Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39427 | |
Entity Registrant Name | Oak Street Health, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-3446686 | |
Entity Address, Address Line One | 30 W. Monroe Street | |
Entity Address, Address Line Two | Suite 1200 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60603 | |
City Area Code | 844 | |
Local Phone Number | 871-5650 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | OSH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 242,915,915 | |
Entity Central Index Key | 0001564406 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 204,300,000 | $ 104,700,000 |
Restricted cash | 18,700,000 | 15,700,000 |
Other receivables, net (Humana comprised $0.2 as of December 31, 2021) | 2,100,000 | 3,100,000 |
Capitated accounts receivable (Humana comprised $105.0 as of December 31, 2021) | 833,900,000 | 559,400,000 |
Marketable debt securities | 339,000,000 | 671,100,000 |
Prepaid expenses and other current assets | 18,100,000 | 14,000,000 |
Total current assets | 1,416,100,000 | 1,368,000,000 |
Property, plant and equipment, net | 196,100,000 | 144,800,000 |
Goodwill | 158,000,000 | 152,900,000 |
Intangible assets, net | 9,600,000 | 10,800,000 |
Operating right-of-use assets (Humana comprised $70.9 as of December 31, 2021) | 313,100,000 | 157,700,000 |
Other long-term assets | 7,600,000 | 6,900,000 |
Total assets | 2,100,500,000 | 1,841,100,000 |
Current liabilities: | ||
Accounts payable | 25,900,000 | 22,100,000 |
Accrued compensation and benefits | 47,100,000 | 41,700,000 |
Liability for unpaid claims (Humana comprised $99.1 as of December 31, 2021) | 787,100,000 | 556,300,000 |
Other liabilities (Humana comprised $19.3 as of December 31, 2021) | 46,400,000 | 44,000,000 |
Total current liabilities | 906,500,000 | 664,100,000 |
Long-term debt | 977,000,000 | 901,400,000 |
Long-term operating lease liabilities (Humana comprised $66.0 as of December 31, 2021) | 341,800,000 | 164,200,000 |
Other long-term liabilities (Humana comprised $43.1 as of December 31, 2021) | 30,800,000 | 55,400,000 |
Total liabilities | 2,256,100,000 | 1,785,100,000 |
Commitments and contingencies (See Note 10) | ||
STOCKHOLDERS' EQUITY/(DEFICIT) | ||
Preferred stock, par value $0.001; 50,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, par value $0.001; 500,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 242,950,926 and 240,937,465 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 200,000 | 200,000 |
Additional paid-in capital (Humana comprised $50.0 as of December 31, 2021) | 1,185,000,000 | 1,017,900,000 |
Accumulated other comprehensive loss | (4,100,000) | (1,400,000) |
Accumulated deficit | (1,341,500,000) | (965,300,000) |
Total stockholders' equity/(deficit) allocated to Oak Street Health, Inc. | (160,400,000) | 51,400,000 |
Non-controlling interests | 4,800,000 | 4,600,000 |
Total stockholders' equity/(deficit) | (155,600,000) | 56,000,000 |
Total liabilities and stockholders' equity/(deficit) | $ 2,100,500,000 | $ 1,841,100,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Other receivables, net | $ 2.1 | $ 3.1 |
Operating right-of-use assets | 313.1 | 157.7 |
Liability for unpaid claims | 787.1 | 556.3 |
Other Liabilities, Current | 46.4 | 44 |
Operating Lease, Liability, Noncurrent | 341.8 | 164.2 |
Other Liabilities, Noncurrent | $ 30.8 | $ 55.4 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 242,950,926 | 240,937,465 |
Common stock, shares outstanding (in shares) | 242,950,926 | 240,937,465 |
Additional paid-in capital | $ 1,185 | $ 1,017.9 |
Humana | ||
Other receivables, net | 0.2 | |
Capitated accounts receivable, related parties | 105 | |
Operating right-of-use assets | 70.9 | |
Liability for unpaid claims | 99.1 | |
Other Liabilities, Current | 19.3 | |
Operating Lease, Liability, Noncurrent | 66 | |
Other Liabilities, Noncurrent | 43.1 | |
Additional paid-in capital | $ 50 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenues | $ 545.7 | $ 388.7 | $ 1,583.2 | $ 1,038.5 |
Operating expenses: | ||||
Medical claims expense (Humana comprised $99.1 for the three-months ended September 30, 2021 and $277.7 for the nine-months ended September 30, 2021) | 427.4 | 309.8 | 1,198.4 | 790.9 |
Cost of care, excluding depreciation and amortization (Humana comprised $2.8 for the three-months ended September 30, 2021 and $7.1 for the nine-months ended September 30, 2021) | 113.6 | 76.3 | 307.6 | 203.6 |
Sales and marketing | 44.1 | 30.5 | 120.5 | 80.5 |
Corporate, general and administrative | 81.7 | 77 | 265.3 | 224.3 |
Depreciation and amortization | 9.1 | 4.5 | 25.3 | 11.7 |
Total operating expenses | 675.9 | 498.1 | 1,917.1 | 1,311 |
Loss from operations | (130.2) | (109.4) | (333.9) | (272.5) |
Other (expense): | ||||
Interest expense, net | 0 | (0.6) | (1.1) | (1.8) |
Other | (0.2) | 0 | (40.3) | 0 |
Total other (expense) | (0.2) | (0.6) | (41.4) | (1.8) |
Net loss | (130.4) | (110) | (375.3) | (274.3) |
Net income/(loss) attributable to non-controlling interests | 0.3 | (0.6) | 0.9 | (3.5) |
Net loss attributable to Oak Street Health, Inc. | $ (130.7) | $ (109.4) | $ (376.2) | $ (270.8) |
Weighted average common shares outstanding - basic (in shares) | 231,919,421 | 223,435,698 | 228,042,160 | 221,932,624 |
Weighted average common shares outstanding - diluted (in shares) | 231,919,421 | 223,435,698 | 228,042,160 | 221,932,624 |
Net loss per share – diluted (in dollars per share) | $ (0.56) | $ (0.49) | $ (1.65) | $ (1.22) |
Net loss per share – basic (in dollars per share) | $ (0.56) | $ (0.49) | $ (1.65) | $ (1.22) |
Capitated Revenue | ||||
Total revenues | $ 537.9 | $ 376.7 | $ 1,560.1 | $ 1,014.6 |
Other Revenue | ||||
Total revenues | $ 7.8 | $ 12 | $ 23.1 | $ 23.9 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Total revenues | $ 388.7 | $ 1,038.5 |
Medical claims expense | 309.8 | 790.9 |
Cost of care | 76.3 | 203.6 |
Humana | ||
Medical claims expense | 99.1 | 277.7 |
Cost of care | 2.8 | 7.1 |
Capitated Revenue | ||
Total revenues | 376.7 | 1,014.6 |
Capitated Revenue | Humana | ||
Total revenues | 130.7 | 379.2 |
Other Revenue | ||
Total revenues | 12 | 23.9 |
Other Revenue | Humana | ||
Total revenues | $ 2.8 | $ 4.5 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (130.4) | $ (110) | $ (375.3) | $ (274.3) |
Other comprehensive loss: | ||||
Net unrealized gain/(loss) on marketable debt securities, net of tax | 0.7 | 0.1 | (2.7) | (0.2) |
Comprehensive loss | (129.7) | (109.9) | (378) | (274.5) |
Less: Comprehensive income/(loss) attributable to non-controlling interests | 0.3 | (0.6) | 0.9 | (3.5) |
Comprehensive loss attributable to Oak Street Health, Inc. | $ (130) | $ (109.3) | $ (378.9) | $ (271) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/(DEFICIT) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2020 | 240,756,714 | |||||
Beginning balance at Dec. 31, 2020 | $ 423.2 | $ 0.2 | $ 971.8 | $ (555.8) | $ 0 | $ 7 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Purchase of capped calls | (123.6) | (123.6) | ||||
Issuance of common stock upon vesting of restricted stock units, (in shares) | 55,781 | |||||
Issuance of common stock upon exercise of options (in shares) | 222,203 | |||||
Issuance of common stock upon exercise of options | 4.5 | 4.5 | ||||
Shares withheld related to net settlement of stock based awards (in shares) | (1,412) | |||||
Stock issued during period shares employee stock purchase plans (in shares) | 62,575 | |||||
Issuance of common stock under the employee purchase plan | 3 | 3 | ||||
Forfeitures (in shares) | (175,905) | |||||
Forfeitures | (0.9) | (0.9) | ||||
Stock-based compensation expense | 122.8 | 122.8 | ||||
Payments to non-controlling interests | 0.1 | 0.1 | ||||
Payments to non-controlling interests | (1.5) | (1.5) | ||||
Net unrealized gain (loss) on marketable debt securities | (0.2) | (0.2) | ||||
Net loss | (274.3) | (270.8) | (3.5) | |||
Ending balance (in shares) at Sep. 30, 2021 | 240,919,956 | |||||
Ending balance at Sep. 30, 2021 | 153.1 | $ 0.2 | 977.6 | (826.6) | (0.2) | 2.1 |
Beginning balance (in shares) at Jun. 30, 2021 | 240,785,554 | |||||
Beginning balance at Jun. 30, 2021 | 220.8 | $ 0.2 | 935 | (717.2) | (0.3) | 3.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon vesting of restricted stock units, (in shares) | 33,542 | |||||
Issuance of common stock upon exercise of options (in shares) | 47,389 | |||||
Issuance of common stock upon exercise of options | 0.9 | 0.9 | ||||
Shares withheld related to net settlement of stock based awards (in shares) | (782) | |||||
Stock issued during period shares employee stock purchase plans (in shares) | 62,575 | |||||
Issuance of common stock under the employee purchase plan | 3 | 3 | ||||
Forfeitures (in shares) | (8,322) | |||||
Forfeitures | (0.1) | (0.1) | ||||
Stock-based compensation expense | 38.8 | 38.8 | ||||
Payments to non-controlling interests | (0.4) | (0.4) | ||||
Net unrealized gain (loss) on marketable debt securities | 0.1 | 0.1 | ||||
Net loss | (110) | (109.4) | (0.6) | |||
Ending balance (in shares) at Sep. 30, 2021 | 240,919,956 | |||||
Ending balance at Sep. 30, 2021 | 153.1 | $ 0.2 | 977.6 | (826.6) | (0.2) | 2.1 |
Beginning balance (in shares) at Dec. 31, 2021 | 240,937,465 | |||||
Beginning balance at Dec. 31, 2021 | $ 56 | $ 0.2 | 1,017.9 | (965.3) | (1.4) | 4.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon vesting of restricted stock units, (in shares) | 149,850 | |||||
Issuance of common stock upon exercise of options (in shares) | 560,905 | 662,034 | ||||
Issuance of common stock upon exercise of options | $ 13.4 | 13.4 | ||||
Shares withheld related to net settlement of stock based awards (in shares) | (15,995) | |||||
Shares withheld related to net settlement of stock based awards | (0.2) | (0.2) | ||||
Stock issued during period shares employee stock purchase plans (in shares) | 224,473 | |||||
Issuance of common stock under the employee purchase plan | 4.1 | 4.1 | ||||
Issuance of common stock under RMD earnout (in shares) | 1,225,122 | |||||
Issuance of common stock pursuant to RubiconMD Holdings, Inc. earn-out | $ 32.5 | 32.5 | ||||
Forfeitures (in shares) | (442,025) | (232,023) | ||||
Forfeitures | $ (4.3) | (4.3) | ||||
Stock-based compensation expense | 124.3 | 124.3 | ||||
Payments to non-controlling interests | (1.3) | (1.3) | ||||
Purchase of joint venture minority interest | (2.1) | (2.7) | 0.6 | |||
Net unrealized gain (loss) on marketable debt securities | (2.7) | (2.7) | ||||
Net loss | (375.3) | (376.2) | 0.9 | |||
Ending balance (in shares) at Sep. 30, 2022 | 242,950,926 | |||||
Ending balance at Sep. 30, 2022 | (155.6) | $ 0.2 | 1,185 | (1,341.5) | (4.1) | 4.8 |
Beginning balance (in shares) at Jun. 30, 2022 | 241,084,244 | |||||
Beginning balance at Jun. 30, 2022 | (101.9) | $ 0.2 | 1,108.5 | (1,210.8) | (4.8) | 5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon vesting of restricted stock units, (in shares) | 70,849 | |||||
Issuance of common stock upon exercise of options (in shares) | 543,082 | |||||
Issuance of common stock upon exercise of options | 11.1 | 11.1 | ||||
Shares withheld related to net settlement of stock based awards (in shares) | (9,478) | |||||
Shares withheld related to net settlement of stock based awards | (0.2) | (0.2) | ||||
Stock issued during period shares employee stock purchase plans (in shares) | 161,189 | |||||
Issuance of common stock under the employee purchase plan | 2.3 | 2.3 | ||||
Issuance of common stock under RMD earnout (in shares) | 1,225,122 | |||||
Issuance of common stock pursuant to RubiconMD Holdings, Inc. earn-out | 32.5 | 32.5 | ||||
Forfeitures (in shares) | (124,082) | |||||
Forfeitures | (2.9) | (2.9) | ||||
Stock-based compensation expense | 33.7 | 33.7 | ||||
Payments to non-controlling interests | (0.5) | (0.5) | ||||
Net unrealized gain (loss) on marketable debt securities | 0.7 | 0.7 | ||||
Net loss | (130.4) | (130.7) | 0.3 | |||
Ending balance (in shares) at Sep. 30, 2022 | 242,950,926 | |||||
Ending balance at Sep. 30, 2022 | $ (155.6) | $ 0.2 | $ 1,185 | $ (1,341.5) | $ (4.1) | $ 4.8 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (375.3) | $ (274.3) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of discount on debt and related issuance costs | 3.3 | 2.4 |
Accretion of discounts and amortization of premiums on short-term marketable securities, net | 4.9 | 2.4 |
Fair value adjustment to contingent consideration | 38.3 | 0 |
Depreciation and amortization | 25.3 | 11.7 |
Non-cash operating lease costs | 31.6 | 11.2 |
Stock-based compensation, net of forfeitures | 120 | 121.9 |
Change in operating assets and liabilities, net of impact of acquisitions: | ||
Accounts receivables | (273.4) | (208) |
Other assets | (5.3) | (10.5) |
Accounts payable and accrued compensation and benefits | 7.4 | 23.1 |
Liability for unpaid claims | 230.9 | 180.2 |
Operating lease liabilities | (15.6) | (9.9) |
Other liabilities | (5.4) | 23.9 |
Net cash used in operating activities | (213.3) | (125.9) |
Cash flows from investing activities: | ||
