Ladies and gentlemen, good day and welcome to the Clover Health Q1 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. At that time, if you wish to ask a question, please press star one on your telephone keypad. As a reminder, today's call is being recorded. I would now like to turn the call over to Derrick Nueman, Head of Investor Relations and Corporate Strategy for Clover Health. Please go ahead. Good afternoon, everyone. Joining me on the call today is our CEO, Vivek Garipalli, our President, Andrew Toy, and our interim CFO, Mark Herbers. We will discuss Q1 results and answer your questions. This call is being recorded. Before we get started, I would like to remind you that our Q1 earnings materials, including the release, are available on our website at cloverhealth.com. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risk and uncertainties, including expectations about future performance. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the Risk Factors section of our most recent annual report on Form 10-K and in our other SEC filings. Information about non-GAAP financial measures referenced, including the reconciliation of those measures to GAAP measures, can be found in earnings materials available on our website. Lastly, I want to note we updated the names of our Medicare Advantage and direct contracting segments to our insurance and non-insurance segments, respectively. We believe that this better reflects each segment's current role and contribution to our business. There has been no change to the existing composition of these segments, and previously reported financial results were not impacted by these changes. Finally, direct contracting will be known as ACO Reach starting next year and will fall into our non-insurance segment. With that, let me now turn over the call to Vivek. Thanks, Derrick, and thanks everyone for joining us today. We are really excited about Clover's start to 2022 and the groundwork we're laying for 2023 and beyond. We believe we can deliver growth well above industry averages, deliver improving margins, and ultimately generate significant positive free cash flow. Let me now cover some highlights from this quarter before handing it over to Andrew for a more in-depth discussion. Leading off, our Q1 revenue grew significantly to $874 million while operating expense growth slowed. Both our insurance MCR and non-insurance MCR improved significantly versus the Q4 to 96.4% and 99.8%, respectively. The Clover Assistant continues to be a differentiator, showing an insurance MCR differential of over 1,000 basis points for returning members whose PCPs use the Clover Assistant versus those who don't. With that, let me turn the call over to Andrew. Thanks, Vivek. I'm also very pleased with our results in Q1 and cautiously optimistic around the rest of 2022. It is early in the year, and we don't want to get ahead of ourselves, particularly given our rapid growth and the unknowns surrounding COVID-19. Therefore, we are maintaining some conservatism as we need more data points before we change any of our expectations. Our key areas of focus right now are on continuing to build an intelligent, sustainable, and efficient growth model, investing in the Clover Assistant to deliver data-driven, value-based care, and rounding out our leadership team with top-level talent. We believe these efforts will benefit 2023 by driving further improvements across insurance MCR, positive contribution from our non-insurance business, and a more efficient operating structure. In short, we believe there are multiple levers we can pull to drive margin improvements while maintaining above industry average growth rates. As mentioned earlier, we delivered strong top-line revenue growth to begin 2022, powered by our technology-driven approach, PPO-first plan strategy, and wide inclusive networks. Our year-over-year insurance growth demonstrates the moat our PPO product has created in the market by pairing affordability with choice. Our non-insurance beneficiary growth of 179% since last quarter demonstrates our differentiated ability provided by the Clover Assistant to bring more doctors into value-based care. In our insurance business, we are focused on continuing to execute our mission of serving our members with high-quality care across a wide network, while also balancing intelligent adjustments to benefits and network design to drive nearer-term efficiencies. One item worth highlighting is our differing MCRs by region. Maturing markets, such as counties that we refer to as our northern New Jersey region, and newer growth markets, such as Georgia, have significantly better dynamics than more challenging markets, such as counties that we refer to as our southern New Jersey region. We are currently working on measures to achieve solid growth margins across all segments, and we plan to share more specifics on the next several earnings calls around the actions we are taking that we believe will drive another stepwise improvement in 2023 MA MCR. In our non-insurance business, there is a similar dynamic of balancing growth and margin. We are analyzing data and learnings from the first year of the program to strengthen our go-to-market efforts around the providers and regions we target. Our goal for our non-insurance business is, of course, for it to provide a positive margin contribution. We are also working on reducing our operating expenses as a percentage of revenues. You are seeing some results of the initial efforts as operating expense growth is slowing, and we expect year-over-year growth rates to decelerate throughout the remainder of the year. On the technology