QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
x | Accelerated Filer | o | ||||||||||||
Non-accelerated Filer | o | Smaller Reporting Company | ||||||||||||
Emerging Growth Company |
Other Information | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and equivalents | |||||||||||
Marketable securities | |||||||||||
Receivables, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other assets, net | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
Current liabilities: | |||||||||||
Medical claims and related payables | $ | $ | |||||||||
Accounts payable and accrued expenses | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity (deficit): | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Total agilon health, inc. stockholders' equity (deficit) | |||||||||||
Noncontrolling interests | ( | ( | |||||||||
Total stockholders’ equity (deficit) | |||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Medical services revenue | $ | $ | $ | $ | |||||||||||||||||||
Other operating revenue | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Medical services expense | |||||||||||||||||||||||
Other medical expenses | |||||||||||||||||||||||
General and administrative (including noncash stock-based compensation expense of $ | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total expenses | |||||||||||||||||||||||
Income (loss) from operations | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Income (loss) from equity method investments | ( | ||||||||||||||||||||||
Other income (expense), net | |||||||||||||||||||||||
Gain (loss) on lease terminations | ( | ||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax benefit (expense) | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
Income (loss) before income taxes | ( | ||||||||||||||||||||||
Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
Total discontinued operations | ( | ||||||||||||||||||||||
Net income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Noncontrolling interests’ share in (earnings) loss | |||||||||||||||||||||||
Net income (loss) attributable to common shares | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income (loss) per common share, basic and diluted | |||||||||||||||||||||||
Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Discontinued operations | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Net unrealized gain (loss) on marketable securities, net of tax | ( | ( | ( | ||||||||||||||||||||
Foreign currency translation adjustment | |||||||||||||||||||||||
Total comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive (income) loss attributable to noncontrolling interests | |||||||||||||||||||||||
Total comprehensive income (loss) attributable to agilon health, inc. | $ | ( | $ | ( | $ | ( | $ | ( |
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interest | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
July 1, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Common stock repurchase | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
September 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interest | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
July 1, 2022 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interest | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
January 1, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Common stock repurchase | ( | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
September 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interests | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
January 1, 2022 | $ | $ | $ | ( | $ | — | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | ( | $ | ( | |||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Loss (income) from equity method investments | ( | ( | |||||||||
Other noncash items | ( | ||||||||||
Changes in operating assets and liabilities | ( | ( | |||||||||
Net cash provided by (used in) operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment, net | ( | ( | |||||||||
Purchase of intangible assets | ( | ( | |||||||||
Investment in loans receivable and other | ( | ( | |||||||||
Investments in marketable securities | ( | ( | |||||||||
Proceeds from maturities and sales of marketable securities and other | |||||||||||
Net cash paid in business combination | ( | ||||||||||
Proceeds from sale of business and property, net of cash divested | |||||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from equity issuances, net | |||||||||||
Common stock repurchase | ( | ||||||||||
Repayments of long-term debt | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash and equivalents | ( | ( | |||||||||
Cash, cash equivalents and restricted cash and equivalents, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash and equivalents, end of period | $ | $ |
NOTE 1. Business |
NOTE 2. Summary of Significant Accounting Policies |
NOTE 3. Revenue, Receivables, and Concentration of Credit Risk |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Payor A | % | % | % | % | |||||||||||||||||||
Payor B | % | % | % | % | |||||||||||||||||||
Payor C | % | % | % | % | |||||||||||||||||||
Payor F | % | * | % | * |
September 30, 2023 | December 31, 2022 | ||||||||||
Payor A | * | % | |||||||||
Payor B | % | % | |||||||||
Payor C | % | % | |||||||||
Payor D | * | % | |||||||||
Payor E | * | % | |||||||||
Payor F | % | * |
NOTE 4. Marketable Securities and Fair Value Measurements |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
U.S. Treasury notes | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | $ | ( | $ |
Year | Amortized Cost | Fair Value | ||||||||||||
2023 | $ | $ | ||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
$ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
U.S. Treasury notes | |||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
NOTE 5. Other Assets, net |
September 30, 2023 | December 31, 2022 | ||||||||||
Loans to physician partners | $ | $ | |||||||||
Health plan deposits | |||||||||||
Equity method investments(1) | |||||||||||
Right-of-use lease assets | |||||||||||
Other | |||||||||||
$ | $ |
NOTE 6. Medical Claims and Related Payables |
September 30, | |||||||||||
2023 | 2022 | ||||||||||
Medical claims and related payables, beginning of the year | $ | $ | |||||||||
Components of incurred costs related to: | |||||||||||
Current year | |||||||||||
Prior years | |||||||||||
Discontinued operations - prior years | |||||||||||
Claims paid related to: | |||||||||||
Current year | ( | ( | |||||||||
Prior years | ( | ( | |||||||||
Discontinued operations - prior years | ( | ||||||||||
( | ( | ||||||||||
Medical claims and related payables, end of the period | $ | $ |
NOTE 7. Other Liabilities |
September 30, 2023 | December 31, 2022 | ||||||||||
Other long-term contingencies | $ | $ | |||||||||
L | |||||||||||
Equity method liabilities – ACO REACH | |||||||||||
Other | |||||||||||
$ | $ |
NOTE 8. Debt |
NOTE 9. Commitments and Contingencies |
NOTE 10. Common Stock |
NOTE 11. Net Income (Loss) Per Common Share |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Income (loss) from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Noncontrolling interests’ share in (earnings) loss from continuing operations | |||||||||||||||||||||||
Net income (loss) attributable to common stockholders before discontinued operations | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) from discontinued operations | ( | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted average shares outstanding – basic | |||||||||||||||||||||||