Proceeds from sales and maturities of marketable debt securities | 716.6 | 43.7 |
Purchases of marketable debt securities | (392.2) | (817.6) |
Purchase of business, net of cash acquired | (5.6) | (1.4) |
Purchases of property and equipment | (67.6) | (40.6) |
Net cash provided by (used by) investing activities | 251.2 | (815.9) |
Cash flows from financing activities: | ||
Proceeds from borrowings on term loan, net | 72.3 | 0 |
Proceeds from borrowings on Convertible Senior Notes, net | 0 | 897.9 |
Purchase of capped calls | 0 | (123.6) |
Capital contributions from non-controlling interests | 0 | 0.1 |
Settlement of contingent earnout liability | (21.7) | 0 |
Capital distributions to non-controlling interests | (1.3) | (1.5) |
Purchase of joint venture minority interest | (2.1) | 0 |
Proceeds from exercise of options | 13.4 | 4.5 |
Proceeds from issuance of common stock under the employee purchase plan | 4.1 | 3 |
Net cash provided by financing activities | 64.7 | 780.4 |
Net change in cash, cash equivalents and restricted cash | 102.6 | (161.4) |
Cash, cash equivalents and restricted cash, beginning of period | 120.4 | 419.7 |
Cash, cash equivalents and restricted cash, end of period | 223 | 258.3 |
Supplemental disclosures | ||
Additions to construction in process funded through accounts payable | $ 7 | $ 4.7 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | ORGANIZATION AND NATURE OF BUSINESS Description of Business Oak Street Health, Inc. (collectively with its consolidated subsidiaries is referred to as “Oak Street Health,” “OSH,” “we,” “us,” “our” or the “Company”) was formed as a Delaware corporation on October 22, 2019 for the purpose of completing a public offering and related reorganization transactions (collectively referred to as the “IPO”) in order to carry on the business of Oak Street Health, LLC (“OSH LLC”) and its affiliates. On August 10, 2020, the Company completed its IPO. As the managing member of OSH LLC, Oak Street Health, Inc. operates and controls all of the business affairs of OSH LLC and its affiliates. The Company operates primary care centers serving Medicare beneficiaries. The Company, through its centers and management services organization, combines an innovative care model with superior patient experience. The Company invests resources into primary care to prevent unnecessary acute events and manage chronic illnesses. The Company engages Medicare eligible patients through the use of an innovative community outreach approach. Once patients are engaged, the Company integrates population health analytics, social support services and primary care into the care model to drive improved outcomes. The Company contracts with health plans to generate medical costs savings and realize a return on its investment in primary care. As of September 30, 2022, the Company operated 161 centers. Basis of Presentation and Consolidation The accompanying unaudited interim consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such regulations that would substantially duplicate the disclosures contained in the Company's annual audited consolidated financial statements. These financial statements have been prepared on a basis consistent with the accounting principles applied for the fiscal year ended December 31, 2021 in the Company’s 2021 Form 10-K filed with the SEC. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine-months ended September 30, 2022, including the impact of COVID-19, are not necessarily indicative of the results that may be expected any other interim period for or for the year ending December 31, 2022. The consolidated financial statements of the Company include the financial statements of all wholly owned subsidiaries and majority-owned or controlled companies, which include the variable interest entities (“VIE”) in which OSH has an interest and is the primary beneficiary. See Note 11, “Variable Interest Entities.” For those consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocable to the non-controlling interests is reported as “Net loss (gain) attributable to non-controlling interests” in the consolidated statements of operations. Intercompany balances and transactions have been eliminated in consolidation. In addition, Oak Street Health is the majority interest owner in two joint ventures: OSH-PCJ Joliet, LLC ("PCJ JV") and OSH-RI, LLC ("RI JV"), which are consolidated in the Company’s financial statements. In January 2022, the Company paid a former joint venture partner, Evangelical Services Corporation, $2.1 million to acquire its 49.9% ownership interest in OSH-ESC Joint Venture, LLC. As such, OSH owned 100% of this entity as of March 31, 2022, and the joint venture was effectively dissolved. During the quarters ended June and September 30, 2022, distributions were made from OSH-PCJ Joliet, LLC to Oak Street Health MSO, LLC, a subsidiary of the Company that holds 50.1% ownership interest in PCJ JV, and Primary Care Physicians of Joliet, an unaffiliated third party that holds 49.9% ownership interest in PCJ JV. Distributions made during the quarter ended June 30, 2022 totaled $0.8 million to each owner and in the quarter ended September 30, 2022 distributions totaled $0.5 million to each owner. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances including estimates of the impact of COVID-19. The areas where significant estimates are used in the accompanying financial statements include revenue recognition, the liability for unpaid claims, stock-based compensation, valuation and related impairment recognition of long-lived assets, including intangibles and goodwill and the valuation of stock options. Actual results could differ from those estimates. COVID-19 Even as the COVID-19 pandemic subsides, disruptions caused by the pandemic, including labor shortages and inflationary pressures, may continue and could, in turn, have a negative impact on the Company. Further, recurring COVID-19 outbreaks, including outbreaks caused by different virus variants, could have the potential to impact the Company and its future results of operations, cash flows and financial position. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company described its significant accounting policies in Note 2 of the notes to consolidated financial statements for the year ended December 31, 2021 included in its 2021 Form 10-K. During the nine-months ended September 30, 2022, there were no significant changes to those accounting policies, other than those noted below and those policies impacted by the new accounting pronouncements adopted during the period and further described below. Stock-based compensation expense The Company accounts for stock-based compensation as an expense in the statements of operations based on the awards' fair values at their respective grant dates. The Company estimates the fair value of options with service conditions granted using the Black-Scholes option pricing model. Stock options that include service and performance conditions are valued at their grant date using the Black-Scholes model and estimates regarding the probability of achieving the performance metrics. The Black-Scholes option pricing model requires inputs based on certain assumptions, including (a) the fair value per share of the Company's common stock, (b) the expected stock price volatility, (c) the expected term of the award, (d) the risk-free interest rate and (e) expected dividends. The fair value of stock-based awards is recognized as compensation expense, net of actual forfeitures, over the requisite service period, which is generally the vesting period, with the exception of the fair value of stock-based payments for awards that include service and performance conditions which is recognized as compensation expense over the requisite service period as achievement of the performance objective becomes probable. The Company issued certain performance stock options (“PSOs”) during the first quarter of 2022, that vest based on the satisfaction of certain service and performance-based conditions. The Company estimates compensation expense based on the grant date fair value of the awards and recognizes the expense on a graded vesting basis over the vesting period of the awards. Compensation expense for these awards is recognized only if the Company has determined that it is probable that the performance condition will be met. The Company reassesses the probability of vesting at each reporting period and adjusts compensation expense based on the probability assessment. The Company issued certain performance stock units ("PSUs") during the second quarter of 2022. The awards will vest based on the satisfaction of certain service conditions and performance-based conditions. The Company estimates compensation expense based on the grant date fair value of the awards and recognizes the expense on a straight-line basis over the vesting period of the award. Compensation expense for these awards is recognized only if the Company has determined that it is probable that the performance condition will be met. The Company reassesses the probability of vesting at each reporting period and adjusts compensation expense based on the probability assessment. Correction of immaterial error in previously issued financial statements The Company has arrangements with Humana, that include a license fee payable by the Company to Humana for the Company’s provision of health care services in certain centers owned or leased by Humana. The license fee is a reimbursement to Humana for its costs of owning or leasing and maintaining the centers, including rental payments, center maintenance or repair expenses, equipment expenses, special assessments, cost of upgrades, taxes, leasehold improvements and other expenses identified by Humana. During the second quarter of 2022, the Company reassessed the nature of its license fee arrangements and determined that the reimbursement for leasehold improvements included in the license fee payments should be included as a lease component and accounted for under ASC 842, Leases ("ASC 842"). As previously disclosed in the Company's 2021 Form 10-K, the Company adopted ASC 842 effective January 1, 2021 under the modified retrospective transition method. The Company considered the guidance Accounting Standards Codification 250, Accounting Changes and Error Corrections as well as the guidance in SEC Staff Bulletin 99, Materiality and concluded that the error was immaterial to the Company's previously issued interim and annual consolidated financial statements. The Company has corrected the cumulative impact of the error within the Quarterly Report on Form 10-Q for the period ended June 30, 2022 and disclosed the impact in Note 2 therein. We recorded a decrease to cost of care, excluding depreciation and amortization, within the consolidated statements of operations of $3.6 million and impact of $0.02 to our net loss per share- basic and diluted for the nine-months ended September 30, 2022. There was no impact to the consolidated statement of cash flows or the consolidated statements of equity/(deficit). Recently Adopted Accounting Pronouncements In October 2021, the FASB issued Accounting Standard Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The new guidance requires contract assets and liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers , as if it had originated the contracts. Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. The new standard is effective for fiscal years beginning after December 15, 2022. Early adoption is permitted. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the effective date of adoption. We elected to adopt this guidance early effective as of the quarter ended September 30, 2022 in connection with the Company’s acquisition of substantially all of the assets of CHW Cares Inc. ("CHW"), which was completed during the quarter. The guidance was not applicable to the CHW acquisition as contract assets and liabilities were not acquired, and as such, the adoption did not have a material effect on our consolidated financial statements or notes to the consolidated financial statements. For more information about the CHW acquisition, see Note 5, "Business Combinations, Goodwill and Intangible Assets." In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This standard is effective for fiscal years beginning after December 15, 2021 and should be applied prospectively or retrospectively. We have adopted ASU 2021-10 as of January 1, 2022 using the prospective method. This adoption did not have a material impact on our consolidated financial statements or notes to the consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) of Equity Securities Subject to Contractual Sale Restrictions |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company earns revenue from our capitated arrangements with health plan payers and other revenue arrangements. Other revenue is comprised of ancillary fees earned under contracts with certain managed care organizations for the provision of certain care coordination and care management services; license subscription and fees; and fee-for- service revenue. Both our capitated and fee-for-service revenue generally relate to contracts with patients in which our performance obligation is to provide and/or manage healthcare services to the patients. Revenues are recorded during the period our obligations to provide healthcare services are satisfied as noted below within each service type. Our care coordination services include a single performance obligation to stand ready to provide care coordination services to patients, which constitutes a series of distinct service increments. Payments received are recognized in other revenue ratably over the length of contract terms and are refundable on a pro rata basis to Humana if the Company ceases to provide services at the centers within the length of the term specified in the contracts. Under our care management services, we have a single performance to stand ready to provide care management services, which constitutes a series of distinct service increments. The Company acquired RubiconMD Holdings, Inc. (“RMD”) on October 20, 2021. RMD is a healthcare technology company specializing in an online eConsult platform which enables primary care providers to easily access same-day insights from top specialists in order to provide better care for their patients. RMD generates revenue by providing subscription licenses to its customers to access its eConsult platform, as well as providing integration, training and other ad-hoc services. We have identified the performance obligation to be standing ready to provide access to the eConsult platform. Subscription license revenue is recognized when the performance obligation is met over time by either the straight-line method or when services are performed over the terms of the applicable contract. RMD also provides services to assist customers with initial usage and training of the platform. These services are typically provided for a fixed fee and do not have a variable component. We identified the performance obligation is to provide the other professional services, which is typically achieved over time. Capitated Revenue and Accounts Receivable The Company has agreements in place with the payors listed below, and payor sources of capitated revenue for each period presented were as follows: Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Humana 31 % 35 % 32 % 37 % Wellcare/Meridian 16 % 15 % 17 % 16 % UnitedHealth Care 10 % 8 % 9 % 7 % CMS 8 % 10 % 8 % 7 % Other 35 % 32 % 34 % 33 % Medicare Part D comprised 2% of capitated revenues for the three and nine-months ended September 30, 2022 and September 30, 2021. Medicare Part D comprised 3% of medical claims expense for the three-months ended September 30, 2022 and 2% for the nine-months ended September 30, 2022. Medicare Part D comprised 2% of medical claims expense for the three-months ended September 30, 2021 and 3% for the nine-months ended September 30, 2021. For the nine-months ended September 30, 2022 and 2021, respectively, we estimate that we will receive an additional $44.4 million and $40.1 million for acuity-related adjustments to be received in subsequent periods. Under our capitated revenue arrangements, we receive a fixed fee per patient, per month ("PPPM") for services. In certain contracts, PPPM fees also include adjustments for items such as performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. There were no material PPPM adjustments related to performance incentives/penalties for quality-related metrics for the three and nine-months ended September 30, 2022 and 2021. Other Revenue The composition of other revenue for each period was as follows ($ in millions): Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Care coordination and care management services $ 1.8 $ 9.8 5.2 $ 18.4 License subscription and other fees 3.3 — 9.5 — Fee for service 2.7 2.2 8.4 5.5 Total other revenue $ 7.8 $ 12.0 23.1 $ 23.9 As of September 30, 2022 and December 31, 2021, the Company’s contract liabilities related to the Humana care coordination payments totaled $37.3 million and $33.9 million, respectively. The short-term portion is recorded in other liabilities and the long-term portion is included in other long-term liabilities in the accompanying consolidated balance sheets. As of September 30, 2022 and December 31, 2021, we recorded $6.7 million and $6.2 million of short-term contract liabilities, respectively, and $30.6 million and $27.7 million of long-term contract liabilities, respectively. |
FAIR VALUE MEASUREMENTS AND INV
FAIR VALUE MEASUREMENTS AND INVESTMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS AND INVESTMENTS | FAIR VALUE MEASUREMENTS AND INVESTMENTS Fair Value Measurements In determining the fair value of financial assets and liabilities, the Company utilizes market data or other assumptions that it believes market participants would use in pricing the asset or liability in the principal or most advantageous market and adjusts for non-performance and/or other risks associated with the Company as well as counterparties, as appropriate. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date: Level 1 – Valuations based on unadjusted quoted prices which are available in active markets for identical assets or liabilities accessible at the measurement date. Level 2 – Valuations with inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 – Valuations with unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis ($ in millions): Fair Value Measurements as of September 30, 2022 using: Fair Value Measurements as of December 31, 2021 using: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Marketable debt securities: Commercial paper $ 61.5 $ — $ — $ 120.8 $ — $ — U.S. Treasury obligations — 12.8 — — 26.0 — Corporate bonds — 201.2 — — 412.3 — Asset-backed securities — 33.8 — — 99.2 — Other — 29.7 — — 12.8 — Total financial assets $ 61.5 $ 277.5 $ — $ 120.8 $ 550.3 $ — Liabilities: Convertible senior notes $ — $ 710.5 $ — $ — $ 752.7 $ — Contingent consideration 1 — — 0.2 — — 21.8 Total liabilities $ — $ 710.5 $ 0.2 $ — $ 752.7 $ 21.8 1 During the quarter-ended June 30, 2022, RMD achieved both earn-out hurdles. As such, the Company no longer measured the fair value of the contingent consideration and instead recorded the maximum earn-out as an amount payable to RMD as of June 30, 2022. See Footnote 5 for further detail. The Company measures the fair value of corporate bonds, U.S. treasury obligations and asset-backed securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. During the three and nine-months ended September 30, 2022, there were no transfers between Levels 1, 2 and 3. The Company's Convertible Senior Notes are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices in an inactive market on the last day in the reporting period. In September 2022, the Company and certain of its subsidiaries entered into a $300.0 million loan and security agreement (the "Loan Agreement") with Hercules Capital Inc., as administrative and collateral agent and lender (the “Agent”), and Silicon Valley Bank and other lenders from time to time parties thereto (collectively with the Agent in its capacity as a lender, the “Lenders”) with such amount to be funded in five committed tranches (collectively, the "Term Loan"). As of September 30, 2022, the carrying value of the loan is $72.3 million, net of debt issuance costs. The fair value of the Term Loan approximates its carrying value since the interest rate is at market. For more information about the Term Loan, see Note 8, “Long-Term Debt.” Investments At September 30, 2022, the Company’s marketable debt securities classified as available-for-sale were as follows ($ in millions): September 30, 2022 December 31, 2021 Amortized cost Net unrealized gains (losses) Fair value Amortized cost Net unrealized gains (losses) Fair value Marketable debt securities: Commercial paper $ 61.7 $ (0.2) $ 61.5 $ 120.9 $ (0.1) $ 120.8 U.S. Treasury obligations 12.9 (0.1) 12.8 26.0 — 26.0 Corporate bonds 204.6 (3.4) 201.2 413.4 (1.1) 412.3 Asset-backed securities 34.0 (0.2) 33.8 99.4 (0.2) 99.2 Other 29.9 (0.2) 29.7 12.8 — 12.8 Total marketable debt securities $ 343.1 $ (4.1) $ 339.0 $ 672.5 $ (1.4) $ 671.1 These investments in marketable debt securities carry maturity dates of less than five years from the date of purchase. The net realized gains and losses were immaterial during the three and nine-months ended September 30, 2022. We do not intend to sell these investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis. We did not record an allowance for credit losses as of September 30, 2022 or December 31, 2021 as no losses were determined to be caused by credit losses. |
BUSINESS COMBINATIONS, GOODWILL
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination And Goodwill And Intangible Assets Disclosure [Abstract] | |
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS | BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $158.0 million and $152.9 million at September 30, 2022 and December 31, 2021, respectively. Intangible assets with a finite useful life continue to be amortized over their useful lives. Net intangible assets amounted to $9.6 million and $10.8 million at September 30, 2022 and December 31, 2021, respectively. Accumulated amortization related to intangible assets amount to $2.9 million and $1.7 million at September 30, 2022 and December 31, 2021, respectively. The Company recorded amortization expense of $0.4 million and $0.1 million for the three-months ended September 30, 2022 and 2021, respectively. The Company recorded amortization expense of $1.2 million and $0.3 million for the nine-months ended September 30, 2022 and 2021, respectively. The remaining weighted average amortization period of finite-lived intangible assets is 5.8 years. The remaining estimated future amortization expense by year, as of September 30, 2022, is presented in the following table: (in millions) 2022 $ 0.5 2023 1.7 2024 1.7 2025 1.7 2026 1.7 Thereafter 2.3 Estimated aggregate future intangible asset amortization $ 9.6 During the nine-months ended September 30, 2022, we made a $0.2 million adjustment to our preliminary allocation of the purchase consideration for the RMD acquisition related to finalized net working capital adjustments. As of September 30, 2022, the purchase price allocation is considered final. During the nine-months ended September 30, 2022, RMD achieved certain internal volumes required to earn the maximum earn-out consideration of $60.0 million. The Company paid out $27.5 million in cash and issued $32.5 million of Oak Street Health common stock during the three-months ended September 30, 2022. Of the total cash paid, $21.7 million had been recorded as a liability at the date of acquisition and presented as cash used in financing activities in the consolidated statement of cash flows with remaining amount reflected as cash used in operating activities- other liabilities. Additionally, the change in fair value of the contingent consideration liability was recorded in other income (expense) on the consolidated statement of operations. For the three and nine-months ended September 30, 2022, the Company recorded $0 million and $38.3 million, respectively, within our other expenses as a result of RMD achieving the maximum earn-out consideration. On September 23, 2022 OSH acquired substantially all of the assets of CHW for a total purchase price of $6.2 million, including contingent consideration with an estimated fair value of $0.2 million. The estimated fair value of the contingent consideration is recorded within other long-term liabilities. The maximum potential earn-out is $5.5 million dependent on internal metrics. As part of the CHW acquisition, the Company recorded $5.3 million of goodwill. As of September 30, 2022, the purchase price allocation is considered preliminary, and the Company may record certain adjustments during the one-year measurement period following the CHW acquisition. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The components of lease expense for the Company’s operating leases were as follows for the three and nine-months ended September 30, 2022 and September 30, 2021 ($ in millions): Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Operating lease cost 2 $ 13.3 $ 5.6 $ 34.6 $ 15.0 Variable lease cost 2 2.1 5.3 7.3 14.0 Total lease cost $ 15.4 $ 10.9 $ 41.9 $ 29.0 2 See Note 2 for discussion of the correction of an immaterial prior period error. The correction of the classification of leasehold improvements resulted in a prior period benefit recorded to operating lease costs during the nine-months ended September 30, 2022. Additionally, as a result of the correction, certain variable lease expenses were re-classified as operating lease expenses during the nine-months ended September 30, 2022. These corrections impacted the comparability of variable lease costs year over year. The Company entered into operating leases that resulted in $22.6 million and $89.2 million of right-of-use assets in exchange for operating lease obligations for the three and nine-months ended September 30, 2022, respectively. The Company entered into operating leases that resulted in $22.7 million and $49.5 million of right-of-use assets in exchange for operating lease obligations for the three and nine-months ended September 30, 2021, respectively. The weighted-average remaining lease term and discount rate for operating lease liabilities included in the consolidated balance sheets are as follows: September 30, 2022 December 31, 2021 Weighted-average remaining lease term (in years) 8.8 9.9 Weighted-average discount rate 4.37 % 4.17 % The table below presents the future minimum lease payments under the non-cancelable operating leases as of September 30, 2022 ($ in millions): 2022 $ 10.5 2023 48.5 2024 54.7 2025 52.5 2026 52.1 2027 52.3 Thereafter 196.9 Total lease payments $ 467.5 Less: imputed interest (101.8) Total operating lease liabilities $ 365.7 Reported as: Operating lease liabilities, current (1) 23.9 Operating lease liabilities, noncurrent 341.8 Total operating lease liabilities $ 365.7 (1) Included in other liabilities on the consolidated balance sheet |
