Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 04, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39289 | |
Entity Registrant Name | Cano Health, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-1524224 | |
Entity Address, Address Line One | 9725 NW 117th Avenue | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33178 | |
City Area Code | 855 | |
Local Phone Number | 226-6633 | |
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 Central Index Key | 0001800682 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock, $0.0001 par value per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | |
Trading Symbol | CANO | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 244,574,327 | |
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share | |
Trading Symbol | CANO/WS | |
Security Exchange Name | NYSE | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 249,909,475 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 24,097 | $ 163,170 |
Accounts receivable, net of unpaid service provider costs | 202,037 | 133,433 |
Prepaid expenses and other current assets | 78,833 | 20,632 |
Total current assets | 304,967 | 317,235 |
Property and equipment, net | 125,513 | 85,261 |
Operating lease right-of-use assets | 171,442 | 132,173 |
Goodwill | 787,885 | 769,667 |
Payor relationships, net | 565,213 | 576,648 |
Other intangibles, net | 231,368 | 248,973 |
Other assets | 9,751 | 13,582 |
Total assets | 2,196,139 | 2,143,539 |
Current liabilities: | ||
Accounts payable and accrued expenses (Related parties comprised $3,047 and $144 as of September 30, 2022 and December 31, 2021, respectively) | 110,301 | 80,829 |
Current portion of notes payable | 6,444 | 6,493 |
Current portion of finance lease liabilities | 1,595 | 1,295 |
Current portion of contingent consideration | 5,700 | 3,123 |
Current portions due to sellers | 2,038 | 17,357 |
Current portion of operating lease liabilities | 24,946 | 15,275 |
Other current liabilities | 34,537 | 36,664 |
Total current liabilities | 185,561 | 161,036 |
Notes payable, net of current portion and debt issuance costs | 914,394 | 915,266 |
Long term portion of operating lease liabilities | 160,479 | 122,935 |
Warrant liabilities | 88,528 | 80,144 |
Long term portion of finance lease liabilities | 3,139 | 2,181 |
Long term portion of contingent consideration | 28,000 | 35,300 |
Other liabilities | 33,004 | 28,109 |
Total liabilities | 1,413,105 | 1,344,971 |
Stockholders’ Equity | ||
Additional paid-in capital | 544,106 | 397,443 |
Accumulated deficit | (137,661) | (78,760) |
Total Stockholders' Equity before non-controlling interests | 406,494 | 318,731 |
Non-controlling interests | 376,540 | 479,837 |
Total Stockholders' Equity | 783,034 | 798,568 |
Total Liabilities and Stockholders' Equity | 2,196,139 | 2,143,539 |
Class A | ||
Stockholders’ Equity | ||
Common stock | 24 | 18 |
Class B | ||
Stockholders’ Equity | ||
Common stock | $ 25 | $ 30 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts payable and accrued expenses, related parties | $ 3,047 | $ 144 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Common stock, shares issued (in shares) | 241,646,505 | 180,113,551 |
Common stock, shares outstanding (in shares) | 241,646,505 | 180,113,551 |
Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 250,093,479 | 297,385,981 |
Common stock, shares outstanding (in shares) | 250,093,479 | 297,385,981 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 665,028 | $ 498,931 | $ 2,058,543 | $ 1,117,114 |
Operating expenses: | ||||
Third-party medical costs (Related parties comprised $0 and $249,819 in the nine months ended September 30, 2022 and 2021, respectively) | 489,565 | 381,316 | 1,566,661 | 868,177 |
Direct patient expense (Related parties comprised $1,972 and $6, in the three months ended September 30, 2022 and 2021, respectively, and $6,490 and $1,502, in the nine months ended September 30, 2022 and 2021, respectively) | 63,867 | 50,368 | 177,190 | 120,212 |
Selling, general, and administrative expenses (Related parties comprised $2,709 and $4,225, in the three months ended September 30, 2022 and 2021, respectively, and $6,913 and $9,814, in the nine months ended September 30, 2022 and 2021, respectively) | 111,765 | 76,618 | 314,617 | 158,786 |
Depreciation and amortization expense | 25,343 | 16,955 | 64,215 | 30,746 |
Transaction costs and other (Related parties comprised $0 and $1,483 in the nine months ended September 30, 2022 and 2021, respectively) | 5,033 | 11,206 | 19,616 | 36,274 |
Change in fair value of contingent consideration | 900 | (3,940) | (9,525) | (4,152) |
Total operating income (expenses) | 696,473 | 532,523 | 2,132,774 | 1,210,043 |
Income (loss) from operations | (31,445) | (33,592) | (74,231) | (92,929) |
Other income and expense: | ||||
Interest expense | (16,451) | (16,023) | (42,868) | (36,363) |
Interest income | 4 | 1 | 7 | 4 |
Loss on extinguishment of debt | 0 | 0 | (1,428) | (13,225) |
Change in fair value of warrant liabilities | (65,721) | (14,650) | (8,383) | 24,565 |
Other income (loss) | 354 | (29) | 884 | (54) |
Total other income (loss) | (81,814) | (30,701) | (51,788) | (25,073) |
Net income (loss) before income tax expense | (113,259) | (64,293) | (126,019) | (118,002) |
Income tax expense (benefit) | (1,248) | 547 | 641 | (762) |
Net income (loss) | (112,011) | (64,840) | (126,660) | (117,240) |
Net income (loss) attributable to non-controlling interests | (57,783) | (41,602) | (67,759) | (98,559) |
Net income (loss) attributable to Class A common stockholders | $ (54,228) | $ (23,238) | $ (58,901) | $ (18,681) |
Net income (loss) per share attributable to Class A common stockholders, basic (in dollars per share) | $ (0.23) | $ (0.14) | $ (0.28) | $ (0.11) |
Net income (loss) per share attributable to Class A common stockholders, diluted (in dollars per share) | $ (0.23) | $ (0.14) | $ (0.28) | $ (0.16) |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 232,314,170 | 170,871,429 | 211,408,974 | 168,100,210 |
Diluted (in shares) | 232,314,170 | 477,255,983 | 211,408,974 | 169,312,258 |
Capitated revenue | ||||
Revenue: | ||||
Total revenue | $ 625,895 | $ 473,763 | $ 1,955,739 | $ 1,064,604 |
Fee-for-service and other revenue | ||||
Revenue: | ||||
Total revenue | $ 39,133 | $ 25,168 | $ 102,804 | $ 52,510 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenue | $ 665,028 | $ 498,931 | $ 2,058,543 | $ 1,117,114 |
Third-party medical costs | 489,565 | 381,316 | 1,566,661 | 868,177 |
Direct patient expense | 63,867 | 50,368 | 177,190 | 120,212 |
Selling, general and administrative expenses | 111,765 | 76,618 | 314,617 | 158,786 |
Transaction and other costs | 5,033 | 11,206 | 19,616 | 36,274 |
Capitated revenue | ||||
Total revenue | 625,895 | 473,763 | 1,955,739 | 1,064,604 |
Fee-for-service and other revenue | ||||
Total revenue | 39,133 | 25,168 | 102,804 | 52,510 |
Affiliated Entity | ||||
Third-party medical costs | 0 | 249,819 | ||
Direct patient expense | 1,972 | 6 | 6,490 | 1,502 |
Selling, general and administrative expenses | 2,709 | 4,225 | 6,913 | 9,814 |
Transaction and other costs | 0 | 1,483 | ||
Affiliated Entity | Capitated revenue | ||||
Total revenue | $ 0 | $ 128,394 | 0 | 307,684 |
Affiliated Entity | Fee-for-service and other revenue | ||||
Total revenue | $ 0 | $ 631 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY / MEMBERS' CAPITAL - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Notes Receivable | Notes Receivable Cumulative Effect, Period of Adoption, Adjusted Balance | Class A Shares | Class B Shares | Members' Capital | Members' Capital Cumulative Effect, Period of Adoption, Adjustment | Members' Capital Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock Class A Shares | Common Stock Class A Shares Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock Class B Shares | Common Stock Class B Shares Cumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-in Capital | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjusted Balance | Non-Controlling Interests | Non-Controlling Interests Cumulative Effect, Period of Adoption, Adjusted Balance |
Balance at the beginning (in shares) at Dec. 31, 2020 | 14,629,533 | 292,214,129 | 306,843,662 | ||||||||||||||||||
Balance at the beginning at Dec. 31, 2020 | $ 49,625 | $ 0 | $ 49,625 | $ (134) | $ (134) | $ 157,591 | $ (157,560) | $ 31 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 157,560 | $ 157,560 | $ (107,832) | $ (107,832) | $ 0 | $ 0 | ||
Balance at the beginning (in shares) at Dec. 31, 2020 | 0 | 0 | 0 | 0 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Net income (loss) prior to business combination | (65,213) | (65,213) | |||||||||||||||||||
Business combination and PIPE financing (in shares) | 306,843,662 | 166,243,491 | 306,843,662 | ||||||||||||||||||
Business combination | 773,093 | $ (31) | $ 17 | $ 31 | 169,093 | 112,306 | 491,677 | ||||||||||||||
Stock-based compensation expense | 13,131 | 13,131 | |||||||||||||||||||
Issuance of Class A common stock for acquisitions (in shares) | 4,178,147 | ||||||||||||||||||||
Issuance of Class A common stock for acquisitions | 61,500 | 61,500 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock (in shares) | 1,173,276 | 1,173,276 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock | 0 | 1,970 | (1,970) | ||||||||||||||||||
Impact of transactions affecting non-controlling interests | 0 | (34,901) | 34,901 | ||||||||||||||||||
Notes receivable - related parties | 134 | 134 | |||||||||||||||||||
Net income (loss) | (52,028) | (18,684) | (33,344) | ||||||||||||||||||
Balance at the end (in shares) at Sep. 30, 2021 | 0 | ||||||||||||||||||||
Balance at the end at Sep. 30, 2021 | 780,242 | 0 | $ 0 | $ 17 | $ 31 | 368,353 | (79,423) | 491,264 | |||||||||||||
Balance at the end (in shares) at Sep. 30, 2021 | 171,594,914 | 305,670,386 | |||||||||||||||||||
Balance at the beginning at Jun. 30, 2021 | 833,993 | (136) | $ 17 | $ 31 | 356,239 | (56,187) | 534,029 | ||||||||||||||
Balance at the beginning (in shares) at Jun. 30, 2021 | 170,299,189 | 306,843,662 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Stock-based compensation expense | 9,451 | 9,451 | |||||||||||||||||||
Issuance of Class A common stock for acquisitions (in shares) | 122,449 | ||||||||||||||||||||
Issuance of Class A common stock for acquisitions | 1,502 | 1,502 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock (in shares) | 1,173,276 | (1,173,276) | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock | 0 | 1,970 | (1,970) | ||||||||||||||||||
Impact of transactions affecting non-controlling interests | 0 | (809) | 809 | ||||||||||||||||||
Notes receivable - related parties | 136 | 136 | |||||||||||||||||||
Net income (loss) | (64,840) | (23,236) | (41,604) | ||||||||||||||||||
Balance at the end (in shares) at Sep. 30, 2021 | 0 | ||||||||||||||||||||
Balance at the end at Sep. 30, 2021 | 780,242 | $ 0 | $ 0 | $ 17 | $ 31 | 368,353 | (79,423) | 491,264 | |||||||||||||
Balance at the end (in shares) at Sep. 30, 2021 | 171,594,914 | 305,670,386 | |||||||||||||||||||
Balance at the beginning at Dec. 31, 2021 | 798,568 | $ 18 | $ 30 | 397,443 | (78,760) | 479,837 | |||||||||||||||
Balance at the beginning (in shares) at Dec. 31, 2021 | 180,113,551 | 297,385,981 | 180,113,551 | 297,385,981 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Stock-based compensation expense | 42,641 | 42,641 | |||||||||||||||||||
Issuance of Class A common stock upon vesting of restricted stock units (in shares) | 2,667,896 | ||||||||||||||||||||
Issuance of Class A common stock upon vesting of restricted stock units | 0 | $ 1 | (13,357) | 13,356 | |||||||||||||||||
Issuance of Class A common stock for acquisitions (in shares) | 9,752,997 | ||||||||||||||||||||
Issuance of Class A common stock for acquisitions | 57,108 | 57,108 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock (in shares) | 47,292,502 | 47,292,502 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock | 0 | $ 5 | $ (5) | 76,322 | (76,322) | ||||||||||||||||
Employee stock purchase plan issuance (in shares) | 1,819,559 | ||||||||||||||||||||
Employee stock purchase plan issuance | 11,377 | 11,377 | |||||||||||||||||||
Impact of transactions affecting non-controlling interests | 0 | (27,428) | 27,428 | ||||||||||||||||||
Net income (loss) | (126,660) | (58,901) | (67,759) | ||||||||||||||||||
Balance at the end at Sep. 30, 2022 | 783,034 | $ 24 | $ 25 | 544,106 | (137,661) | 376,540 | |||||||||||||||
Balance at the end (in shares) at Sep. 30, 2022 | 241,646,505 | 250,093,479 | 241,646,505 | 250,093,479 | |||||||||||||||||
Balance at the beginning at Jun. 30, 2022 | 840,997 | $ 22 | $ 27 | 495,642 | (83,433) | 428,739 | |||||||||||||||
Balance at the beginning (in shares) at Jun. 30, 2022 | 218,028,952 | 264,527,434 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Stock-based compensation expense | 11,041 | 11,041 | |||||||||||||||||||
Issuance of Class A common stock upon vesting of restricted stock units (in shares) | 1,860,581 | ||||||||||||||||||||
Issuance of Class A common stock upon vesting of restricted stock units | 0 | (8,271) | 8,271 | ||||||||||||||||||
Issuance of Class A common stock for acquisitions (in shares) | 6,895,830 | ||||||||||||||||||||
Issuance of Class A common stock for acquisitions | 41,337 | 41,337 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock (in shares) | 14,433,955 | 14,433,955 | |||||||||||||||||||
Exchange of Class B common stock for Class A common stock | 0 | $ 2 | $ (2) | 24,557 | (24,557) | ||||||||||||||||
Employee stock purchase plan issuance (in shares) | 427,187 | ||||||||||||||||||||
Employee stock purchase plan issuance | 1,670 | 1,670 | |||||||||||||||||||
Impact of transactions affecting non-controlling interests | 0 | (21,870) | 21,870 | ||||||||||||||||||
Net income (loss) | (112,011) | (54,228) | (57,783) | ||||||||||||||||||
Balance at the end at Sep. 30, 2022 | $ 783,034 | $ 24 | $ 25 | $ 544,106 | $ (137,661) | $ 376,540 | |||||||||||||||
Balance at the end (in shares) at Sep. 30, 2022 | 241,646,505 | 250,093,479 | 241,646,505 | 250,093,479 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ (126,660) | $ (117,240) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 64,215 | 30,746 |
Change in fair value of contingent consideration | (9,525) | (4,152) |
Change in fair value of warrant liabilities | 8,383 | (24,565) |
Loss on extinguishment of debt | 1,428 | 13,225 |
Amortization of debt issuance costs | 2,743 | 4,162 |
Non-cash lease expense | 8,367 | 0 |
Class A shares issued for bonus award | 2,194 | 0 |
Stock-based compensation | 42,641 | 13,131 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net (Related parties comprised $0and $(92) for the nine months ended September 30, 2022 and 2021, respectively) | (75,913) | (25,494) |
Other assets | 10,885 | (9,874) |
Prepaid expenses and other current assets | (47,492) | (22,603) |
Interest accrued due to sellers | 100 | 1,208 |
Accounts payable and accrued expenses (Related parties comprised $3,047 and $(112) for the nine months ended September 30, 2022 and 2021, respectively) | 30,955 | 40,620 |
Other liabilities (Related parties comprised $0 and $(92) for the nine months ended September 30, 2022 and 2021, respectively) | 3,521 | 6,343 |
Net cash provided by (used in) operating activities | (84,158) | (94,493) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment (Related parties comprised $0 and $5,697 for the nine months ended September 30, 2022 and 2021, respectively) | (39,061) | (23,221) |
Acquisitions of subsidiaries including non-compete intangibles, net of cash acquired | (4,995) | (1,065,479) |
Payments to sellers | (4,097) | (24,148) |
Net cash provided by (used in) investing activities | (48,153) | (1,112,848) |
Cash Flows from Financing Activities: | ||
Business combination and PIPE financing | 0 | 935,362 |
Payments of long-term debt | (4,833) | (656,294) |
Debt issuance costs | (88) | (16,489) |
Proceeds from long-term debt | 0 | 1,120,000 |
Proceeds from revolving line of credit | 25,000 | 0 |
Repayments of revolving line of credit | (25,000) | 0 |
Proceeds from insurance financing arrangements | 2,529 | 1,702 |
Payments of principal on insurance financing arrangements | (2,070) | (1,419) |
Principal payments under finance leases | (1,037) | (233) |
Repayment of equipment loans | (385) | (316) |
Employee Stock Purchase Plan withholding tax payments | (878) | 0 |
Other | 0 | 134 |
Net cash provided by (used in) financing activities | (6,762) | 1,382,447 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (139,073) | 175,106 |
Cash, cash equivalents and restricted cash at beginning of year | 163,170 | 33,807 |
Cash, cash equivalents and restricted cash at end of period | 24,097 | 208,913 |
Supplemental cash flow information: | ||
Interest paid | 38,233 | 28,075 |
Income taxes paid | 82 | 1,150 |
Non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange of lease liabilities | 58,595 | 0 |
Issuance of class A common stock for acquisitions | 54,914 | 61,500 |
Contingent consideration liability in connection with acquisitions | 1,500 | 47,900 |
Contingent consideration assets in connection with acquisitions | (5,600) | 0 |
Due to sellers in connection with acquisitions | 1,530 | 1,295 |
Addition to construction in process funded through accounts payable | 5,665 | 0 |
Humana Affiliate Provider clinic leasehold improvements | 5,878 | 5,605 |
2021 Employee Stock Purchase Plan issuance | 11,377 | 0 |
Capital lease obligations entered into for property and equipment | 0 | 225 |
Equipment loan obligations entered into for property and equipment | $ 0 | $ 1,013 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Changes in accounts receivable, net | $ 75,913 | $ 25,494 |
Purchase of property and equipment | 39,061 | 23,221 |
Changes in accounts payable and accrued expenses | 30,955 | 40,620 |
Changes in other liabilities | 3,521 | 6,343 |
Affiliated Entity | ||
Changes in accounts receivable, net | 0 | (92) |