Weighted average shares outstanding – diluted | |||||||||||||||||||||||
Net income (loss) per share attributable to common stockholders | |||||||||||||||||||||||
Net income (loss) per common share from continuing operations, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income (loss) per common share from discontinued operations, basic and diluted | $ | $ | $ | $ |
September 30, | |||||||||||
2023 | 2022 | ||||||||||
Stock options | |||||||||||
Restricted stock units |
NOTE 12. Goodwill and Amortizable Intangible Assets |
NOTE 13. Supplemental Cash Flow Information |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | |||||||||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||||||
Right-of-use asset obtained in exchange for new operating lease liability | |||||||||||
Non-cash investment in unconsolidated subsidiaries |
September 30, 2023 | December 31, 2022 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and equivalents(1) | |||||||||||
Cash, cash equivalents and restricted cash equivalents | $ | $ |
NOTE 14. Variable Interest Entities |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash equivalents | |||||||||||
Receivables, net | |||||||||||
Prepaid expenses and other current assets, net | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Other assets, net | |||||||||||
Liabilities | |||||||||||
Medical claims and related payables | |||||||||||
Accounts payable and accrued expenses | |||||||||||
Other liabilities |
September 30, 2023 | December 31, 2022 | ||||||||||
Equity method investments - Other(1) | $ | $ | |||||||||
Equity method investments - ACO REACH(1) | |||||||||||
Equity method liabilities - ACO REACH(2) | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Medical services revenue | $ | $ | $ | $ | |||||||||||||||||||
Medical services expense | ( | ( | ( | ( | |||||||||||||||||||
Other medical expenses(1) | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) from operations | ( | ||||||||||||||||||||||
Net income (loss)(2) | ( |
September 30, 2023 | December 31, 2022 | ||||||||||
Current assets | $ | $ | |||||||||
Noncurrent assets | |||||||||||
Total assets | |||||||||||
Current and total liabilities |
As of and For the | As of and For the | ||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||||||||||||||||
MA members | 420,300 | 266,600 | 58 | 420,300 | 266,600 | 58 | |||||||||||||||||||||||||||||
Medical services revenue | $ | 1,212,132 | $ | 693,934 | 75 | $ | 3,494,006 | $ | 2,015,541 | 73 | |||||||||||||||||||||||||
Gross profit | $ | 30,477 | $ | 25,912 | 18 | $ | 164,966 | $ | 102,290 | 61 | |||||||||||||||||||||||||
Medical margin(1) | $ | 107,736 | $ | 75,647 | 42 | $ | 408,049 | $ | 243,906 | 67 | |||||||||||||||||||||||||
Platform support costs | $ | 46,629 | $ | 34,764 | 34 | $ | 141,176 | $ | 104,868 | 35 | |||||||||||||||||||||||||
Net income (loss) | $ | (31,483) | $ | (30,739) | (2) | $ | (32,319) | $ | (50,315) | 36 | |||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | (5,777) | $ | (25,839) | 78 | $ | 28,342 | $ | (20,473) | 238 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Total revenues | $ | 1,215,660 | $ | 694,858 | $ | 3,500,859 | $ | 2,018,437 | |||||||||||||||
Medical services expense | (1,104,396) | (618,287) | (3,085,957) | (1,771,635) | |||||||||||||||||||
Other medical expenses(1) | (80,787) | (50,659) | (249,936) | (144,512) | |||||||||||||||||||
Gross profit | $ | 30,477 | $ | 25,912 | $ | 164,966 | $ | 102,290 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Platform support costs | $ | 46,629 | $ | 34,764 | $ | 141,176 | $ | 104,868 | |||||||||||||||
% of Revenue | 4 | % | 5 | % | 4 | % | 5 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Medical services revenue | $ | 1,212,132 | $ | 693,934 | $ | 3,494,006 | $ | 2,015,541 | |||||||||||||||
Other operating revenue | 3,528 | 924 | 6,853 | 2,896 | |||||||||||||||||||
Total revenues | 1,215,660 | 694,858 | 3,500,859 | 2,018,437 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Medical services expense | 1,104,396 | 618,287 | 3,085,957 | 1,771,635 | |||||||||||||||||||
Other medical expenses | 80,787 | 50,659 | 249,936 | 144,512 | |||||||||||||||||||
General and administrative (including noncash stock-based compensation expense of $20,736, $7,907, $53,980 and $18,430, respectively) | 74,138 | 51,980 | 222,483 | 143,738 | |||||||||||||||||||
Depreciation and amortization | 5,310 | 3,450 | 15,014 | 9,865 | |||||||||||||||||||
Total expenses | 1,264,631 | 724,376 | 3,573,390 | 2,069,750 | |||||||||||||||||||
Income (loss) from operations | (48,971) | (29,518) | (72,531) | (51,313) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Income (loss) from equity method investments | 14,659 | (4,314) | 24,507 | 3,473 | |||||||||||||||||||
Other income (expense), net | 5,690 | 4,888 | 21,001 | 6,367 | |||||||||||||||||||
Gain (loss) on lease terminations | — | — | — | (5,458) | |||||||||||||||||||
Interest expense | (1,651) | (1,000) | (4,772) | (2,816) | |||||||||||||||||||
Income (loss) before income taxes | (30,273) | (29,944) | (31,795) | (49,747) | |||||||||||||||||||
Income tax benefit (expense) | (1,210) | (559) | (524) | (1,068) | |||||||||||||||||||
Income (loss) from continuing operations | (31,483) | (30,503) | (32,319) | (50,815) | |||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
Income (loss) before income taxes | — | (224) | — | 526 | |||||||||||||||||||
Income tax benefit (expense) | — | (12) | — | (26) | |||||||||||||||||||
Total discontinued operations | — | (236) | — | 500 | |||||||||||||||||||
Net income (loss) | (31,483) | (30,739) | (32,319) | (50,315) | |||||||||||||||||||
Noncontrolling interests’ share in (earnings) loss | 47 | 71 | 156 | 228 | |||||||||||||||||||
Net income (loss) attributable to common shares | $ | (31,436) | $ | (30,668) | $ | (32,163) | $ | (50,087) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Medical services revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Other operating revenue | — | — | — | — | |||||||||||||||||||
Total revenues | 100 | 100 | 100 | 100 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Medical services expense | 91 | 89 | 88 | 88 | |||||||||||||||||||
Other medical expenses | 7 | 7 | 7 | 7 | |||||||||||||||||||
General and administrative (including noncash stock-based compensation expense of 2%, 1%, 1% and 1%, respectively) | 6 | 7 | 6 | 7 | |||||||||||||||||||
Depreciation and amortization | — | — | — | — | |||||||||||||||||||
Total expenses | 104 | 104 | 102 | 102 | |||||||||||||||||||
Income (loss) from operations | (4) | (4) | (2) | (2) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Income (loss) from equity method investments | 1 | (1) | 1 | — | |||||||||||||||||||
Other income (expense), net | — | 1 | 1 | — | |||||||||||||||||||
Gain (loss) on lease terminations | — | — | — | — | |||||||||||||||||||
Interest expense | — | — | — | — | |||||||||||||||||||
Income (loss) before income taxes | (2) | (4) | (1) | (2) | |||||||||||||||||||
Income tax benefit (expense) | — | — | — | — | |||||||||||||||||||
Income (loss) from continuing operations | (2) | (4) | (1) | (2) | |||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
Income (loss) before income taxes | — | — | — | — | |||||||||||||||||||
Income tax benefit (expense) | — | — | — | — | |||||||||||||||||||
Total discontinued operations | — | — | — | — | |||||||||||||||||||
Net income (loss) | (2) | (4) | (1) | (2) | |||||||||||||||||||
