Matthew Gilmore

Matthew Gilmore asked for an updated perspective on the Evolent acquisition, specifically regarding business synergies and cross-sale discussions to integrate the Privia platform into the acquired physician base in new or existing states.

Answer

Parth Mehrotra, CEO of Privia Health Group, expressed enthusiasm for the Evolent team and the quality of their provider groups, noting the opportunity to significantly increase the savings rate of the acquired MSSP book. He highlighted the strategic benefit of the Care Partners model, which allows engagement with providers not on Privia Health's technology stack, and the potential for cross-selling the full medical group business model over time to both existing Evolent providers and in new states.

Matthew Gilmore asked for updated perspectives on the Evolent acquisition, specifically regarding business synergies and cross-sale discussions of the Privia platform into the acquired physician base in both new and existing states.

Answer

Parth Mehrotra (CEO, Privia Health Group) expressed excitement about the Evolent team and provider groups, noting the potential to significantly increase the MSSP savings rate over time by implementing Privia's playbook. He highlighted that the acquisition allows for an offering where providers are not on Privia's technology stack, creating opportunities to engage more providers and cross-sell into the full medical group business model over the next few years, both with existing Evolent providers and in new states.

Matthew Gilmore asked for more details on CEO Debbie Osteen's comments about reviewing operational layers, seeking to understand the current team organization, contemplated changes, and expected benefits. He also inquired about the fourth quarter volume performance, specifically patient days, relative to expectations and any notable areas of strength.

Answer

CEO Debbie Osteen explained that the review of operational layers encompasses both corporate and field leadership structures, aiming to ensure corporate support aligns with field needs. She is assessing the scope, geography, and experience of leaders to right-size the organization, with changes already underway. CFO Todd Young stated that Q4 volume performance, particularly patient days, was slightly better than expectations, with broad-based strength observed in both acute and specialty service lines.

Matthew Gilmore inquired about the primary swing factors influencing the high versus low end of Evolent's EBITDA guidance, specifically asking if oncology cost trends are the most significant variable.

Answer

CFO Mario Ramos identified the Medical Expense Ratio (MER) as the biggest swing factor, given the company's clear view on membership. He noted that while oncology trend can be a factor, new contract provisions and levers are in place to protect Evolent from adverse trend changes caused by factors outside its control.

Matthew Gilmore inquired about the key swing factors influencing the high versus low end of the 2026 EBITDA guidance range, specifically asking if oncology cost trend is the primary driver.

Answer

CFO Mario Ramos identified MER as the biggest swing factor, followed by the acceleration of projected savings. He noted that new contract provisions help mitigate the impact of oncology trend changes that are outside of the company's control.

Matthew Gilmore asked if Tenet could quantify the cost efficiencies expected this year and clarify their timing, specifically whether benefits would be captured early in 2026 or build throughout the year.

Answer

Saum Sutaria, Chairman and Chief Executive Officer, stated that specific guidance on cost efficiencies is not provided, but they are embedded in the core EBITDA growth. He emphasized that these expense management strategies are structural and designed to prepare for future years, not just 2026.

Matthew Gilmore asked if Tenet Healthcare could quantify the cost efficiencies expected to be pulled through in 2026 and clarify their timing, specifically whether benefits would be captured entirely in 2026 or build for future year-over-year impact.

Answer

CEO Saum Sutaria stated that Tenet Healthcare is not providing specific guidance on the quantification of cost efficiencies. He noted that these initiatives are embedded within the core EBITDA growth guidance for 2026 and are designed not just for the current year but also to prepare the company for the years ahead.

Matthew Gilmore asked about Humana's value-based contracting, specifically the proportion of MA members that are capitated versus other risk models, and if there are any changes in this thinking for 2026 and future periods.

Answer

George Renaudin (President of Medicare and Medicaid) stated that the proportion of membership in value-based models remains relatively stable: about a third in full risk, a third in other value-based types, and a third in non-value-based or basic pay-for-performance. He noted that this number typically decreases slightly at the start of the year with new member influx but builds back up as members choose PCPs or are attributed to panels. He emphasized strong relationships with value-based partners, who are looking to expand, and that Humana supports them, including taking back Part D risk in 2025 and 2026 and mitigating Stars impacts.