front, we believe that the Clover Assistant is still in its early innings, with incredible potential to be realized. That said, we are excited about what we've already accomplished. Growth in total lives under Clover Assistant management, increased clinician use, and our rapid software iteration cycle. We've done this across a wide network, which is something most plans can't do. Because of Clover Assistant's untapped potential, we continue to invest heavily in the platform and believe it is a key differentiator, particularly the strong differential in MCR between members whose providers use the Clover Assistant and those who do not. To build on this momentum, we have a roadmap of new capabilities and features designed to further augment its clinical value. We also see a number of ways to increase the reach of the Clover Assistant. Ultimately, we see CA as a way to bring more clinicians into value-based Medicare on both the Medicare Advantage and fee-for-service side. We are continually working on ways for clinicians to use CA for more of their Medicare panels, and the launch of the direct contracting program, which we noted above will transition to the ACO Reach program in 2023, significantly helped with that. Our goal from a CA product standpoint is to allow for total Medicare panel coverage with any given PCP, including those that have never participated in value-based care, and we continue to engineer the business with this in mind. Finally, we strengthened our management team significantly this past quarter. We brought aboard a chief technology officer, general counsel, and head of value-based care. We are thrilled by the caliber of talent we've been able to attract and believe these executives will be pivotal to helping us achieve our goals and significant long-term potential. With that, I will now hand it to Mark for the financial update. Thanks, Andrew. We delivered $874 million in revenue in the Q1. Our strong year-over-year growth was driven by the large increase in lives under Clover management due to our differentiated capability to participate in both Medicare Advantage and original Medicare. Moving to medical expenses, our net medical claims incurred for the quarter were $862 million. Our GAAP insurance MCR was 96.4%, down 640 basis points compared to the Q4 and within our guidance range. We saw increased COVID-19 costs in January, but there was much less of an impact for the remainder of the quarter. Our non-insurance margin was 99.8%. Q1 non-GAAP adjusted operating expenses were $84.4 million, representing 10% of total revenues. This quarter also included approximately $10 million of broker payments specific to AEP that will not occur in other quarters this year. Headcount is only expected to grow moderately. We also recognized a premium deficiency reserve benefit in the quarter, equating to a non-cash net gain of $27.7 million. Our GAAP net loss for the quarter was $75.3 million. Our Adjusted EBITDA loss for the Q1 was $71.8 million. Note that our Adjusted EBITDA excluded the $27.7 million of PDR benefit, as this is not reflective of operating results. Our cash equivalents and investments totaled $723 million as of March 31, 2022. Additionally, in conjunction with earnings, we have filed a universal shelf registration statement on form S-3 in order to maintain good corporate housekeeping. The S-3 is not yet effective, and we have no current plans to utilize the S-3. Finally, we are maintaining our 2022 guidance. Now let me turn the call over to Vivek for some closing comments. Thank you, Mark. To wrap up, I wanted to close with some general thoughts. There is market uncertainty for almost every company today. What I believe will matter when we look back in 10 years in terms of whether or not a company in healthcare has a massive market value is if that company did the following. One, make a massively positive impact by solving real problems. Two, having accomplished that through the creation of a significant technology moat. The key ingredients to those special companies I believe will be the following. Number one, an inspiring and ambitious mission that has been consistent. Two, an entrepreneurial team. And three, a demonstrated willingness to make hard decisions. When we look at various companies' recent earnings reports, they at best can be described as mixed. Here are some aspects of Clover that make me excited, not just about today, but about the near term to medium term. Clover is growing while expanding our technology moat. Our clinical impact is growing materially along the way. Margins are improving. Profitability and the generation of a free cash flow engine are in sight. On a macro basis, our business is generally agnostic to inflation, economic cycles, commodity prices, and uncertainty around supply chains. We continue to believe that if a number of things fall into place, it is even possible we may be profitable next year on a non-GAAP basis, excluding non-cash expenses and non-recurring expenses. Thank you, and we look forward to updating you more on our efforts as the year progresses. With that, let's take questions. At this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue by pressing the pound key. In the interest of time, we ask that you please limit yourself to one question and one quick follow-up. We will be taking questions first from Clover's research analysts, followed by the Clover Health community. We will take our first question from Richard Close, Canaccord Genuity. Yeah, thanks. Congratulations on the progress. I was curious if you guys could talk about the MCR a little bit. I guess you're reiterating guidance of the 95%-99%. But