Noncontrolling interests’ share in (earnings) loss | — | — | — | — | |||||||||||||||||||
Net income (loss) attributable to common shares | (2) | % | (4) | % | (1) | % | (2) | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Medical services revenue | $ | 1,212,132 | $ | 693,934 | $ | 518,198 | 75 | % | |||||||||||||||
% of total revenues | 100 | % | 100 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Medical services revenue | $ | 3,494,006 | $ | 2,015,541 | $ | 1,478,465 | 73 | % | |||||||||||||||
% of total revenues | 100 | % | 100 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Medical services expense | $ | 1,104,396 | $ | 618,287 | $ | 486,109 | 79 | % | |||||||||||||||
% of total revenues | 91 | % | 89 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Medical services expense | $ | 3,085,957 | $ | 1,771,635 | $ | 1,314,322 | 74 | % | |||||||||||||||
% of total revenues | 88 | % | 88 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Other medical expenses | $ | 80,787 | $ | 50,659 | $ | 30,128 | 59 | % | |||||||||||||||
% of total revenues | 7 | % | 7 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Other medical expenses | $ | 249,936 | $ | 144,512 | $ | 105,424 | 73 | % | |||||||||||||||
% of total revenues | 7 | % | 7 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
General and administrative | $ | 74,138 | $ | 51,980 | $ | 22,158 | 43 | % | |||||||||||||||
% of total revenues | 6 | % | 7 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
General and administrative | $ | 222,483 | $ | 143,738 | $ | 78,745 | 55 | % | |||||||||||||||
% of total revenues | 6 | % | 7 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Income (loss) from equity method investments | $ | 14,659 | $ | (4,314) | $ | 18,973 | 440 | % | |||||||||||||||
% of total revenues | 1 | % | (1) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Income (loss) from equity method investments | $ | 24,507 | $ | 3,473 | $ | 21,034 | 606 | % | |||||||||||||||
% of total revenues | 1 | % | — | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Other income (expense), net | $ | 5,690 | $ | 4,888 | $ | 802 | 16 | % | |||||||||||||||
% of total revenues | 1 | % | 1 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Other income (expense), net | $ | 21,001 | $ | 6,367 | $ | 14,634 | 230 | % | |||||||||||||||
% of total revenues | 1 | % | — | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Gross profit(1) | $ | 30,477 | $ | 25,912 | $ | 164,966 | $ | 102,290 | |||||||||||||||
Other operating revenue | (3,528) | (924) | (6,853) | (2,896) | |||||||||||||||||||
Other medical expenses | 80,787 | 50,659 | 249,936 | 144,512 | |||||||||||||||||||
Medical margin | $ | 107,736 | $ | 75,647 | $ | 408,049 | $ | 243,906 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income (loss) | $ | (31,483) | $ | (30,739) | $ | (32,319) | $ | (50,315) | |||||||||||||||
(Income) loss from discontinued operations, net of income taxes | — | 236 | — | (500) | |||||||||||||||||||
Interest expense | 1,651 | 1,000 | 4,772 | 2,816 | |||||||||||||||||||
Income tax expense (benefit) | 1,210 | 559 | 524 | 1,068 | |||||||||||||||||||
Depreciation and amortization | 5,310 | 3,450 | 15,014 | 9,865 | |||||||||||||||||||
(Gain) loss on lease terminations | — | — | — | 5,458 | |||||||||||||||||||
Severance and related costs(1) | — | 512 | 188 | 2,470 | |||||||||||||||||||
Stock-based compensation expense | 20,736 | 7,907 | 53,980 | 18,430 | |||||||||||||||||||
EBITDA adjustments related to equity method investments | 3,702 | 1,325 | 8,426 | 2,988 | |||||||||||||||||||
Other(2) | (6,903) | (10,089) | (22,243) | (12,753) | |||||||||||||||||||
Adjusted EBITDA(3) | $ | (5,777) | $ | (25,839) | $ | 28,342 | $ | (20,473) |
Nine Months Ended September 30, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
Net cash provided by (used in) operating activities | $ | (95,033) | $ | (80,849) | $ | (14,184) | |||||||||||
Net cash provided by (used in) investing activities | (41,816) | (436,418) | 394,602 | ||||||||||||||
Net cash provided by (used in) financing activities | (192,288) | 26,926 | (219,214) |
Exhibit Number | Description | |||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.* | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).* |
Date: November 2, 2023 | agilon health, inc. | |||||||
(Registrant) | ||||||||
/s/ TIMOTHY S. BENSLEY | ||||||||
Timothy S. Bensley | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Date: November 2, 2023 | By: | /s/ STEVEN J. SELL | |||||||||
Steven J. Sell | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
Date: November 2, 2023 | By: | /s/ TIMOTHY S. BENSLEY | |||||||||
Timothy S. Bensley | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
Date: November 2, 2023 | By: | /s/ STEVEN J. SELL | |||||||||
Steven J. Sell | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
Date: November 2, 2023 | By: | /s/ TIMOTHY S. BENSLEY | |||||||||
Timothy S. Bensley | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 405,980,000 | 412,385,000 |
Common stock, shares outstanding (in shares) | 405,980,000 | 412,385,000 |
Assets | $ 2,278,075 | $ 1,697,468 |
Liabilities | 1,406,475 | 656,859 |
Variable Interest Entity, Primary Beneficiary | ||
Assets | 1,480,000 | 703,300 |
Liabilities | $ 1,230,000 | $ 462,400 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Stock-based compensation expense | $ 20,736 | $ 7,907 | $ 53,980 | $ 18,430 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (31,483) | $ (30,739) | $ (32,319) | $ (50,315) |
Other comprehensive income (loss): | ||||
Net unrealized gain (loss) on marketable securities, net of tax | 114 | (5,611) | (758) | (5,098) |
Foreign currency translation adjustment | 25 | 0 | 88 | 0 |
Total comprehensive income (loss) | (31,344) | (36,350) | (32,989) | (55,413) |
Comprehensive (income) loss attributable to noncontrolling interests | 47 | 71 | 156 | 228 |
Total comprehensive income (loss) attributable to agilon health, inc. | $ (31,297) | $ (36,279) | $ (32,833) | $ (55,185) |
Business |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Business |
Description of Business agilon health, inc., through its partnerships and platform, provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. As of September 30, 2023, the Company, through its contracted physician networks, provided care to approximately 420,300 Medicare Advantage members enrolled with private health plans. Beginning January 1, 2023, the Company expanded its operations into: (i) Portland, Maine, (ii) St. Paul, Minnesota, (iii) Detroit, Michigan, (iv) Charleston, South Carolina; (v) Statesville, North Carolina; and (vi) Jackson, Tennessee, along with additional partnerships in the Company’s existing Texas markets. See Note 14 for additional discussions related to the Company’s involvement with VIEs. The Company’s largest shareholder is an investment fund associated with Clayton Dubilier & Rice, LLC (“CD&R”), a private equity firm. All funds affiliated with CD&R are considered related parties. Subsequent Events On October 27, 2023, the Company entered into a definitive agreement to sell MDX Hawaii, Inc. (“MDX Hawaii”), a wholly-owned subsidiary, and its related operations. Acquired by agilon in 2016, MDX Hawaii is a provider network with fully-delegated risk contracts and management services organization capabilities, including claims processing and utilization management. The sale of MDX Hawaii and its related operations closed on October 31, 2023.
