Mike Ha

Filton said DPP reimbursement still increasing through 2027 via new program approvals and Medicaid utilization growth. Outpatient growth serves as natural hedge since outpatient margins better and payer mix more commercial-weighted versus Medicaid. Planning to maximize DPP benefit before 2028 phase-down begins.

Filton reiterated long-term model: acute 5-6% same-store revenue (2.5-3% price + 2.5-3% volume), behavioral 6-7% revenue (3.5-4.5% price + 2-3% volume). Confirmed near-term behavioral volume expectations at lower end of 2-3% range.

Filton noted the targeted population (young, healthy males) may not be heavy users of UHS services. Behavioral side has more optionality to manage payer mix versus acute ER-driven Medicaid volumes.

Filton expressed confidence in ability to shift programming and revenue sources but acknowledged it's difficult to make specific long-term margin commitments given the 2028-2032 timeline.

Filton highlighted the 100+ bps leap day headwind in Q1 that diminishes through the year. Of 3 prior headwinds, only labor remains persistent; redetermination and specific facility issues resolved.

Filton described a two-track dynamic: administrative CMS approval process appears restarted, separate from potential legislative restrictions on future programs.

Filton cautioned structural headwinds (150bp physician fee increase, inpatient-to-outpatient shift) may prevent full acute margin recovery, though consolidated pre-COVID margins achievable in a couple years.

Filton confirmed DPP numbers are net of provider tax and generally flow through to the bottom line, compensating for historically inadequate Medicaid reimbursement.

Asher gave directional colour on zero utilizers falling toward pre-PHE levels but declined the requested MLR-range definition and cohort distribution granularity.

Sarah noted duplicative members tracked closely but not expected to be a huge shift. On OB3, emphasized more disruptive provisions like per capita caps and block grants were taken off the table, showing Medicaid bipartisan support.

Drew bridged $10.1B Q1 to $39B full-year with attrition to high 4M. Sarah addressed fraud concerns, noting agent-of-record lock pioneer status and utilization by new members as positive sign.

Sarah emphasized original program integrity assumptions are baked in; results so far are more muted than assumed, reducing surprise risk.

James confirmed transformation efforts are more mature and provide broader array of operational levers beyond benefits. Every year the logic is: assess funding gap vs trend, apply operational improvements, then determine necessary benefit adjustments to achieve target margin. More momentum on transformation side than 2 years ago, but still must address both operational and benefit levers.

Celeste declined to speculate on 2027 rate notice, noting historical imprecision of such forecasts. Will see first look at beginning of next year.

James acknowledged theoretical operational limits but said likelihood is low. Will monitor and adjust. Focused on long-term value not afraid of year-1 economics. Celeste added late-year membership pickup has marketing cost headwind.

James confirmed no change from prior 2027 target. No structural V28 impairment to CenterWell J curves. Celeste clarified put-call is complex calculation unrelated to V28.

Felicia cited Indiana and Georgia work requirement experience as positive precedents. Emphasized operational support to states for efficient implementation to minimize procedural disenrollment risk.

Mark did not provide specific percentages but confirmed no substantial variation from plan. Noted risk corridors and rebates would offset any hypothetical higher utilization.

Gail pushed back firmly, framing retention as the key metric and emphasizing group MA growth from a long-standing client relationship, not suppression.

Bobby supported modernization and advocated for chart linking finalized in final rule. Krista said too early for 2028 impact, noted puts and takes for complex populations in proposed changes, reiterated commitment to value-based care as foundational for CMS goals.