Topic: Provider engagement negotiations and denial rate comparison
Key points:
Provider engagement negotiations are progressing; some markets will see expansion (states to be shared), others will not, which will dictate entry decisions.
Company’s denial rates are less than 2%, while some larger plans have 13%–15% denial rates; management argues hospital billing integrity (100% acute claims) needs equal scrutiny.
Medicare Advantage pays hospitals 85%–86% of traditional Medicare per health system CEOs; management posits they pay 100% of contractual obligations.
Mgmt stance: Bullish – low denial rates and provider engagement model differentiate ALHC; sees policy opportunity to address hospital billing accuracy.
Q12 — Craig Jones (with follow-up from Ryan Daniels)
Topic: Final rate notice (2.5%), industry trend, and capital deployment for ancillary benefits
Key points:
Final rate notice increase of 2.48% is in line with general inflation; but national industry trend is “way higher” than that – L.A. County rate increases are closer to 6%, which benefits ALHC.
For 2027 bids, company is doing market-by-market business plans; default for other plans would be tougher unit economics or benefit reductions.
Management is considering M&A for supplemental benefits (behavioral health HMO, dental PPO, vision PPO, transportation) to lower MLR by bringing them in-house – low risk, low capital, high return; not embedded in first-half guidance.
Mgmt stance: Neutral on rate notice (trend higher than 2.48% creates affordability challenge, but geographic tailwinds help) + bullish on capital deployment (ancillary in-sourcing can be upside).