|
Summary of Significant Accounting Policies |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||
Accounting Policies [Abstract] | |||||||
Summary of Significant Accounting Policies |
Basis of Presentation The accompanying condensed consolidated financial statements have been prepared by management 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 agilon health, inc., its wholly-owned subsidiaries, and both joint ventures and VIEs that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. All adjustments (consisting of normal recurring adjustments unless otherwise indicated), which the Company considers necessary to present fairly its financial position, results of operations, and cash flows, have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying condensed consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. Use of Estimates Management is required to make estimates and assumptions in the preparation of financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates can include, among other things, those used to determine revenues and related receivables from risk adjustments, medical services expense and related payables (including the reserve for incurred but not reported (“IBNR”) claims), and valuation of long-lived assets, goodwill and intangible assets (acquired in business combinations and analysis of impairment). Management’s estimates for revenue recognition, medical services expense, and other estimates, judgments, and assumptions, may be materially and adversely different from actual results. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Property and Equipment As of September 30, 2023 and December 31, 2022, the Company’s gross carrying amount of property and equipment was $38.6 million and $29.5 million, with accumulated depreciation of $12.4 million and $9.4 million, respectively. For the three months ended September 30, 2023 and 2022, the Company recognized $2.1 million and $1.4 million, respectively, in depreciation expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations. For the nine months ended September 30, 2023 and 2022, the Company recognized $5.6 million and $2.7 million, respectively, in depreciation expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations. Income Taxes The Company determined the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, applied to year-to-date results, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative catch-up adjustment is recorded in that quarter. The Company applied the intra-period tax allocation rules to allocate income taxes between continuing operations and discontinued operations as prescribed in U.S. GAAP, where the tax effect of income (loss) before income taxes from continuing operations is computed without regard to the tax effects of income (loss) before income taxes from the other categories.
|
Revenue, Receivables, and Concentration of Credit Risk |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, Receivables, and Concentration of Credit Risk |
Medical Services Revenue Medical services revenue consists of capitation fees under contracts with various Medicare Advantage payors (“payors”). Under the typical capitation arrangement, the Company is entitled to monthly per-member, per-month (“PMPM”) fees to provide a defined range of healthcare services for Medicare Advantage health plan members (“members”) attributed to the Company’s contracted primary care physicians. PMPM fees are determined as a percent of the premium payors receive from the Centers for Medicare & Medicaid Services’ (“CMS”) for these members. The Company generally accepts full financial risk for members attributed to its contracted primary care physicians and therefore is responsible for the cost of all healthcare services required by those members. Fees are generally recorded gross in revenue because the Company is acting as a principal in coordinating and controlling the range of services provided (other than clinical decisions) under its capitation contracts with payors. Capitation contracts with payors are generally multi-year arrangements and have a single performance obligation that constitutes a series, as defined by Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), to stand ready on a monthly basis to provide all aspects of necessary medical care to members for the contracted period. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term. The transaction price for the Company’s capitation contracts is variable, as the PMPM fees to which the Company is entitled are subject to periodic adjustment under CMS’s risk adjustment payment methodology. CMS deploys a risk adjustment model that determines premiums paid to all payors according to each member’s health status and certain demographic factors. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from various settings. The Company and healthcare providers collect and submit the necessary and available diagnosis data to payors and such data is utilized by the Company to estimate risk adjustment payments to be received in subsequent periods. Risk adjustment-related revenues are estimated using the most likely amount methodology and amounts are only included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. PMPM fees are also subject to adjustment for incentives or penalties based on the achievement of certain quality metrics defined in the Company’s contracts with payors. The Company recognizes incentive revenue as earned using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. Neither the Company nor any of its affiliates is a registered insurance company because state law in the states in which it operates does not require such registration for risk-bearing providers. Receivables Receivables primarily consist of amounts due under capitation contracts with various payors. Receivables due under capitation contracts are recorded monthly based on reports received from payors and management’s estimate of risk adjustment payments to be received in subsequent periods for open performance years. Receivables are recorded at the amount expected to be realized. Concentration The Company contracts with various payors whereby the Company is entitled to monthly PMPM fees to provide a defined range of healthcare services for members attributed to its contracted primary care physicians. The Company generally accepts full financial risk for such members and therefore is responsible for the cost of all healthcare services required by them. Substantially all of the Company’s receivable balances are from a small number of payors. Revenue from Medicare Advantage payors constitutes substantially all of the Company’s total revenue for the three and nine months ended September 30, 2023 and 2022. The following table provides the Company’s revenue concentration with respect to major payors as a percentage of the Company’s total revenues:
___________________________________________ *Less than 10% of total revenues. The following table provides the Company’s concentration of credit risk with respect to major payors as a percentage of receivables, net:
___________________________________________ *Less than 10% of total receivables.
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Marketable Securities and Fair Value Measurements |
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Debt Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities and Fair Value Measurements |
Marketable Securities The following table summarizes the Company’s marketable securities (in thousands):
At September 30, 2023 and December 31, 2022, marketable securities of $373.3 million and $407.4 million, respectively, were in an unrealized loss position for less than twelve months. The Company’s unrealized losses from marketable securities as of September 30, 2023 and December 31, 2022 were caused primarily by interest rate increases. The Company does not intend to sell marketable securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. Therefore, the Company believes these losses to be temporary. There was no allowance for credit losses on available-for-sale marketable securities at September 30, 2023 and December 31, 2022. The following table summarizes the Company’s marketable securities maturity as of September 30, 2023 (in thousands):
Fair Value Measurements The Company’s financial instruments consist of cash and cash equivalents, restricted cash and cash equivalents, marketable securities, receivables, other liabilities, accounts payable, certain accrued expenses, and borrowings which consist of a term loan and a revolving credit facility. The carrying values of the financial instruments classified as current in the consolidated balance sheets approximate their fair values due to their short-term maturities. The Company's cash and cash equivalents are classified within Level 1 of the fair value hierarchy. The Company may be required, from time to time, to measure its loans to physician partner groups, primarily in connection with taxes payable on shares distributed to them upon completion of the initial public offering ("IPO"), at fair value on a nonrecurring basis. Such measurements are classified within Level 2 of the fair value hierarchy. The carrying values of the term loan and revolving credit facility are a reasonable estimate of fair value because the interest rates on such borrowings approximate market rates as of the reporting date. Such borrowings are classified within Level 2 of the fair value hierarchy. During the three and nine months ended September 30, 2023 and 2022, there were no material transfers of financial assets or liabilities within the fair value hierarchy. The Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy: •Level 1—quoted prices for identical instruments in active markets; •Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and •Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The table below summarizes the Company’s financial instruments measured at fair value on a recurring basis (in thousands):
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Other Assets, net |
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, net |
The following table summarizes the Company’s other assets, net (in thousands):
___________________________________________ (1)See Note 14 for additional discussion related to the Company's equity method investments. Loans to Physician Partners Loans to physician partners primarily represent loans in connection with taxes payable on shares distributed to them in connection with the IPO. These loans mature between 2026 and 2031 with nominal interest compounding annually and no prepayment penalties. Such loans are stated at the amount expected to be collected.