LIABILITY FOR UNPAID CLAIMS
LIABILITY FOR UNPAID CLAIMS | 9 Months Ended |
Sep. 30, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
LIABILITY FOR UNPAID CLAIMS | LIABILITY FOR UNPAID CLAIMS Activity within liabilities for unpaid claims was as follows for the nine-months ended ($ in millions): September 30, 2022 2021 Balance, beginning of period $ 556.3 $ 262.1 Incurred health care costs: Current year 1,195.3 785.2 Prior years — 5.2 Total claims incurred $ 1,195.3 $ 790.4 Claims paid: Current year (482.9) (366.5) Prior years (485.4) (246.4) Total claims paid $ (968.3) $ (612.9) Adjustments to other claims-related liabilities 3.8 2.7 Balance, end of period $ 787.1 $ 442.3 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Term Loan On September 30, 2022, the Company and certain of its subsidiaries entered into the Loan Agreement with Hercules Capital, Inc., as administrative and collateral agent and lender, and Silicon Valley Bank and other lenders from time to time parties thereto. The Loan Agreement provides the Company with a Term Loan Facility of up to $300.0 million to be funded in five committed tranches available to be drawn at the Company’s option during the specified time period. Under Tranche A (available from September 30, 2022 ("Closing") until March 31, 2023), the Company was required to draw down $75.0 million upon Closing and may draw up to an additional $25.0 million. Under Tranche B (available from Closing until December 15, 2023), the Company may borrow up to $50.0 million in $25.0 million increments. Under Tranche C (available from January 1, 2024 until June 30, 2024), the Company may borrow up to $50.0 million in $25.0 million increments. Under Tranche D (available from the earlier of (a) the date on which Tranche C is fully drawn and (b) July 1, 2024 until December 15, 2024), the Company may borrow up to $75.0 million in $25.0 million increments. Under Tranche E (available from Closing until June 1, 2025), the Company may borrow up to $25.0 million subject to the approval of the individual lender. If the Company does not elect to draw the entire principal amount available under the Tranche B, C or D during the applicable drawdown period, then any such undrawn portion will be added to the aggregate principal amount available under Tranche E. The obligations under the Term Loan Facility are secured by a perfected security interest in substantially all of the assets of the Company, subject to certain limitations and exceptions. The Term Loan Facility is scheduled to mature on October 1, 2027, subject to a springing maturity date of September 1, 2025 if, prior to June 1, 2025, the Company’s Convertible Senior Notes have not been (i) converted into equity interests of the Company, (ii) amended such that the scheduled maturity date of the Convertible Senior Notes is at least 180 days after the initial maturity date of the tranches of the Term Loans then in effect, or (iii) fully redeemed and extinguished. The Term Loan interest rate will float and change on the day the prime rate changes from time to time. The Term Loan interest rate is equal to the greater of either 7.95% or the prime rate plus 2.45%. In addition, the principal balance of the Term Loans will bear “payment-in-kind” interest at the rate of 1.00% (“PIK Interest”), which PIK Interest will be added to the outstanding principal balance of the Term Loans and increase the outstanding principal balance of the Term Loans on each payment date. In addition, an end-of-term charge equal to 4.95% of the aggregate original principal amount of the Term Loans, due on the earlier of the maturity date of the Term Loans or the repayment of the Term Loans, is payable by the Company. Interest payments on the loan are due on the first day of each month. Borrowings under the Term Loan Facility may be voluntarily prepaid in minimum increments of $25.0 million, subject to a prepayment fee equal to (i) 2.00% of the amount prepaid, if the prepayment occurs during the first year following the closing, (ii) 1.00% of the amount prepaid, if the prepayment occurs during the second year following the closing, and (iii) 0.50% of the amount prepaid, if the prepayment occurs during the third year following the closing. There is no prepayment fee, penalty or premium applicable to voluntary prepayments made by the Company on or after the fourth year following the closing. At September 30, 2022 the outstanding balance of the Term Loan was $72.3 million, net of debt issuance costs. In addition, beginning on the earlier of (i) the reporting deadline of the Company’s fourth quarter 2023 financial statements under the Loan Agreement and (ii) the date at which more than $100.0 million in aggregate principal (excluding any paid-in-kind interest) is outstanding under the Term Loan Facility, the Company is required to maintain a specified trailing twelve-month platform contribution (as defined in the Loan Agreement), with the applicable platform contribution increasing over time and as the Company’s borrowings under the Term Loan Facility increase. At September 30, 2022, the financial covenant was not yet in effect. Convertible Senior Notes On March 16, 2021, the Company issued, at par value, $920.0 million aggregate principal amount of 0% Convertible Senior Notes, including $120.0 million in aggregate principal amount pursuant to the option we granted to the initial purchasers to purchase additional convertible senior notes, which was exercised in full in March 2021. Total proceeds received by the Company from the sale of the Convertible Senior Notes, net of debt issuance and offering costs of $22.1 million, were $897.9 million. The Company used $123.6 million of the net proceeds to pay for the cost of the capped call transactions (see discussion on capped call transactions further below). The Convertible Senior Notes are governed by an indenture (“Indenture”), dated as of March 16, 2021, between the Company and U.S. Bank National Association, as trustee. Under the Indenture, the Convertible Senior Notes are general senior, unsecured obligations of the Company and will mature on March 15, 2026, unless earlier redeemed, repurchased or converted. The Convertible Senior Notes are equal in right of payment with the Company’s future senior, unsecured indebtedness and structurally subordinated to all indebtedness and liabilities of the Company’s subsidiaries. Pursuant to the terms of the Indenture, the Convertible Senior Notes are convertible at the option of the holders, or may be called by the Company for redemption, upon the occurrence of certain circumstances. For additional information on the conversion provisions included in the Indenture, please see Long-Term Debt, of the notes to consolidated financial statements included in our 2021 Form 10-Q for the period ended June 30, 2022. Based upon the reported sales price of our common stock during the last 30 consecutive trading days of the third quarter of 2022, the Convertible Senior Notes were not convertible by the holders on September 30, 2022 and will not be convertible until December 15, 2025. Capped Call Transactions Concurrently with the pricing of the Convertible Senior Notes, the Company entered into convertible note hedge transactions (the “capped call transactions”) with six initial purchasers or their respective affiliates and other financial institutions (the “option counterparties”) to mitigate the impact of potential economic dilution to our common stock upon conversion of the Convertible Senior Notes. The capped calls were purchased for $123.6 million from the net proceeds from the issuance of the Convertible Senior Notes and have an initial strike price of approximately $79.16 per share, which corresponds to the initial conversion price of the Convertible Senior Notes. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the Convertible Senior Notes. The capped call transactions are expected to offset the potential dilution to the Company’s common stock upon any conversion of Convertible Senior Notes, with such reduction and/or offset subject to a cap initially equal to $138.8750 per share. The capped call transactions will expire on March 12, 2026. The capped call transactions are separate transactions and are not part of the terms of the Convertible Senior Notes. The capped call transactions cover, subject to anti-dilution adjustments, approximately 11,622,176 shares of the Company’s common stock. The capped call transactions are subject to either adjustment or termination upon the occurrence of specified extraordinary and disruption events affecting the Company . The Convertible Senior Notes and capped call transactions consisted of the following balances reported in the consolidated balance sheet as of September 30, 2022 and December 31, 2021 ($ in millions): September 30, 2022 December 31, 2021 Liability component: Principal 920.0 920.0 Less: debt issuance costs, net of amortization (15.3) (18.6) Net carrying amount 904.7 901.4 Equity component recorded at issuance: Capped call transactions 123.6 123.6 The Company recognized $1.1 million and $3.3 million related to the amortization of debt issuance and offering costs in interest expense, net on the consolidated statements of operations related to the Convertible Senior Notes for the three and nine-months ended September 30, 2022, respectively. The Company recognized $1.1 million and $2.4 million related to the amortization of debt issuance and offering costs in interest expense, net on the consolidated statements of operations related to the Convertible Senior Notes for the three and nine-months ended September 30, 2021, respectively. The effective interest rate for all periods was 0.49%. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2020 Omnibus Incentive Plan On August 5, 2020, the Company’s Board of Directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan,”). Under the 2020 Plan, employees, consultants and directors of the Company and our affiliates that perform services for us are eligible to receive awards. The 2020 Plan provides for the grant of incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), stock appreciation rights, restricted stock awards (“RSAs”), performance awards, other share-based awards (including restricted stock units (“RSUs”)) and other cash-based awards. The maximum number of shares available for issuance under the 2020 Plan may not exceed the sum of (i) 33,473,410 shares and (ii) 21,888,258 shares issued pursuant to restricted shares and the aggregate number of shares that may be issued pursuant to the rights granted under the ESPP may not exceed 2,386,875 shares, subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization (subject to annual increases as approved by the Board of Directors). Stock Options Activity, excluding PSOs Stock options granted by the Company generally vest over four years with 25% of the option shares vesting each year. Options generally expire ten years from the date of the grant. The following is a summary of stock option activity, excluding PSOs, as of and for the nine-months ended September 30, 2022 ($ in millions): Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Aggregate Intrinsic Value Outstanding, December 31, 2021 14,945,566 $ 21.89 8.61 $ 177.2 Granted 1,829,910 16.92 Exercised (560,905) 21.00 Cancelled (442,025) 23.77 Outstanding, September 30, 2022 15,772,546 $ 21.31 8.03 $ 62.1 Options exercisable as of September 30, 2022 8,630,780 $ 21.37 7.85 30.1 The aggregate intrinsic value of options exercised in each of the three-months ended September 30, 2022 and 2021 was $1.6 million, and $2.0 million and $8.2 million in the nine-months ended September 30, 2022 and 2021, respectively. Aggregate intrinsic value represents the difference between the exercise price of the option and the closing price of the Company’s common stock on the date of exercise. The fair value of options granted for the three-months ended September 30, 2022 and 2021 was $0.9 million and $0.4 