based on the Q1 results, you know, it seems like you guys are being conservative, which is understandable there. Can you talk a little bit like how it progressed from January to March, just to give us some perspectives there? Sure, yeah. Hi, Richard. So obviously, MCR, as you say, has improved, which we're very pleased about and which we talked about last year, that we hoped then to see that in 2022. We did have COVID effects, which I think you're alluding to within the Q1, more in January and February. Some of those effects obviously flowed into the economics. All of that's inside that overall MCR that we've seen. We've decided to take an approach where we're gonna look, see what happens. None of us really know what's gonna happen with COVID going forward. We hope, however, that as in even if there are future variants, as we learn how to treat this as a society, more and more of this is now getting baked into how we manage healthcare within the country. We do believe that our ability to manage the condition, manage the pandemic is stabilizing, and we are therefore comfortable reiterating our guidance around our MCR. We do see things generally improving. We do think there is a possibility of future sort of like events around, variants and things like that. Q1 did have COVID in it. Okay. With respect to the regional information that you provided for 2021, can you guys talk a little bit about Southern New Jersey and, you know, I guess that was 120 or something like that. You know, how do you expect to address that? You know, how quickly could you move the needle on that, do you think? Just any details there would be helpful. Sure, absolutely. As you're pointing out, our more mature markets do have a lower MCR, and we do think that there's a lot of opportunities for our newer markets, not just Southern New Jersey, but also Georgia, to look a lot like our mature ones, over time. We do think that's a natural progression of the business. In Southern New Jersey itself, we do plan to be more aggressive in our MCR improvement efforts. We'll have more to share on that, but we have a lot of levers at our disposal around Clover Assistant deployments, around working with our physician partners in Southern New Jersey, around deploying things like our in-home care program within that region. There are levers that we can deploy there. We do think we can do better over time. We did want to emphasize as well that we do, you know, all of our MCR is not just one number, but we do see regional differences, and we plan to manage those differences, regionally as well. Okay, thank you. I'll jump back in the queue. Congratulations. Thank you. Our next question comes from Jason Cassorla of Citi. Please go ahead. Great. Thanks for taking my question. Just a quick clarification to start. Of the 211,000 lives under Clover Assistant Management, I just wanna make sure, virtually all of your 172,000 DCE lives are included in that stat. That's correct? That is correct. Okay. I guess just based on my math, it looks like the lives under Clover Assistant Management within your MA book specifically, it looks like it increased from 34,000 in Q4 to 39,000 in Q1, but it only represented about 46% of total MA members in Q1, versus about half last quarter. Is there anything to call out on that deceleration and penetration there besides just maybe simply higher membership growth to start the year, and you would expect greater Clover Assistant Management penetration within the MA book over the course of 2022? Anything else to call out there would be helpful. Thanks. Yeah, great question. Definitely as you framed it, we have quite strong growth. What will actually happen into those numbers is that, we wait to see, you know, claims data, physician data lets us know which PCPs are actually being seen by our members in the various regions we're going. As we expand geographically as well as grow, what that means is that it takes a little while for us to build up that CA user base in those markets. We are actively doing that in all of our markets right now, but there is a bit of a lag as we grow in those markets to see which PCPs we should be targeting. We feel good about our ability to keep that number moving up and to the right. The total number of CA visits and members who have a CA doctor is increasing year-over-year. Because we are growing rapidly as a percentage, you might see a little bit of that flattening, but I do believe that we will see that continue to move upwards as we then stabilize and improve in the new regions. Got it. Okay, that's really helpful. Thank you for that color. Just as my follow-up here, just given the Clover model and your offerings on the MA side and in context of the finalized 5% overall MA rate increase for 2023 without any risk coding considerations, I guess it'd just be helpful to understand how you're approaching MA bids for 2023 and any color on how you're balancing kind of the growth versus profit for next year, with kind of in tune with what you were discussing in your prepared remarks. I guess just in context of your comments last call around the theoretical building blocks to getting closer or close to break-even EBITDA would be helpful. Yeah, absolutely. As we said, well, first of all, bids are filed and due in June, so we'll have more to report on exactly what we bid, coming up soon. And we'll be able to talk about that. On the general theme, what we want to do is continue to generate industry-defining and industry-beating growth, but we are now certainly not looking at growing at all costs, right? We wanna balance our MCR, balance our operating costs, balance our ability to