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Medical Claims and Related Payables |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medical Claims and Related Payables |
Medical services expense represents costs incurred for medical services provided to members by physicians, hospitals and other ancillary providers for which the Company is financially responsible and that are paid either directly by the Company or by payors with whom the Company has contracted. Medical services expenses are recognized in the period in which services are provided and include estimates of claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported. Such estimates are developed using actuarial methods commonly used by health insurance actuaries that include a number of factors and assumptions including medical service utilization trends, changes in membership, observed medical cost trends, historical claim payment patterns and other factors. Generally, for the most recent months, the Company estimates claim costs incurred by applying observed medical cost trend factors to the average PMPM medical costs incurred in prior months for which more complete claims data are available. Each period, the Company re-examines previously established medical claims payable estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claims information becomes available, the Company adjusts its estimates and recognizes those changes in estimates in the period in which the change is identified. The difference between the estimated liability and the actual settlements of claims is recognized in the period the claims are settled. The Company’s medical claims payable balance represents management’s best estimate of its liability for unpaid medical costs as of September 30, 2023 and 2022. The Company uses judgment to determine the appropriate assumptions for developing the required estimates. The following table presents the components of changes in medical claims and related payables (in thousands):
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Other Liabilities |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities |
The following table summarizes the Company’s other liabilities (in thousands):
As of September 30, 2023 and December 31, 2022, the Company’s accruals for contingent liabilities related to unasserted claims were $49.5 million and $62.9 million, respectively. The accrued amounts represent the Company’s estimate of probable losses in accordance with ASC Topic 450, Contingencies. The Company’s estimate of the range of reasonably possible losses in excess of such accruals was $0 to $69.1 million as of September 30, 2023. See Note 14 for equity method liabilities related to the Company's ACO REACH investments.
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Debt |
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Sep. 30, 2023 | |||||||
Debt Disclosure [Abstract] | |||||||
Debt |
On February 18, 2021, the Company executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021 and the Second Amendment to Credit Agreement, dated as of May 25, 2023, the “Credit Facilities”). The Credit Facilities include: (i) a $100.0 million secured term loan (the “Secured Term Loan Facility”) and (ii) a $100.0 million senior secured revolving credit facility (the “Secured Revolving Facility”) with a capacity to issue standby letters of credit in certain circumstances up to a maximum of $100.0 million. Subject to specified conditions and receipt of commitments, the Secured Term Loan Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to (i) $50.0 million plus (ii) an additional amount determined in accordance with a formula tied to repayment of certain of the Company’s indebtedness. The maturity date of the Credit Facilities is February 18, 2026. As of September 30, 2023, the Company had $40.0 million outstanding under the Secured Term Loan Facility and availability under the Secured Revolving Facility was $32.9 million, as the Company had outstanding letters of credit totaling $67.1 million, of which $37.2 million was for the Company's ACO REACH investments. The standby letters of credit are automatically extended without amendment for one-year periods, unless the Company notifies the institution in advance of the expiration date that the letter will be terminated. No amounts have been drawn on the outstanding letters of credit as of September 30, 2023. Effective with the Second Amendment to Credit Agreement on May 25, 2023, the Company transitioned to the Secured Overnight Financing Rate ("SOFR") as a benchmark interest rate used in the Credit Agreement. At the Company’s option, borrowings under the agreement can be either: (i) SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans. Daily Simple SOFR Rate Loans and SOFR Rate Loans bear interest at a rate equal to the sum of 4.00% (stepping down to 3.50% on and following October 1, 2023) and the higher of (a) SOFR, as defined in the credit agreement, and (b) 0%. Base Rate Loans bear interest at a rate equal to the sum of 3.00% (stepping down to 2.50% on and following October 1, 2023) and the highest of: (a) 0.50% in excess of the overnight federal funds rate, (b) the prime rate established by the administrative agent from time to time, (c) the one-month LIBO rate (adjusted for maximum reserves) plus 1.00% and (d) 0%. Additionally, the Company pays a commitment fee on the unfunded 2021 Revolving Credit Facility amount of 0.50% (stepping down to 0.375% on and following October 1, 2023). The Company must also pay customary letter of credit fees. As of September 30, 2023, the effective interest rate on the Secured Term Loan Facility was 9.349%. The Credit Facilities are guaranteed by certain of the Company’s subsidiaries, including those identified as VIEs, and contain customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios. Failure to meet any of these covenants could result in an event of default under the agreement. If an event of default occurs, the lenders could elect to declare all amounts outstanding under the agreement to be immediately due and payable. As of September 30, 2023, the Company was in compliance with all covenants under the Credit Facilities.
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Commitments and Contingencies |
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Sep. 30, 2023 | |||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||
Commitments and Contingencies |
Legal Proceedings From time to time, the Company is a party to, or has a significant relationship to, legal proceedings, lawsuits, and other claims. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred.
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Common Stock |
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Sep. 30, 2023 | |||||||
Equity [Abstract] | |||||||
Common Stock |
Common Stock 2023. During the three months ended September 30, 2023, the Company issued approximately 0.6 million shares of common stock primarily in connection with exercises and vesting of stock-based awards. During the nine months ended September 30, 2023, the Company issued approximately 3.2 million shares of common stock primarily in connection with exercises and vesting of stock-based awards. On May 18, 2023, the Company repurchased and retired 9.6 million shares of common stock pursuant to an underwritten secondary public offering of 94.6 million shares of its common stock by CD&R. The Company paid approximately $20.80 per share, which is the same per share price paid by the underwriters to CD&R in the offering. 2022. During the three months ended September 30, 2022, the Company issued approximately 3.5 million shares of common stock primarily in connection with exercises and vesting of stock-based awards. During the nine months ended September 30, 2022, the Company issued approximately 11.6 million shares of common stock primarily in connection with exercises and vesting of stock-based awards.
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Net Income (Loss) Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) Per Common Share |
Basic net income (loss) per common share (“EPS”) is computed based upon the weighted average number of common shares outstanding. Diluted net income (loss) per common share is computed based upon the weighted average number of common shares outstanding plus the impact of common shares issuable from the assumed conversion of stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on basic net income (loss) per share are included in diluted net income (loss) per share during the periods presented. The following table illustrates the computation of basic and diluted EPS (in thousands, except per share amounts):
The following table provides the weighted-average potential shares of common stock that were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their effect would have been anti-dilutive (in thousands):
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Goodwill and Amortizable Intangible Assets |
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Sep. 30, 2023 | |||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||
Goodwill and Amortizable Intangible Assets |
As of September 30, 2023 and December 31, 2022, the Company’s goodwill balance was $62.4 million and $41.5 million, respectively, of which $39.0 million was allocated to the Company’s Hawaii reporting unit. The carrying value of the Hawaii reporting unit was negative as of September 30, 2023 and December 31, 2022. There were no events or circumstances that warranted an interim impairment test for goodwill during the three and nine months ended September 30, 2023. As of September 30, 2023 and December 31, 2022, the Company’s gross carrying amount of amortizable intangible assets was $165.1 million and $130.8 million, with accumulated amortization of $72.4 million and $63.1 million, respectively. For the three months ended September 30, 2023 and 2022, the Company recognized $3.2 million and $2.1 million, respectively, in amortization expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations. For the nine months ended September 30, 2023 and 2022, the Company recognized $9.4 million and $7.2 million, respectively, in amortization expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations. Acquisition On February 28, 2023, the Company completed the acquisition of My Personal Health Record Express, Inc. (the “Acquisition”), a leading provider of value-based care technology and interoperability solutions for cash consideration of $44.5 million, net of cash acquired and subject to certain post-closing adjustments. The Company accounted for the Acquisition utilizing the acquisition method of accounting, which requires assets and liabilities to be recognized based on estimates of their acquisition date fair values. The determination of the values of the acquired assets and assumed liabilities, including other intangible assets and deferred taxes, requires significant judgment. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the Company estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Measurement period adjustments are recorded in the period in which they are determined, as if they had been completed at the acquisition date. Upon the conclusion of the final determination of the values of assets acquired or liabilities assumed, or one year after the date of acquisition, whichever comes first, any subsequent adjustments are recorded within the Company's consolidated results of operations. The following preliminary allocation of the purchase price related to the Acquisition based upon the fair value of assets and liabilities assumed included developed technology intangible assets of $25.7 million, customer relationship intangible assets of $1.9 million, and assumed net liabilities of $3.7 million, with the residual amount being recorded as goodwill of $20.6 million. The intangible assets acquired have a weighted-average life of 10 years.