million, respectively, and $15.7 million and $9.6 million for the nine-months ended September 30, 2022 and 2021, respectively. Performance Stock Options Activity In February 2022, the Company granted PSOs to certain of its executives, with 50% of the option shares vesting at the end of year two three The following is a summary of PSO activity as of and for the nine-months ended September 30, 2022 ($ in millions): Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Aggregate Intrinsic Value Outstanding, December 31, 2021 — $ — — $ — Granted 3,300,505 15.75 Exercised — — Cancelled — — Outstanding, September 30, 2022 3,300,505 $ 15.75 9.4 $ 28.9 Options exercisable as of September 30, 2022 — $ — — — RSU Activity RSUs granted generally vest ratably over four years. The following is a summary of RSU transactions as of and for the nine-months ended September 30, 2022: Unvested Shares Grant Date Fair Value Unvested, December 31, 2021 476,628 $ 47.30 Granted 2,572,673 17.69 Vested (149,850) 40.39 Canceled and forfeited (281,823) 21.97 Unvested, September 30, 2022 2,617,628 $ 21.59 PSU Activity The Company granted PSUs to certain of its employees during the second quarter of 2022 with the units vesting in April 2023, subject in each case to the satisfaction of certain performance-based conditions. The following is a summary of PSU activity as of and for the nine-months ended September 30, 2022: Unvested Shares Grant Date Fair Value Unvested, December 31, 2021 111,184 $ 33.73 Granted 455,426 23.66 Vested — — Canceled and forfeited (5,705) 24.17 Unvested, September 30, 2022 560,905 $ 27.88 RSA Activity The RSAs were granted as part of the pre-IPO conversion. The following is a summary of RSA transactions as of and for the nine-months ended September 30, 2022: Unvested Shares Grant Date Fair Value Unvested, December 31, 2021 16,090,990 $ 14.71 Granted — — Vested (9,040,014) 15.73 Canceled and forfeited (280,956) 15.57 Unvested, September 30, 2022 6,770,020 $ 13.31 Employee Stock Purchase Plan On August 5, 2020, the Board of Directors adopted, and the OSH LLC’s and OSH MH LLC’s majority unitholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP is more fully described in Note 13 to the consolidated financial statements included in our 2021 Form 10-K. During the nine-months ended September 30, 2022 and 2021, 224,473 shares and 62,575 shares, respectively, were purchased under the ESPP. Stock-Based Compensation Expense The following table is a summary of stock-based compensation expense by function ($ in millions): Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Cost of care, excluding depreciation and amortization $ 1.3 $ 0.5 $ 2.7 $ 1.2 Sales and marketing 1.4 0.8 3.8 2.5 Corporate, general and administrative 28.1 37.4 113.5 118.2 Total 30.8 38.7 120.0 121.9 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingencies The Company is presently, and from time to time, subject to various claims and lawsuits arising in the normal course of business. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations. Uncertainties The healthcare industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not limited to, matters such as licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with imposition of significant fines and penalties, as well as significant repayments for patient services billed. On November 1, 2021, the Company received a civil investigative demand (“CID”) from the United States Department of Justice. According to the CID, the Department of Justice is investigating whether the Company may have violated the False Claims Act, 31 U.S.C. §§ 3729-3722. The CID requests certain documents and information related to the Company’s relationships with third-party marketing agents and related to the Company’s provision of free transportation to federal health care beneficiaries and requests information and documents related to such matters. We are continuing to cooperate with the Department of Justice in response to the CID. We are currently unable to predict the outcome of this investigation or whether litigation is probable. Regardless of the outcome, this inquiry has the potential to have an adverse impact on us due to any related defense and settlement costs, diversion of management resources and other factors. On January 10, 2022, Reginald T. Allison, individually and on behalf of all others similarly situated, filed a putative class action lawsuit against the Company, Michael Pykosz, and Timothy Cook in the United States District Court for the Northern District of Illinois (Case No. 1:22-cv-00149). On March 25, 2022, Central Pennsylvania Teamsters Pension Fund – Defined Benefit Plan, Central Pennsylvania Teamsters Pension Fund – Retirement Income Plan 1987, and Boston Retirement System’s (collectively, the “Northeast Pension Funds”) were appointed as the lead plaintiffs in the case. On May 25, 2022, the Northeast Pension Funds along with an additional named plaintiff, the City of Dearborn Police & Fire Revised Retirement System, filed their consolidated amended and restated complaint (the “Amended Complaint”). Plaintiffs allege that the Company and certain of its executive officers made false and/or misleading statements about patient acquisition tactics that purportedly violated the False Claims Act and federal Anti-Kickback Statute, and are purportedly the subject of the CID discussed above. The Amended Complaint includes two categories of claims: (1) claims under the Securities Exchange Act of 1934 based on allegedly misleading public statements throughout the class period of August 6, 2020 through November 8, 2021 (the “Exchange Act Claims”), and (2) claims under the Securities Act of 1933 based on allegedly misleading statements in the registration statements and prospectuses accompanying Oak Street Health, Inc.’s initial public offering and secondary public offerings (the “Securities Act Claims”). The Exchange Act claims are asserted against Oak Street Health, Inc., Michael Pykosz, our CEO and Timothy Cook, our CFO, and also against certain stockholders of as “control persons.” The Securities Act Claims are asserted against the same defendants as well as the underwriters of the Company’s public offerings, and the Oak Street Health, Inc. directors who signed the registration statements. The Amended Complaint seeks damages, interest, costs, attorneys’ fees and other unspecified equitable relief. On July 25, 2022, the defendants filed a consolidated motion to dismiss the Amended Complaint. On September 26, 2022, the plaintiffs' opposition to that motion to dismiss was filed, and the defendants reply to that opposition was filed on October 26, 2022. The court will now consider the motion in due course. In the event that the defendants's motion to dismiss is not granted, the Company intends to continue to vigorously defend this matter. Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for success on the merits, the Company cannot estimate the reasonably possible loss or range of loss that may result from this action. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Physician Groups, or affiliated physician practice organizations, were established to employ healthcare providers, contract with managed care payors and to deliver healthcare services to patients in the markets that the Company serves. The Company evaluated whether it has a variable interest in the Physician Groups, whether the Physician Groups are VIEs and whether the Company has a controlling financial interest in the Physician Groups. The Company concluded that it has variable interests in the Physician Groups on the basis of its Administrative Service Agreement (“ASA”) which provides for reimbursement of costs and a management fee payable to the Company from the Physician Groups in exchange for providing management and administrative services which creates risks and a potential return to the Company. The Physician Group’s equity at risk, as defined by U.S. GAAP, is insufficient to finance its activities without additional support, and, therefore, the Physician Groups are considered VIEs. The tables below illustrates the VIE assets and liabilities and performance for the Physician Groups as of and for the periods ended ($ in millions): September 30, 2022 December 31, 2021 Total assets $ 945.7 $ 596.2 Total liabilities 868.2 564.4 Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Total revenues $ 543.3 $ 350.5 $ 1,575.9 $ 644.9 Medical claims expense 426.3 283.0 1,195.4 481.9 Cost of care 55.5 34.5 153.3 67.4 Total operating expenses $ 481.8 $ 317.5 $ 1,348.7 $ 549.3 |
RELATED PARTIES
RELATED PARTIES | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES Humana Humana held over 5% of our common stock during the year ended December 31, 2021. Additionally, a Humana representative served on the Board of Directors from 2020 until his retirement, effective September 7, 2021. Humana no longer has a representative on the Board of Directors as of September 7, 2021. Humana is no longer a related party for the year ending December 31, 2022, and as such, the Company has included prior year transaction amounts only on the consolidated balance sheet and consolidated statement of operations. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per common share for the three and nine-months ended September 30, 2022 and 2021 ($ in millions). Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Numerator: Net loss $ (130.4) $ (110.0) $ (375.3) $ (274.3) Less: Net income/(loss) attributable to non-controlling interests 0.3 (0.6) 0.9 (3.5) Net loss attributable to Oak Street Health, Inc. (130.7) (109.4) (376.2) (270.8) Denominator: Weighted average common shares outstanding - basic and diluted 231,919,421 223,435,698 228,042,160 221,932,624 Net loss per share – basic and diluted $ (0.56) $ (0.49) $ (1.65) $ (1.22) The Company’s potentially dilutive securities, which included stock options (including PSOs), unvested RSUs (including PSUs), unvested RSAs, and shares issuable upon conversion of our Convertible Senior Notes, have been excluded from the computation of diluted net loss per share as the effect would reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share was the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated: Nine-Months Ended September 30, 2022 2021 Stock options 19,073,051 14,999,384 RSUs 3,178,533 341,215 RSAs 6,770,020 16,792,134 Convertible Senior Notes 11,622,176 11,622,176 40,643,780 43,754,909 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited interim consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such regulations that would substantially duplicate the disclosures contained in the Company's annual audited consolidated financial statements. These financial statements have been prepared on a basis consistent with the accounting principles applied for the fiscal year ended December 31, 2021 in the Company’s 2021 Form 10-K filed with the SEC. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. |
Consolidation | The consolidated financial statements of the Company include the financial statements of all wholly owned subsidiaries and majority-owned or controlled companies, which include the variable interest entities (“VIE”) in which OSH has an interest and is the primary beneficiary. See Note 11, “Variable Interest Entities.” For those consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocable to the non-controlling interests is reported as “Net loss (gain) attributable to non-controlling interests” in the consolidated statements of operations. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances including estimates of the impact of COVID-19. The areas where significant estimates are used in the accompanying financial statements include revenue recognition, the liability for unpaid claims, stock-based compensation, valuation and related impairment recognition of long-lived assets, including intangibles and goodwill and the valuation of stock options. Actual results could differ from those estimates. |
