NeueHealth posted a $242 million net loss during its fourth-quarter earnings March 6, as the insurtech attempts to turn a corner after a tumultuous 2023.
The company recorded a net loss of $1.2 billion last year, but it achieved $292 million in revenue last quarter, up 29% year-over-year, and $1.2 billion in full-year consolidated revenue, a 55% increase year-over-year. Earnings per share came in at a loss of $30.47, though that jumps to $19.54 in the black once it excluded discontinued operations.
NeueHealth rebranded from Bright Health in January, attempting to put its past troubles in the rearview mirror. The company closed the sale of its Medicare Advantage business to Molina Healthcare and also made the final repayment of an amended credit facility with JPMorgan, eliminating secured debt.
It intends to use $110 million in funds from escrow to eventually offset liabilities in its discontinued ACA business under the Centers for Medicare & Medicaid (CMS) repayment agreement due before March 2025. The company expects to see $100 million by 2024 fourth quarter, pending conditions met.
CFO Jay Matushak said the company nearly achieved breakeven EBITDA if non-recurring bad debt is eliminated, and the impacts of CMS benchmark adjustments are written off. Otherwise, the company tallied $10.4 million in EBITDA loss.
The company's core business units include NeueCare, consisting of owned clinics in Florida and Texas and more than 3,000 affiliated providers, and NeueSolutions, a provider-enablement business.
CEO Mike Mikan pointed to digital health company Babylon Health's bankruptcy filing last year, as well as CMS coding intensity changes, as reasons its ACO REACH business faced headwinds.
"We see our ability to effectively manage a diverse population mix, agnostic of product category, as a key differentiator that will fuel future growth," said Mikan. "We see our provider enablement and ACO REACH businesses as complementary with each driving future growth opportunities for the other."
Babylon negatively impacted gross margin by $14 million in 2023, Matushak said.
"That was a big impact," said Mikan. "We don't have anywhere near that level of concentration risk going forward. That was a big part of our ACO book of business. We will no longer take any type of that concentration risk going forward."
Mikan said he sees growth opportunities to serve more Medicaid members through federally qualified health centers. Currently, NeueHealth serves 461,000 consumers, a 294% increase year-over-year.
"It is important to note that there is substantial opportunity for revenue growth as we look to take on greater levels of risk sharing in our contracts," said Matushak.
NeueHealth projects revenue greater than $1 billion in 2024, with nearly three-quarters of it coming from NeueSolutions. The company projects enterprise-adjusted EBITDA to be between $15 and $25 million.