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Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information |
The following table provides supplemental cash flow information (in thousands):
The following table summarizes cash, cash equivalents and restricted cash equivalents from continuing operations (in thousands):
___________________________________________ (1)Restricted cash and equivalents primarily consist of amounts used as collateral to secure letters of credit that the Company is required to maintain pursuant to contracts with payors.
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Variable Interest Entities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities |
Consolidated Variable Interest Entities agilon health, inc.’s consolidated assets and liabilities as of September 30, 2023 and December 31, 2022 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to agilon health, inc. agilon health, inc.’s consolidated assets and liabilities include VIE assets and liabilities as follows (in thousands):
Risk-bearing Entities. At September 30, 2023, the Company operates 29 wholly-owned risk-bearing entities (“RBEs”) for the purpose of entering into risk-bearing contracts with payors. Each RBE’s equity at risk is considered insufficient to finance its activities without additional support, and, therefore, each RBE is considered a VIE. The Company consolidates the RBEs as it has determined that it is the primary beneficiary because it has: (i) the ability to control the activities that most significantly impact the RBEs’ economic performance; and (ii) the obligation to absorb losses or right to receive benefits that could potentially be significant to the RBEs. Specifically, the Company has the unilateral ability and authority, through the RBE governance and management agreements, to make significant decisions about strategic and operating activities of the RBEs, including negotiating and entering into risk-bearing contracts with payors, and approving the RBEs’ annual operating budgets. The Company also has the obligation to fund losses of the RBEs and the right to receive a significant percentage of any financial surplus generated by the RBEs. The assets of the RBEs primarily consist of cash and cash equivalents, receivables, net, intangible assets, net, and other assets, net; its obligations primarily consist of medical claims and related payables as well as operating expenses of the RBEs (accounts payable and accrued expenses), including incentive compensation obligations to the Company’s physician partners. On February 18, 2021, the Company executed the Credit Facilities, which are guaranteed by certain of the Company’s VIEs. Assets generated by the RBEs (primarily from medical services revenues) may be used, in certain limited circumstances, to settle the Company’s contractual debt obligations. Unconsolidated Variable Interest Entities As of September 30, 2023, the Company had nine equity method investments (liabilities) that were deemed to be VIEs. The Company has determined that the activities that most significantly impact the performance of these VIEs consist of the allocation of resources to and other decisions related to clinical activities and provider contracting decisions. Because the Company does not have the ability to control these activities due to another party’s control of the VIEs’ board of directors, the Company has determined that it is not the primary beneficiary of and therefore does not consolidate these VIEs. The Company's maximum loss exposure as a result of the Company’s involvement with the VIEs cannot be quantified as the Company has the obligation to provide ongoing operational support to the unconsolidated VIEs, as needed. Equity Method Investments The following table summarizes the Company’s equity method investments (in thousands):
___________________________________________ (1)Included in Other assets, net in the condensed consolidated balance sheets. (2)Included in Other liabilities in the condensed consolidated balance sheets. The Company is a partner in eight wholly-owned ACO REACH entities in collaboration with 12 of its physician group partners operating in 10 geographies. The combined summarized operating results of the Company’s ACO REACH entities are as follows (in thousands):
___________________________________________ (1)For the three months ended September 30, 2023 and 2022, includes physician incentive expenses of $25.1 million and $2.9 million, respectively. For the nine months ended September 30, 2023 and 2022, includes physician incentive expenses of $51.4 million and $15.0 million, respectively. (2)Included in Income (loss) from equity method investments in the condensed consolidated statements of operations. The combined summarized balance sheet of the Company’s ACO REACH entities are as follows (in thousands):
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income (loss) | $ (31,436) | $ (30,668) | $ (32,163) | $ (50,087) |
Insider Trading Arrangements |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2023
shares
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Sep. 30, 2023
shares
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Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On August 15, 2023, Veeral Desai, the registrant’s Chief Strategy and Development Officer, adopted a Rule 10b5-1 plan intended to satisfy the affirmative defense of Commission Rule 10b5-1(c). The trading plan commences November 20, 2023, ends June 7, 2024 and covers 1,307,441 options to purchase common stock of the registrant. | |
Rule 10b5-1 Arrangement Adopted | true | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Veeral Desai [Member] | ||
Trading Arrangements, by Individual | ||
Name | Veeral Desai | |
Title | Chief Strategy and Development Officer | |
Adoption Date | August 15, 2023 | |
Arrangement Duration | 200 days | |
Aggregate Available | 1,307,441 | 1,307,441 |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying condensed consolidated financial statements have been prepared by management 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 agilon health, inc., its wholly-owned subsidiaries, and both joint ventures and VIEs that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. All adjustments (consisting of normal recurring adjustments unless otherwise indicated), which the Company considers necessary to present fairly its financial position, results of operations, and cash flows, have been included. |
Use of Estimates | Use of Estimates Management is required to make estimates and assumptions in the preparation of financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates can include, among other things, those used to determine revenues and related receivables from risk adjustments, medical services expense and related payables (including the reserve for incurred but not reported (“IBNR”) claims), and valuation of long-lived assets, goodwill and intangible assets (acquired in business combinations and analysis of impairment). Management’s estimates for revenue recognition, medical services expense, and other estimates, judgments, and assumptions, may be materially and adversely different from actual results. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates.
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Income Taxes | Income Taxes The Company determined the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, applied to year-to-date results, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative catch-up adjustment is recorded in that quarter. The Company applied the intra-period tax allocation rules to allocate income taxes between continuing operations and discontinued operations as prescribed in U.S. GAAP, where the tax effect of income (loss) before income taxes from continuing operations is computed without regard to the tax effects of income (loss) before income taxes from the other categories.