Stock-based compensation expense | The Company accounts for stock-based compensation as an expense in the statements of operations based on the awards' fair values at their respective grant dates. The Company estimates the fair value of options with service conditions granted using the Black-Scholes option pricing model. Stock options that include service and performance conditions are valued at their grant date using the Black-Scholes model and estimates regarding the probability of achieving the performance metrics. The Black-Scholes option pricing model requires inputs based on certain assumptions, including (a) the fair value per share of the Company's common stock, (b) the expected stock price volatility, (c) the expected term of the award, (d) the risk-free interest rate and (e) expected dividends. The fair value of stock-based awards is recognized as compensation expense, net of actual forfeitures, over the requisite service period, which is generally the vesting period, with the exception of the fair value of stock-based payments for awards that include service and performance conditions which is recognized as compensation expense over the requisite service period as achievement of the performance objective becomes probable. The Company issued certain performance stock options (“PSOs”) during the first quarter of 2022, that vest based on the satisfaction of certain service and performance-based conditions. The Company estimates compensation expense based on the grant date fair value of the awards and recognizes the expense on a graded vesting basis over the vesting period of the awards. Compensation expense for these awards is recognized only if the Company has determined that it is probable that the performance condition will be met. The Company reassesses the probability of vesting at each reporting period and adjusts compensation expense based on the probability assessment. The Company issued certain performance stock units ("PSUs") during the second quarter of 2022. The awards will vest based on the satisfaction of certain service conditions and performance-based conditions. The Company estimates compensation expense based on the grant date fair value of the awards and recognizes the expense on a straight-line basis over the vesting period of the award. Compensation expense for these awards is recognized only if the Company has determined that it is probable that the performance condition will be met. The Company reassesses the probability of vesting at each reporting period and adjusts compensation expense based on the probability assessment. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In October 2021, the FASB issued Accounting Standard Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The new guidance requires contract assets and liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers , as if it had originated the contracts. Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. The new standard is effective for fiscal years beginning after December 15, 2022. Early adoption is permitted. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the effective date of adoption. We elected to adopt this guidance early effective as of the quarter ended September 30, 2022 in connection with the Company’s acquisition of substantially all of the assets of CHW Cares Inc. ("CHW"), which was completed during the quarter. The guidance was not applicable to the CHW acquisition as contract assets and liabilities were not acquired, and as such, the adoption did not have a material effect on our consolidated financial statements or notes to the consolidated financial statements. For more information about the CHW acquisition, see Note 5, "Business Combinations, Goodwill and Intangible Assets." In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance . This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This standard is effective for fiscal years beginning after December 15, 2021 and should be applied prospectively or retrospectively. We have adopted ASU 2021-10 as of January 1, 2022 using the prospective method. This adoption did not have a material impact on our consolidated financial statements or notes to the consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) of Equity Securities Subject to Contractual Sale Restrictions |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company has agreements in place with the payors listed below, and payor sources of capitated revenue for each period presented were as follows: Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Humana 31 % 35 % 32 % 37 % Wellcare/Meridian 16 % 15 % 17 % 16 % UnitedHealth Care 10 % 8 % 9 % 7 % CMS 8 % 10 % 8 % 7 % Other 35 % 32 % 34 % 33 % The composition of other revenue for each period was as follows ($ in millions): Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Care coordination and care management services $ 1.8 $ 9.8 5.2 $ 18.4 License subscription and other fees 3.3 — 9.5 — Fee for service 2.7 2.2 8.4 5.5 Total other revenue $ 7.8 $ 12.0 23.1 $ 23.9 |
FAIR VALUE MEASUREMENTS AND I_2
FAIR VALUE MEASUREMENTS AND INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | The following tables present information about the Company’s financial assets measured at fair value on a recurring basis ($ in millions): Fair Value Measurements as of September 30, 2022 using: Fair Value Measurements as of December 31, 2021 using: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Marketable debt securities: Commercial paper $ 61.5 $ — $ — $ 120.8 $ — $ — U.S. Treasury obligations — 12.8 — — 26.0 — Corporate bonds — 201.2 — — 412.3 — Asset-backed securities — 33.8 — — 99.2 — Other — 29.7 — — 12.8 — Total financial assets $ 61.5 $ 277.5 $ — $ 120.8 $ 550.3 $ — Liabilities: Convertible senior notes $ — $ 710.5 $ — $ — $ 752.7 $ — Contingent consideration 1 — — 0.2 — — 21.8 Total liabilities $ — $ 710.5 $ 0.2 $ — $ 752.7 $ 21.8 1 During the quarter-ended June 30, 2022, RMD achieved both earn-out hurdles. As such, the Company no longer measured the fair value of the contingent consideration and instead recorded the maximum earn-out as an amount payable to RMD as of June 30, 2022. See Footnote 5 for further detail. |
Schedule of Marketable Debt Securities Classified as Available-for-sale | At September 30, 2022, the Company’s marketable debt securities classified as available-for-sale were as follows ($ in millions): September 30, 2022 December 31, 2021 Amortized cost Net unrealized gains (losses) Fair value Amortized cost Net unrealized gains (losses) Fair value Marketable debt securities: Commercial paper $ 61.7 $ (0.2) $ 61.5 $ 120.9 $ (0.1) $ 120.8 U.S. Treasury obligations 12.9 (0.1) 12.8 26.0 — 26.0 Corporate bonds 204.6 (3.4) 201.2 413.4 (1.1) 412.3 Asset-backed securities 34.0 (0.2) 33.8 99.4 (0.2) 99.2 Other 29.9 (0.2) 29.7 12.8 — 12.8 Total marketable debt securities $ 343.1 $ (4.1) $ 339.0 $ 672.5 $ (1.4) $ 671.1 |
BUSINESS COMBINATIONS, GOODWI_2
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination And Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The remaining estimated future amortization expense by year, as of September 30, 2022, is presented in the following table: (in millions) 2022 $ 0.5 2023 1.7 2024 1.7 2025 1.7 2026 1.7 Thereafter 2.3 Estimated aggregate future intangible asset amortization $ 9.6 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense for the Company’s operating leases were as follows for the three and nine-months ended September 30, 2022 and September 30, 2021 ($ in millions): Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Operating lease cost 2 $ 13.3 $ 5.6 $ 34.6 $ 15.0 Variable lease cost 2 2.1 5.3 7.3 14.0 Total lease cost $ 15.4 $ 10.9 $ 41.9 $ 29.0 2 See Note 2 for discussion of the correction of an immaterial prior period error. The correction of the classification of leasehold improvements resulted in a prior period benefit recorded to operating lease costs during the nine-months ended September 30, 2022. Additionally, as a result of the correction, certain variable lease expenses were re-classified as operating lease expenses during the nine-months ended September 30, 2022. These corrections impacted the comparability of variable lease costs year over year. The weighted-average remaining lease term and discount rate for operating lease liabilities included in the consolidated balance sheets are as follows: September 30, 2022 December 31, 2021 Weighted-average remaining lease term (in years) 8.8 9.9 Weighted-average discount rate 4.37 % 4.17 % |
Lessee, Operating Lease, Liability, Maturity | The table below presents the future minimum lease payments under the non-cancelable operating leases as of September 30, 2022 ($ in millions): 2022 $ 10.5 2023 48.5 2024 54.7 2025 52.5 2026 52.1 2027 52.3 Thereafter 196.9 Total lease payments $ 467.5 Less: imputed interest (101.8) Total operating lease liabilities $ 365.7 Reported as: Operating lease liabilities, current (1) 23.9 Operating lease liabilities, noncurrent 341.8 Total operating lease liabilities $ 365.7 (1) Included in other liabilities on the consolidated balance sheet |
LIABILITY FOR UNPAID CLAIMS (Ta
LIABILITY FOR UNPAID CLAIMS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |
Summary of Liability for Unpaid Claims and Claims Adjustment Expense | Activity within liabilities for unpaid claims was as follows for the nine-months ended ($ in millions): September 30, 2022 2021 Balance, beginning of period $ 556.3 $ 262.1 Incurred health care costs: Current year 1,195.3 785.2 Prior years — 5.2 Total claims incurred $ 1,195.3 $ 790.4 Claims paid: Current year (482.9) (366.5) Prior years (485.4) (246.4) Total claims paid $ (968.3) $ (612.9) Adjustments to other claims-related liabilities 3.8 2.7 Balance, end of period $ 787.1 $ 442.3 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt Instruments | The Convertible Senior Notes and capped call transactions consisted of the following balances reported in the consolidated balance sheet as of September 30, 2022 and December 31, 2021 ($ in millions): September 30, 2022 December 31, 2021 Liability component: Principal 920.0 920.0 Less: debt issuance costs, net of amortization (15.3) (18.6) Net carrying amount 904.7 901.4 Equity component recorded at issuance: Capped call transactions 123.6 123.6 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following is a summary of stock option activity, excluding PSOs, as of and for the nine-months ended September 30, 2022 ($ in millions): Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Aggregate Intrinsic Value Outstanding, December 31, 2021 14,945,566 $ 21.89 8.61 $ 177.2 Granted 1,829,910 16.92 Exercised (560,905) 21.00 Cancelled (442,025) 23.77 Outstanding, September 30, 2022 15,772,546 $ 21.31 8.03 $ 62.1 Options exercisable as of September 30, 2022 8,630,780 $ 21.37 7.85 30.1 |
Share-based Payment Arrangement, Performance Shares, Activity | The following is a summary of PSO activity as of and for the nine-months ended September 30, 2022 ($ in millions): Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Aggregate Intrinsic Value Outstanding, December 31, 2021 — $ — — $ — Granted 3,300,505 15.75 Exercised — — Cancelled — — Outstanding, September 30, 2022 3,300,505 $ 15.75 9.4 $ 28.9 Options exercisable as of September 30, 2022 — $ — — — |
Summary of Restricted Stock Awards (RSA) Activity | The following is a summary of RSU transactions as of and for the nine-months ended September 30, 2022: Unvested Shares Grant Date Fair Value Unvested, December 31, 2021 476,628 $ 47.30 Granted 2,572,673 17.69 Vested (149,850) 40.39 Canceled and forfeited (281,823) 21.97 Unvested, September 30, 2022 2,617,628 $ 21.59 The RSAs were granted as part of the pre-IPO conversion. The following is a summary of RSA transactions as of and for the nine-months ended September 30, 2022: Unvested Shares Grant Date Fair Value Unvested, December 31, 2021 16,090,990 $ 14.71 Granted — — Vested (9,040,014) 15.73 Canceled and forfeited (280,956) 15.57 Unvested, September 30, 2022 6,770,020 $ 13.31 |
Schedule of Nonvested Performance-based Units Activity | The following is a summary of PSU activity as of and for the nine-months ended September 30, 2022: Unvested Shares Grant Date Fair Value Unvested, December 31, 2021 111,184 $ 33.73 Granted 455,426 23.66 Vested — — Canceled and forfeited (5,705) 24.17 Unvested, September 30, 2022 560,905 $ 27.88 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | The following table is a summary of stock-based compensation expense by function ($ in millions): Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Cost of care, excluding depreciation and amortization $ 1.3 $ 0.5 $ 2.7 $ 1.2 Sales and marketing 1.4 0.8 3.8 2.5 Corporate, general and administrative 28.1 37.4 113.5 118.2 Total 30.8 38.7 120.0 121.9 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of VIE Assets and Liabilities and Performance for the Physician Groups | The tables below illustrates the VIE assets and liabilities and performance for the Physician Groups as of and for the periods ended ($ in millions): September 30, 2022 December 31, 2021 Total assets $ 945.7 $ 596.2 Total liabilities 868.2 564.4 Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Total revenues $ 543.3 $ 350.5 $ 1,575.9 $ 644.9 Medical claims expense 426.3 283.0 1,195.4 481.9 Cost of care 55.5 34.5 153.3 67.4 Total operating expenses $ 481.8 $ 317.5 $ 1,348.7 $ 549.3 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Common Unit | The following table sets forth the computation of basic and diluted net loss per common share for the three and nine-months ended September 30, 2022 and 2021 ($ in millions). Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Numerator: Net loss $ (130.4) $ (110.0) $ (375.3) $ (274.3) Less: Net income/(loss) attributable to non-controlling interests 0.3 (0.6) 0.9 (3.5) Net loss attributable to Oak Street Health, Inc. (130.7) (109.4) (376.2) (270.8) Denominator: Weighted average common shares outstanding - basic and diluted 231,919,421 223,435,698 228,042,160 221,932,624 Net loss per share – basic and diluted $ (0.56) $ (0.49) $ (1.65) $ (1.22) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated: Nine-Months Ended September 30, 2022 2021 Stock options 19,073,051 14,999,384 RSUs 3,178,533 341,215 RSAs 6,770,020 16,792,134 Convertible Senior Notes 11,622,176 11,622,176 40,643,780 43,754,909 |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) center jointVenture | Jun. 30, 2022 USD ($) | Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Number of centers operated | center | 161 | |||
