.03 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations (the “Non-GAAP C&DIs”) and Rule 100(b) of Regulation G, and the Company believes that its presentation of Adjusted EBITDA, including adjustments for geography entry costs and accruals for unasserted claims and contingent liabilities, is not misleading or otherwise in violation of Rule 100(b) of Regulation G.

The Company respectfully advises the Staff that it does not consider geography entry costs to be normal, recurring or necessary to operate the Company’s business in the manner contemplated by the Staff in Question 100.01 due to the nature, variability of amount and lack of predictability as to occurrence and/or timing of such payments. As the Company has described in its Form 10-K, geography entry costs primarily include investments in growth related to new physician partner groups that are in implementation and are not yet generating revenue, such as costs to determine member attribution and establish health status (acuity). The Company tailors its investments in each new physician partner group, as the amount and nature of such costs vary significantly based on, among other factors, the membership size and the specific characteristics of each enrolled member (including demographics, government program eligibility and acuity) within a geography. Geography entry costs also include, to a lesser extent, investments to grow existing markets through physician recruitment, support of clinical initiatives and enhancements to network capabilities, which are not part of the Company’s standard physician partner group compensation arrangements. These investments are discrete and are not required to operate the Company’s business. The frequency of the Company’s geography entry costs is dependent upon timing of the integration of new physician partner groups to the Company’s platform and opportunistic investments in existing markets. During each period, the geography entry costs that the Company will incur are variable as they are related to growth, and the Company believes adjusting to remove such costs provides investors with a transparent basis for evaluating the core performance of the Company’s business across financial periods, absent limited-duration costs that are incurred before normal revenue-generating activity from a new physician partner group commences and investments in platform expansion. As a result, the Company believes adjusting for these costs is useful to its investors who seek to understand the Company’s underlying business performance. In order to provide further transparency as to the nature of the adjustment, the Company will in future filings modify the title of the adjustment to “geography entry and expansion costs,” and clarify that such costs primarily comprise costs in geographies that are in implementation and are not yet generating revenue and, to a lesser extent, investments in the expansion of the Company’s platform.


Best regards,

/s/ Timothy Bensley
Timothy Bensley
Executive Vice President and Chief Financial Officer