Purchase of property and equipment | 0 | 5,697 |
Changes in accounts payable and accrued expenses | $ 3,047 | (112) |
Changes in other liabilities | $ (92) |
NATURE OF BUSINESS AND OPERATIO
NATURE OF BUSINESS AND OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND OPERATIONS | NATURE OF BUSINESS AND OPERATIONS Nature of Business Cano Health, Inc. (“Cano Health”, or the “Company”), formerly known as Primary Care (ITC) Intermediate Holdings, LLC (“PCIH”), provides value-based medical care for its members through a network of primary care physicians across the U.S. and Puerto Rico. The Company focuses on providing high-touch population health and wellness services to Medicare Advantage, Medicare Global and Professional Direct Contracting Entity ("DCE"), Medicare patients under Accountable Care Organizations ("ACO") and Medicaid capitated members, particularly in underserved communities by leveraging a proprietary technology platform to d eliver high-quality health care services. The Company also operates pharmacies in the network for the purpose of providing a full range of managed care services to its members. On June 3, 2021 (the “Closing Date”), Jaws Acquisition, Corp. (“Jaws”), consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement, dated as of November 11, 2020 (as amended, the “Business Combination Agreement”) by and among Jaws, Jaws Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), PCIH, and PCIH’s sole member, Primary Care (ITC) Holdings, LLC (“Seller”). Upon the closing of the Business Combination, Jaws was reincorporated in the State of Delaware and changed its name to "Cano Health, Inc." Unless the context requires, "the Company", "we", "us", and "our" refer, for periods prior to the completion of the Business Combination, to PCIH and its consolidated subsidiaries, and for periods upon or after the completion of the Business Combination, to Cano Health, Inc. and its consolidated subsidiaries, including PCIH, and its subsidiaries. Pursuant to the Business Combination Agreement, on the Closing Date, Jaws contributed cash to PCIH in exchange for 69.0 million common limited liability company units of PCIH ("PCIH Common Units") equal to the number of shares of Jaws' Class A ordinary shares outstanding on the Closing Date as well as 17.25 million Class B ordinary shares owned by Jaws Sponsor, LLC (the "Sponsor"). In connection with the Business Combination, the Company issued 306.8 million shares of the Company’s Class B common stock to existing shareholders of PCIH. The Company also issued 80.0 million shares of the Company’s Class A common stock in a private placement for $800.0 million (the "PIPE Investors"). Following the consummation of the Business Combination, substantially all of the Company’s assets and operations are held and conducted by PCIH and its subsidiaries. As the Company is a holding company with no material assets other than its ownership of PCIH Common Units and its managing member interest in PCIH, the Company has no independent means of generating revenue or cash flow. The Company’s ability to pay taxes and pay dividends depend on the financial results and cash flows of PCIH and the distributions it receives from PCIH. The Company’s only assets are equity interests in PCIH, which represented a 35.1% and 49.1% controlling ownership as of the Closing Date and September 30, 2022, respectively. Certain members of PCIH who retained their common unit interests in PCIH held the remaining 64.9% and 50.9% non-controlling ownership interests as of the Closing Date and September 30, 2022, respectively. These members hold economic interest in PCIH through PCIH Common Units and a corresponding number of non-economic Class B common stock, which enables the holder to one vote per share. Our organizational structure following the completion of the Business Combination is commonly referred to as an umbrella partnership-C (or Up-C) corporation structure. This organizational structure allowed the Seller, the former sole owner and managing member of PCIH, to retain its equity ownership in PCIH, an entity that is classified as a partnership for U.S. federal income tax purposes, in the form of PCIH Common Units. The former stockholders of Jaws and the PIPE Investors who, prior to the Business Combination, held Class A ordinary shares or Class B ordinary shares of Jaws, by contrast, received equity ownership in Cano Health, Inc., a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes. Subject to the terms and conditions set forth in the Business Combination Agreement, the Seller and its equity holders received aggregate consideration with a value equal to $3,534.9 million, which consisted of (i) $466.5 million of cash and (ii) $3,068.4 million of Cano Health, Inc.'s common stock or 306.8 million shares of Class B common stock based on a reference stock price of $10.00 per share. Following the closing of the Business Combination, Class A stockholders owned direct controlling interests in the combined results of PCIH and Cano Health, Inc. while the Seller as the sole Class B stockholder owned indirect economic interests in PCIH shown as non-controlling interests in the unaudited condensed consolidated financial statements of Cano Health, Inc. The indirect economic interests are held by the Seller in the form of PCIH Common Units that can be redeemed for Class A common stock together with the cancellation of an equal number of shares of Class B common stock in Cano Health, Inc. The non-controlling interests will decrease over time as shares of Class B common stock and PCIH Common Units are exchanged for shares of Class A common stock in Cano Health, Inc. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The portion of an entity not wholly-owned by the Company is presented as non-controlling interests. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. The Company has interests in various entities and considers itself to control an entity if it is the majority owner of or has voting control over such entity. The Company also assesses control through means other than voting rights (“variable interest entities” or “VIEs”) and determines which business entity is the primary beneficiary of the VIE. The Company consolidates VIEs when it is determined that the Company is the primary beneficiary of the VIE. Included in the consolidated results of the Company are Cano Health Texas, PLLC, Cano Health Nevada, PLLC, Cano Health California, PC and Cano Health Illinois, PLLC (collectively, the "Physicians Groups"), which the Company has concluded are VIEs. All material intercompany accounts and transactions have been eliminated in consolidation. Risks and Uncertainties As of September 30, 2022, the Company’s coverage area is primarily in the State of Florida. Given this concentration, the Company is subject to adverse economic, regulatory, or other developments in the State of Florida that could have a material adverse effect on the Company’s financial condition and operations. In addition, federal, state and local laws and regulations concerning healthcare affect the healthcare industry. The Company’s long-term success is dependent on the ability to successfully generate revenues; maintain or reduce operating costs; obtain additional funding when needed; and ultimately, achieve profitable operations. The Company is not able to p redict the content or impact of future changes in laws and regulations affecting the healthcare industry; however, management believes that its existing cash position, along with expected cash generation through operations and revolving line of credit, will be sufficient to fund operating and capital expenditure requirements through at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements. Basis of Presentation These Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2022 and 2021, the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021, and the Condensed Consolidated Balance Sheet at September 30, 2022 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation. Our interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K ("Form 10-K") filed with the U.S. Securities and Exchange Commission (the "SEC") on March 14, 2022. The Company was deemed the accounting acquirer in the Business Combination of Jaws based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") Topic 805, " Business Combinations" ("ASC 805"), as the Company’s former owner retained control after the Business Combination. Refer to Note 1, " Nature of Business" , for details surrounding the Business Combination. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of the Company issuing stock for the net assets of Jaws, accompanied by a recapitalization. The net assets of Jaws were stated at historical cost, with no goodwill or other intangible assets recorded. While Jaws was the legal acquirer in the Business Combination, because the Company was deemed the accounting acquirer, the historical financial statements of PCIH became the historical financial statements of the combined company upon the consummation of the Business Combination. As a result, the unaudited condensed consolidated financial statements reflect the historical operating results of PCIH prior to the Business Combination, the combined results of Jaws and the Company following the close of the Business Combination, the assets and liabilities of the Company at their historical cost, and the Company’s equity structure for all periods presented. Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. Such reclassifications impacted the classification of: accounts receivable, inventory, current and long-term portion of equipment loans, due to seller, accounts payable and accrued expenses and current and long-term deferred revenue. These reclassifications had no impact on net loss as previously presented. |
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 to the audited consolidated financial statements for the year ended December 31, 2021 included in its Form 10-K. During the nine months ended September 30, 2022, there were no significant changes to those accounting policies. Recent Accounting Pronouncements Adoption of New Accounting Standards In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The guidance provides optional expedients and exceptions related to certain contract modifications and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another rate that is expected to be discontinued. The guidance was effective upon issuance and generally can be applied to applicable contract modifications and hedge relationships prospectively through December 31, 2022. The Company elected to use the practical expedients within the standard when accounting for a portion of the amendment to the term loan. The adoption did not impact net loss. |
REVENUE AND ACCOUNTS RECEIVABLE
REVENUE AND ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND ACCOUNTS RECEIVABLE | REVENUE AND ACCOUNTS RECEIVABLE The Company’s revenue streams for the three and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, 2022 2021 (in thousands) Revenue $ Revenue % Revenue $ Revenue % Capitated revenue Medicare $ 577,989 86.9 % $ 419,233 84.0 % Other capitated revenue 47,906 7.2 % 54,530 10.9 % Total capitated revenue 625,895 94.1 % 473,763 94.9 % Fee-for-service and other revenue Fee-for-service 9,677 1.5 % 8,176 1.6 % Pharmacy 12,910 1.9 % 10,096 2.0 % Other 16,546 2.5 % 6,896 1.5 % Total fee-for-service and other revenue 39,133 5.9 % 25,168 5.1 % Total revenue $ 665,028 100.0 % $ 498,931 100.0 % Nine Months Ended September 30, 2022 2021 (in thousands) Revenue $ Revenue % Revenue $ Revenue % Capitated revenue Medicare $ 1,795,820 87.2 % $ 924,892 82.8 % Other capitated revenue 159,919 7.8 % 139,712 12.5 % Total capitated revenue 1,955,739 95.0 % 1,064,604 95.3 % Fee-for-service and other revenue Fee-for-service 29,349 1.4 % 17,113 1.5 % Pharmacy 37,185 1.8 % 25,619 2.3 % Other 36,270 1.8 % 9,778 0.9 % Total fee-for-service and other revenue 102,804 5.0 % 52,510 4.7 % Total revenue $ 2,058,543 100.0 % $ 1,117,114 100.0 % Accounts Receivable The Company's accounts receivable balances are summarized for the periods indicated below. The Company’s accounts receivable are presented net of the unpaid service provider costs. A right of offset exists when all of the following conditions are met: 1) each of the two parties owed the other determinable amounts; 2) the reporting party has the right to offset the amount owed with the amount owed to the other party; 3) the reporting party intends to offset; and 4) the right of offset is enforceable by law. The Company believes all of the aforementioned conditions existed as of September 30, 2022 and December 31, 2021. As of (in thousands) September 30, 2022 December 31, 2021 Accounts receivable $ 374,456 $ 227,889 Medicare risk adjustment 26,915 21,072 Unpaid service provider costs (199,334) (115,528) Accounts receivable, net $ 202,037 $ 133,433 Concentration of Risk Contracts with three of the payors accounted for the following amounts: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenues 61.3% 60.7% 63.8% 63.7% As of September 30, 2022 December 31, 2021 Accounts receivable 47.2% 43.3% Payors that represented greater than 10% of our total revenue included four and three payors that represented approximately 71.3% and 63.8% of our total revenue for the three and nine months ended September 30, 2022, respectively an d three and two payors that represented approximately 60.7% and 55.7% of our total revenue for the three and nine months ended September 30, 2021, respectively. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, 2022 December 31, 2021 Third party receivables $ 57,800 $ $ — Other 21,033 20,632 Prepaid expenses and other current assets $ 78,833 $ $ 20,632 Third party receivables represent amounts due from MSP Recovery Inc. ("MSP") totaling $57.8 million. Included in other is $1.2 million of unregistered MSP Class A Common Stock owned by the Company as of September 30, 2022. MSP provides healthcare claims reimbursement recovery services using data analytics to identify and recover improper payments made by Medicare, Medicaid and Commercial Health Insurers (each a “Health Plan”), and charged to the company under risk agreements, when the Health Plan is not the primary payer under the Medicare Secondary Payer Act and other state and federal laws. MSP employs a team of data scientists and medical professionals who analyze historical medical claims data to identify recoverable opportunities, which MSP then aggregates and pursues. The Company has irrevocably assigned certain past claims data to MSP, which will be paid by either cash or equity at MSP's choice. The $57.8 million in receivables is payable on the earlier of one business day before the filing of MSP's Annual Report on Form 10-K for the year ended December 31, 2022, or April 30, 2023. As of December 31, 2021, $10.0 million of MSP receivables were non-current and included in other assets in the consolidated balance sheet. |
UNPAID SERVICE PROVIDER COSTS
UNPAID SERVICE PROVIDER COSTS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
UNPAID SERVICE PROVIDER COSTS | UNPAID SERVICE PROVIDER COSTS Activity in unpaid service provider costs for the nine months ended September 30, 2022 and 2021 is summarized below: (in thousands) 2022 2021 Balance as of January 1, $ 129,110 $ 54,524 Incurred related to: Current year 1,267,742 566,473 Prior years 11,319 3,526 1,279,061 569,999 Paid related to: Current year 955,998 439,460 Prior years 132,475 58,051 1,088,473 497,511 Balance as of September 30, $ 319,698 $ 127,012 The foregoing reconciliation reflects an increase in our estimate during the nine months ended September 30, 2022 of $11.3 million and an increase in our estimate during the nine months ended September 30, 2021 of $3.5 million due to higher than expected utilization rates. $120.4 million and $32.8 million of the liabilities for medical services incurred but not reported The Company maintains a provider excess loss insurance policy to protect against claim expenses exceeding certain levels that are incurred by the Company on behalf of members and uses MSP for claims recovery as described in more detail in Note 4 above. A s of both September 30, 2022 and September 30, 2021, the Company’s excess loss insurance deductible was $0.1 million and maximum coverage was $2.0 million per member per calendar year. The Company recorded excess loss insurance premiums of $5.6 million and $10.6 million for the three and nine months ended September 30, 2022, respectively, and reimbursement of $16.0 million and $23.1 million for the three and nine months ended September 30, 2022, respectively. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS During the nine months ended September 30, 2022, the Company completed seven asset acquisitions for a total purchase price of $41.7 million. The consideration included $5.0 million in cash, $1.5 million in deferred cash payments, and $39.3 million was issued in Class A common stock. These amounts were offset by $4.1 million in net contingent assets . Further, in the nine months ended September 30, 2022 the Company paid a deferred acquisition payment in Class A common stock for $15.8 million related to a prior year acquisition. The acquisitions were each accounted for as business combinations. The Company does not consider these acquisitions to be material, individually or in aggregate, to the Company’s unaudited condensed consolidated financial statements. The purchase price allocations substantially resulted in $18.2 million of goodwill and $21.8 million of acquired identifiable intangible assets related to brand names, non-compete agreements, and payor relationships valued using the income method. Acquisition-related costs were not material and were expensed as incurred in the unaudited condensed consolidated statements of operations. In the prior year, the Company completed various acquisitions for a total purchase price of $1.1 billion. The most significant of these acquisitions were University Health Care and its Affiliates ("University") and Doctor’s Medical Center, LLC and Affiliates for $607.9 million and $300.7 million, respectively. For further details refer to Note 3 “Business Acquisitions” in the Company’s Form 10-K for the fiscal year ended December 31, 2021. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the asset acquisition date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the asset acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. For changes in the valuation of intangible assets between the preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is identified. Transaction costs that are incurred in connection with an asset acquisition, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. |