Number of majority interest joint ventures | jointVenture | 2 | |||
OSH-ESC Joint Venture, LLC | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Payments to acquire business, gross | $ 2.1 | |||
Percentage of interests acquired | 49.90% | |||
Ownership percentage | 100% | |||
Primary Care Physicians of Joliet | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Distribution from limited partnership | $ 0.5 | $ 0.8 | ||
Primary Care Physicians of Joliet | OSH-PCJ Joliet, LLC (PCJ JV) | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Limited liability company, ownership interest | 49.90% | |||
Oak Street Health MSO, LLC | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Distribution from limited partnership | $ 0.5 | $ 0.8 | ||
Oak Street Health MSO, LLC | OSH-PCJ Joliet, LLC (PCJ JV) | ||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Limited liability company, ownership interest | 50.10% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Significant Accounting Policies [Line Items] | ||||
Decrease in cost of care | $ (113.6) | $ (76.3) | $ (307.6) | $ (203.6) |
Net loss per share – basic (in dollars per share) | $ (0.56) | $ (0.49) | $ (1.65) | $ (1.22) |
Net loss per share – diluted (in dollars per share) | $ (0.56) | $ (0.49) | $ (1.65) | $ (1.22) |
Revision of Prior Period, Adjustment | Lease Liability Correction | ||||
Significant Accounting Policies [Line Items] | ||||
Decrease in cost of care | $ 3.6 | |||
Net loss per share – basic (in dollars per share) | $ 0.02 | |||
Net loss per share – diluted (in dollars per share) | $ 0.02 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Sources of Capitated Revenue (Details) - Capitated Revenue - Capitated Revenue - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Humana | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration risk percentage | 31% | 35% | 32% | 37% |
Wellcare/Meridian | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration risk percentage | 16% | 15% | 17% | 16% |
UnitedHealth Care | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration risk percentage | 10% | 8% | 9% | 7% |
CMS | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration risk percentage | 8% | 10% | 8% | 7% |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Concentration risk percentage | 35% | 32% | 34% | 33% |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | |||||
Acuity-related adjustments receivable | $ 44,400,000 | $ 40,100,000 | $ 44,400,000 | $ 40,100,000 | |
Contract liabilities | 37,300,000 | 37,300,000 | $ 33,900,000 | ||
Short-term contract liability | 6,700,000 | 6,700,000 | 6,200,000 | ||
Long-term contract liability | $ 30,600,000 | $ 30,600,000 | $ 27,700,000 | ||
Capitated Revenue | Customer Concentration Risk | Medicare Part D | |||||
Disaggregation Of Revenue [Line Items] | |||||
Concentration risk percentage | 2% | 2% | 2% | 2% | |
Medical Claims Expense Benchmark | Customer Concentration Risk | Medicare Part D | |||||
Disaggregation Of Revenue [Line Items] | |||||
Concentration risk percentage | 3% | 2% | 2% | 3% |
REVENUE RECOGNITION - Summary_2
REVENUE RECOGNITION - Summary of Composition of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 545.7 | $ 388.7 | $ 1,583.2 | $ 1,038.5 |
Other Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 7.8 | 12 | 23.1 | 23.9 |
Fee-For-Service | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 2.7 | 2.2 | 8.4 | 5.5 |
Care Coordination And Care Management | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 1.8 | 9.8 | 5.2 | 18.4 |
License Subscription And Other Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | $ 3.3 | $ 0 | $ 9.5 | $ 0 |
FAIR VALUE MEASUREMENTS AND I_3
FAIR VALUE MEASUREMENTS AND INVESTMENTS - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Marketable debt securities | $ 339,000,000 | $ 671,100,000 |
Commercial paper | ||
ASSETS | ||
Marketable debt securities | 61,500,000 | 120,800,000 |
U.S. Treasury obligations | ||
ASSETS | ||
Marketable debt securities | 12,800,000 | 26,000,000 |
Corporate bonds | ||
ASSETS | ||
Marketable debt securities | 201,200,000 | 412,300,000 |
Asset-backed securities | ||
ASSETS | ||
Marketable debt securities | 33,800,000 | 99,200,000 |
Other | ||
ASSETS | ||
Marketable debt securities | 29,700,000 | 12,800,000 |
Fair Value Measurements, Recurring Basis | Level 1 | ||
ASSETS | ||
Total financial assets | 61,500,000 | 120,800,000 |
Liabilities: | ||
Convertible senior notes | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 1 | Commercial paper | ||
ASSETS | ||
Marketable debt securities | 61,500,000 | 120,800,000 |
Fair Value Measurements, Recurring Basis | Level 1 | U.S. Treasury obligations | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 1 | Corporate bonds | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 1 | Asset-backed securities | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 1 | Other | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 2 | ||
ASSETS | ||
Total financial assets | 277,500,000 | 550,300,000 |
Liabilities: | ||
Convertible senior notes | 710,500,000 | 752,700,000 |
Contingent consideration | 0 | 0 |
Total liabilities | 710,500,000 | 752,700,000 |
Fair Value Measurements, Recurring Basis | Level 2 | Commercial paper | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 2 | U.S. Treasury obligations | ||
ASSETS | ||
Marketable debt securities | 12,800,000 | 26,000,000 |
Fair Value Measurements, Recurring Basis | Level 2 | Corporate bonds | ||
ASSETS | ||
Marketable debt securities | 201,200,000 | 412,300,000 |
Fair Value Measurements, Recurring Basis | Level 2 | Asset-backed securities | ||
ASSETS | ||
Marketable debt securities | 33,800,000 | 99,200,000 |
Fair Value Measurements, Recurring Basis | Level 2 | Other | ||
ASSETS | ||
Marketable debt securities | 29,700,000 | 12,800,000 |
Fair Value Measurements, Recurring Basis | Level 3 | ||
ASSETS | ||
Total financial assets | 0 | 0 |
Liabilities: | ||
Convertible senior notes | 0 | 0 |
Contingent consideration | 200,000 | 21,800,000 |
Total liabilities | 200,000 | 21,800,000 |
Fair Value Measurements, Recurring Basis | Level 3 | Commercial paper | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 3 | U.S. Treasury obligations | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 3 | Corporate bonds | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 3 | Asset-backed securities | ||
ASSETS | ||
Marketable debt securities | 0 | 0 |
Fair Value Measurements, Recurring Basis | Level 3 | Other | ||
ASSETS | ||
Marketable debt securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS AND I_4
FAIR VALUE MEASUREMENTS AND INVESTMENTS - Schedule of Marketable Debt Securities Classified as Available-for-sale (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 343.1 | $ 672.5 |
Net unrealized gains (losses) | (4.1) | (1.4) |
Fair value | 339 | 671.1 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 61.7 | 120.9 |
Net unrealized gains (losses) | (0.2) | (0.1) |
Fair value | 61.5 | 120.8 |
U.S. Treasury obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 12.9 | 26 |
Net unrealized gains (losses) | (0.1) | 0 |
Fair value | 12.8 | 26 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 204.6 | 413.4 |
Net unrealized gains (losses) | (3.4) | (1.1) |
Fair value | 201.2 | 412.3 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 34 | 99.4 |
Net unrealized gains (losses) | (0.2) | (0.2) |
Fair value | 33.8 | 99.2 |
Other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 29.9 | 12.8 |
Net unrealized gains (losses) | (0.2) | 0 |
Fair value | $ 29.7 | $ 12.8 |
FAIR VALUE MEASUREMENTS AND I_5
FAIR VALUE MEASUREMENTS AND INVESTMENTS - Additional Information (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt securities, available-for-sale, term | 5 years | |
Debt securities, available-for-sale, allowance for credit loss | $ 0 | $ 0 |
Line of Credit | Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument face value | 300,000,000 | |
Net carrying amount | $ 72,300,000 |
BUSINESS COMBINATIONS, GOODWI_3
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS -Summary of remaining weighted average amortization period of finite-lived intangible assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Business Combination And Goodwill And Intangible Assets Disclosure [Abstract] | ||
2022 | $ 500,000 | |
2023 | 1,700,000 | |
2024 | 1,700,000 | |
2025 | 1,700,000 | |
2026 | 1,700,000 | |
Thereafter | 2,300,000 | |
Other long-term assets | $ 9,600,000 | $ 10,800,000 |
BUSINESS COMBINATIONS, GOODWI_4
BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 23, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Combination And Goodwill And Intangible Assets Disclosure [Abstract] | ||||||
Goodwill | $ 158,000,000 | $ 158,000,000 | $ 152,900,000 | |||
Net intangible assets | 9,600,000 | 9,600,000 | 10,800,000 | |||
Accumulated amortization | 2,900,000 | 2,900,000 | 1,700,000 | |||
Amortization of intangible assets | 400,000 | $ 100,000 | $ 1,200,000 | $ 300,000 | ||
Weighted average useful life of finite-lived intangible assets acquired | 5 years 9 months 18 days | |||||
Business Acquisition [Line Items] | ||||||
Settlement of contingent earnout liability | $ 21,700,000 | 0 | ||||
Fair value adjustment to contingent consideration | 38,300,000 | $ 0 | ||||
Goodwill | 158,000,000 | 158,000,000 | $ 152,900,000 | |||
RMD | ||||||
Business Acquisition [Line Items] | ||||||
Purchase accounting adjustments | 200,000 | |||||
Current contingent liability | 60,000,000 | 60,000,000 | ||||
Payments for previous acquisition | 27,500,000 | |||||
Equity interests issuable | 32,500,000 | |||||
Fair value adjustment to contingent consideration | $ 0 | $ 38,300,000 | ||||
CHW Cares Inc. | ||||||
Business Combination And Goodwill And Intangible Assets Disclosure [Abstract] | ||||||
Goodwill | $ 5,300,000 | |||||
Business Acquisition [Line Items] | ||||||
Total purchase price | 6,200,000 | |||||
Estimated fair value of contingent consideration | 200,000 | |||||
Maximum potential earn-out | 5,500,000 | |||||
Goodwill | $ 5,300,000 |
LEASES - Summary of Components
LEASES - Summary of Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 13.3 | $ 5.6 | $ 34.6 | $ 15 |
Variable lease cost | 2.1 | 5.3 | 7.3 | 14 |
Total lease cost | $ 15.4 | $ 10.9 | $ 41.9 | $ 29 |
LEASES - Additional Information
LEASES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease right-of-use asset | $ 22.6 | $ 22.7 | $ 89.2 | $ 49.5 |
LEASES - Summary of Weighted Av
LEASES - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 8 years 9 months 18 days | 9 years 10 months 24 days |
Weighted-average discount rate | 4.37% | 4.17% |
LEASES - Summary of Future Mini
LEASES - Summary of Future Minimum Lease Payments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2022 | $ 10.5 | |
2023 | 48.5 | |
2024 | 54.7 | |
2025 | 52.5 | |
2026 | 52.1 | |
2027 | 52.3 | |
Thereafter | 196.9 | |
Total lease payments | 467.5 | |
Less: imputed interest | (101.8) | |
Total operating lease liabilities | 365.7 | |
Reported as: | ||
Operating lease liabilities, current | 23.9 | |
Operating Lease, Liability, Noncurrent | 341.8 | $ 164.2 |
Total operating lease liabilities | $ 365.7 | |
Operating lease, liability, current, statement of financial position | Other liabilities (Humana comprised $19.3 as of December 31, 2021) |
LIABILITY FOR UNPAID CLAIMS (De
LIABILITY FOR UNPAID CLAIMS (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balance, beginning of period | $ 556.3 | $ 262.1 |
Incurred health care costs: | ||
Current year | 1,195.3 | 785.2 |
Prior years | 0 | 5.2 |
Total claims incurred | 1,195.3 | 790.4 |
Claims paid: | ||
Current year | (482.9) | (366.5) |
Prior years | (485.4) | (246.4) |
Total claims paid | (968.3) | (612.9) |
Adjustments to other claims-related liabilities | 3.8 | 2.7 |
Balance, end of period | $ 787.1 | $ 442.3 |
LONG-TERM DEBT - Additional Inf
LONG-TERM DEBT - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) | Mar. 16, 2021 USD ($) center $ / shares shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | |
Prepayment Penalty Fee, Year One | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee | 2% | 2% | 2% | |||||
Prepayment Penalty Fee, Year Two | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee | 1% | 1% | 1% | |||||
Prepayment Penalty Fee, Year Three | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee | 0.50% | 0.50% | 0.50% | |||||
Prepayment Penalty Fee, Year Four And After Year Four | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment fee | 0% | 0% | 0% | |||||
Capped Call Transactions | ||||||||
Debt Instrument [Line Items] | ||||||||
Payments for capped calls | $ 123,600,000 | |||||||
