Financial Data and Key Metrics Changes - Capitated revenue increased by approximately 6%, with total capitated revenue for the quarter at $341.6 million, or about $982 per member per month [5][15] - Adjusted EBITDA loss for the quarter was $45.9 million, with a year-to-date adjusted EBITDA loss of $85.2 million [8][18] - The company revised its full-year adjusted EBITDA guidance to a range of -$110 million to -$95 million, reflecting current expectations [9][20] Business Line Data and Key Metrics Changes - Membership was approximately 116,000 members, aligning with expectations [8] - Medical margin for the quarter was $4.4 million, or $13 per member per month, compared to $500,000 or $1 per member per month in the prior period [16] - Year-to-date medical margin was $52.2 million, or $50 per member per month [16] Market Data and Key Metrics Changes - The normalized adjusted EBITDA loss year-to-date was approximately $70 million, providing a clearer reflection of underlying performance [8] - The operational improvement plan achieved over $100 million in EBITDA improvement year-over-year [7] Company Strategy and Development Direction - The company is focused on improving stability, strengthening operating discipline, and maturing its clinical foundation [5] - A strategic joint venture is expected to add approximately 13,000 fully accredited ACO members, enhancing profitability and cash flow [7] - The company is rationalizing its provider network to improve margin performance, exiting groups that do not align clinically or economically [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core operating model, highlighting stable medical cost trends and improved provider alignment [22] - The company anticipates favorable macro tailwinds heading into 2026, with expected improvements in the rate environment communicated by CMS [22] - Management identified $120 million-$170 million in EBITDA expansion opportunities for 2026, positioning the company for meaningful profitability [23] Other Important Information - The company ended the quarter with $37.7 million in cash, maintaining a disciplined approach to working capital management [18] - The normalized medical cost trend has remained flat year-over-year, reflecting progress in clinical execution and cost management [17] Q&A Session Summary Question: What convinces the plans to cede margin in their M&A books? - Management indicated that payers are motivated by the investment made into their membership, particularly concerning high-risk patients and quality metrics [26] Question: Have you made an attempt to have the plans participate in a potential surplus? - Management confirmed that they take the risk from the payers, who receive their administrative margin, while the company operates on a percentage of premium [28] Question: Was the guidance reduction driven by a single payer or more broad-based? - The guidance reduction was primarily related to mid-year settlements coming in less than expected and was more broad-based than just one payer [36] Question: What was the prior period dollar amount in the third quarter? - The prior period amount net in the P&L was a $3 million decrement, with a total unfavorable impact of $24 million in Q3 due to mid-year true-ups [42][44] Question: What are the odds of another prior period adjustment in 2026? - Management expects a more consistent method of booking expenses and revenue moving forward, which should preclude significant normalization adjustments [46] Question: What was the PMPM revenue growth expectation in 2026? - Management anticipates about a 5% net improvement in premium across their markets, with further guidance on coding improvements expected in the next quarter [48]