PAYOR RELATIONSHIPS AND OTHER I
PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NET | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NET | PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NETAs of September 30, 2022, the Company’s total intangibles, net consisted of the following: (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangibles: Trade names $ 1,409 $ (905) $ 504 Brand names 183,568 (21,952) 161,616 Non-compete agreements 81,795 (23,946) 57,849 Customer relationships 880 (221) 659 Payor relationships 620,913 (55,700) 565,213 Provider relationships 16,142 (5,402) 10,740 Total intangibles, net $ 904,707 $ (108,126) $ 796,581 As of December 31, 2021, the Company’s total intangibles, net consisted of the following: (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangibles: Trade names $ 1,409 $ (787) $ 622 Brand names 183,238 (9,037) 174,201 Non-compete agreements 75,794 (12,110) 63,684 Customer relationships 880 (184) 696 Payor relationships 609,362 (32,714) 576,648 Provider relationships 12,242 (2,472) 9,770 Total intangibles, net $ 882,925 $ (57,304) $ 825,621 The Company recorded amortization expens e of $20.2 million and $14.2 million for the three months ended September 30, 2022 and 2021, respectively, and $50.8 million an d $23.3 million for the nine months ended September 30, 2022 and 2021, respectively. Expected amortization expense for the Company’s existing amortizable intangibles for the next five years, and thereafter, as of September 30, 2022 is as follows: Amount (in thousands) 2022 - remaining $ 56,069 2023 58,317 2024 56,703 2025 53,893 2026 44,658 Thereafter 526,941 Total $ 796,581 We periodically assess our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Changes or consolidation of the use of any of our brand names could result in a reduction in their remaining estimated economic lives, which could lead to increased amortization expense. During the three months ended September 30, 2022, the Company decided to rebrand the University primary care facilities which resulted in the useful life of the brand intangibles decreasing from 20 years to 2.5 years, and an acceleration of |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases offices, operating medical centers, vehicles and medical equipment. Leases consist of finance and operating leases, and have a remaining lease term of 1 year to 10 years. The Company elected the practical expedient, which allows the Company to exclude leases with a lease term less than 12 months from being recorded on the balance sheet. The Company adopted the practical expedient related to the combining of lease and non-lease components, which allows us to account for the lease and non-lease components as a single lease component. Future minimum lease payments under operating and finance leases as of September 30, 2022 were as follows (in thousands): Operating Finance Total 2022 - remaining $ 10,442 $ 494 $ 10,936 2023 33,772 1,729 35,501 2024 32,017 1,449 33,466 2025 29,156 1,023 30,179 2026 26,702 460 27,162 Thereafter 106,162 71 106,233 Total minimum lease payments 238,251 5,226 243,477 Less: amount representing interest (52,826) (492) (53,318) Lease liabilities $ 185,425 $ 4,734 $ 190,159 Future minimum lease payments under operating and finance leases as of December 31, 2021 were as follows (in thousands): Operating Finance Total 2022 $ 23,051 $ 1,485 $ 24,536 2023 24,577 1,078 25,655 2024 22,561 797 23,358 2025 20,489 364 20,853 2026 18,424 107 18,531 Thereafter 67,569 — 67,569 Total minimum lease payments 176,671 3,831 180,502 Less: amount representing interest (38,461) (355) (38,816) Lease liabilities $ 138,210 $ 3,476 $ 141,686 The Company recorded rent expense of $8.7 million and $6.9 million for the three months ended September 30, 2022 and 2021, respectively, and $24.1 million and $15.9 million for the nine months ended September 30, 2022 and 2021, respectively. |
LEASES | LEASES The Company leases offices, operating medical centers, vehicles and medical equipment. Leases consist of finance and operating leases, and have a remaining lease term of 1 year to 10 years. The Company elected the practical expedient, which allows the Company to exclude leases with a lease term less than 12 months from being recorded on the balance sheet. The Company adopted the practical expedient related to the combining of lease and non-lease components, which allows us to account for the lease and non-lease components as a single lease component. Future minimum lease payments under operating and finance leases as of September 30, 2022 were as follows (in thousands): Operating Finance Total 2022 - remaining $ 10,442 $ 494 $ 10,936 2023 33,772 1,729 35,501 2024 32,017 1,449 33,466 2025 29,156 1,023 30,179 2026 26,702 460 27,162 Thereafter 106,162 71 106,233 Total minimum lease payments 238,251 5,226 243,477 Less: amount representing interest (52,826) (492) (53,318) Lease liabilities $ 185,425 $ 4,734 $ 190,159 Future minimum lease payments under operating and finance leases as of December 31, 2021 were as follows (in thousands): Operating Finance Total 2022 $ 23,051 $ 1,485 $ 24,536 2023 24,577 1,078 25,655 2024 22,561 797 23,358 2025 20,489 364 20,853 2026 18,424 107 18,531 Thereafter 67,569 — 67,569 Total minimum lease payments 176,671 3,831 180,502 Less: amount representing interest (38,461) (355) (38,816) Lease liabilities $ 138,210 $ 3,476 $ 141,686 The Company recorded rent expense of $8.7 million and $6.9 million for the three months ended September 30, 2022 and 2021, respectively, and $24.1 million and $15.9 million for the nine months ended September 30, 2022 and 2021, respectively. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIESOther current liabilities consisted of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, 2022 December 31, 2021 Service fund liability $ 18,668 $ 11,451 Acquired provider payments liability 10,255 10,255 2021 Employee Stock Purchase Plan withholding liability 764 10,494 Other 4,850 4,464 Other current liabilities $ 34,537 $ 36,664 |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT LIABILITIES | CONTRACT LIABILITIES As further explained in Note 14, “Related Party Transactions”, the Company entered into certain agreements with Humana, Inc. ("Humana") under which the Company receives administrative payments in exchange for providing care coordination services at certain clinics licensed to the Company over the term of such agreements. The Company’s contract liabilities balance related to these payments from Humana was $6.9 million and $6.1 million as of September 30, 2022 and December 31, 2021, respectively. The short-term portion was recorded in other current liabilities and the long-term portion was recorded in other liabilities. The Company recognized $0.7 million and $1.9 million in revenue from contract liabilities recorded during the three and nine months ended September 30, 2022, respectively. A summary of significant changes in the contract liabilities balance during the period is as follows: (in thousands) For the three months ended September 30, 2022 Balance at June 30, 2022 $ 7,537 Increases due to amounts collected — Decreases due to revenue recognized (657) Balance at September 30, 2022 $ 6,880 (in thousands) For the nine months ended September 30, 2022 Balance at December 31, 2021 $ 6,059 Increases due to amounts collected 2,750 Decreases due to revenue recognized (1,929) Balance at September 30, 2022 $ 6,880 Of the September 30, 2022 contract liabilities balance, the Company expects to recognize the following amounts as revenue in the succeeding years: Years ended December 31, Amount (in thousands) 2022 - remaining $ 657 2023 2,628 2024 2,442 2025 1,111 2026 42 Total $ 6,880 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTThe Company’s notes payable were as follows as of September 30, 2022 and December 31, 2021: (in thousands) 2022 2021 Term loan $ 639,599 $ 644,432 Senior Notes 300,000 300,000 Less: Current portion of notes payable (6,444) (6,493) 933,155 937,939 Less: Debt issuance costs (18,761) (22,673) Notes payable, net of current portion and debt issuance costs $ 914,394 $ 915,266 Term Loan Pursuant to a Credit Agreement with Credit Suisse and the other lenders party thereto (the “Credit Agreement”), the Company has a senior secured term loan (together with the revolving line of credit, the "Credit Facilities"). Obligations under the Credit Facilities are secured by substantially all of the Company’s assets. The Credit Facilities contain a financial maintenance covenant (which is for the benefit of the lenders under the revolving line of credit only), requiring the Company to not exceed a total first lien secured net debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio, which is tested quarterly only if the Company has exceeded a certain amount drawn under its revolving line of credit. As of September 30, 2022, the Company was in compliance with the financial maintenance covenant. The term loan is subject to principal amortization repayments due on the last business day of each calendar quarter equal to 0.25% of the initial principal amount, as applicable, based on the funding dates. Amortization payments commenced on March 31, 2021. The outstanding amount of unpaid principal and interest associated with the term loan is due on the maturity date of November 23, 2027. Prior to the maturity date, the Company may elect to prepay, in whole or in part at any time without premium or penalty, other than in connection with certain repricing transactions and customary breakage costs. As of September 30, 2022, the available balance on our revolving line of credit was $120.0 million. As of September 30, 2022 and December 31, 2021, two health plans required the Company to maintain restricted letters of credit for an aggregate amount of $7.2 million and $3.5 million, respectively, which are presented within cash, cash equivalents and restricted cash. On January 14, 2022, the Company entered into an amendment to the Credit Agreement, pursuant to which the outstanding principal amount of term loans was replaced with an equivalent amount of new term loans having substantially similar terms, except with a lower interest rate margin applicable to the new term loan. The amendment of the Credit Agreement implemented a forward-looking term rate based on the secured overnight financing rate (“SOFR”) as the replacement of LIBOR as the benchmark interest rate for borrowings under the term loan and revolving line of credit, and certain other provisions. The new interest rate applicable to the term loan and borrowing under the revolving line of credit was revised to 4.00% plus the greater of SOFR and the applicable credit spread adjustment or 0.50%; provided that if the Company achieves a public corporate rating from S&P of at least B and a public rating from Moody's of at least B2, then for as long as such ratings remain in effect, a margin of 3.75% shall be applicable. The Company has not reached the applicable ratings. The amendment represented a partial extinguishment and resulted in a write-off of deferred issuance costs of $1.3 million which was recorded as a loss on extinguishment of debt for the nine months ended September 30, 2022. During the three months ended September 30, 2022, the SOFR exceeded the credit spread adjustment of 0.50% resulting in monthly variable interest rates for the quarter. As of September 30, 2022, the effective interest rate of the term loan was 7.61%. Senior Notes On September 30, 2021, the Company issued senior unsecured notes for a principal amount of $300.0 million (the "Senior Notes") in a private offering. The Senior Notes bear interest at 6.25% per annum, payable semi-annually on April 1st and October 1st of each year, which interest commenced on April 1, 2022. As of September 30, 2022, the effective interest rate of the Senior Notes was 6.66%. Principal on the Senior Notes is due in full on October 1, 2028. The Senior Notes are not subject to any amortization payments. Prior to October 1, 2024, the Company may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount redeemed, plus accrued and unpaid interest, plus a make-whole premium. Prior to October 1, 2024, the Company may also redeem up to 40% of the aggregate principal amount of the notes with the net cash proceeds of certain equity offerings, at a redemption price of 106.25%, plus accrued and unpaid interest. On or after October 1, 2024, the Company may redeem some or all of the Senior Notes at a redemption price of 100% to 103.13%, plus accrued and unpaid interest, depending on the date that the Senior Notes are redeemed. Future Principal Payments on Term Loan and Senior Notes The following table sets forth the Company’s future principal payments as of September 30, 2022 , assuming mandatory prepayment does not occur: (in thousands) Year ending December 31, Amount 2022 - remainder $ 1,611 2023 6,444 2024 6,444 2025 6,444 2026 6,444 Thereafter 912,212 Total $ 939,599 As of September 30, 2022 and December 31, 2021, the balance of debt issuance costs totaled $19.5 million and 23.3 million, respectively , and are being amortized into interest expense over the life of the loan using the effective interest method. Of the balance as of September 30, 2022 , $18.8 million was related to the term loan and the Senior Notes reflected as a direct reduction to the long-term debt balances, while the remaining $0.7 million was related to the revolving line of credit, and reflected in prepaid expenses and other current assets. Th e Company recognized interest expense of $16.5 million and $16.0 million for the three months ended September 30, 2022 and 2021, respectively, and $42.9 million and $36.4 million for the nine months ended September 30, 2022 and 2021, respectively, of which $1.1 million and $4.0 million for the three months ended September 30, 2022 and 2021, respectively and $2.7 million and $4.2 million for the nine months ended September 30, 2022 and 2021, respectively, were related to the amortization of debt issuance costs. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS ASC 820, " Fair Value Measurements and Disclosures" , provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the accounting standard are described as follows: • Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. • Level 2 Inputs to the valuation methodology include: • quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive markets; • inputs other than quoted prices that are observable for the asset or liability; • inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. • Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying amounts of financial instruments including cash, accounts receivable, accounts payable, accrued liabilities, due to sellers, short-term borrowings and equity investments approximate fair value due to the short maturities of such instruments. The fair value of the Company’s debt using Level 2 inputs was approximately $902.9 million a nd $945.0 million as of September 30, 2022 and December 31, 2021, respectively. The following is a description of the valuation methodology used for liabilities measured at fair value. Contingent Consideration : On June 11, 2021, we entered into a purchase agreement with University Health Care and its affiliates (“University”). The transaction was financed, in part, through contingent consideration which University would have been entitled to from acquisition add-ons based on additional acquired entities . The consideration was valued at fair value applying a Scenario Based method. The liability balance related to the University contingent consideration was derecognized from the balance sheet in June 2022 as no additional acquisition requirements were completed. On August 11, 2021, the Company issued 2,720,966 shares of Class A common stock (the “escrowed shares”) to the escrow agent, on behalf of the seller, as part of the consideration in connection with an acquisition. The amount of shares was based on a $30.0 million purchase price divided by the average share price of the Company during the twenty consecutive trading days preceding the closing date of the transaction. The shares were deposited in escrow and will be released to the seller upon the satisfaction of certain performance metrics in 2022 and 2023. The final number of escrowed shares will be calculated by multiplying the initial share amount by an earned share percentage ranging from 0% to 100% in accordance with the purchase agreement and subtracting any forfeited indemnity shares. The fair value of this contingent consideration is determined using a Monte-Carlo simulation model. These inputs are used to calculate the pay-off amount per the agreement which is then discounted to present value using the risk-free rate and the Company’s cost of debt. On August 5, 2022, the Company entered into a purchase agreement in connection with an acquisition. The transaction was financed, in part, through the issuance of Class A shares and various contingent consideration arrangements valued using different valuation models. Pursuant to the purchase agreement, the seller may exercise its put right and sell the shares to the Company