Capped call strike price (in dollars per share) | $ / shares | $ 79.16 | |||||||
Conversion price cap (in dollars per share) | $ / shares | $ 138.8750 | |||||||
Number of shares covered by capped calls (in shares) | shares | 11,622,176 | |||||||
Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from long term debt issuance | $ 897,900,000 | |||||||
Net carrying amount | $ 904,700,000 | $ 904,700,000 | $ 904,700,000 | $ 901,400,000 | ||||
Debt instrument face value | $ 920,000,000 | $ 120,000,000 | ||||||
Long term debt variable interest rate percentage | 0% | |||||||
Debt issuance cost | $ 22,100,000 | |||||||
Amortization of debt issuance costs | $ 1,100,000 | $ 1,100,000 | $ 3,300,000 | $ 2,400,000 | ||||
Effective interest rate | 0.49% | 0.49% | 0.49% | 0.49% | 0.49% | |||
Consecutive trading days | center | 30 | |||||||
Line of Credit | Term Loan | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 795% | 795% | 795% | |||||
Debt instrument, PIK interest percentage | 1% | 1% | 1% | |||||
End of term fee | 4.95% | 4.95% | 4.95% | |||||
Net carrying amount | $ 72,300,000 | $ 72,300,000 | $ 72,300,000 | |||||
Debt instrument face value | 300,000,000 | 300,000,000 | 300,000,000 | |||||
Voluntary prepaid minimum increment amount | 25,000,000 | |||||||
Debt instrument, covenant, outstanding threshold | $ 100,000,000 | 100,000,000 | 100,000,000 | |||||
Line of Credit | Term Loan | Prime Rate | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable interest rate spread | 245% | |||||||
Line of Credit | Term Loan, Tranche A | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 25,000,000 | 25,000,000 | 25,000,000 | |||||
Line of Credit | Term Loan, Tranche A | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from long term debt issuance | 75,000,000 | |||||||
Line of Credit | Term Loan, Tranche B | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 50,000,000 | 50,000,000 | 50,000,000 | |||||
Incremental borrowing value | 25,000,000 | 25,000,000 | 25,000,000 | |||||
Line of Credit | Term Loan, Tranche C | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 50,000,000 | 50,000,000 | 50,000,000 | |||||
Incremental borrowing value | 25,000,000 | 25,000,000 | 25,000,000 | |||||
Line of Credit | Term Loan, Tranche D | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 75,000,000 | 75,000,000 | 75,000,000 | |||||
Incremental borrowing value | 25,000,000 | 25,000,000 | 25,000,000 | |||||
Line of Credit | Term Loan, Tranche E | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 |
LONG-TERM DEBT - Summary of Lon
LONG-TERM DEBT - Summary of Long-term Debt Instruments (Detail) - Convertible Debt - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Liability component: | ||
Principal | $ 920 | $ 920 |
Less: debt issuance costs, net of amortization | (15.3) | (18.6) |
Net carrying amount | 904.7 | 901.4 |
Equity component recorded at issuance: | ||
Capped call transactions | $ 123.6 | $ 123.6 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 05, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based payment award, number of shares available for issuance (in shares) | 33,473,410 | |||||
Aggregate intrinsic value of options exercised | $ 1.6 | $ 1.6 | $ 2 | $ 8.2 | ||
Fair value of grants in period | 0.9 | $ 0.4 | 15.7 | $ 9.6 | ||
Unrecognized compensation expense | $ 98.9 | $ 98.9 | ||||
Unrecognized compensation expense, period of recognition | 1 year 5 months 8 days | |||||
RSAs | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based payment award, number of shares available for issuance (in shares) | 21,888,258 | |||||
Employee Stock | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based payment award, number of shares available for issuance (in shares) | 2,386,875 | |||||
Stock options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Award vesting period | 4 years | |||||
Share-based payment award, expiration period | 10 years | |||||
Stock options | Tranche Two | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Stock options | Tranche Three | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Stock options | Tranche Four | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting percentage | 25% | |||||
Performance Shares | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based payment award, expiration period | 10 years | |||||
Fair value of grants in period | $ 25.8 | |||||
Performance Shares | Tranche One | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Award vesting period | 2 years | |||||
Vesting percentage | 50% | |||||
Performance Shares | Tranche Two | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Award vesting period | 3 years | |||||
Vesting percentage | 50% | |||||
RSUs | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Award vesting period | 4 years |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Number of Options | ||
Outstanding at beginning of period (in shares) | shares | 14,945,566 | |
Granted (in shares) | shares | 1,829,910 | |
Exercised (in shares) | shares | (560,905) | |
Cancelled (in shares) | shares | (442,025) | |
Outstanding at end of period (in shares) | shares | 15,772,546 | 14,945,566 |
Options exercisable (in shares) | shares | 8,630,780 | |
Weighted-Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 21.89 | |
Granted (in dollars per share) | $ / shares | 16.92 | |
Exercised (in dollars per share) | $ / shares | 21 | |
Cancelled (in dollars per share) | $ / shares | 23.77 | |
Outstanding at end of period (in dollars per share) | $ / shares | 21.31 | $ 21.89 |
Options exercisable (in dollars per share) | $ / shares | $ 21.37 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding balance | 8 years 10 days | 8 years 7 months 9 days |
Options exercisable | 7 years 10 months 6 days | |
Aggregate Intrinsic Value | ||
Options outstanding | $ | $ 62.1 | $ 177.2 |
Options exercisable | $ | $ 30.1 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Performance Share Activity (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Number of Options | ||
Outstanding at beginning of period (in shares) | shares | 14,945,566 | |
Granted (in shares) | shares | 1,829,910 | |
Exercised (in shares) | shares | (560,905) | |
Cancelled (in shares) | shares | (442,025) | |
Outstanding at end of period (in shares) | shares | 15,772,546 | 14,945,566 |
Weighted-Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 21.89 | |
Granted (in dollars per share) | $ / shares | 16.92 | |
Exercised (in dollars per share) | $ / shares | 21 | |
Cancelled (in dollars per share) | $ / shares | 23.77 | |
Outstanding at end of period (in dollars per share) | $ / shares | $ 21.31 | $ 21.89 |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding balance | 8 years 10 days | 8 years 7 months 9 days |
Options exercisable | 7 years 10 months 6 days | |
Aggregate Intrinsic Value | ||
Options outstanding | $ | $ 62,100,000 | $ 177,200,000 |
Options exercisable | $ | $ 30,100,000 | |
Performance Stock Options | ||
Number of Options | ||
Outstanding at beginning of period (in shares) | shares | 0 | |
Granted (in shares) | shares | 3,300,505 | |
Exercised (in shares) | shares | 0 | |
Cancelled (in shares) | shares | 0 | |
Outstanding at end of period (in shares) | shares | 3,300,505 | 0 |
Options exercisable (in shares) | shares | 0 | |
Weighted-Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 0 | |
Granted (in dollars per share) | $ / shares | 15.75 | |
Exercised (in dollars per share) | $ / shares | 0 | |
Cancelled (in dollars per share) | $ / shares | 0 | |
Outstanding at end of period (in dollars per share) | $ / shares | 15.75 | $ 0 |
Options exercisable (in dollars per share) | $ / shares | $ 0 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding balance | 9 years 4 months 24 days | 0 years |
Options exercisable | 0 years | |
Aggregate Intrinsic Value | ||
Options outstanding | $ | $ 28,900,000 | $ 0 |
Options exercisable | $ | $ 0 |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of RSU Activity (Details) - RSUs | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Unvested Shares | |
Beginning balance (in shares) | shares | 476,628 |
Granted (in shares) | shares | 2,572,673 |
Vested (in shares) | shares | (149,850) |
Canceled and forfeited (in shares) | shares | (281,823) |
Ending balance (in shares) | shares | 2,617,628 |
Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 47.30 |
Granted (in dollars per share) | $ / shares | 17.69 |
Vested (in dollars per share) | $ / shares | 40.39 |
Canceled and forfeited (in dollars per share) | $ / shares | 21.97 |
Ending balance (in dollars per share) | $ / shares | $ 21.59 |
STOCK-BASED COMPENSATION - Su_4
STOCK-BASED COMPENSATION - Summary of PSU Activity (Details) - Performance Share Unit (PSU) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Unvested Shares | |
Beginning balance (in shares) | shares | 111,184 |
Granted (in shares) | shares | 455,426 |
Vested (in shares) | shares | 0 |
Canceled and forfeited (in shares) | shares | (5,705) |
Ending balance (in shares) | shares | 560,905 |
Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 33.73 |
Granted (in dollars per share) | $ / shares | 23.66 |
Vested (in dollars per share) | $ / shares | 0 |
Canceled and forfeited (in dollars per share) | $ / shares | 24.17 |
Ending balance (in dollars per share) | $ / shares | $ 27.88 |
STOCK-BASED COMPENSATION - Su_5
STOCK-BASED COMPENSATION - Summary of Restricted Stock Awards (RSA) (Detail) - RSAs | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Options | |
Beginning balance (in shares) | shares | 16,090,990 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (9,040,014) |
Canceled and forfeited (in shares) | shares | (280,956) |
Ending balance (in shares) | shares | 6,770,020 |
Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 14.71 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 15.73 |
Canceled and forfeited (in dollars per share) | $ / shares | 15.57 |
Ending balance (in dollars per share) | $ / shares | $ 13.31 |
STOCK-BASED COMPENSATION - Su_6
STOCK-BASED COMPENSATION - Summary of Stock-based Compensation Expense by Function (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 30,800,000 | $ 38,700,000 | $ 120,000,000 | $ 121,900,000 |
Cost of care, excluding depreciation and amortization | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,300,000 | 500,000 | 2,700,000 | 1,200,000 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,400,000 | 800,000 | 3,800,000 | 2,500,000 |
Corporate, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 28,100,000 | $ 37,400,000 | $ 113,500,000 | $ 118,200,000 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||||
Total assets | $ 2,100.5 | $ 2,100.5 | $ 1,841.1 | ||
Total liabilities | 2,256.1 | 2,256.1 | 1,785.1 | ||
Total revenues | 545.7 | $ 388.7 | 1,583.2 | $ 1,038.5 | |
Medical claims expense | 427.4 | 309.8 | 1,198.4 | 790.9 | |
Cost of care | 113.6 | 76.3 | 307.6 | 203.6 | |
Total operating expenses | 675.9 | 498.1 | 1,917.1 | 1,311 | |
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Total assets | 945.7 | 945.7 | 596.2 | ||
Total liabilities | 868.2 | 868.2 | $ 564.4 | ||
Total revenues | 543.3 | 350.5 | 1,575.9 | 644.9 | |
Medical claims expense | 426.3 | 283 | 1,195.4 | 481.9 | |
Cost of care | 55.5 | 34.5 | 153.3 | 67.4 | |
Total operating expenses | $ 481.8 | $ 317.5 | $ 1,348.7 | $ 549.3 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Humana | |
Related Party Transaction [Line Items] | |
Percentage Of Common Stock Hold By Related Parties | 5% |
NET LOSS PER SHARE - Summary of
NET LOSS PER SHARE - Summary of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net loss | $ (130.4) | $ (110) | $ (375.3) | $ (274.3) |
Less: Net loss attributable to non-controlling interests | 0.3 | (0.6) | 0.9 | (3.5) |
Net loss attributable to Oak Street Health, Inc. | $ (130.7) | $ (109.4) | $ (376.2) | $ (270.8) |
Denominator: | ||||
Weighted average common shares outstanding - basic (in shares) | 231,919,421 | 223,435,698 | 228,042,160 | 221,932,624 |
Weighted average common shares outstanding - diluted (in shares) | 231,919,421 | 223,435,698 | 228,042,160 | 221,932,624 |
Net loss per share – basic (in dollars per share) | $ (0.56) | $ (0.49) | $ (1.65) | $ (1.22) |
Net loss per share – diluted (in dollars per share) | $ (0.56) | $ (0.49) | $ (1.65) | $ (1.22) |
NET LOSS PER SHARE - Summary _2
NET LOSS PER SHARE - Summary of Potential Common Shares Outstanding from the Computation of Diluted Net Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Computation of diluted net loss per share | 40,643,780 | 43,754,909 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Computation of diluted net loss per share | 19,073,051 | 14,999,384 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Computation of diluted net loss per share | 3,178,533 | 341,215 |
RSAs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Computation of diluted net loss per share | 6,770,020 | 16,792,134 |
Convertible Senior Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Computation of diluted net loss per share | 11,622,176 | 11,622,176 |