Matthew Gilmore asked about the proportion of MA members in capitated versus other risk models within value-based contracting and how this has changed for 2026 and future periods.

Answer

President of Medicare and Medicaid George Renaudin stated that the proportion of membership remains relatively consistent: about a third in full risk, a third in other value-based models, and a third in non-value-based or basic pay-for-performance. He noted that an influx of new members typically causes this number to decrease slightly at the start of the year but builds back up as members choose PCPs or are attributed to panels. He also highlighted strong interest from value-based partners in growing with Humana.

Matthew Gilmore inquired about the drivers behind the stronger-than-expected census growth, specifically asking whether the success stemmed more from InnovAge's internal Medicaid redetermination processes or improvements at the state level. He also asked about the magnitude and nature (one-time vs. ongoing) of the reduction in revenue write-offs.

Answer

CEO Patrick Blair explained that initial progress was primarily due to InnovAge's internal control over rigorous patient accounting and workflow management processes. CFO Ben Adams added that many participants who had previously lost Medicaid coverage were successfully reestablished, providing an enrollment cushion. He clarified that while the company is now on a regular glide path for enrollments, disenrollments are being closely monitored. CFO Ben Adams further detailed that a new Salesforce-built patient accounting system allows for more methodical and precise setting of monthly revenue reserves, leading to a tighter process and appropriate conservatism, though it's too early to conclude on the exact magnitude of future write-off reductions.

Matthew Gilmore asked about the drivers behind InnovAge's stronger-than-expected census growth, specifically inquiring whether the success stemmed more from InnovAge's internal Medicaid redetermination processes or improvements at the state level. He also followed up on the magnitude of the reduction in revenue write-offs and whether it represented a one-time pickup or a sustainable go-forward improvement.

Answer

CEO Patrick Blair stated that initial progress was primarily due to InnovAge's internal control over rigorous patient accounting systems and workflow management for eligibility and premium reconciliation. CFO Ben Adams elaborated that more participants who had previously lost Medicaid coverage were reestablished than anticipated, providing an enrollment cushion in the first half. Ben Adams explained that a new Salesforce-built patient accounting system allows for more precise and methodical setting of monthly revenue reserves, leading to a tighter process and appropriate conservatism, though it's too early to conclude on the extent of future revenue reserve improvements.

Matthew Gilmore inquired about the current member mix, the progress of acuity normalization following census growth, and how these factors are influencing margins and cost trends.

Answer

CEO Patrick Blair and President and COO Michael Scarborough explained that the member mix has largely rebalanced as anticipated since sanctions were lifted, with a balanced pool of enrollments focused on keeping participants in the community. They noted that while this mix can negatively impact risk scores, it contributes to growth and margin expansion. CFO Ben Adams added that the V-28 Medicare Advantage payment model phase-in is expected to be a slight headwind to revenue over the next couple of years, though it is factored into current guidance.

Matthew Gilmore from KeyBanc inquired about the normalization of member mix and acuity, its progression, and the impact on InnovAge's margins and cost trends, as well as the expected effects of the V-28 Medicare Advantage payment model phase-in on revenue growth for fiscal year 2026 and beyond.

Answer

Patrick Blair (CEO, InnovAge) and Michael Scarborough (President and COO, InnovAge) stated that the member mix has largely rebalanced since sanctions were lifted, with a balanced pool of enrollments for community and assisted living residents. They noted that the mix of population, age, and acuity has progressed as anticipated, reaching target levels. While this shift can impact revenue due to lower risk scores, the right clinical model ensures appropriate contribution to growth and margin expansion. Ben Adams (CFO, InnovAge) confirmed that the V-28 phase-in is included in the FY2026 guidance and is expected to be a headwind over the next couple of years, though only one year of guidance is provided.

Matthew Gilmore asked for clarification on the sequential revenue decline implied in the Q4 guidance and requested an update on the engagement progress for the Care Anywhere program.

Answer

Executive Robert Freeman explained that sequential revenue declines in Q4 are typical, as growth from new, lower-PMPM members and disenrollment of higher-acuity members offset overall membership gains. He also confirmed that Care Anywhere engagement reached over 40% of targeted new members in Q3, keeping them on track for their year-end goals despite higher-than-expected growth.