at a set price by delivering written notice of such exercise to the Company by November 3, 2022 if the Company’s Class A common stock as of the trading day immediately preceding the exercise date is less than the put price per share. Conversely, the Company may exercise its call right and buy the shares that were issued to the seller at a set price by delivering written notice of such exercise to the seller at any time if the Company’s Class A common stock is more than the call price per share. The put and call options described above are valued using the Black-Scholes model. Further, the purchase price is based on the future performance of the assets acquired in the acquisition which are valued using Monte-Carlo simulations. As of September 30, 2022, the total of such contingent consideration was an asset of $9.1 million of which, $5.7 million was classified in other assets in the condensed consolidated balance sheets, while $3.4 million was classified in prepaid expenses and other current assets in the consolidated balance sheet. On November 3, 2022, the Company entered into an agreement that, along with other provisions, cancelled these put and call rights. The preceding methods described may produce fair value calculations that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There wa s a decrease of $9.5 million in the fair value of the net contingent consideration liability during the nine months ended September 30, 2022 which was recorded in change in fair value of contingent consideration in the condensed consolidated statement of operations. A gain of $2.1 million related to an amount owed for an acquisition that will be paid in Class A common stock where the decrease in the liability and corresponding gain was a result of our stock price decreasing during the nine months ended September 30, 2022. Additionally, a gain of $2.9 million was recorded, as described above, related to derecognizing University's contingent consideration from the balance sheet as of September 30, 2022. Further, a gain of $4.5 million was recorded related to the acquisition which was completed on August 5, 2022, as described above, resulting from a change in the fair value of the put and call options and future performance of the assets acquired in the acquisitions. Warrant Liabilities: As of June 3, 2021, the Closing Date of the Business Combination, and as of September 30, 2022 , there were 23.0 million public warrants (" Public Warrants") and 10.5 million private placement warrants ("Private Placement Warrants") outstanding. The Company accounts for the Public Warrants and Private Placement Warrants in accordance with the guidance contained in ASC 815, " Derivatives and Hedges" , under which the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Public Warrants and the Private Placement Warrants as liabilities and adjusts them to fair value at each reporting period. This liability is subject to remeasurement at each balance sheet date until exercised, and any changes in fair value of warrant liabilities is recognized in the Company’s consolidated statements of operations. The Company’s valuation of the warrant liabilities utilize a binomial lattice in a risk-neutral framework (a special case of the Income Approach). The fair value of the Public Warrants and Private Placement Warrants utilized Level 1 and 3 inputs, respectively. The Private Placement Warrants are based on significant inputs not observable in the market as of September 30, 2022 and December 31, 2021. The preceding methods described may produce fair value calculations that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following table provides quantitative information regarding the Level 3 inputs used for the fair value measurements of the warrant liabilities: As of Unobservable Input September 30, 2022 December 31, 2021 Exercise price $11.50 $11.50 Stock price $8.67 $8.91 Term (years) 3.7 4.4 Risk free interest rate 4.1% 1.2% Dividend yield None None Public warrant price $2.64 $2.39 The following table sets forth by level, within the fair value hierarchy, the Company’s liabilities measured at fair value on a recurring basis as of September 30, 2022 : (in thousands) Carrying Quoted Prices in Significant Significant Liabilities and assets measured at fair value on a recurring basis: Contingent consideration liability, net $ 24,600 $ — $ — $ 24,600 Public Warrant Liabilities 60,720 60,720 — — Private Placement Warrant Liabilities 27,808 — — 27,808 Total liabilities measured at fair value $ 113,128 $ 60,720 $ — $ 52,408 There was an increase of $5.8 million in the fair value of the Public Warrant Liabilities during the nine months ended September 30, 2022, and an increase of $2.6 million in the fair value of the Private Placement Warrant Liabilities during the nine months ended September 30, 2022. The change in fair value of the warrant liabilities is reflected in our condensed consolidated statements of operations under the caption change in fair value of warrant liabilities. As of September 30, 2022, $5.7 million of the contingent consideration was in an asset position and classified in other assets in the condensed consolidated balance sheets, while $3.4 million was in an asset position and classified in prepaid expenses and other current assets in the consolidated balance sheet. The following table sets forth by level, within the fair value hierarchy, the Company’s liabilities measured at fair value on a recurring basis as of December 31, 2021: (in thousands) Carrying Quoted Prices in Significant Significant Liabilities measured at fair value on a recurring basis: Contingent consideration liability $ 38,423 $ — $ — $ 38,423 Public Warrant Liabilities 54,970 54,970 — — Private Placement Warrant Liabilities 25,174 — — 25,174 Total liabilities measured at fair value $ 118,567 $ 54,970 $ — $ 63,597 The following table includes a roll forward of the amounts for the three and nine months ended September 30, 2022 and 2021 and for liabilities measured at fair value: Fair Value Measurements for the Three Months Ended September 30, 2022 2021 Original Balance as of July 1, $ 50,805 $ 136,190 Change in fair value of contingent consideration 900 (3,940) Contingent consideration recognized due to acquisitions (4,100) 38,300 Change in fair value of warrants 65,720 14,649 Contingent consideration write off (197) — Closing Balance as of September 30, $ 113,128 $ 185,199 Fair Value Measurements for the Nine Months Ended September 30, 2022 2021 Original Balance as of January 1, $ 118,567 $ 5,172 Change in fair value of contingent consideration (9,525) (4,152) Contingent consideration recognized due to acquisitions (4,100) 47,900 Warrants acquired in the Business Combination — 163,058 Change in fair value of warrants 8,383 (24,565) Contingent consideration write off (197) — Contingent consideration payments — (2,214) Closing Balance as of September 30, $ 113,128 $ 185,199 |
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 Physicians Groups were established to employ healthcare providers to 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 Physicians Groups, whether the Physicians Groups are VIEs, and whether the Company has a controlling financial interest in the Physicians Groups. The Company concluded that it has variable interests in the Physicians Groups on the basis of each respective Master Service Agreement (“MSA”), which provides office space, consulting services, managerial and administrative services, billing and collection, personnel services, financial management, licensing, permitting, credentialing, and claims processing in exchange for a service fee and performance bonuses payable to the Company. Each respective MSA transfers substantially all the residual risks and rewards of ownership to the Company. The Physicians Groups’ equity at risk, as defined by GAAP, is insufficient to finance its activities without additional support, and therefore, the Physicians Groups are considered VIEs, and are not affiliates of the Company. In order to determine whether the Company has a controlling financial interest in the Physicians Groups, and thus, whether the Company is the primary beneficiary, the Company considered whether it has i) the power to direct the activities that most significantly impact the Physicians Groups’ economic performance and ii) the obligation to absorb losses of the entities that could potentially be significant to it or the right to receive benefits from the Physicians Groups that could potentially be significant to it. The Company concluded that it may unilaterally remove the physician owners of the Physicians Groups at its discretion and is therefore considered to hold substantive kick-out rights over the decision maker of the Physicians Groups. Under each MSA, the Company is entitled to a management fee and a performance bonus that entitle the Company to substantially all of the residual returns or losses and is exposed to economics which could be significant to it. As a result, the Company concluded that it is the primary beneficiary of the Physicians Groups and therefore, consolidates the balance sheets, results of operations, and cash flows of these entities. The Company performs a qualitative assessment on an ongoing basis to determine if it continues to be the primary beneficiary. The table below illustrates the aggregated VIE assets and liabilities and performance for the Physicians Groups: (in thousands) September 30, 2022 December 31, 2021 Total Assets $ 129,242 $ 80,445 Total Liabilities $ 95,160 $ 59,988 Three Months Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Total revenue $ 17,784 $ 12,321 $ 56,856 $ 14,621 Operating expenses: Third-party medical costs 10,372 8,582 35,795 8,582 Direct patient expense 6,483 2,413 19,913 5,203 Selling, general and administrative expenses 6,082 7,277 26,835 12,540 Depreciation and amortization expense 1,672 353 3,564 860 Transaction and other costs 460 — 1,322 — Total operating expenses 25,069 18,625 87,429 27,185 Net loss $ (7,285) $ (6,304) $ (30,573) $ (12,564) There are no restrictions on the Physicians Groups' assets or on the settlement of their liabilities. The assets of the Physicians Group can be used to settle obligations of the Company. The Physicians Groups are included in the Company’s creditor group; thus, creditors of the Company have recourse to the assets owned by the Physicians Groups. There are no liabilities for which creditors of the Physicians Groups do not have recourse to the general credit of the Company. There are no restrictions placed on the retained earnings or net income of the Physicians Groups with respect to potential future distributions. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS MedCloud Depot, LLC Relationship On August 1, 2022, the Company appointed a Chief Operating Officer ("COO"). The COO owns 20% of MedCloud Depot, LLC ("MedCloud"), a Florida-based software development firm that specializes in health information technology and data warehousing. The Company has a license agreement with MedCloud pursuant to which MedCloud has granted the Company a non-exclusive, non-transferable license to use their software. The Company recorded payments which amounted to $0.6 million and $0.3 million for three months ended September 30, 2022 and 2021, respectively, and $1.8 million and $0.9 million for nine months ended September 30, 2022 and 2021, respectively, which were recorded within the caption selling, general and administrative expenses. The Company did not owe MedCloud any amounts as of September 30, 2022. Dental Excellence and Onsite Dental Relationships On April 14, 2022, CD Support, LLC ("Onsite Dental") acquired Dental Excellence Partners, LLC ("DEP"), a company formerly owned by the spouse of the Chief Executive Officer ("CEO"), and entered into a dental services agreement with the Company. The spouse of the CEO became a minority shareholder of Onsite Dental upon closing of the acquisition. The Company has various sublease agreements with Onsite Dental. The Company recognized sublease income of approximately $0.7 million and $0.3 million, during the nine months ended September 30, 2022 and 2021, respectively, and $0.2 million and $0.1 million during the three months ended September 30, 2022 and 2021, respectively, which was recorded within the caption "Other Income (Expense)" in the accompanying unaudited condensed consolidated statements of operations. As of September 30, 2022, an immaterial amount was due to the Company in relation to these agreements and recorded in the caption accounts receivable. On October 9, 2020, the Company entered into a dental services agreement with DEP pursuant to which DEP agreed to provide dental services for managed care members of the Company. The Company recognized approximately $1.5 million and $3.2 million during the nine months ended September 30, 2022 and 2021, respectively, and an immaterial amount and $2.5 million during the three months ended September 30, 2022 and 2021. As of September 30, 2022, no balance was due to DEP. Subsequent to Onsite Dental acquiring DEP, the Company entered into a new dental services administration agreement with Onsite Dental to provide dental services for managed care members of the Company. The Company recognized expenses in the amount of approximately $2.0 million and $5.0 million for the three and nine months ended September 30, 2022. As of September 30, 2022, no balance was owed to Onsite Dental. Humana Relationship In 2020, the Company entered into multi-year agreements with Humana, a managed care organization, agreeing that Humana will be the exclusive health plan for Medicare Advantage products in certain centers in San Antonio and Las Vegas but allowing services to non-Humana members covered by original Medicare, Medicaid, and commercial health plans in those centers. Pursuant to the agreements, Humana is obligated to pay the Company an administrative payment in exchange for the Company providing certain care coordination services. The care coordination payments are refundable to Humana on a pro-rata basis if the Company ceases to provide services at the centers within the specified contract term. The Company identified one performance obligation per center to stand-ready to provide care coordination services to patients and recognizes revenue ratably over the contract term. Care coordination revenue is included in other revenue along with other ancillary healthcare revenues. In addition, in 2020, the Company and Primary Care (ITC), LLC entered into multi-year agreements with Humana and its affiliates whereby Primary Care (ITC) Holdings, LLC entered into a note purchase agreement with Humana for a convertible note due October 2022 with an aggregate principal amount of $60.0 million. The note accrued interest at a rate of 8.0% per annum through March 2020 and 10.0% per annum thereafter, payable in kind. The note was convertible to Class A-4 units of Primary Care (ITC) Holdings, LLC at the option of Humana in the event Primary Care (ITC) Holdings, LLC and affiliates seek to consummate a sale transaction and could be settled in cash at the option of Humana. While the multi-year agreement still exists between the Company and Humana, the note was converted and settled in cash upon the consummation of the Business Combination on June 3, 2021. As such, as of December 31, 2021 and for the nine months ended September 30, 2022, Humana was not a related party due to the repayment of the note. The multi-year agreements also contain an arrangement for a license fee that is payable by the Company to Humana for the Company’s use of certain Humana owned or leased medical centers to provide health care services. The license fee is a reimbursement to Humana for its costs of owning or leasing and maintaining the clinics, including rental payments, maintenance or repair expenses, equipment expenses, special assessments, cost of upgrades, taxes, leasehold improvements, and other expenses identified by Humana. The Company recorded $0.3 million and $0.5 million in operating lease expense related to its use of Humana clinics during the three and nine months ended September 30, 2021, respectively. Prior to entering into the agreements, the Company had existing payor relationships with Humana related to existing revenue arrangements within the Company. The Company recognized in its consolidated statements of operations revenue from Humana, including its subsidiaries, of $128.4 million for the nine months ended September 30, 2021, respectively. The Company recognized third-party medical expenses of $249.8 million for the nine months ended September 30, 2021, respectively. In addition, we have entered into expansion agreements with Humana which provide a roadmap to opening new Humana-funded medical centers in the southwestern U.S. by 2024. Humana may decline to fund additional medical centers, which would have an adverse effect on our growth and future prospects. Operating Leases The Company leased several offices and medical spaces from an employee of the company who is a beneficial shareholder of the Company. Monthly rent expense in aggregate totaled approximately $0.1 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively, and $0.2 million and $2.1 million for the nine months ended September 30, 2022 and 2021, respectively. General Contractor Agreements As of December 31, 2018, the Company has entered into various general contractor agreements with a company that is controlled by the father of the CEO of the Company to perform leasehold improvements at various Company locations as well as various repairs and related maintenance as deemed necessary. Payments made pursuant to the general contractor agreements as well as amounts paid for repairs and maintenance to this related party totaled approximately $2.6 million and $3.2 million for the three months ended September 30, 2022 and 2021, respectively and $6.2 million and $5.6 million for the nine months ended September 30, 2022 and 