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Revenue from Contract with Customer | Medical Services Revenue Medical services revenue consists of capitation fees under contracts with various Medicare Advantage payors (“payors”). Under the typical capitation arrangement, the Company is entitled to monthly per-member, per-month (“PMPM”) fees to provide a defined range of healthcare services for Medicare Advantage health plan members (“members”) attributed to the Company’s contracted primary care physicians. PMPM fees are determined as a percent of the premium payors receive from the Centers for Medicare & Medicaid Services’ (“CMS”) for these members. The Company generally accepts full financial risk for members attributed to its contracted primary care physicians and therefore is responsible for the cost of all healthcare services required by those members. Fees are generally recorded gross in revenue because the Company is acting as a principal in coordinating and controlling the range of services provided (other than clinical decisions) under its capitation contracts with payors. Capitation contracts with payors are generally multi-year arrangements and have a single performance obligation that constitutes a series, as defined by Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), to stand ready on a monthly basis to provide all aspects of necessary medical care to members for the contracted period. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term. The transaction price for the Company’s capitation contracts is variable, as the PMPM fees to which the Company is entitled are subject to periodic adjustment under CMS’s risk adjustment payment methodology. CMS deploys a risk adjustment model that determines premiums paid to all payors according to each member’s health status and certain demographic factors. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from various settings. The Company and healthcare providers collect and submit the necessary and available diagnosis data to payors and such data is utilized by the Company to estimate risk adjustment payments to be received in subsequent periods. Risk adjustment-related revenues are estimated using the most likely amount methodology and amounts are only included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. PMPM fees are also subject to adjustment for incentives or penalties based on the achievement of certain quality metrics defined in the Company’s contracts with payors. The Company recognizes incentive revenue as earned using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. Neither the Company nor any of its affiliates is a registered insurance company because state law in the states in which it operates does not require such registration for risk-bearing providers.
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Receivables | Receivables Receivables primarily consist of amounts due under capitation contracts with various payors. Receivables due under capitation contracts are recorded monthly based on reports received from payors and management’s estimate of risk adjustment payments to be received in subsequent periods for open performance years. Receivables are recorded at the amount expected to be realized.
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Revenue, Receivables, and Concentration of Credit Risk (Tables) |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk as a Percentage of Revenues and Receivables | The following table provides the Company’s revenue concentration with respect to major payors as a percentage of the Company’s total revenues:
___________________________________________ *Less than 10% of total revenues. The following table provides the Company’s concentration of credit risk with respect to major payors as a percentage of receivables, net:
___________________________________________ *Less than 10% of total receivables.
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Marketable Securities and Fair Value Measurements (Tables) |
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Marketable Securities | The following table summarizes the Company’s marketable securities (in thousands):
The following table summarizes the Company’s marketable securities maturity as of September 30, 2023 (in thousands):
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Summary of Fair Value Assets Measured on Recurring Basis | The table below summarizes the Company’s financial instruments measured at fair value on a recurring basis (in thousands):
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Other Assets, net (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets, Net | The following table summarizes the Company’s other assets, net (in thousands):
___________________________________________ (1)See Note 14 for additional discussion related to the Company's equity method investments.
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Medical Claims and Related Payables (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Changes in Medical Claims and Related Payables | The following table presents the components of changes in medical claims and related payables (in thousands):
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Other Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Liabilities | The following table summarizes the Company’s other liabilities (in thousands):
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Net Income (Loss) Per Common Share (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summery of Net Income (Loss) Per Share Attributable to Common Stockholder | The following table illustrates the computation of basic and diluted EPS (in thousands, except per share amounts):
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Schedule of Antidilutive Securities | The following table provides the weighted-average potential shares of common stock that were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their effect would have been anti-dilutive (in thousands):
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Supplemental Cash Flow Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Supplemental Cash Flow Information | The following table provides supplemental cash flow information (in thousands):
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Summary of Restricted Cash Equivalents from Continuing Operations | The following table summarizes cash, cash equivalents and restricted cash equivalents from continuing operations (in thousands):
___________________________________________ (1)Restricted cash and equivalents primarily consist of amounts used as collateral to secure letters of credit that the Company is required to maintain pursuant to contracts with payors.
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Schedule of Cash and Cash Equivalents from Continuing Operations | The following table summarizes cash, cash equivalents and restricted cash equivalents from continuing operations (in thousands):
___________________________________________ (1)Restricted cash and equivalents primarily consist of amounts used as collateral to secure letters of credit that the Company is required to maintain pursuant to contracts with payors.
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Variable Interest Entities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Consolidated Asset and Liabilities Include VIE Assets and Liabilities | agilon health, inc.’s consolidated assets and liabilities include VIE assets and liabilities as follows (in thousands):
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Schedule of Equity Method Investments | The following table summarizes the Company’s equity method investments (in thousands):
___________________________________________ (1)Included in Other assets, net in the condensed consolidated balance sheets. (2)Included in Other liabilities in the condensed consolidated balance sheets.
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Summary of Operating Results | The combined summarized operating results of the Company’s ACO REACH entities are as follows (in thousands):
___________________________________________ (1)For the three months ended September 30, 2023 and 2022, includes physician incentive expenses of $25.1 million and $2.9 million, respectively. For the nine months ended September 30, 2023 and 2022, includes physician incentive expenses of $51.4 million and $15.0 million, respectively. (2)Included in Income (loss) from equity method investments in the condensed consolidated statements of operations.
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Summarized Balance Sheet | The combined summarized balance sheet of the Company’s ACO REACH entities are as follows (in thousands):
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Business (Details) |
Sep. 30, 2023
member
|
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of medicare advantage members enrolled with private health plans | 420,300 |
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
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Accounting Policies [Abstract] | |||||
Gross carrying amount of property and equipment | $ 38.6 | $ 38.6 | $ 29.5 | ||
Accumulated amortization | 12.4 | 12.4 | $ 9.4 | ||
Depreciation expense | $ 2.1 | $ 1.4 | $ 5.6 | $ 2.7 |