access the wide network market, which we believe is the product that Medicare eligibles are looking for, alongside the ability to manage those costs within our plans. We are certainly balancing those two things, as you're pointing out, and we intend to look at the bid as one tool to look at which markets we enter. We have a tremendous amount of data both on the DCE, ACO Reach side as well as within MA that helps us do that. You'll see us continue to grow strongly, but you will also see us focus on having nuanced data-driven choices within each of these areas to improve the MCR. Got it. Thanks. Very helpful. Appreciate the color. Thank you. Our next question comes from Whit Mayo of SVB Securities. Please go ahead. Hey, thanks. I wanted to just go back to the 3,600 users on Clover Assistant in the quarter. I presume the majority of that growth came from DCE. Is there any way to maybe break out what the really, I guess, the organic growth was in the MA Clover Assistant users? Yeah. We actually don't break out those particular numbers. The reason we don't break them out is because there is overlap between the doctors that we're signing up for Clover Assistant within both the fee for service and the MA population, right? Sometimes there's overlap, sometimes there isn't. It could just be MA, it could just be fee for service. But as we discussed on the prepared remarks, you know, my goal, our goal is to cover as much of that physician's panel, Medicare panel as possible going forward. The way we're really tracking this is number of PCPs who are on Clover Assistant, and that's a number that we have shared. We might be able to share some breakout between, like, you know, how many of those are double between MA and fee for service, but that's the KPI that we're generally tracking. Yeah. Okay. I mean, we can take it offline. I guess I'm just trying to get a sense if you just normalize for DCE just to see kind of what that number is. 'Cause I do fully appreciate the desire not to break out between MA and fee for service. My other question, Andrew, you referenced, I think you were trying to reference Clover Home Care sort of in your comments as a potential trend bender in the Southern New Jersey market. Can you just elaborate a little bit more on that, maybe discuss the capabilities so that we have a full appreciation really for that business, number one, and number two, for what you think you can accomplish with that? Yeah, absolutely. Clover Home Care is absolutely a key anchor of our strategy, and that's where we are saying that at some point for the multi-chronic, for the multiple comorbid, it does make sense for them to be looked after in their own home. What we say is we work with the primary care physician, we continue to manage them with Clover Assistant, both within with their original PCP and with our home care program, and we transfer them and start looking after them and having regular visits with them in the comfort of their own home. By doing this, we're able to provide more accurate care, more longitudinal care, do things post-discharge after they've unfortunately gone to the hospital, and basically just try to holistically manage them in conjunction with their existing PCP, which overall throughout the Clover Assistant platform is coordinating data sharing and coordinating how we actually render care. I'd love to, like, just add in Vivek here who can add some more commentary on this. Yeah. Thanks, Andrew, and great question. I think one of the really unique aspects of our home-based primary care program is it's direct employees of Clover in terms of the home-based primary care physicians. What we've seen in the marketplace is when in-network primary care physicians are referring to a home-based primary care program, there's a lot more coordination and collaboration there. If you take typical markets where some of these complex care centers end up popping up, the enrollment rate of clinically eligible very rarely goes above 30%. While there's a MedEx impact, you have 70%+ of those that are clinically eligible won't actually enroll in those programs. There's lots of local market reasons why and resistance from existing primary care not wanting to lose their patient population to, you know, these, you know, the quote-unquote "shiny new centers" that are popping up. That has an influence on patient decisions. When it's actually in a model that's not conflicting with current care, but actually synergistic, home-based, we don't have a technology ceiling, the enrollment rate is much higher. We're last checked, I think a little bit north of 60% of eligibles, clinical eligibles are actually enrolled in Clover Home-based Primary Care, obviously, the most acute portion of the population, while we're growing at a pretty rapid clip as well. Importantly, and unfortunately, you know, since late March of 2020, we were not able to physically be in the home. Our home-based primary care program has only been able to go back physically into the home, in February of this year. We still maintained and grew the program, but it was wholly virtual. You know, there's no doubt the clinical impact is much lower when we're not able to be in the home. We do think we're hopefully gonna see that impact come back and scale in a lot more effective way than it did prior to COVID. I think one other kind of important thing to add is we just launched in a small way in some initial markets our own wholly owned palliative care program as well. We'll start to see the positive clinical effects of that over the next couple of years as well. Okay. Thanks, guys. Appreciate it. Our next question comes from Kevin Fischbeck