2021, respectively, |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2021 Stock Option and Incentive Plan At the Company’s special meeting of stockholders held on June 2, 2021, the stockholders approved the 2021 Stock Option and Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (“2021 ESPP”) to encourage and enable the current and future officers, employees, directors, and consultants of the Company and its affiliates to obtain ownership in the Company. The aggregate number of shares authorized for issuance under the 2021 Plan will not exceed 52.0 million shares of stock. The aggregate number of shares authorized for issuance under the 2021 ESPP will not exceed 4.7 million, plus on January 1, 2022, and each January 1 thereafter through January 1, 2031 the number of shares of Class A common stock reserved and available for issuance under the 2021 ESPP shall be cumulatively increased by the lessor of (i) 15.0 million shares of Class A common stock, (ii) one percent 1.0% of the number of shares of Class A common stock issued and outstanding on the immediately preceding December 31st, or (iii) such lesser number of shares determined by the administrator appointed by the Board of Directors. The 2021 Plan provides for the grant of incentive and nonqualified stock option, restricted stock units (“RSUs”), restricted share awards, stock appreciation awards, unrestricted stock awards, and cash-based awards to employees, directors, and consultants of the Company. Stock Options On June 3, 2021, in connection with the closing of the Business Combination, the Company granted 12.8 million stock options with market conditions (“Market Condition Awards”) to several executive officers and directors of the Company. The Market Condition Awards are eligible to vest when the Company’s stock price meets specified hurdle prices and stays above those prices for 20 consecutive days after June 3, 2021 and before June 3, 2024 (i.e., the period from grant to the end date of the performance period). Once the market condition is satisfied, the applicable percentage of the Market Condition Awards will vest 50% on each of the first and second anniversaries so long as the optionee stays employed. The unrecognized compensation cost of the Market Condition Awards as of September 30, 2022 was $23.0 million, which is expected to be recognized over the weighted average remaining service period of 1.7 years. Further, on March 15, 2022, in connection with certain performance metrics, the Company granted 0.4 million stock options with service conditions ("Service Condition Awards") to several executive officers of the Company. The Service Conditions Awards vest over four years, with 25% of the shares underlying the award vesting on March 15, 2023, and 25% of the shares underlying the award at the end of each successive one-year period thereafter so long as the optionee stays employed. The unrecognized compensation cost of the Service Condition Awards as of September 30, 2022 was $1.3 million, which is expected to be recognized over the weighted average remaining service period of 2.0 years. Stock Option Valuation The Company uses two valuation methods to determine the fair value of the stock options. The Monte-Carlo simulation model is used to estimate the fair value of the Market Condition Awards . The Monte-Carlo simulation model calculates multiple potential outcomes for an award and establishes a fair value based on the most likely outcome. For further information regarding the key assumptions, refer to Note 15, "Stock-Based Compensation" on the Company's Form 10-K for the fiscal year ended December 31, 2021. The Black-Scholes valuation method is used to determine the fair value of the Service Condition Awards. The Black-Scholes valuation model requires the input of assumptions regarding the expected term, expected volatility, dividend yield and risk-free interest to estimate the fair value of the stock option. The fair values of the Service Condition Awards were calculated using the following assumptions as of the grant date on March 15, 2022: As of March 15, 2022 Strike price $ 6.03 Risk-free interest rate 2.1% Expected volatility 70.0% Expected dividend yield 0.0% Expected term 6.25 A summary of the status of unvested options granted under the 2021 Plan through September 30, 2022 is presented below: Market-Based Stock Options Service-Based Stock Options Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, December 31, 2020 — — — — Granted 12,831,184 $ 4.23 — — Vested — — — — Forfeitures (97,486) 4.23 — — Balance, September 30, 2021 12,733,698 $ 4.23 — Balance, December 31, 2021 12,703,698 $ 4.23 Granted — — 435,141 $ 3.88 Vested — — — — Forfeitures (1,929,940) 4.23 (28,865) 3.88 Balance, September 30, 2022 10,773,758 $ 4.23 406,276 $ 3.88 Restricted Stock Units The fair value of RSUs is based on the closing price of the Company’s Class A common stock on the grant date. The unrecognized compensation cost of the RSUs as of September 30, 2022 was $78.8 million for service based awards and $3.4 million for performance based awards, which are performance-adjusted restricted stock units that link granted equity compensation value to the achievement of critical financial objectives. The RSUs and performance-adjusted restricted stock units are expected to be recognized over the weighted average remaining service period of 1.4 years and 1.2 years, respectively. A majority of RSUs vest in equal annual installments over a period of four years from the date of grant. Certain executives of the Company received RSUs which vest over a period of two years in equal annual installments. Further, RSUs granted to non-employee members of the Board of Directors vest over the lesser of one year or upon the next annual shareholder meeting. A summary of the status of unvested RSUs granted under the 2021 Plan through September 30, 2022 is presented below: Restricted-Stock Units Performance - Restricted-Stock Units Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, December 31, 2020 — — — — Granted 4,133,693 $ 14.75 706,751 $ 13.37 Vested — — — — Forfeitures (16,750) — — — Balance, September 30, 2021 4,116,943 $ 14.75 706,751 $ 13.37 Balance, December 31, 2021 4,460,772 $ 14.43 706,750 $ 12.73 Granted 11,793,758 5.40 — — Vested (2,517,378) 9.75 (176,688) 13.37 Forfeitures (1,771,518) 7.97 — — Balance, September 30, 2022 11,965,634 $ 7.47 530,062 $ 12.52 The Company recorded compensation expenses related to stock options and RSUs of $10.7 million and $9.5 million for the three months ended September 30, 2022 and 2021, respectively, $41.3 million and $13.1 million for the nine months ended September 30, 2022 and 2021, respectively. The Company recorded compensation expense related to the 2021 ESPP of $0.4 million and $1.4 million for the three and nine months ended September 30, 2022. The total stock-based compensation expense related to all the stock-based awards granted by the Company is reported in the condensed consolidated statement of operations as compensation expense within the selling, general and administrative expense caption. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Vendor Agreements The Company, through its subsidiaries Comfort Pharmacy, LLC, Comfort Pharmacy 2, LLC, and Belen Pharmacy Group, LLC, entered into a multi-year Prime Vendor Agreement ("PVA") with a pharmaceutical wholesaler, effective November 1, 2020, that continues through October 31, 2023. This agreement extends on a month-to-month basis thereafter until either party gives 90 days' written notice to terminate. The pharmaceutical wholesaler serves as the Company’s primary wholesale supplier for branded and generic pharmaceuticals. The agreement contains a provision that requires average monthly net purchases of $0.8 million, and if the minimum is not met, the vendor may adjust the pricing of goods. A Joinder Agreement was entered into on December 1, 2020, which amended the PVA to include IFB Pharmacy, LLC, a fully consolidated subsidiary, under the agreement as of this date. As a result of the University acquisition, the Company assumed the vendor agreement in 2021 that University, through its subsidiary University Health Care Pharmacy, Inc., had with a second pharmaceutical vendor. The agreement, effective through July 2023, contains a provision that requires average monthly net purchases of $0.6 million, and if the minimum is not met, the vendor may adjust the pricing of goods. Management believes for the nine months ended September 30, 2022 and 2021, the minimum requirements of the agreements in place were met. Legal Matters On March 18, 2022, a purported stockholder of the Company filed a complaint seeking class action status in the United States District Court for the Southern District of Florida against the Company and certain current and former officers. The lawsuit alleges, inter alia , violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all defendants for failure to disclose that “(i) Cano overstated its due diligence efforts and expertise with respect to acquiring target businesses; (ii) accordingly, Cano performed inadequate due diligence into whether the Company, post-Business Combination, could properly account for the timing of revenue recognition as prescribed by ASC 606, particularly with respect to Medicare risk adjustments; (iii) as a result, the Company misstated its capitated revenue, direct patient expense, accounts receivable, net of unpaid service provider costs, and accounts payable and accrued expenses; (iv) accordingly, the Company was at an increased risk of failing to timely file one or more of its periodic financial reports.” These omissions, according to Plaintiff, made the Company’s earlier statements materially misleading. The lawsuit seeks, among other things, certification of a class action and unspecified compensatory damages, as well as costs, interest and attorneys’ fees. The Company believes it has meritorious defenses and intends to vigorously defend against the allegations. A possible loss cannot be reasonably estimated at this time. The Company is exposed to various other asserted and unasserted potential claims encountered in the normal course of business. Management believes that the resolution of these matters will not have a material effect on the Company’s consolidated financial position, results of their operations or cash flows. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate for the nine months ended September 30, 2022 was (0.5)% compared to 0.6% for the nine months ended September 30, 2021. The effective tax rate for the periods presented differs from the statutory U.S. tax rate. This is primarily because a portion of income is allocated to non-controlling interests, including the Company’s full valuation allowance position. The Company does not have any uncertain tax positions (UTPs) as of September 30, 2022. While the Company currently does not have any UTPs, it is foreseeable that the calculation of the Company’s tax liabilities may involve dealing with uncertainties in the application of complex tax laws and regulations in multiple jurisdictions across the Company’s operations. The Company files income tax returns in the U.S. with Federal, State and local agencies, and in Puerto Rico. The Company, and its subsidiaries are subject to U.S. Federal, state and local tax examinations for tax years starting in 2019. In addition, the Puerto Rico subsidiary group is subject to U.S. Federal, state and foreign tax examinations for tax years starting in 2018. The Company does not currently have any ongoing income tax examinations in any of its jurisdictions. The Company has analyzed filing positions in the Federal, State, local and foreign jurisdictions where it is required to file income tax returns for all open tax years and does not believe any tax uncertainties exist. Tax Receivable Agreement Upon the completion of the Business Combination, Cano Health, Inc. became a party to the Tax Receivable Agreement ("TRA"). Under the terms of that agreement, Cano Health, Inc. generally will be required to pay to the Seller and to each other person from time to time that becomes a “TRA Party” under the Tax Receivable Agreement, 85% of the tax savings, if any, that Cano Health, Inc. is deemed to realize in certain circumstances as a result of certain tax attributes that exist following the Business Combination and that are created thereafter, including as a result of payments made under the Tax Receivable Agreement. To the extent payments are made pursuant to the Tax Receivable Agreement, Cano Health, Inc. generally will be required to pay to the Sponsor and to each other person from time to time that becomes a “Sponsor Party” under the Tax Receivable Agreement such Sponsor Party’s proportionate share of, an amount equal to such payments multiplied by a fraction with the numerator 0.15 and the denominator 0.85. As a result of the payments to the TRA Party and Sponsor Party we generally will be required to pay an amount equal to but not in excess of the tax benefit realized from the tax attributes subject to the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless Cano Health, Inc. exercises its right to terminate the Tax Receivable Agreement for an amount representing the present value of anticipated future tax benefits under the Tax Receivable Agreement or certain other acceleration events occur. The Tax Receivable Agreement liability is determined and recorded under ASC 450, “Contingencies”, as a contingent liability; therefore, we are required to evaluate whether the liability is both probable and the amount can be estimated. Since the Tax Receivable Agreement liability is payable upon cash tax savings and we have determined that positive future taxable income is not probable based on Cano Health, Inc’s historical loss position and other factors that make it difficult to rely on forecasts, we |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE The following table sets forth the net income (loss) and the computation of basic and diluted per common stock for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except shares and per share data) 2022 2021 2022 2021 Numerator: Net income (loss) $ (112,011) $ (64,840) $ (126,660) $ (117,240) Less: net loss attributable to non-controlling interests (57,783) (41,602) (67,759) (98,559) Net income (loss) attributable to Class A common stockholders (54,228) (23,238) (58,901) (18,681) Dilutive effect of warrants on net income to Class A common stockholders — — — (8,780) Dilutive effect of Class B common stock — (41,602) — — Net loss attributable to Class A common stockholders - Diluted $ (54,228) $ (64,840) $ (58,901) $ (27,461) Basic and Diluted Earnings Per Share denominator: Weighted average common stock outstanding - basic 232,314,170 170,871,429 211,408,974 168,100,210 Net income (loss) per share - basic $ (0.23) $ (0.14) $ (0.28) $ (0.11) Diluted Earnings Per Share: Dilutive effect of warrants on weighted average common stock outstanding — — — 1,212,048 Dilutive effect of Class B common stock on weighted average common stock outstanding — 306,384,554 — — Weighted average common stock outstanding - diluted 232,314,170 477,255,983 211,408,974 169,312,258 Net loss per share - diluted $ (0.23) $ (0.14) $ (0.28) $ (0.16) The outstanding Company’s Class B common stock does not represent economic interests in the Company, and as such, is not included in the denominator of the basic net loss per share calculation. On August 11, 2021, the Company issued 2,720,966 shares of Class A common stock (the “escrowed shares”) to the escrow agent, on behalf of the seller, as part of the consideration in connection with an acquisition. The amount of shares was based on a $30.0 million purchase price divided by the average share price of the Company during the twenty consecutive trading days preceding the closing date of the transaction. The shares were deposited in escrow and will be released to the seller upon the satisfaction of certain performance metrics during 2022 and 2023. The final number of shares to be issued to the seller, if any, from the escrow account will be calculated by multiplying the initial share amount by an earned share percentage in accordance with the purchase agreement and subtracting any forfeited indemnity shares . The dilutive effects of these shares were excluded from the three and nine months ended September 30, 2022 diluted earnings per share calculation because they were antidilutive. No securities were dilutive for the three and nine months ended September 30, 2022. The table below presents the Company’s potentially dilutive securities: As of September 30, 2022 Class B common stock 250,093,479 Public Warrants 22,999,900 Private Placement Warrants 10,533,292 Restricted Stock Units 12,495,697 Stock Options 11,180,034 Contingent Shares Issued in Connection with Acquisitions 2,720,966 2021 ESPP Shares 611,183 Potential Common Stock Equivalents 310,634,551 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATIONThe Company organizes its operations into one reportable segment. The Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), reviews financial information and makes decisions about resource allocation based on the Company’s responsibility to deliver high quality primary medical care services to the Company’s patient population. For the periods presented, all of the Company’s revenues were earned in the United States including Puerto Rico, and all of the Company’s long lived assets were located in the United States. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSThe Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the unaudited condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The portion of an entity not wholly-owned by the Company is presented as non-controlling interests. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company. The Company has interests in various entities and considers itself to control an entity if it is the majority owner of or has voting control over such entity. The Company also assesses control through means other than voting rights (“variable interest entities” or “VIEs”) and determines which business entity is the primary beneficiary of the VIE. The Company consolidates VIEs when it is determined that the Company is the primary beneficiary of the VIE. Included in the consolidated results of the Company are Cano Health Texas, PLLC, Cano Health Nevada, |