Marketable Securities and Fair Value Measurements - Summary of Marketable Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Marketable debt securities [Line Items] | ||
Amortized Cost | $ 402,196 | $ 417,461 |
Gross Unrealized Gains | 0 | 60 |
Gross Unrealized Losses | (6,318) | (5,620) |
Fair Value | 395,878 | 411,901 |
Corporate debt securities | ||
Marketable debt securities [Line Items] | ||
Amortized Cost | 241,723 | 255,613 |
Gross Unrealized Gains | 0 | 60 |
Gross Unrealized Losses | (3,515) | (3,240) |
Fair Value | 238,208 | 252,433 |
U.S. Treasury notes | ||
Marketable debt securities [Line Items] | ||
Amortized Cost | 150,473 | 151,873 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (2,751) | (2,306) |
Fair Value | 147,722 | 149,567 |
Other | ||
Marketable debt securities [Line Items] | ||
Amortized Cost | 10,000 | 9,975 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (52) | (74) |
Fair Value | $ 9,948 | $ 9,901 |
Marketable Securities and Fair Value Measurements - Additional Information (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Securities [Abstract] | ||
Marketable securities in an unrealized loss position for less than twelve months | $ 373,300,000 | $ 407,400,000 |
Allowances for credit losses | $ 0 | $ 0 |
Marketable Securities and Fair Value Measurements - Summarizes Marketable Securities Maturity (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Amortized Cost | ||
2023 | $ 27,922 | |
2024 | 155,006 | |
2025 | 183,796 | |
2026 | 35,472 | |
Amortized Cost | 402,196 | $ 417,461 |
Fair Value | ||
2023 | 27,826 | |
2024 | 153,241 | |
2025 | 179,855 | |
2026 | 34,956 | |
Fair Value | $ 395,878 | $ 411,901 |
Other Assets, net (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Assets [Abstract] | ||
Loans to physician partners | $ 70,475 | $ 69,383 |
Health plan deposits | 12,051 | 11,728 |
Equity method investments | 39,170 | 17,352 |
Right-of-use lease assets | 14,594 | 13,029 |
Other | 3,894 | 5,432 |
Other assets, net | $ 140,184 | $ 116,924 |
Medical Claims and Related Payables - Summary Changes in Medical Claims and Related Payables (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
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Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Medical claims and related payables, beginning of the year | $ 339,748 | $ 239,014 |
Components of incurred costs related to: | ||
Current year | 3,032,501 | 1,756,943 |
Prior years | 53,456 | 14,692 |
Incurred cost related to claims | 3,085,957 | 1,771,635 |
Claims paid related to: | ||
Current year | (2,046,004) | (1,283,242) |
Prior years | (387,161) | (236,413) |
Claims paid related | (2,433,165) | (1,519,809) |
Medical claims and related payables, end of the period | 992,540 | 490,840 |
Discontinued Operations | ||
Components of incurred costs related to: | ||
Prior Year Claims And Claims Adjustment Recovery | 0 | 0 |
Claims paid related to: | ||
Discontinued operations - prior years | $ 0 | $ (154) |
Medical Claims and Related Payables - Additional Information (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Insurance [Abstract] | ||
Related payables associated with retained liability | $ 13.2 | $ 7.0 |
Other Liabilities - Summary of Other Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Liabilities [Abstract] | ||
Other long-term contingencies | $ 49,523 | $ 62,931 |
Lease liabilities, long-term | 11,975 | 9,885 |
Equity method liabilities – ACO REACH | 0 | 4,657 |
Other | 8,872 | 5,813 |
Other liabilities | $ 70,370 | $ 83,286 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Other Liabilities - Additional Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Liabilities [Line Items] | ||
Other long-term contingencies | $ 49,523 | $ 62,931 |
Unasserted Claim | ||
Other Liabilities [Line Items] | ||
Other long-term contingencies | 49,500 | $ 62,900 |
Minimum | ||
Other Liabilities [Line Items] | ||
Estimated range of reasonably possible losses in excess of reserves accrued | 0 | |
Maximum | ||
Other Liabilities [Line Items] | ||
Estimated range of reasonably possible losses in excess of reserves accrued | $ 69,100 |
Common Stock (Details) - $ / shares shares in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
May 18, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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CD&R | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 94,600 | ||||
Sale of stock, price paid per share (in dollars per share) | $ 20.80 | ||||
Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Number of shares issued under share-based awards (in shares) | 600 | 3,500 | 3,200 | 11,600 | |
Common stock repurchase (in shares) | 9,600 | 9,615 |
Net Income (Loss) Per Common Share - Schedule of Antidilutive Securities (Details) - shares shares in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 17,424 | 20,474 |
Restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 9,183 | 1,908 |
Goodwill and Amortizable Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 28, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 62,387 | $ 62,387 | $ 41,540 | |||
Gross carrying amount of amortizable intangible assets | 165,100 | 165,100 | 130,800 | |||
Accumulated amortization | 72,400 | 72,400 | 63,100 | |||
Amortization expense | 3,200 | $ 2,100 | 9,400 | $ 7,200 | ||
Net cash paid in business combination | 44,479 | $ 0 | ||||
Weighted-average life | 10 years | |||||
mphrX | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Net cash paid in business combination | $ 44,500 | |||||
mphrX | Developed Technology | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Assets acquired | 25,700 | |||||
mphrX | Customer Relationships | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | 20,600 | |||||
Assets acquired | 1,900 | |||||
Net liabilities assumed | $ 3,700 | |||||
Hawaii Reporting Unit | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 39,000 | $ 39,000 | ||||
Goodwill | $ 39,000 |
Supplemental Cash Flow Information - Summary of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Supplemental cash flow information: | ||
Interest paid | $ 4,519 | $ 2,878 |
Income taxes paid | 5,156 | 4,223 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use asset obtained in exchange for new operating lease liability | 3,612 | 7,288 |
Non-cash investment in unconsolidated subsidiaries | $ 0 | $ 190 |
Supplemental Cash Flow Information - Summary of Cash, Cash Equivalents and Restricted Cash Equivalents from Continuing Operations (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 168,339 | $ 497,070 | ||
Restricted cash and equivalents | 10,204 | 10,610 | ||
Cash, cash equivalents and restricted cash equivalents | $ 178,543 | $ 507,680 | $ 564,479 | $ 1,054,820 |
Variable Interest Entities - Summary of Consolidated Asset and Liabilities Include VIE Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets | ||
Cash and cash equivalents | $ 168,339 | $ 497,070 |
Receivables, net | 1,345,711 | 497,574 |
Prepaid expenses and other current assets | 36,512 | 34,119 |
Property and equipment, net | 26,203 | 20,050 |
Intangible assets, net | 92,657 | 67,680 |
Liabilities | ||
Medical claims and related payables | 1,005,762 | 346,727 |
Accounts payable and accrued expenses | 290,563 | 183,364 |
Variable Interest Entity | ||
Assets | ||
Cash and cash equivalents | 86,581 | 155,819 |
Restricted cash equivalents | 10,202 | 10,610 |
Receivables, net | 1,334,394 | 492,077 |
Prepaid expenses and other current assets | 20,781 | 15,515 |
Property and equipment, net | 1,817 | 1,567 |
Intangible assets, net | 20,187 | 17,347 |
Other assets, net | 9,790 | 10,371 |
Liabilities | ||
Medical claims and related payables | 962,505 | 300,798 |
Accounts payable and accrued expenses | 259,553 | 159,526 |
Other liabilities | $ 4,188 | $ 2,059 |
Variable Interest Entities - Additional Information (Details) |
3 Months Ended |
---|---|
Sep. 30, 2023
partner
geography
investment
entity
| |
Variable Interest Entity [Line Items] | |
Number of geographies | geography | 10 |
Variable Interest Entity, Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Number of wholly-owned risk-bearing entities | 29 |
Number of direct contracting entities | 8 |
Number of physician group partners | partner | 12 |
Variable Interest Entity, Not Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Number of equity method investments for VIEs | investment | 9 |
Variable Interest Entities - Schedule of Equity Method Investments (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Equity method investments | $ 39,170 | $ 17,352 |
Equity method liabilities | 0 | (4,657) |
Other Equity Methods | ||
Variable Interest Entity [Line Items] | ||
Equity method investments | 9,114 | 8,329 |
ACO REACH | ||
Variable Interest Entity [Line Items] | ||
Equity method investments | $ 30,056 | $ 9,023 |
Variable Interest Entities - Summarized balance sheet (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Current assets | $ 1,956,644 | $ 1,451,274 |
Total assets | 2,278,075 | 1,697,468 |
Current and total liabilities | 1,406,475 | 656,859 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Variable Interest Entity [Line Items] | ||
Current assets | 165,257 | 70,625 |
Noncurrent assets | 130 | 0 |
Total assets | 165,387 | 70,625 |
Current and total liabilities | $ 136,285 | $ 67,343 |
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