of Bank of America. Please go ahead. Great. Thanks. Wanted to follow up on the regional MLR data. I guess, you know, during COVID, you guys have talked a lot about how New Jersey got hit harder from a hospitalization perspective during some of the COVID spikes. It sounded like you viewed the improvement to be coming through engagement and maybe repricing, and you didn't really signal out unusual costs, I guess. Are you now of the view that when you look at it for the year that 120% is a real number, but it needs to be brought down? Or is there any kind of elevated disruptive cost that you think is kind of a natural tail into South Jersey? Yeah, absolutely. Definitely, like, as we look at data, this is a place where after getting a full year of data, we can break it out more. It's difficult with the COVID effects, like you said, and that's why we wanted to share it now as part of this particular set of results. We do think that the way that the healthcare is working, the way that COVID effects worked as well within these markets is that certain regions have a bit of a multiplier effect. The way that healthcare is delivered in South Jersey makes it be hit a little harder on the COVID front, from the admissions, et cetera, given the population mix over there. Like we said, we always serve a more underserved mix, but particularly in that market as well, which is all fine. These are things that we can absolutely manage, but it was a magnifying effect that we got from COVID. It's a little too early, and we're waiting for data signals to see that as we revert back to hopefully a more normal or a little bit post-COVID world, what the effect will be in South Jersey. We did want to show that to your point, like, the Medicare side of things were different from a different regional basis. This is something whereby, you know, given how fast we're expanding, given how fast we're growing, it makes sense for us to look at our cohort data in this way and by market and geography as well. Okay. I guess, since it sounds like getting people engaged with the Clover system is such a big part of the story and the cost control going forward, I wanna go back to to that, you know, kinda growth in the MA Lives. In one of your early answers, you made it sound like a lot of that lower penetration is actually coming from new markets. Is that the way to think of it in the more established markets, the penetration rates increasing, but it's the new markets where it's bringing down the average? I guess, any stats to show about kind of I was of the impression that kind of doing the direct contracting was really gonna help accelerate that. I would expect to see a higher penetration of MA lives go up because you'd be engaging, you know, doctors in a lot more ways, which means you'd capture more MA patients. It's a little bit surprising to see it come down, even though you are growing in new markets. It's a little bit surprising to see it come down. Maybe color on that. Yeah. Definitely makes sense the way you framed it there. The way to think about that is that all the effects you're saying are there between the synergies between fee for service and the MA population within a given doctor's panel. When we have a market, say, like Georgia, where we, like, grew a lot in one season, part of that is that we don't go in and just sort of cover Georgia with CA. What we do is we approach doctors who have meaningful numbers of lives and say, "Look, why don't you work with us on Clover Assistant?" We have very good uptake on that program. There is, however, some lag between when, because we're growing so quick, say in Georgia, for us to identify which doctors to work with because we need to pull that data in, and we're getting better and better at that. What you'll see is we'll go, and then our team will look at doctors who have material Clover Assistant lives, who have potential opportunity on the fee for service side, and we'll start doing that B2B motion we've talked about where we go, it's like a sales motion, talk to a doctor, sign them up to use CA. We feel good that the story resonates well in all markets. It's just that where we have significant sort of percentage year-over-year growth, there's a natural effect where it takes a little longer for us to go identify those docs, get them signed up, get them live, and then they'll move under management. We feel like we'll be okay there. Okay, the penetration did increase in your core markets? Correct. Correct. All right, great. We're always moving up to the right. Yeah. Okay, thanks. Our next question comes from Jonathan Yong of Credit Suisse. Please go ahead. Hi, everyone. It's Nick on for Jonathan today. Thanks for taking the question. Would you mind giving us some color around sort of non-COVID utilization trends exiting the quarter and kind of how you see those progressing for the rest of the year? Non-COVID utilization trends. Yes, correct. What we're seeing right now in the index, it's kind of like the reverse form of the COVID question. It's a little bit difficult for us to deconflate what is in the COVID trend versus the non-COVID trend. Because what we really have is like conditions or procedures done with a COVID diagnosis, for example, in the inpatient setting, or we'll see how many total COVID diagnoses there are. With the less severe variants now in play, it's unclear whether it's COVID being treated, how much complexity is being added, whether that's really a COVID thing, a non-COVID thing, and whether or not there's any deferred utilization at play, which I think is part of your question as well. What we've really started to say overall though, is that what we see in the COVID data is that COVID is still there, right? We think that there's an effect in the high single digits diagnosis rate within our population for any given month we looked at. That said, we don't think all of that care is appropriately flowing through as COVID care, if that makes sense. Oh, by the way, we can hear you typing, if you don't mind muting. Sorry. Basically we don't classify all of that as COVID care, and the answer's somewhere in between. Generally, the way we think about it is we do believe that COVID is normalizing at this point. We believe at some point, the government will remove the extra, you know, 20% surcharges, etc., that are being paid for COVID-related procedure care, where there exists a COVID diagnosis, which would be a tailwind for us, because we don't think all of that is necessarily going towards COVID care anymore. As things will stabilize into our overall MCR. Got it. Thank you. I guess just as a follow-up, moving over to OpEx, which looked like it trended lower towards the guided range of 10%-12%. Can you give us some insight as to what drove it towards the lower end and how we should expect it to trend throughout the rest of the year? Thanks. Yeah, absolutely. As Mark mentioned in that, like where, we also have loaded a lot of our commissions are front-loaded for this year, so we see those built into our Q1 OpEx number that you're citing there as well. Just wanted to call that out. We are absolutely focused on the path to profitability. Part of that is to still continue delivering industry-beating growth, which is critical for us and, you know, powered by our wide network model at superior MCRs. We feel very good about that. The third leg of that stool is to also manage and blunt OpEx growth. You see that we've started to do that. We started looking at that late last year, and we're starting to see those effects flow through now into our actual numbers, and our OpEx rate is slowing. The growth rate is slowing. We have plenty of efficiencies that we believe that we can deliver in this area, given that we've been so focused on growth, setting our differentiation, proving our differentiated model. We think we've achieved all of those things now. Now it's a focus on that path to profitability, and you'll see us talking a lot more about that, now and in future earnings. Great. Thank you. Thank you. We have a follow-up question from Richard Close of Canaccord Genuity. Your line is open. Yeah. To talk a little bit more about the Clover Assistant adoption, you guys cited the 2018, 2019 and 2020 MCR data, lower MCR data for patients managed by the physicians using Clover Assistant. How are you using that data, I guess when you go out to, you know, talk to physicians, how receptive are they? Do they really dig into it? Just curious thoughts in and around that. Yeah. Thanks. Yes. We definitely see, as you say, an improvement as physicians use the Clover Assistant more and more. We've shared data there before that cohort based upon when the physician joined, started using Clover Assistant, the longer they've been using it, the better the MCR improvements. As per the previous question, we can see it. It's a very low churn program. Once people are on it, the satisfaction is quite high. People stay on the program, and we feel good about that. It's just now about fast-following our geographic and membership growth to make sure we sign up those doctors where they're seeing those docs, and we feel good about that as well. When we're talking to our physician partners about the Clover Assistant, I think the key thing is we're all about making sure that we tell them that we're not here to tell them how to practice medicine. We're not here to tie them to like, you know, medicine by the numbers, which they don't really wanna do at all. We're here to make them successful in value-based care, and many of these physicians have dipped their toe in value-based care but been sort of like, found it unappealing for a number of different reasons. We're able to show them with Clover Assistant, we truly wanna arm them with data so they can decide how to deliver better care. We want them to arm them with a personalized care capability so they can customize their clinical protocols to the patient sitting in front of them. The fact that we pay them on a flat basis and not on a moving basis lets them feel like we're not twisting their arm to any given, you know, take any given clinical action, which makes them feel really good. Then we show them that we have more data available to us as the plan than they would have in their own EHR, and that our data platform with Clover Assistant is able to pull in things like, you know, whether someone has picked up their medication or compliance sort of like to a given a med, like cost comparison data. All these kinds of things let them make better decisions that whereas their EHR is more seen as like a documentation tool where they're sort of compelled to use it. All of these things together let us bring physicians into value-based care who otherwise probably wouldn't participate in it and stay more on that fee-for-service chassis. We're seeing that on the MA side. We're seeing that in our ACO Reach DCE growth as well. Like, our market is highly claims aligned because we're able to meet physicians and patients where they are, and they sign up quickly to UCA. As these motions synergize more and more, we're still only in year two of the ACO DCE program after all. We're gonna see, I think, a lot of adoption. We're getting a request now for how can you help us with the entirety of our Medicare panel, and that's something we alluded to, is our ultimate goal, is to cover the entirety of a Medicare panel, enable physicians to feel like they can succeed in value-based care with their entire Medicare panel, and that'll be a really great place to be. Okay. As a follow-up, with respect to the ACO Reach transition, can you talk a little bit, how you guys are thinking about that, how you're positioned, to make that transition? Any milestones that you have to achieve or whatnot in terms of altering the business you have now to meet the requirements for ACO Reach? Yeah, yeah. Good question. We feel good about our ongoing participation in DCE, which is DCE, which is still in effect, you know, this year. As it transitions to ACO Reach next year, we're one of the biggest direct contracting entities that'll flow through to us believing we'll be one of the biggest ACOs as well. We have a large amount of data which we can use to intelligently drive our growth and drive decisions being made by our physician partners, which we think will be really fantastic as we look for it to be contributing to profitability. In terms of the changes that were made to the program by CMS, we're generally supportive of almost all of them, if not all of them. There are things about greater physician participation on the board, for example, and we think that's a great idea. We're all about physician empowerment. Most of those changes really are things that we're supportive of that we can make in our program in a relatively straightforward way, and we think that we're gonna be quite successful in the program. Good. Thank you. I would now like to return the call to Derrick Nueman for community questions. Great. Thank you. Our first community question is, are there plans to expand to other states in 2022, 2023? If so, which- I'll jump on this one, Derrick. So it's still a bit early for us to share too much publicly in terms of our expansion thinking, but what we can say is just overall strategy is weighted towards going deeper in our existing markets. That really necessitates a focus on growing the markets that we're currently successful in and where we know we can continue to drive improvements in MCR. We've grown significantly over the last year. We've got the luxury now of getting more intelligence around our data, a lot of learnings coming from that, and that's gonna continue to positively impact MCR as we go into next year as well. Our strategy works best the longer that we're in markets. It allows us to continue to increase clinical impact, decrease churn, and continue to increase in Clover Assistant usage. I think it's always important to remember that while growing, even today, there's about a little over a thousand basis point differential on MCR for returning members whose PCPs use the Clover Assistant versus those who don't. Great. Our next community question, anything new about a CFO? Yeah. We've been focused on significantly strengthening our management team, and we've made a few announcements around that. Just this quarter, we've brought aboard a new Chief Technology Officer, Conrad, who's taking over the CTO role for myself. A new General Counsel, Joe Martin. We just announced, I think today, our new Head of Value-Based Care, again emphasizing our focus on the ACO Reach program and the fact that we truly believe that Clover Assistant can help us bring physicians who normally don't participate in value-based care into programs like this. All of that are significant strengthening of our bench, and we feel great about that. On the CFO front, we're making very good progress, nothing to directly announce there at this time. Our focus is on absolutely getting the right person, and we do have the luxury to be selective here given our strong finance team and our Interim CFO, Mark, who's on the call. We're making good progress. We'll have more to talk about at a future date. Okay. Our final community question, do you plan on licensing out Clover Assistant? If so, when? And is there demand for it? Yeah. Excellent question. Nothing to announce at this time, but as I've mentioned previously on the call, our goal is absolutely to cover the entirety of a PCP's Medicare panel and make it easy for them to deliver great data-driven care and be successful in value-based Medicare. We are actually getting a lot of inquiry from our CA partners around that because they really, there is no difference between how they care for clinically the folks who are on Medicare based upon which insurance company or what their form of insurance is, whether they're on MA, Clover MA, fee for service. They wanna bring all of that together and have a central place that they can manage those capabilities and, you know, we can provide that with Clover Assistant. We believe there's a significant opportunity here for us to really play that role with CA for our physician partners, and we're definitely looking at that. There's a huge advantage coming from a Medicare Advantage plan for having built the tool, and now we're looking at ways that we can scale out to other parts of the physicians Medicare panel as well. Great. Thanks, Andrew. Just to close, while we feel very good about where we are today, there's really great and really hard work being done this year to drive continued progress. Enabling this is the Clover Assistant. It's providing us a growing technology moat while we're making a meaningful and positive impact in health equity along our mission to improve every life. Thank you everyone for joining us today. Thank you. This concludes today's Clover Health's Q1 2022 Earnings Call and webcast. You may disconnect your line at this time. Have a wonderful day.