Basis of Presentation | Basis of Presentation These Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2022 and 2021, the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021, and the Condensed Consolidated Balance Sheet at September 30, 2022 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation. Our interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K ("Form 10-K") filed with the U.S. Securities and Exchange Commission (the "SEC") on March 14, 2022. The Company was deemed the accounting acquirer in the Business Combination of Jaws based on an analysis of the criteria outlined in Accounting Standards Codification ("ASC") Topic 805, " Business Combinations" ("ASC 805"), as the Company’s former owner retained control after the Business Combination. Refer to Note 1, " Nature of Business" , for details surrounding the Business Combination. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of the Company issuing stock for the net assets of Jaws, accompanied by a recapitalization. The net assets of Jaws were stated at historical cost, with no goodwill or other intangible assets recorded. While Jaws was the legal acquirer in the Business Combination, because the Company was deemed the accounting acquirer, the historical financial statements of PCIH became the historical financial statements of the combined company upon |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. Such reclassifications impacted the classification of: accounts receivable, inventory, current and long-term portion of equipment loans, due to seller, accounts payable and accrued expenses and current and long-term deferred revenue. These reclassifications had no impact on net loss as previously presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adoption of New Accounting Standards In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The guidance provides optional expedients and exceptions related to certain contract modifications and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another rate that is expected to be discontinued. The guidance was effective upon issuance and generally can be applied to applicable contract modifications and hedge relationships prospectively through December 31, 2022. The Company elected to use the practical expedients within the standard when accounting for a portion of the amendment to the term loan. The adoption did not impact net loss. |
REVENUE AND ACCOUNTS RECEIVAB_2
REVENUE AND ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue | The Company’s revenue streams for the three and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, 2022 2021 (in thousands) Revenue $ Revenue % Revenue $ Revenue % Capitated revenue Medicare $ 577,989 86.9 % $ 419,233 84.0 % Other capitated revenue 47,906 7.2 % 54,530 10.9 % Total capitated revenue 625,895 94.1 % 473,763 94.9 % Fee-for-service and other revenue Fee-for-service 9,677 1.5 % 8,176 1.6 % Pharmacy 12,910 1.9 % 10,096 2.0 % Other 16,546 2.5 % 6,896 1.5 % Total fee-for-service and other revenue 39,133 5.9 % 25,168 5.1 % Total revenue $ 665,028 100.0 % $ 498,931 100.0 % Nine Months Ended September 30, 2022 2021 (in thousands) Revenue $ Revenue % Revenue $ Revenue % Capitated revenue Medicare $ 1,795,820 87.2 % $ 924,892 82.8 % Other capitated revenue 159,919 7.8 % 139,712 12.5 % Total capitated revenue 1,955,739 95.0 % 1,064,604 95.3 % Fee-for-service and other revenue Fee-for-service 29,349 1.4 % 17,113 1.5 % Pharmacy 37,185 1.8 % 25,619 2.3 % Other 36,270 1.8 % 9,778 0.9 % Total fee-for-service and other revenue 102,804 5.0 % 52,510 4.7 % Total revenue $ 2,058,543 100.0 % $ 1,117,114 100.0 % |
Schedule of Account Receivable Balance | The Company's accounts receivable balances are summarized for the periods indicated below. The Company’s accounts receivable are presented net of the unpaid service provider costs. A right of offset exists when all of the following conditions are met: 1) each of the two parties owed the other determinable amounts; 2) the reporting party has the right to offset the amount owed with the amount owed to the other party; 3) the reporting party intends to offset; and 4) the right of offset is enforceable by law. The Company believes all of the aforementioned conditions existed as of September 30, 2022 and December 31, 2021. As of (in thousands) September 30, 2022 December 31, 2021 Accounts receivable $ 374,456 $ 227,889 Medicare risk adjustment 26,915 21,072 Unpaid service provider costs (199,334) (115,528) Accounts receivable, net $ 202,037 $ 133,433 |
Schedule of Concentration of Risk | Contracts with three of the payors accounted for the following amounts: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenues 61.3% 60.7% 63.8% 63.7% As of September 30, 2022 December 31, 2021 Accounts receivable 47.2% 43.3% |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid expenses and other current assets consisted of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, 2022 December 31, 2021 Third party receivables $ 57,800 $ $ — Other 21,033 20,632 Prepaid expenses and other current assets $ 78,833 $ $ 20,632 |
UNPAID SERVICE PROVIDER COSTS (
UNPAID SERVICE PROVIDER COSTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Activity in Unpaid Service Provider Costs | Activity in unpaid service provider costs for the nine months ended September 30, 2022 and 2021 is summarized below: (in thousands) 2022 2021 Balance as of January 1, $ 129,110 $ 54,524 Incurred related to: Current year 1,267,742 566,473 Prior years 11,319 3,526 1,279,061 569,999 Paid related to: Current year 955,998 439,460 Prior years 132,475 58,051 1,088,473 497,511 Balance as of September 30, $ 319,698 $ 127,012 |
PAYOR RELATIONSHIPS AND OTHER_2
PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Total Intangible, Net | As of September 30, 2022, the Company’s total intangibles, net consisted of the following: (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangibles: Trade names $ 1,409 $ (905) $ 504 Brand names 183,568 (21,952) 161,616 Non-compete agreements 81,795 (23,946) 57,849 Customer relationships 880 (221) 659 Payor relationships 620,913 (55,700) 565,213 Provider relationships 16,142 (5,402) 10,740 Total intangibles, net $ 904,707 $ (108,126) $ 796,581 As of December 31, 2021, the Company’s total intangibles, net consisted of the following: (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangibles: Trade names $ 1,409 $ (787) $ 622 Brand names 183,238 (9,037) 174,201 Non-compete agreements 75,794 (12,110) 63,684 Customer relationships 880 (184) 696 Payor relationships 609,362 (32,714) 576,648 Provider relationships 12,242 (2,472) 9,770 Total intangibles, net $ 882,925 $ (57,304) $ 825,621 |
Schedule of Expected Amortization Expense of The Intangible Assets | Expected amortization expense for the Company’s existing amortizable intangibles for the next five years, and thereafter, as of September 30, 2022 is as follows: Amount (in thousands) 2022 - remaining $ 56,069 2023 58,317 2024 56,703 2025 53,893 2026 44,658 Thereafter 526,941 Total $ 796,581 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments under operating and finance leases as of September 30, 2022 were as follows (in thousands): Operating Finance Total 2022 - remaining $ 10,442 $ 494 $ 10,936 2023 33,772 1,729 35,501 2024 32,017 1,449 33,466 2025 29,156 1,023 30,179 2026 26,702 460 27,162 Thereafter 106,162 71 106,233 Total minimum lease payments 238,251 5,226 243,477 Less: amount representing interest (52,826) (492) (53,318) Lease liabilities $ 185,425 $ 4,734 $ 190,159 Future minimum lease payments under operating and finance leases as of December 31, 2021 were as follows (in thousands): Operating Finance Total 2022 $ 23,051 $ 1,485 $ 24,536 2023 24,577 1,078 25,655 2024 22,561 797 23,358 2025 20,489 364 20,853 2026 18,424 107 18,531 Thereafter 67,569 — 67,569 Total minimum lease payments 176,671 3,831 180,502 Less: amount representing interest (38,461) (355) (38,816) Lease liabilities $ 138,210 $ 3,476 $ 141,686 |
Schedule of Future Minimum Lease Payments for Finance Leases | Future minimum lease payments under operating and finance leases as of September 30, 2022 were as follows (in thousands): Operating Finance Total 2022 - remaining $ 10,442 $ 494 $ 10,936 2023 33,772 1,729 35,501 2024 32,017 1,449 33,466 2025 29,156 1,023 30,179 2026 26,702 460 27,162 Thereafter 106,162 71 106,233 Total minimum lease payments 238,251 5,226 243,477 Less: amount representing interest (52,826) (492) (53,318) Lease liabilities $ 185,425 $ 4,734 $ 190,159 Future minimum lease payments under operating and finance leases as of December 31, 2021 were as follows (in thousands): Operating Finance Total 2022 $ 23,051 $ 1,485 $ 24,536 2023 24,577 1,078 25,655 2024 22,561 797 23,358 2025 20,489 364 20,853 2026 18,424 107 18,531 Thereafter 67,569 — 67,569 Total minimum lease payments 176,671 3,831 180,502 Less: amount representing interest (38,461) (355) (38,816) Lease liabilities $ 138,210 $ 3,476 $ 141,686 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, 2022 December 31, 2021 Service fund liability $ 18,668 $ 11,451 Acquired provider payments liability 10,255 10,255 2021 Employee Stock Purchase Plan withholding liability 764 10,494 Other 4,850 4,464 Other current liabilities $ 34,537 $ 36,664 |
CONTRACT LIABILITIES (Tables)
CONTRACT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Significant Changes In The Contract Liabilities | A summary of significant changes in the contract liabilities balance during the period is as follows: (in thousands) For the three months ended September 30, 2022 Balance at June 30, 2022 $ 7,537 Increases due to amounts collected — Decreases due to revenue recognized (657) Balance at September 30, 2022 $ 6,880 (in thousands) For the nine months ended September 30, 2022 Balance at December 31, 2021 $ 6,059 Increases due to amounts collected 2,750 Decreases due to revenue recognized (1,929) Balance at September 30, 2022 $ 6,880 Of the September 30, 2022 contract liabilities balance, the Company expects to recognize the following amounts as revenue in the succeeding years: Years ended December 31, Amount (in thousands) 2022 - remaining $ 657 2023 2,628 2024 2,442 2025 1,111 2026 42 Total $ 6,880 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The Company’s notes payable were as follows as of September 30, 2022 and December 31, 2021: (in thousands) 2022 2021 Term loan $ 639,599 $ 644,432 Senior Notes 300,000 300,000 Less: Current portion of notes payable (6,444) (6,493) 933,155 937,939 Less: Debt issuance costs (18,761) (22,673) Notes payable, net of current portion and debt issuance costs $ 914,394 $ 915,266 |
Schedule of Maturities of Long-term Debt | The following table sets forth the Company’s future principal payments as of September 30, 2022 , assuming mandatory prepayment does not occur: (in thousands) Year ending December 31, Amount 2022 - remainder $ 1,611 2023 6,444 2024 6,444 2025 6,444 2026 6,444 Thereafter 912,212 Total $ 939,599 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Quantitative Information Regarding Level 3 Fair Value Measurements | The following table provides quantitative information regarding the Level 3 inputs used for the fair value measurements of the warrant liabilities: As of Unobservable Input September 30, 2022 December 31, 2021 Exercise price $11.50 $11.50 Stock price $8.67 $8.91 Term (years) 3.7 4.4 Risk free interest rate 4.1% 1.2% Dividend yield None None Public warrant price $2.64 $2.39 |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table sets forth by level, within the fair value hierarchy, the Company’s liabilities measured at fair value on a recurring basis as of September 30, 2022 : (in thousands) Carrying Quoted Prices in Significant Significant Liabilities and assets measured at fair value on a recurring basis: Contingent consideration liability, net $ 24,600 $ — $ — $ 24,600 Public Warrant Liabilities 60,720 60,720 — — Private Placement Warrant Liabilities 27,808 — — 27,808 Total liabilities measured at fair value $ 113,128 $ 60,720 $ — $ 52,408 The following table sets forth by level, within the fair value hierarchy, the Company’s liabilities measured at fair value on a recurring basis as of December 31, 2021: (in thousands) Carrying Quoted Prices in Significant Significant Liabilities measured at fair value on a recurring basis: Contingent consideration liability $ 38,423 $ — $ — $ 38,423 Public Warrant Liabilities 54,970 54,970 — — Private Placement Warrant Liabilities 25,174 — — 25,174 Total liabilities measured at fair value $ 118,567 $ 54,970 $ — $ 63,597 |
Schedule of Liabilities Measured At Fair Value Using Significant Unobservable Inputs | The following table includes a roll forward of the amounts for the three and nine months ended September 30, 2022 and 2021 and for liabilities measured at fair value: Fair Value Measurements for the Three Months Ended September 30, 2022 2021 Original Balance as of July 1, $ 50,805 $ 136,190 Change in fair value of contingent consideration 900 (3,940) Contingent consideration recognized due to acquisitions (4,100) 38,300 Change in fair value of warrants 65,720 14,649 Contingent consideration write off (197) — Closing Balance as of September 30, $ 113,128 $ 185,199 Fair Value Measurements for the Nine Months Ended September 30, 2022 2021 Original Balance as of January 1, $ 118,567 $ 5,172 Change in fair value of contingent consideration (9,525) (4,152) Contingent consideration recognized due to acquisitions (4,100) 47,900 Warrants acquired in the Business Combination — 163,058 Change in fair value of warrants 8,383 (24,565) Contingent consideration write off (197) — Contingent consideration payments — (2,214) Closing Balance as of September 30, $ 113,128 $ 185,199 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Aggregated VIE Assets and Liabilities and Performance | The table below illustrates the aggregated VIE assets and liabilities and performance for the Physicians Groups: (in thousands) September 30, 2022 December 31, 2021 Total Assets $ 129,242 $ 80,445 Total Liabilities $ 95,160 $ 59,988 Three Months Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Total revenue $ 17,784 $ 12,321 $ 56,856 $ 14,621 Operating expenses: Third-party medical costs 10,372 8,582 35,795 8,582 Direct patient expense 6,483 2,413 19,913 5,203 Selling, general and administrative expenses 6,082 7,277 26,835 12,540 Depreciation and amortization expense 1,672 353 3,564 860 Transaction and other costs 460 — 1,322 — Total operating expenses 25,069 18,625 87,429 27,185 Net loss $ (7,285) $ (6,304) $ (30,573) $ (12,564) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Fair Value of Stock Options Granted Using e Monte-Carlo model | The fair values of the Service Condition Awards were calculated using the following assumptions as of the grant date on March 15, 2022: As of March 15, 2022 Strike price $ 6.03 Risk-free interest rate 2.1% Expected volatility 70.0% Expected dividend yield 0.0% Expected term 6.25 |
Schedule of Activity of Unvested Options | A summary of the status of unvested options granted under the 2021 Plan through September 30, 2022 is presented below: Market-Based Stock Options Service-Based Stock Options Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, December 31, 2020 — — — — Granted 12,831,184 $ 4.23 — — Vested — — — — Forfeitures (97,486) 4.23 — — Balance, September 30, 2021 12,733,698 $ 4.23 — Balance, December 31, 2021 12,703,698 $ 4.23 Granted — — 435,141 $ 3.88 Vested — — — — Forfeitures (1,929,940) 4.23 (28,865) 3.88 Balance, September 30, 2022 10,773,758 $ 4.23 406,276 $ 3.88 |
Schedule of Unvested Restricted Stock Units and Performance Restricted Stock Activity | A summary of the status of unvested RSUs granted under the 2021 Plan through September 30, 2022 is presented below: Restricted-Stock Units Performance - Restricted-Stock Units Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, December 31, 2020 — — — — Granted 4,133,693 $ 14.75 706,751 $ 13.37 Vested — — — — Forfeitures (16,750) — — — Balance, September 30, 2021 4,116,943 $ 14.75 706,751 $ 13.37 Balance, December 31, 2021 4,460,772 $ 14.43 706,750 $ 12.73 Granted 11,793,758 5.40 — — Vested (2,517,378) 9.75 (176,688) 13.37 Forfeitures (1,771,518) 7.97 — — Balance, September 30, 2022 11,965,634 $ 7.47 530,062 $ 12.52 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Common Share | The following table sets forth the net income (loss) and the computation of basic and diluted per common stock for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except shares and per share data) 2022 2021 2022 2021 Numerator: Net income (loss) $ (112,011) $ (64,840) $ (126,660) $ (117,240) Less: net loss attributable to non-controlling interests (57,783) (41,602) (67,759) (98,559) Net income (loss) attributable to Class A common stockholders (54,228) (23,238) (58,901) (18,681) Dilutive effect of warrants on net income to Class A common stockholders — — — (8,780) Dilutive effect of Class B common stock — (41,602) — — Net loss attributable to Class A common stockholders - Diluted $ (54,228) $ (64,840) $ (58,901) $ (27,461) Basic and Diluted Earnings Per Share denominator: Weighted average common stock outstanding - basic 232,314,170 170,871,429 211,408,974 168,100,210 Net income (loss) per share - basic $ (0.23) $ (0.14) $ (0.28) $ (0.11) Diluted Earnings Per Share: Dilutive effect of warrants on weighted average common stock outstanding — — — 1,212,048 Dilutive effect of Class B common stock on weighted average common stock outstanding — 306,384,554 — — Weighted average common stock outstanding - diluted 232,314,170 477,255,983 211,408,974 169,312,258 Net loss per share - diluted $ (0.23) $ (0.14) $ (0.28) $ (0.16) |
Schedule of Diluted Net Loss Per Share | The table below presents the Company’s potentially dilutive securities: As of September 30, 2022 Class B common stock 250,093,479 Public Warrants 22,999,900 Private Placement Warrants 10,533,292 Restricted Stock Units 12,495,697 Stock Options 11,180,034 Contingent Shares Issued in Connection with Acquisitions 2,720,966 2021 ESPP Shares 611,183 Potential Common Stock Equivalents 310,634,551 |
NATURE OF BUSINESS AND OPERAT_2
NATURE OF BUSINESS AND OPERATIONS - Additional Information (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Aug. 11, 2021 shares | Jun. 03, 2021 USD ($) $ / shares shares | Sep. 30, 2022 vote shares | Dec. 31, 2021 USD ($) shares | |
Nature Of Business And Operations [Line Items] | ||||
Payment to acquire business | $ | $ 1,100 | |||
Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Percentage of controlling ownership | 35.10% | |||
Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Percentage of non controlling ownership | 64.90% | |||
Jaws Acquisition Corp | Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Payment to acquire business | $ | $ 466.5 | |||
Business combination, consideration transferred | $ | $ 3,534.9 | |||
Business acquisition equity interests issued or issuable shares (in shares) | 3,068,400,000 | |||
Business acquisition share price (in dollars per share) | $ / shares | $ 10 | |||
Jaws Acquisition Corp | PIPE Financing | ||||
Nature Of Business And Operations [Line Items] | ||||
Payment to acquire business | $ | $ 800 | |||
University Health Care and its Affiliates | ||||
Nature Of Business And Operations [Line Items] | ||||
Payment to acquire business | $ | $ 607.9 | |||
University Health Care and its Affiliates | Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Percentage of controlling ownership | 49.10% | |||
University Health Care and its Affiliates | Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Percentage of non controlling ownership | 50.90% | |||
Class A | ||||
Nature Of Business And Operations [Line Items] | ||||
Common stock outstanding (in shares) | 241,646,505 | 180,113,551 | ||
Shares issued in PIPE financing (in shares) | 2,720,966 | |||
Class A | Jaws Acquisition Corp | PIPE Financing | ||||
Nature Of Business And Operations [Line Items] | ||||
Shares issued in PIPE financing (in shares) | 80,000,000 | |||
Class A | Jaws Acquisition Corp | Stock Outstanding Prior To Business Combination | ||||
Nature Of Business And Operations [Line Items] | ||||
Common stock outstanding (in shares) | 69,000,000 | |||
Class B common stock | ||||
Nature Of Business And Operations [Line Items] | ||||
Common stock outstanding (in shares) | 250,093,479 | 297,385,981 | ||
Class B common stock | Jaws Acquisition Corp | Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Business acquisition equity interests issued or issuable shares (in shares) | 306,800,000 | |||
Class B common stock | Jaws Acquisition Corp | PCIH Shareholders | ||||
Nature Of Business And Operations [Line Items] | ||||
Stock issued during period, acquisitions (in shares) | 306,800,000 | |||
Class B common stock | Jaws Acquisition Corp | Founder Shares | Jaws Sponsor LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Common stock outstanding (in shares) | 17,250,000 | |||
Class B common stock | Primary Care ITC Intermediate Holdings LLC | ||||
Nature Of Business And Operations [Line Items] | ||||
Common stock, voting rights (in dollars per share) | vote | 1 |
REVENUE AND ACCOUNTS RECEIVAB_3
REVENUE AND ACCOUNTS RECEIVABLE - Summary of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 665,028 | $ 498,931 | $ 2,058,543 | $ 1,117,114 |
Revenue % | 100% | 100% | 100% | 100% |
Capitated revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 625,895 | $ 473,763 | $ 1,955,739 | $ 1,064,604 |
Revenue % | 94.10% | 94.90% | 95% | 95.30% |
Fee-for-service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 39,133 | $ 25,168 | $ 102,804 | $ 52,510 |
Revenue % | 5.90% | 5.10% | 5% | 4.70% |
Medicare | Capitated revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 577,989 | $ 419,233 | $ 1,795,820 | $ 924,892 |
Revenue % | 86.90% | 84% | 87.20% | 82.80% |
Other | Capitated revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 47,906 | $ 54,530 | $ 159,919 | $ 139,712 |
Revenue % | 7.20% | 10.90% | 7.80% | 12.50% |
Other | Fee-for-service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 16,546 | $ 6,896 | $ 36,270 | $ 9,778 |
Revenue % | 2.50% | 1.50% | 1.80% | 0.90% |
Fee-for-service | Fee-for-service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 9,677 | $ 8,176 | $ 29,349 | $ 17,113 |
Revenue % | 1.50% | 1.60% | 1.40% | 1.50% |
Pharmacy | Fee-for-service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 12,910 | $ 10,096 | $ 37,185 | $ 25,619 |
Revenue % | 1.90% | 2% | 1.80% | 2.30% |
REVENUE AND ACCOUNTS RECEIVAB_4
REVENUE AND ACCOUNTS RECEIVABLE - Summary of Account Receivable Balance (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Account Receivable [Line Items] | ||
Accounts receivable, net | $ 202,037 | $ 133,433 |
Accounts receivable | ||
Schedule of Account Receivable [Line Items] | ||
Accounts receivable, net | 374,456 | 227,889 |
Medicare risk adjustment | ||
Schedule of Account Receivable [Line Items] | ||
Accounts receivable, net | 26,915 | 21,072 |
Unpaid service provider costs | ||
Schedule of Account Receivable [Line Items] | ||
Accounts receivable, net | $ (199,334) | $ (115,528) |
REVENUE AND ACCOUNTS RECEIVAB_5
REVENUE AND ACCOUNTS RECEIVABLE - Concentration of Risk (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Four Payors | Revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 71.30% | ||||
Three Payors | Revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 61.30% | 60.70% | 63.80% | 63.70% | |
Three Payors | Accounts receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 47.20% | 43.30% | |||
Two Payors | Revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 55.70% |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Schedule of Prepaid And Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Third party receivables | $ 57,800 | $ 0 |
Other | 21,033 | 20,632 |
Prepaid expenses and other current assets | $ 78,833 | $ 20,632 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS - Narrative (Details) $ in Thousands | Sep. 30, 2022 USD ($) day | Dec. 31, 2021 USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Third party receivables | $ 57,800 | $ 0 |
Noncurrent third party receivable | $ 10,000 | |
MSP Recovery Inc. | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equity investment | 1,200 | |
MSP Recovery Inc. | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Third party receivables | $ 57,800 | |
Number of business day | day | 1 |
UNPAID SERVICE PROVIDER COSTS -
UNPAID SERVICE PROVIDER COSTS - Summary of Activity in Unpaid Service Provider Cost For The Period (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Unpaid Service Cost [Roll Forward] | ||
Beginning balance | $ 129,110 | $ 54,524 |
Unpaid service cost incurred in current year | 1,267,742 | 566,473 |
Unpaid service cost incurred in prior years | 11,319 | 3,526 |
Total | 1,279,061 | 569,999 |
Unpaid service cost paid in current year | 955,998 | 439,460 |
Unpaid service cost paid in prior years | 132,475 | 58,051 |
Total | 1,088,473 | 497,511 |
Ending balance | $ 319,698 | $ 127,012 |
UNPAID SERVICE PROVIDER COSTS_2
UNPAID SERVICE PROVIDER COSTS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Increase (decrease) in estimates for unpaid service costs | $ 11.3 | $ 3.5 | ||
Incurred but not realized costs reclassified to other current liabilities | 120.4 | 32.8 | ||
Loss contingency insurance policy, deductible | 0.1 | 0.1 | ||
Loss contingency insurance policy, maximum coverage limit | 2 | 2 | ||
Loss contingency insurance policy, premiums | $ 5.6 | $ 1.9 | 10.6 | 5.4 |
Loss contingency insurance policy, insurance reimbursements | $ 16 | $ 3.6 | $ 23.1 | $ 5.4 |
BUSINESS ACQUISITIONS - Additio
BUSINESS ACQUISITIONS - Additional Information (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 USD ($) acquistion | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||
Cash payments to acquire assets | $ 1,100,000 | ||
Contingent assets | $ 1,500 | $ 47,900 | |
University Health Care and its Affiliates | |||
Business Acquisition [Line Items] | |||
Cash payments to acquire assets | 607,900 | ||
Doctor's Medical Center, LLC | |||
Business Acquisition [Line Items] | |||
Cash payments to acquire assets | $ 300,700 | ||
Other asset acquisitions | |||
Business Acquisition [Line Items] | |||
Number of acquisitions | acquistion | 7 | ||
Purchase price of asset acquisition | $ 41,700 | ||
Cash payments to acquire assets | 5,000 | ||
Deferred cash payments | 1,500 | ||
Liability to issue registered shares | 39,300 | ||
Contingent assets | (4,100) | ||
Deferred acquisition payment | 15,800 | ||
Goodwill | 18,200 | ||
Indefinite-lived intangible assets acquired | $ 21,800 |
PAYOR RELATIONSHIPS AND OTHER_3
PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NET - Summary of Total Intangible, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 904,707 | $ 882,925 |
Accumulated Amortization | (108,126) | (57,304) |
Total | 796,581 | 825,621 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,409 | 1,409 |
Accumulated Amortization | (905) | (787) |
Total | 504 | 622 |
Brand names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 183,568 | 183,238 |
Accumulated Amortization | (21,952) | (9,037) |
Total | 161,616 | 174,201 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 81,795 | 75,794 |
Accumulated Amortization | (23,946) | (12,110) |
Total | 57,849 | 63,684 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 880 | 880 |
Accumulated Amortization | (221) | (184) |
Total | 659 | 696 |
Payor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 620,913 | 609,362 |
Accumulated Amortization | (55,700) | (32,714) |
Total | 565,213 | 576,648 |
Provider relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,142 | 12,242 |
Accumulated Amortization | (5,402) | (2,472) |
Total | $ 10,740 | $ 9,770 |
PAYOR RELATIONSHIPS AND OTHER_4
PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NET - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 20.2 | $ 14.2 | $ 50.8 | $ 23.3 | |
Brand names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful life of intangible assets | 2 years 6 months | 20 years | |||
Brand names | Intangible Assets, Amortization Period | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 3.2 | $ 3.2 |
PAYOR RELATIONSHIPS AND OTHER_5
PAYOR RELATIONSHIPS AND OTHER INTANGIBLES, NET - Summary of Expected Amortization Expense of The Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 - remaining | $ 56,069 | |
2023 | 58,317 | |
2024 | 56,703 | |
2025 | 53,893 | |
2026 | 44,658 | |
Thereafter | 526,941 | |
Total | $ 796,581 | $ 825,621 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Rent expense | $ 8.7 | $ 6.9 | $ 24.1 | $ 15.9 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Finance lease, term of contract | 1 year | 1 year | ||
Operating lease, term of contract | 1 year | 1 year | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Finance lease, term of contract | 10 years | 10 years | ||
Operating lease, term of contract | 10 years | 10 years |
LEASES - Schedule of Lease Matu
LEASES - Schedule of Lease Maturity Interim (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating | ||
Remainder of fiscal year | $ 10,442 | |
Year one | 33,772 | $ 23,051 |
Year two | 32,017 | 24,577 |
Year three | 29,156 | 22,561 |
Year four | 26,702 | 20,489 |
Thereafter | 106,162 | |
Total minimum lease payments | 238,251 | 176,671 |
Less: amount representing interest | (52,826) | (38,461) |
Lease liabilities | 185,425 | 138,210 |
Finance | ||
Remainder of fiscal year | 494 | |
Year one | 1,729 | 1,485 |
Year two | 1,449 | 1,078 |
Year three | 1,023 | 797 |
Year four | 460 | 364 |
Thereafter | 71 | |
Total minimum lease payments | 5,226 | 3,831 |
Less: amount representing interest | (492) | (355) |
Lease liabilities | 4,734 | 3,476 |
Total | ||
Remainder of fiscal year | 10,936 | |
Year one | 35,501 | 24,536 |
Year two | 33,466 | 25,655 |
Year three | 30,179 | 23,358 |
Year four | 27,162 | 20,853 |
Thereafter | 106,233 | |
Total minimum lease payments | 243,477 | 180,502 |
Less: amount representing interest | (53,318) | (38,816) |
Lease liabilities | $ 190,159 | $ 141,686 |
Leases - Schedule of Lease Ma_2
Leases - Schedule of Lease Maturity Year End (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating | ||
Year one | $ 33,772 | $ 23,051 |
Year two | 32,017 | 24,577 |
Year three | 29,156 | 22,561 |
Year four | 26,702 | 20,489 |
Year five | 18,424 | |
Thereafter | 67,569 | |
Total minimum lease payments | 238,251 | 176,671 |
Less: amount representing interest | (52,826) | (38,461) |
Lease liabilities | 185,425 | 138,210 |
Finance | ||
Year one | 1,729 | 1,485 |
Year two | 1,449 | 1,078 |
Year three | 1,023 | 797 |
Year four | 460 | 364 |
Year five | 107 | |
Thereafter | 0 | |
Total minimum lease payments | 5,226 | 3,831 |
Less: amount representing interest | (492) | (355) |
Lease liabilities | 4,734 | 3,476 |
Total | ||
Year one | 35,501 | 24,536 |
Year two | 33,466 | 25,655 |
Year three | 30,179 | 23,358 |
Year four | 27,162 | 20,853 |
Year five | 18,531 | |
Thereafter | 67,569 | |
Total minimum lease payments | 243,477 | 180,502 |
Less: amount representing interest | (53,318) | (38,816) |
Lease liabilities | $ 190,159 | $ 141,686 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Service fund liability | $ 18,668 | $ 11,451 |
Acquired provider payments liability | 10,255 | 10,255 |
2021 Employee Stock Purchase Plan withholding liability | 764 | 10,494 |
Other | 4,850 | 4,464 |
Other current liabilities | $ 34,537 | $ 36,664 |
Contract Liabilities - Addition
Contract Liabilities - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Change In Contract With Customer Liability [Line Items] | ||||
Contract liabilities | $ 6,880 | $ 6,880 | $ 7,537 | $ 6,059 |
Humana Affiliate Provider | ||||
Change In Contract With Customer Liability [Line Items] | ||||
Contract liabilities | 6,900 | 6,900 | $ 6,100 | |
Revenue recognized from contract liabilities | $ 700 | $ 1,900 |
Contract Liabilities - Summary
Contract Liabilities - Summary of Significant Changes In The Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 7,537 | $ 6,059 |
Increases due to amounts collected | 0 | 2,750 |
Decreases due to revenue recognized | (657) | (1,929) |
Ending balance | $ 6,880 | $ 6,880 |
Contract Liabilities - Revenue,
Contract Liabilities - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 6,880 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 657 |
Revenue, remaining performance obligation, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2,628 |
Revenue, remaining performance obligation, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2,442 |
Revenue, remaining performance obligation, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 1,111 |
Revenue, remaining performance obligation, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 42 |
Revenue, remaining performance obligation, period | 12 months |
DEBT - Schedule of Notes Payabl
DEBT - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Less: Current portion of notes payable | $ (6,444) | $ (6,493) |
Long-term debt, gross | 933,155 | 937,939 |
Less: Debt issuance costs | (18,761) | (22,673) |
Notes payable, net of current portion and debt issuance costs | 914,394 | 915,266 |
Term Loan Three | ||
Debt Instrument [Line Items] | ||
Term loan | 639,599 | 644,432 |
6.25% Senior Unsecured Notes Due 2028 | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 300,000 | $ 300,000 |
DEBT - Additional Information (
DEBT - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jan. 14, 2022 | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) health_plan | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) health_plan | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) health_plan | Nov. 23, 2020 | |
Debt Instrument [Line Items] | ||||||||
Number of health plan | health_plan | 2 | 2 | 2 | |||||
Letters of credit | $ 7,200 | $ 7,200 | $ 3,500 | |||||
Debt issuance costs and debt discounts premium, net | 19,500 | 19,500 | $ 23,300 | |||||
Interest expenses | 16,451 | $ 16,023 | 42,868 | $ 36,363 | ||||
Amortization of debt issuance costs | 1,100 | $ 4,000 | 2,700 | $ 4,200 | ||||
Term and Senior Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs and debt discounts premium, net | $ 18,800 | $ 18,800 | ||||||
6.25% Senior Unsecured Notes Due 2028 | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate | 6.66% | 6.66% | ||||||
Proceeds from the issuance of the Senior Notes | $ 300,000 | |||||||
Interest rate | 6.25% | 6.25% | 6.25% | |||||
Percentage of principal amount redeemed with net cash proceeds of certain equity offerings | 40% | |||||||
Redemption price percentage | 106.25% | |||||||
6.25% Senior Unsecured Notes Due 2028 | Prior to October 1, 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal amount redeemed with net cash proceeds of certain equity offerings | 100% | |||||||
6.25% Senior Unsecured Notes Due 2028 | On or after October 1, 2024 | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal amount redeemed with net cash proceeds of certain equity offerings | 103.13% | |||||||
6.25% Senior Unsecured Notes Due 2028 | On or after October 1, 2024 | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal amount redeemed with net cash proceeds of certain equity offerings | 100% | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issuance costs and debt discounts premium, net | $ 700 | $ 700 | ||||||
Revolving Credit Facility | New Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate | 7.61% | 7.61% | ||||||
Revolving Credit Facility | SOFR | New Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4% | |||||||
Debt instrument, floor rate | 0.50% | |||||||
Write off of deferred financing costs | $ 1,300 | |||||||
Revolving Credit Facility | SOFR | New Term Loan | Basis Spread Determined Based On Credit Rating | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.75% | |||||||
Revolving Credit Facility | New Credit Suisse Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, remaining borrowing capacity | $ 120,000 | $ 120,000 | ||||||
Initial Term Loan And Each Delayed Draw Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal payment outstanding | 0.25% |
DEBT - Schedule of Maturities o
DEBT - Schedule of Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2022 - remainder | $ 1,611 | |
2023 | $ 6,444 | |
2024 | 6,444 | |
2025 | 6,444 | |
2026 | $ 6,444 | |
Thereafter | 912,212 | |
Long-Term Debt, Total | $ 939,599 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 11, 2021 USD ($) tradingDay shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value, liability, recurring basis, level two debt | $ 902,900 | $ 902,900 | $ 945,000 | |||
Business acquisition, equity interest issued value assigned | $ 30,000 | |||||
Threshold consecutive trading days | tradingDay | 20 | |||||
Gain from acquisition change in fair value | 4,500 | |||||
Increase in fair value of warrants | (65,721) | $ (14,650) | (8,383) | $ 24,565 | ||
Other acquisitions | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Threshold consecutive trading days | tradingDay | 20 | |||||
Contingent consideration asset | 9,100 | 9,100 | ||||
Contingent consideration asset, current | 5,700 | 5,700 | ||||
Contingent consideration asset, noncurrent | $ 3,400 | $ 3,400 | ||||
Public Warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrants outstanding (in shares) | shares | 23,000,000 | 23,000,000 | ||||
Increase in fair value of warrants | $ (5,800) | |||||
Private Placement Warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrants outstanding (in shares) | shares | 10,500,000 | 10,500,000 | ||||
Increase in fair value of warrants | $ (2,600) | |||||
Contingent Consideration | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Decrease in fair value | $ (900) | $ 3,940 | 9,525 | $ 4,152 | ||
Gain from amount owed for acquisition to be paid in common stock | 2,100 | |||||
Gain from derecognition of contingent consideration liability | $ 2,900 | |||||
Class A | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Shares issued in PIPE financing (in shares) | shares | 2,720,966 | |||||
Minimum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earned share percentage | 0% | |||||
Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Earned share percentage | 100% |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Quantitative Information Regarding Level 3 Fair Value Measurements Warrant Liability (Details) - Warrant Liabilities - Level 3 | Sep. 30, 2022 $ / shares yr | Dec. 31, 2021 $ / shares yr |
Exercise price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 11.50 | 11.50 |
Stock price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 8.67 | 8.91 |
Term (years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | yr | 3.7 | 4.4 |
Risk free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.041 | 0.012 |
Dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 0 | 0 |
Public warrant price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | $ / shares | 2.64 | 2.39 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | $ 113,128 | $ 118,567 |
Carrying Value | Contingent consideration liability, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 24,600 | 38,423 |
Carrying Value | Public Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 60,720 | 54,970 |
Carrying Value | Private Placement Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 27,808 | 25,174 |
Estimate of Fair Value Measurement | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 60,720 | 54,970 |
Estimate of Fair Value Measurement | Level 1 | Contingent consideration liability, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 1 | Public Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 60,720 | 54,970 |
Estimate of Fair Value Measurement | Level 1 | Private Placement Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | Contingent consideration liability, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | Public Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 2 | Private Placement Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 52,408 | 63,597 |
Estimate of Fair Value Measurement | Level 3 | Contingent consideration liability, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 24,600 | 38,423 |
Estimate of Fair Value Measurement | Level 3 | Public Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Level 3 | Private Placement Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | $ 27,808 | $ 25,174 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Liabilities Measured At Fair Value Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 50,805 | $ 136,190 | $ 118,567 | $ 5,172 |
Contingent consideration recognized due to acquisitions | (4,100) | 38,300 | (4,100) | 47,900 |
Warrants acquired in the Business Combination | 0 | 163,058 | ||
Contingent consideration write off | (197) | 0 | (197) | 0 |
Contingent consideration payments | 0 | (2,214) | ||
Ending Balance | 113,128 | 185,199 | 113,128 | 185,199 |
Contingent Consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value adjustments | 900 | (3,940) | (9,525) | (4,152) |
Warrant Liabilities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair value adjustments | $ 65,720 | $ 14,649 | $ 8,383 | $ (24,565) |
VARIABLE INTEREST ENTITIES - Sc
VARIABLE INTEREST ENTITIES - Schedule of Aggregated VIE Assets and Liabilities and Performance (Details) - USD ($) $ in Thousands | 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 | $ 2,196,139 | $ 2,196,139 | $ 2,143,539 | ||
Total Liabilities | 1,413,105 | 1,413,105 | 1,344,971 | ||
Operating expenses: | |||||
Selling, general and administrative expenses | 111,765 | $ 76,618 | 314,617 | $ 158,786 | |
Depreciation and amortization expense | 25,343 | 16,955 | 64,215 | 30,746 | |
Transaction and other costs | 5,033 | 11,206 | 19,616 | 36,274 | |
Total operating income (expenses) | 696,473 | 532,523 | 2,132,774 | 1,210,043 | |
Net income (loss) | (112,011) | (64,840) | (126,660) | (117,240) | |
Variable Interest Entity, Primary Beneficiary | Physicians Groups | |||||
Variable Interest Entity [Line Items] | |||||
Total Assets | 129,242 | 129,242 | 80,445 | ||
Total Liabilities | 95,160 | 95,160 | $ 59,988 | ||
Total revenue | 17,784 | 12,321 | 56,856 | 14,621 | |
Operating expenses: | |||||
Third-party medical costs | 10,372 | 8,582 | 35,795 | 8,582 | |
Direct patient expense | 6,483 | 2,413 | 19,913 | 5,203 | |
Selling, general and administrative expenses | 6,082 | 7,277 | 26,835 | 12,540 | |
Depreciation and amortization expense | 1,672 | 353 | 3,564 | 860 | |
Transaction and other costs | 460 | 0 | 1,322 | 0 | |
Total operating income (expenses) | 25,069 | 18,625 | 87,429 | 27,185 | |
Net income (loss) | $ (7,285) | $ (6,304) | $ (30,573) | $ (12,564) |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 01, 2022 | Dec. 31, 2020 | Apr. 01, 2020 | |
Administrative Service Agreement | Dental Excellence Partners, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | $ 0 | $ 2.5 | $ 1.5 | $ 3.2 | |||
Administrative Service Agreement | Onsight Dental | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 2 | 5 | |||||
Humana Relationships | Humana | Convertible Notes Payable | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 60 | ||||||
Interest rate | 8% | 10% | |||||
General Contractor Agreements | Immediate Family Member of Management or Principal Owner | |||||||
Related Party Transaction [Line Items] | |||||||
Transactions with related party | 2.6 | 3.2 | 6.2 | 5.6 | |||
Operating Lease Agreements | Humana | |||||||
Related Party Transaction [Line Items] | |||||||
Transactions with related party | 0.3 | 0.5 | |||||
Operating Lease Agreements | Beneficial Owner | |||||||
Related Party Transaction [Line Items] | |||||||
Transactions with related party | 0.1 | 0.7 | 0.2 | 2.1 | |||
Selling, General and Administrative Expenses | License Agreement | MedCloud Depot, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Transactions with related party | (0.6) | (0.3) | (1.8) | (0.9) | |||
Fee For Service and Other Revenues | Administrative Service Agreement | Dental Excellence Partners, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | $ 0.2 | 0.1 | $ 0.7 | 0.3 | |||
Thirdparty Medical Costs | Humana Relationships | Humana | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | $ 128.4 | ||||||
Expenses from transactions with related party | $ 249.8 | ||||||
MedCloud Depot, LLC | Chief Operating Officer | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of controlling ownership | 20% |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Mar. 15, 2022 shares | Jun. 03, 2021 d shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Jun. 02, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | $ 10.7 | $ 9.5 | $ 41.3 | $ 13.1 | |||
Market-Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options granted (in shares) | shares | 12,800,000 | 0 | 12,831,184 | ||||
Common stock threshold consecutive trading days | d | 20 | ||||||
Percentage of vesting awards during period | 50% | ||||||
Unrecognized compensation cost | 23 | $ 23 | |||||
Remaining service period | 1 year 8 months 12 days | ||||||
Service-Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options granted (in shares) | shares | 400,000 | 435,141,000 | 0 | ||||
Unrecognized compensation cost | 1.3 | $ 1.3 | |||||
Remaining service period | 2 years | ||||||
Vesting period | 4 years | ||||||
Service-Based Stock Options | Awards Vesting on March 15, 2022 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of vesting awards during period | 25% | ||||||
Service-Based Stock Options | Awards Vesting Annually after March 15, 2022 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of vesting awards during period | 25% | ||||||
Restricted-Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Unrecognized compensation expenses | 78.8 | $ 78.8 | |||||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 4 months 24 days | ||||||
Restricted-Stock Units | Certain Executives | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Restricted-Stock Units | Non-Employee, Board of Director Member | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Performance - Restricted-Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation expenses | 3.4 | $ 3.4 | |||||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 2 months 12 days | ||||||
2021 Stock Option and Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | shares | 52,000,000 | ||||||
2021 ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | shares | 4,700,000 | ||||||
Cumulatively increase of common stock reserved and available for issuance (in shares) | shares | 15,000,000 | ||||||
Percentage of cumulative increase of common stock capital shares reserved for future issuance over common stock issued and outstanding | 1% | ||||||
Stock based compensation expense | $ 0.4 | $ 1.4 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Fair Value of Stock Options Granted Using Monte-Carlo Model (Details) - Service-Based Stock Options | Mar. 15, 2022 $ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Strike price (in dollars per share) | $ 6.03 |
Risk-free interest rate | 2.10% |
Expected volatility | 70% |
Expected dividend yield | 0% |
Expected term | 625% |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Activity of Unvested Options (Details) - $ / shares | 9 Months Ended | |||
Mar. 15, 2022 | Jun. 03, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Market-Based Stock Options | ||||
Shares | ||||
Beginning Balance (in shares) | 12,703,698 | 0 | ||
Granted (in shares) | 12,800,000 | 0 | 12,831,184 | |
Vested (in shares) | 0 | 0 | ||
Forfeitures (in shares) | (1,929,940) | (97,486) | ||
Ending Balance (in shares) | 10,773,758 | 12,733,698 | ||
Weighted Average Grant Date Fair Value | ||||
Beginning Balance (in dollars per share) | $ 4.23 | $ 0 | ||
Granted (in dollars per share) | 0 | 4.23 | ||
Vested (in dollars per share) | 0 | 0 | ||
Forfeitures (in dollars per share) | 4.23 | 4.23 | ||
Ending Balance (in dollars per share) | $ 4.23 | $ 4.23 | ||
Service-Based Stock Options | ||||
Shares | ||||
Beginning Balance (in shares) | 0 | |||
Granted (in shares) | 400,000 | 435,141,000 | 0 | |
Vested (in shares) | 0 | 0 | ||
Forfeitures (in shares) | (28,865,000) | 0 | ||
Ending Balance (in shares) | 406,276,000 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning Balance (in dollars per share) | $ 0 | |||
Granted (in dollars per share) | 3.88 | 0 | ||
Vested (in dollars per share) | 0 | 0 | ||
Forfeitures (in dollars per share) | 3.88 | 0 | ||
Ending Balance (in dollars per share) | $ 3.88 | $ 0 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Unvested Restricted Stock Units Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Restricted-Stock Units | ||
Shares | ||
Beginning balance (in shares) | 4,460,772 | 0 |
Granted (in shares) | 11,793,758 | 4,133,693 |
Vested (in shares) | (2,517,378) | 0 |
Forfeitures (in shares) | (1,771,518) | (16,750) |
Ending balance (in shares) | 11,965,634 | 4,116,943 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 14.43 | $ 0 |
Granted (in dollars per share) | 5.40 | 14.75 |
Vested (in dollars per share) | 9.75 | 0 |
Forfeitures (in dollars per share) | 7.97 | 0 |
Ending balance (in dollars per share) | $ 7.47 | $ 14.75 |
Performance - Restricted-Stock Units | ||
Shares | ||
Beginning balance (in shares) | 706,750,000 | 0 |
Granted (in shares) | 0 | 706,751,000 |
Vested (in shares) | (176,688,000) | 0 |
Forfeitures (in shares) | 0 | 0 |
Ending balance (in shares) | 530,062,000 | 706,751,000 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 12.73 | $ 0 |
Granted (in dollars per share) | 0 | 13.37 |
Vested (in dollars per share) | 13.37 | 0 |
Forfeitures (in dollars per share) | 0 | 0 |
Ending balance (in dollars per share) | $ 12.52 | $ 13.37 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Millions | Nov. 01, 2020 USD ($) |
Prime Vendor Agreement PVA | |
Loss Contingencies [Line Items] | |
Notice of termination, period | 90 days |
Purchase obligation | $ 0.8 |
New Agreement | |
Loss Contingencies [Line Items] | |
Purchase obligation | $ 0.6 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) | 9 Months Ended | ||
Jun. 03, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | (0.50%) | 0.60% | |
Tax receivable agreement, percent of tax savings | 85% |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Summary of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income (loss) | $ (112,011) | $ (64,840) | $ (126,660) | $ (117,240) |
Less: net loss attributable to non-controlling interests | (57,783) | (41,602) | (67,759) | (98,559) |
Net income (loss) attributable to Class A common stockholders | (54,228) | (23,238) | (58,901) | (18,681) |
Dilutive effect of warrants on net income to Class A common stockholders | 0 | 0 | 0 | (8,780) |
Dilutive effect of Class B common stock | 0 | (41,602) | 0 | 0 |
Net loss attributable to Class A common stockholders - Diluted | $ (54,228) | $ (64,840) | $ (58,901) | $ (27,461) |
Basic and Diluted Earnings Per Share denominator: | ||||
Weighted average common stock outstanding - basic (in shares) | 232,314,170 | 170,871,429 | 211,408,974 | 168,100,210 |
Net income (loss) per share - basic (in dollars per share) | $ (0.23) | $ (0.14) | $ (0.28) | $ (0.11) |
Dilutive effect of warrants on weighted average common stock outstanding (in shares) | 0 | 0 | 0 | 1,212,048 |
Dilutive effect of Class B common stock on weighted average common stock outstanding (in shares) | 0 | 306,384,554 | 0 | 0 |
Weighted average common stock outstanding - diluted (in shares) | 232,314,170 | 477,255,983 | 211,408,974 | 169,312,258 |
Net loss per share - diluted (in dollars per share) | $ (0.23) | $ (0.14) | $ (0.28) | $ (0.16) |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Additional Information (Details) $ in Millions | 9 Months Ended | |
Aug. 11, 2021 USD ($) tradingDay shares | Sep. 30, 2022 shares | |
Business Acquisition [Line Items] | ||
Escrow shares issued (in shares) | 310,634,551 | |
Business acquisition, equity interest issued value assigned | $ | $ 30 | |
Threshold consecutive trading days | tradingDay | 20 | |
Other acquisitions | ||
Business Acquisition [Line Items] | ||
Threshold consecutive trading days | tradingDay | 20 | |
Number of shares of equity interests issued to acquire entity (in shares) | 2,720,966 | |
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ | $ 30 | |
Contingent Shares Issued in Connection with Acquisitions | ||
Business Acquisition [Line Items] | ||
Escrow shares issued (in shares) | 2,720,966 |
NET INCOME (LOSS) PER SHARE- Su
NET INCOME (LOSS) PER SHARE- Summary of Diluted Net Loss Per Share (Details) | 9 Months Ended |
Sep. 30, 2022 shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 310,634,551 |
Class B | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 250,093,479 |
Warrant | Public Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 22,999,900 |
Warrant | Private Placement Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 10,533,292 |
Restricted Stock Units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 12,495,697 |
Stock Options | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 11,180,034 |
Contingent Shares Issued in Connection with Acquisitions | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 2,720,966 |
2021 ESPP Shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Potential Common Stock Equivalents (in shares) | 611,183 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 reporting_segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |