Good afternoon, everyone. Joining me on the call today is our CEO, Vivek Garipalli; our President and CTO, Andrew Toy; and our interim CFO, Mark Herbers. We will discuss fourth quarter and full year results, recent trends, and answer your questions. This call is being recorded. Before we get started, I would like to remind you that our fourth quarter and full year 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 risks and uncertainties, including expectations about future performance. Factors that may cause actual results to differ materially from our expectations are detailed in our SEC filings, including the Risk Factors section of our Annual Report on Form 10-K and in our other periodic SEC filings. The forward-looking statements are made as of the date hereof, we assume no obligation and do not intend to update these forward-looking statements as a result of future events or developments. Information about non-GAAP financial measures referenced including definitions and a reconciliation of those measures to GAAP measures can also be found in earnings materials available on our website. With that, let me now turn over the call to Vivek. Vivek?

Thanks, Derrick. And thanks, everyone for joining us today. We are really excited about where Clover sits today, the progress we expect to make in 2022 and our goals for the future, not just enabling physicians to provide great healthcare to all especially those in underserved communities, but to do this with a growing sustainable and ultimately profitable model. Let me now reflect quickly on the past year and some recent accomplishments and events. 2021 was an eventful year for us. We went public, dealt with COVID challenges and we accomplished a lot. We more than doubled our revenue to $1.47 billion, lives under Clover Management increased by 124% to approximately 130,000. We launched our first non-insurance line of business Direct Contracting, underpinned by the Clover Assistant, the Clover Assistant continues to be a differentiator with a Medicare Advantage MCR differential of over 1000 basis points for returning members whose PCPs use the Clover Assistant versus those who don't. And we did this while operating on a wide network and driving a positive impact on health equity, with more minority and underserved beneficiaries than typical for Medicare Advantage (ph) scale. We also had a strong AEP in Medicare Advantage growing well above industry levels at 28% year-over-year. In Georgia, we nearly tripled our lives and believe we're on a trajectory there similar to New Jersey, where we are a market leader. We believe our increasing scale, attractive benefit plans and the Clover Assistant will enable us to keep gaining share in core markets while at the same time driving improved MCRs. In Direct Contracting we started 2022 with over 100,000 more lives than we ended 2021 and with providers in over 20 states. Largely due to this growth our lives in the Clover Assistant Management increased to approximately 20,000. And our non-insurance lives now represent about two-thirds of our total lives. We believe the more lives under Clover Assistant Management, the more opportunities we'll have to drive clinical and financial improvements for Clover and our participating providers. Finally, I wanted to touch upon the recent CMS calendar year 2023 advance notice for MA. Obviously, many in the industry are pleased with the rate increase, we are as well. But we are even more excited about the increasing focus on health equity, specifically CMS’ commitment to continue to explore ways to revise the risk adjustment model in order to more appropriately pay for subgroups of Medicare beneficiaries. This is something that will get much more focus over the next year or so, but we believe Clover is well positioned given that almost half of our MA beneficiaries are in underserved communities compared to 34% for the average MA plan. We encourage you to read our health equity white paper for more specifics. With that, let me hand over the call to Andrew to talk about the Clover Assistant and specifics around how it is driving a material impact.

Thanks Vivek. 2021 was a great year for the Clover Assistant, along with unlocking an entire new business line with our entrance into Medicare fee-for-service through direct contracting we continue to invest in its evolution as the preeminent physician enablement platform and increased our annualized metrics under Clover Assistant management to over $1 billion. The Clover Assistant was built on open fire standards in an effort to break down data silos and improve interoperability across the healthcare system. This enabled us to deliver our first major integration of Clover Assistant within athenahealth’s market leading EHR, with more integrations coming soon. We also launched clinical programs and data models specifically targeting some of our most vulnerable members suffering from cancer and chronic kidney disease. These successes are validation of our differentiated software-first approach. The Clover Assistant allowed us to iterate quickly, and we can adapt it to fit the needs of different facets of Medicare, as demonstrated by our rapid scaling of both our MA and fee-for-service businesses. To summarize our opportunity, we believe we can fundamentally change healthcare by providing an easy-to-access on-ramp to value-based care for every single provider in the country. In 2021, the Clover Assistant platform serviced nearly 1 million clinical recommendations to clinicians and flagged more than 200,000 potential care gaps for action. Clinicians that use the Clover Assistant grew 43% year-over-year to approximately 3000 in the fourth quarter, and on average, the platform aided physicians in managing more than 35,000 care plans per month. By leveraging the Clover Assistant platform, we believe we can raise the level of care given by every provider and rapidly and broadly scale in ways that traditional managed care plans and risk-bearing provider groups cannot. This engagement translates to improved MCR; not only is there a difference in MCR between members whose providers use the Clover Assistant and those who don't, but there is also a benefit from the length of Clover Assistant use, we measure this in terms of cohorts of when the physician went live on Clover Assistant. For example, in service year 2021, our MA members with PCPs who went live on Clover Assistant in 2019 had a 2.7% lower incurred MCR than members with PCPs who went live on Clover Assistant in 2020. Similarly, members with PCPs who went live on Clover Assistant in 2018 had a 4.9% lower incurred MCR than members whose PCPs went live on Clover Assistant in 2019. Further, the Clover Assistant is key to unlocking non-insurance business lines. For example, in Direct Contracting, we principally scale our model of care by deploying physician enablement software to providers versus acting as an insurer. In these scenarios, we provide care coordination primarily through our software, the Clover Assistant. This year, we expect to have approximately 250,000 lives under management, with about two-thirds of these lives and two-thirds of our revenue to come from these non-insurance scenarios. We'll be talking more about expanding this non-insurance opportunity in the future. Ultimately, we believe our success in fee-for-service is not indicative of anything program-specific regarding direct contracting, but rather proof of our ability to provide software that allows any physician to be successful in value-based care. This has been demonstrated by our leading growth in fee-for-service, and we fully believe our software platform will be successful in other Medicare value-based models as well. We are highly supportive of innovation in the healthcare space, whether it be through new programs like direct contracting, Medicare for all, or Medicare Advantage as it evolves. In all these cases, the one constant, one that we feel we are well poised to address is how do we quickly bring more physicians into these programs and make them successful. We believe the Clover Assistant is proving to be this digital on-ramp onto value-based care and we feel very confident about our ability to be successful as new programs launch and old programs are changed. With that, I will now hand it to Mark for the financial update.

Thanks, Andrew. I'm going to quickly cover the important items from the fourth quarter before handing it over to Vivek to wrap up the call. We delivered $432 million in revenue in the fourth quarter, up 160% year-over-year. This growth was driven by the launch of Direct Contracting and growth in our MA membership. As of year-end, we have approximately 129,900 lives under Clover Management. And this was comprised of MA membership and direct contracting lives of 68,120 and 61,876, respectively. Moving to medical expenses, our net medical claims incurred for the quarter were 442 million. Our GAAP MA MCR was 102.8%, up only 30 basis points compared to the third quarter despite increased direct COVID costs of approximately 200 basis points, typical seasonal trends and higher outpatient utilization, which is carried over into January and is something we'll be keeping an eye on. Also our non-GAAP normalized MA MCR was 96.7% compared to 98.0% in the year-ago quarter. We’ve recognized the net premium deficiency reserve expense in the quarter, equating to a non-cash net expense of $62 million. This was primarily driven by 110 million reserve recorded for the 2022 financial year to reflect an estimate of the sum of future medical costs, claim adjustment expenses and administrative costs exceeding related future premiums in 2022. This was partially offset by the amortization of the remaining 2021 premium deficiency reserve of $48 million. Direct Contracting medical claims incurred on a GAAP basis were $235.4 million, and our Direct Contracting margin was 103.0%, up only slightly compared to the third quarter due to seasonality and increased COVID costs relating to the Omicron spike in New Jersey and New York, both of which ranked at the top in terms of hospitalizations by state in early January. Excluding direct COVID costs in prior period development, non-GAAP adjusted Direct Contracting margin was 102.1%. Fourth quarter non-GAAP adjusted operating expenses, which exclude non-cash stock-based compensation, seeking Clover Therapeutics from salaries and benefits plus general and administrative expenses were $77.5 million, representing 80% of total revenues compared to $46.8 million and 28% of total revenues in the fourth quarter of 2020. We expected adjusted operating expenses to grow at a more moderate rate and become a smaller portion of revenues as we scale and drive efficiencies, which is a key focus in our 2022 operating strategy. Our GAAP net loss for the quarter was $187.2 million. Our adjusted EBITDA loss for the fourth quarter was $154.8 million. After excluding gross loss from direct contracting, PDR, seeking Clover Therapeutics and normalizing our MA business for the MCR impact of COVID our normalized adjusted EBITDA loss for the quarter was $68.5 million. Clover had approximately 471 million total shares outstanding at the end of the fourth quarter, which includes the 52 million shares we issued in November as part of our capital raise. Our cash, cash equivalents, and investments totaled $791 million as of December 31, 2021, and included $285 million in net proceeds from our capital raise. Now let me turn over to Vivek for some closing comments.

Thank you, Mark. Just to wrap up, we are excited about our expected improvements for 2022 MA MCR. In addition, we believe we will see another stepwise improvement in MA MCR in 2023. As relates to operating expenses, we expect there will be only a moderate increase this year, versus our Q4 2021 run rate driven by operating leverage and efficiency efforts. There is much more work being done this year to drive further cost efficiencies. And because of that work, 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. Our mission is to improve every life; as part of that, I want to reiterate that we are very pleased with the CMS proposal that is now out for comment that lays out a path now in the health equity gap around risk adjustment and stars. With that, let's take questions.

We'll take a question from Richard Close of Canaccord Genuity.

Yes, thanks for the question. Andrew, I was wondering if you could go over that 250,000 lives again in more detail. You said something about non-insurance and I just want to make sure I understand that?

Yes, so basically, the way that we're looking at this is that we have the insurance line of business, which is obviously Medicare Advantage where we act as the insurer and that you understand that business obviously. In other areas which started with Direct Contracting and the fee-for-service space we consider that to be non-insurance because we are not acting in an insurance capacity. We are not an insurance company; that's not how we're covered underneath sort of like HIPAA regulations. We are actually signing business associate agreements with practices and physicians providing them with Clover Assistant and then helping them go at risk within fee-for-service with the government in a value-based program. So where we're assisting physician groups and enabling them to go into value-based arrangements, but are not acting as an insurance company, that's what we meant by that. And the bulk of those are right now in the obviously in fee-for-service and direct contracting, but we intend to look at expanding that business to by enabling physicians to go at risk in other programs as well.

Okay, and do you think you'll have lives in other programs during 2022?

Yes, we are taking this very seriously. It is something we are currently considering. For physicians already using Clover Assistant, it is quite straightforward for them to start with either fee-for-service and direct contracting or with our MA plan, and then expand that to other areas of their panel. We want them to utilize Clover Assistant for as much of their panel coverage as possible. While we don't have any specific guidance on this, it is certainly a focus for us this year.

And Richard, this is Derrick. The breakdown of that almost 250 is 160 to 165 direct contracting lives, and 84 to 85 MA lives – 84,000 to 85,000.

Okay, thanks. And Andrew, I was wondering if you could talk a little bit about now that you have some scale with expected 160,000 to 165,000 lives on direct contracting, how have you guys been successful in getting MA physicians essentially more interested in utilizing Clover Assistant? How has that work since you're entering the third quarter of this?

Yes, absolutely. So what we're seeing here is that there are definitely synergies, the more as I referenced, just now. The more lives that a physician can use to manage their panel using Clover Assistant, the better. It results in more back development of software muscle memory and engagement with the platform. So we definitely are seeing that we tracked physicians who are using it for both fee-for-service and MA. And we are encouraged by what we see there. In addition, we definitely are going out and bringing in folks who are not basically in a region served by our MA plan; I just want to also emphasize that that's something that we think is very successful as well, to be able to approach people on just the fee-for-service side and not necessarily on the MA side at all. We actually do believe that that non-insurance segment could be a very fast-growing segment for us, as shown by our initial success from fee-for-service. And that there are certainly folks that once they start looking at our actual sort of success with Clover Assistant that is integrated into their practice, we see that it's very quick to bootstrap them on that direct contract fee-for-service side and then we can talk to them about moving into at risk with either our own MA plan or with others.

Okay. I'll jump back in the queue. Thanks.

We'll take our next question from Kevin Fischbeck of Bank of America.

Hey, this is Adam on for Kevin Fischbeck. Couple of questions. I think based on the MA MLR disclosure in commentary, you're kind of I think that you baked in a little less COVID costs and probably most of the risk adjustment benefit. So are you basically saying that this 600-ish basis points of COVID that you're building into MA MLR like if things are going to come in better than that's all upside?

Adam, this is Vivek. Are you asking specifically around the guidance side, the 95% to 99%?

Yes, you guided to the GAAP MA MLR. You said you've built in slightly less COVID costs. So I'm just wondering if the rest would be upside if it came in better than the 600-ish basis points that you're implying.

Yes, I can't remember the exact specific amount and if we guided specifically to the amount of COVID costs baked in. But in our last earnings call, we did talk about baking in a few hundred basis points of COVID impact this year. Again, we're not delineating specifically between kind of the risk adjustment portion or pent-up demand or just increased utilization driven by COVID impact. But to your point, if COVID subsides and diminishes impact over this year, that technically would be upside.

Alright, thanks. And then, I guess, not sure how much you have to say about this. But there's just been a controversy around direct contracting in the headlines. I’m wondering if you have any thoughts. And also, you guided to slight improvement in MLR year over year. So is it fair to say, any adjustments are unlikely to actually be impactful to earnings given that it's largely breakeven in the near term?

Yes, good question. Andrew if you try and hit maybe kind of our perspective on core versus direct contracting and I can add some thoughts?

Yes, absolutely. Direct contracting is something that is continuously reviewed by the CMMI program, and the government has the right to assess it. We believe there is a strong focus on bringing more physicians into value-based care, which applies equally to traditional Original Medicare and Medicare Advantage. We believe that consumers should have the choice to select Original Medicare, whether it's with or without Med Sup, or to opt for Medicare Advantage. Our aim is to offer Clover Assistant in either scenario. Currently, we participate in the Original Medicare market through the direct contracting program, but there have been other forms of value-based contracting with providers and the government before, such as MSSPs and ACOs. We think value-based care will endure. Many physicians have struggled to transition into value-based models that deliver better outcomes at lower costs, and Clover Assistant can facilitate that shift. We're encouraged by the success we've achieved and believe we are serving a segment of the market by assisting physicians with our software who need support and aren't receiving it from others. We see this as a lasting value that we provide.

And just to add to that. When we go back to kind of the original founding vision of Clover, it really was always about how do we enable clinicians to make great decisions at scale, and that's the Clover Assistant, our software platform. We made a very intentional decision that we thought we could build the best software inside of a wholly owned insurance case in MA plan. We don't think the debate around payment models is going to slow down; I think it's only going to accelerate whether it's Medicare for all, Medicare Advantage, direct contracting; we're generally agnostic long-term to payment models, mainly because the vast majority of our R&D effort doesn't go into the payment model side very much. It's more around clinical decision support, and how do we help physicians make great clinical decisions on a day-to-day basis. This demand, I think we're at the very early part of that demand curve as we kind of look out over the next five to ten years. That's really where the big business opportunity, clinical opportunity, and consumer opportunity is really developing that platform and making that much more powerful.

Yes, that's a fair point. And then my last question would be around the commentary around MLR improvement in 2023. Was that mostly in reference to stars coming into your P&L the benefit from 3.5 stars? And then given some of the view that CMS gave for those plan rated years in 2023. I was wondering if you can remind us about the confidence levels and maintaining at least 3.4 star - 3.5 stars into 2024. Thanks.

So we've from a guidance perspective, our original guidance was to have three stars repayment year 2020; we ended up with 3.5. Our guidance for 2021 was 3.5 stars. Nothing has caused us to change that guidance that would affect the payment in 2024. As it relates to looking out past this year and into 2023, I think one of the things that is unique to Clover is Clover Assistant is constantly improving. So there's actual feature iterations happening every three weeks or so. That by definition, we feel good is going to cycle into impact throughout the course of this year and definitely into next year. Beyond that, in terms of actual clinical programs, one program that we stood up in the very beginning of this year as part of our annual Primary Care program is a palliative care program; this is the first time we've launched that. For our renal primary care program, couple that with what we’ve started to execute on towards the back half of last year on our partnerships with time care and quick and health in oncology and in chronic kidney disease respectively. We expect to start having an impact going into next year as well. And there's a multitude of other programs that may have more of a modest impact beyond getting to kind of the stars improvement impact to next year.

Alright, thank you.

We'll take our next question from Jonathan Yong of Credit Suisse.

Thanks for taking the question. Appreciate the commentary on MA and then the events notice. I guess, when you think about 2023, how are you thinking about benefit design kind of moving forward? You obviously have rich benefits already. So I guess, given some of your larger peers are thinking about falling back into the market a little bit more heavily, how are you thinking about that competitive landscape? And if you have to redesign your benefits a little bit more in '23?

Yes, so I think, if you just take a step back and if you look at where the growth has been in Medicare Advantage over the last particularly last five years, it's really been on the PPO side. I don't have the numbers in front of me; I think the growth rate for PPO versus HMO plan segments has probably been double, maybe even more than double. So when you look at kind of the incumbent plans, you're probably referring to, their HMO book of business is twice that of their PPO book of business, but it's growing at a much lower level. When they think about driving gross margin, it's really on their HMO side; they don't really have the capabilities to drive attractive gross margin at scale on their PPO plans for a multitude of reasons. Their models are very much generally tied to having strict control around the network and really using kind of that stick approach. The vast majority of our business on the MA side, 90% plus, is on the PPO. So irrespective of what competitors do in terms of pouring dollars, additionally the benefits, they still have to go up against the option of flexibility. So you can make an HMO plan more attractive, but you're still competing against at least in the markets, we're in an attractive PPO model, for that's actually our core business. So we kind of fast forward to next year, the year after, and so forth. The incumbents are getting into a business model that they're not actually well equipped to execute well on, which is a world of choice and network flexibility and technology. And so we feel very good about continuing to invest in building a great PPO plan model, but again, powered by the Clover Assistant. I think taking a step further, I think you're absolutely right, there is definitely in terms your initial point that a huge gap between our plan design attractiveness versus the competitors. We're still very in the very kind of early stages in terms of thinking through bid design, how we want to adjust that and which markets may adjust that. And so I think a lot of work to do there between now and it's an issue or in the May timeframe. But in terms of thinking about balancing growth versus MA MCR, it's very much top of mind, something we're super focused on. And we made reference in our earlier comments around, if something's fall into place, there's definitely that potential on a non-GAAP basis to get to profitability next year, and MA MCR is definitely a huge laboratory.

Great. And then just going back to DC again, kind of turn around the program, I guess. I guess, are there any steps you're taking in case there are significant changes to their program? I understand that you're obviously going to continue to build out the software and develop it as needed. But I guess, is there any contingencies in case there are major changes to the DC program, are you looking to go into the other ACO programs perhaps anything of that nature?

Yes, so without being too specific, because obviously we just want to see what the CMMI decides to do here before we react too much for obvious reasons. Yes, we believe that we want to serve as a larger portion of a patient of a provider's Medicare panel, it's possible that includes fee-for-service and original Medicare, that can be to the direct contracting program, but there will be programs in this area as well that we can move into. As well as being able to serve across the Medicare Advantage gamut, whether or not we're the risk-taking entity or not. That's why we're thinking of it as our non-insurance businesses where we're not playing the role of the insurer. So, I think when you look at our success in direct contracting, and our rapid growth there, that's just a sign of the demand and the fact that we're in that blue water market and have access to this very large TAM, where everyone else is sort of competing for a very small number of sophisticated providers who know how to go to value-based programs. And that's fine. People can compete with those providers. We are able to access the majority of providers who need help going into these programs, haven't been successful in the past, but with Clover Assistant can be successful. And that model, we are sure is going to continue to exist, and the need for that will remain in the fee-for-service world as well. So we don't think we need that kind of direct backup plan here, but we intend to stay in the fee-for-service market.

Okay, great. And just last one. You broke out the cohorts for your MA MLR. I guess, if we think about that, from the DC side, should we expect kind of similar improvements in terms of cohorts? You're obviously adding a lot this year for 2022. So I guess, should we expect 100bp improvement on the 2021 cohort? How should we think about the 2022 cohort coming on? Just add color around that?

Yes, I can say I think it's a little too early for us to actually look at this right now. Very fair question to ask. But we need more data to obviously do that cohorting and DC, and they are obviously different programs similar and almost identical in terms of clinical care, as Vivek pointed out, but one is a benchmark-based program, one is a capitated program, so we wouldn't expect identical; just goes the dollars flow through slightly differently. So we'll share more as we actually are able to track and create those cohorts.

Great, thanks.

Thank you. We'll take our next question from Gary Taylor of Cowen.

Hi, good evening. Just a couple of questions if I could. I wanted to go Vivek’s comment that could actually be non-GAAP profitable in '22. I just want to make sure I'm understanding the point there. If we take the midpoint of your MLR and revenue guidance in your G&A number, I think it implies an EBITDA loss of roughly $240 million. So to flip that even to break even, you'd have to outperform your MLR by 750 basis points or so. So am I kind of in the ballpark on those numbers? And is that MLR piece, what you're describing is sort of the key ways that profitability could be plausible for. And when you went next year, do you meant '23 versus maybe I'm off a year, and it's '23 versus '22. But just to clarify that.

In 2023, regarding the Medical Loss Ratio (MLR), it's important to recognize that a profit and loss statement consists of two components: revenue and expenses. As you have observed, there has been growth in the top line this year compared to last year, and we anticipate further growth next year. Given your extensive experience with managed care organizations, you likely understand that typical operating expenses as a percentage of total Medicare Advantage premiums range from 8% to 12%, depending on the size of the plan. We're currently above that range, which indicates that as the organization grows, we have opportunities to streamline operations and enhance efficiencies, especially in technology and across various business lines, as mentioned by Andrew. On the MLR front, it's a complex area with multiple factors involved. While I won't provide specific guidance on that due to the various possibilities involved, we believe improvement is achievable but aren’t committing to concrete expectations.

And do you have a apparent cash figure for us at the end of the calendar year?

I think total cash I want to say was around $800 million. Mark, you can correct me.

For the end of the year, I don't have a number I can share at the moment.

Gary, we'll get back to that.

We'll look forward in the cave. Last one for me. Can you just describe a little bit about how you've grown the direct contracting? So you've raised guidance twice in terms of your enrollment there for '22? Could you just break out, how much of that enrollment's coming in through claims alignment versus voluntary? And then really, is your strategy around it, is there a per visit financial incentive for the physicians, is there a profit split? Is it really the attractiveness of getting to use Clover Assistant? Can you just one I'd like to see sort of breakout of claims versus attribution, but just sort of, how are you finding the success of signing up these physicians as participants under your DC?

Yes. So basically, I don't have the exact number, but the heavy majority of it is coming through claims alignment. And that's part of our strategy here. The reason is, is that the success we're coming from as we go to existing physician groups, like I said, who want to move into largely maybe on fee-for-service, maybe they've tried to put their toe in there in the water with value-based contracting, and we say to them, we can help you move into a value-based contract and be successful in that. So we are actually having a B2B business-to-business motion there, what we contract with an existing physician. And then their lives move into the DCE, as claims aligned lives, the normal methodology. This is as opposed to other models, which are heavily relying on voluntary alignment, which means that they're trying to switch folks oftentimes, because by definition, if they were claims aligned, they would be claims aligned. If you use voluntary alignment, that means that you actually didn't have the plurality of claims from last year, and you're trying to switch them into your practice. There's no switching required for us; we just wish we just did the people who are already seeing these PCPs. And that's how we're able to grow so rapidly, basically. And then yes, we have a similar model to MA, where we have an economic structure where they are able to predict and say, this is how much we were earning before, we give them extra compensation around like whoever assistance just like we do on the MA for the time and the effort they're using to provide value-based care. And then we move on from there.

Thank you.

We'll take our next question from Whit Mayo of SVB Leerink; your line is open.

Hey, thanks. Good afternoon, I wanted to go back to sort of an industry development that's occurred in the last year with CMS, enhancing a lot of the compliance around third marketing or third-party marketing organizations. And there was a notice that was issued, I want to say, October 8, that I think created a little bit of, I don't know, some anxiety and some concern among certain carriers as to how they were supposed to comply with some of the mandates that CMS had. I guess, by back, I was hoping to get just your overall perspective and view on what happened and how Clover responded? And maybe I'll just stop there to get your response.

Yes, that's a great question. We're very, very supportive of particularly the recent efforts by CMS to create a much higher bar and compliance requirements around third-party marketing. I think we've seen a lot of third-party organizations sort of pop out of nowhere over the last many years really just trying to generate leads and sell leads to various organizations. And we do think it creates a lot of confusion in the marketplace. Consumers don't generally know always what they're signing up for. It's no secret that churn is meaningfully higher with those strategies than kind of a normal word of mouth or independent field agent type approach. And that turns higher, because there's confusion in the sales process. So, we're definitely bearish on kind of all those models that are taking a very sophisticated approach and really trying to explain plan options. But I think suffice to say, I think we would expect to see continued rules and regulations on gearing MA to make sure it's serving its intended purpose and following the policy, and I think there's just as another example that we referenced in our opening remarks; some of the meaningful proposals that CMS is making around health equity that can impact risk adjustment in a way dramatically to help those that are most in need. I think that that's just another example of that. But I expect those types of changes and proposals to only accelerate. Anyone give any other kind of for that.

Yes, I’ll keep it brief. I believe Vivek highlighted the key points. In the past, we've noted that our exposure to certain online brokerages has been limited. Additionally, as you've mentioned, the field marketing organizations have been somewhat problematic; we believe they have been using marketing funds from managed care plans to circumvent the caps on broker commissions, which is clearly against the intent of the regulations. It’s encouraging to see that this is being addressed. On the electronic front, as Vivek pointed out, we’re experiencing high churn from those specific lead sources, along with a rapid increase in cost per lead. We also sell through these electronic brokerages, but our exposure to them has been much less than that of other managed care plans. I think that explains our success in this area.

Got it. One follow-up question, it's just on, as you sort of reflect back on the 2022 open enrollment cycle and looking at some of the growth that you've had in some newer markets. And I guess I should say, not newer, but not your legacy core New Jersey markets, but what lessons were learned in terms of the receptivity, the benefits, what the plan design looked like? And when you look at some of the success stories that you guys have, internally, what do you think was resonating out in the field with brokers, with consumers, just anything that would be helpful for us? Thanks.

Yes, great question. So I think I know, Andrew has some thoughts on this as well, after a few. I think from our initial sort of readout from a lot of the conversations we've had is over from day zero, it has just been a very transparent organization to individuals who are selling MA plans. In terms of consistency around benefit design, being easy to engage with. And I think, importantly, driving within the plan design feature, driving true flexibility in network choice. And we're a broken record on that point. And I think, kind of Andrew's point, all this really showed is that we've been able to maintain an attractive growth rate by sticking with our core principles of making sure it's a very pure sale process, individuals selling Clover know what they're selling. Making sure consumers are picking the right plan for them, irrespective whether it's Clover or another plan design, and leading with choice, leading with PPO. And I think it's going to be a bigger and bigger and bigger struggle with any organizations that lead with HMO where the majority of their margin or business salary is driven by HMO; they're going to struggle, nothing's going to change that trajectory on a go-forward basis.

Really the corollary that I have to this question, and I'll stop, is just any way to frame or size the coverage that you have within these newer markets with Clover Assistant. And I guess, the key is to deploy the technology, get it in the hands of your physician partners, but where do you stand today in terms of the adoption levels and that physician engagement? Thanks.

Yes, definitely. That's a great point. We may have some statistics to share that we haven't made public yet, so we'll consider that. It's important to note that having access to Clover Assistant physicians is fundamental to our model. We believe every member, whether on the fee-for-service side or Medicare Advantage, deserves high-quality, data-driven primary care. We ensure that members have access to Clover Assistant doctors, although it may take some time to identify where our new members are visiting and how quickly we're expanding in new markets. Since most of our new members are recent additions, determining the locations of their doctors and establishing those relationships can take time. We typically ensure Clover Assistant coverage is in place when we build our network, and then we expand the network throughout the year based on the data we gather about where our members are seeking care. There will be more information on this in the new markets, but we are observing a similar trend in core markets like New Jersey and are applying it in places like Georgia as well.

We'll take our next question from Jason Cassorla of Citi.

Great, thanks. Good evening, guys. Great. Thanks for taking my questions. Just really quickly, around the incremental 10 states that you're entering in for the DC program in '22, will those new states help inform you in terms of how you think about MA state and county expansion for 2023 and beyond? Or is there any way you can kind of like help frame that at all? Thanks.

And you said the DC side, the DC state framing MA expansion? That was a question, just make sure I heard right.

Yes, you had an extra 10 states, you're going into 10 states, but you're in 10 states in '21, you're going to 10 states in '22. Just thinking about with those new states will help frame the way you're thinking about exposure.

The way I would think about this, which is a useful framing here is that previously, when we just had MA in order for us to sort of like test out a new market or a new state, we had to do build a network due to adequacy, due to bid, which was we were fine doing that we've been showing that we're very good at that actually by our expansion rates. But that hadn't laid out this material overhead in terms of resources, operational cost, like we’ve extent to do that, was something like direct contracting, we're able to much more easily work with physicians directly in any given state and we don't have to necessarily have all that overhead of building network, et cetera. So that does give us meaningful signal earlier. So I think I'm not saying that we will also sort of test out markets with MA, it just allows us to have higher conviction before we do that by testing the waters with some of our physician partners on the server side first.

Got it. Okay, thanks. That's really helpful. Maybe just going to MA. I mean, you're talking 26% to 27% MA growth year-over-year on average, is there any way to help delineate the attribution of that growth between existing counties in the call 101 new counties for 2022? Just anyway, consideration on that would be helpful. Thanks.

Yes, I can't recall exactly what we've publicly disclosed. We want to ensure we're consistent in providing you with more information. I can say that we are very pleased with our growth in our core areas, particularly in New Jersey. We've also mentioned that Georgia is following the same growth trajectory that we have historically seen in New Jersey. Our markets are still establishing their foothold, but we believe our core markets in New Jersey continue to perform well. In Georgia, we've demonstrated that the strategies we've implemented in New Jersey are effective, and while it's been a couple of years since we started, Georgia's growth resembles what we have experienced in New Jersey. We're quite optimistic about that.

Just really quickly a follow-up on that comment around Georgia. I mean, that's definitely coming in, I think latest enrollment shows around 12,000 members in the states. I know you're talked about replicating what you did in New Jersey, in Georgia, but maybe just really quickly, the thought process around jumping into Georgia specifically and then what's kind of helping to drive that outsized growth relative to your expectations from before? That’s it for me. Thanks.

Yes, absolutely. We are very data-oriented. As someone else mentioned, we typically employ a land and expand strategy with Medicare Advantage; with direct contracts, we have more opportunities due to land, allowing for more flexibility and cost efficiency. When evaluating the market signals, we consider various networks, recognizing that there isn't just one factor at play, certainly other plans come into consideration. However, our focus remains on the local provider landscape and the benefits we can deliver, particularly in terms of offering a robust PPO in this market and providing the network choice that was highlighted. This is central to our approach. We make an effort to stress this point because very few other Medicare Advantage plans highlight their wide network, given that many prioritize narrow networks. Most individuals transitioning from commercial plans understand that they select HMO plans when they are willing to accept a narrow network for potential cost savings. Overall, if having the option is available, this mindset carries over into Medicare. People are becoming accustomed to narrow network HMO plans, but the PPO is more appealing. As long as we keep this perspective, it aligns with our core belief that having choices is beneficial. Additionally, we are observing that this approach resonates with physicians as well. Collaborating with Clover allows them to balance their engagements with large incumbents, which aids in their network negotiations, further supporting physician relationships.

We’ll move next to Calvin Sternick of JPMorgan.

Thanks. I have a question going back to the cohort анализа. I know it's not apples-to-apples. Exactly. It’s the non-GAAP versus that 95% to 99% GAAP MCR range you gave. But if I just think about the year-over-year improvement across the cohorts, I mean, presumably a big chunk comes from the earlier or I guess your more recent cohorts from risk scores improving. But, as we think about the year-over-year improvement, how much how did that get allocated really across the different cohorts? Is it more skewed towards more recent cohorts? Or is it come really through some of the more mature vintages?

Let me answer this way. And you can ask a follow-up if it doesn't make sense. So I definitely, when people start using Clover Assistant, because we have the ML Engine, there were the rules engine because we look at total comprehensive body truth. There certainly ARR additional diagnoses. And in the first year where we say, hey, have you thought about this? Have you thought about kidney disease? Have you thought about this on the risk factors? And that results in risk adjustment credit through diagnosis. However, what we also see is that the cause we push for and insist on care planning for all those which is appropriate from a market position, that doesn't really actually increase that much into later cohorts, like as a physician stays on Clover Assistant in later years. What we're seeing is that it's really the care planning over a longer duration of time, because obviously, if you catch CKD earlier, and you weren't thinking about that, and you're able to capture the lab test and plan for it earlier, that does move the overall medics curve. It might actually increase medic in the short term, but it'll smooth the medics curve over a number of years. And so the increase from cohort to cohort within the same physician tends to be the effects, we believe, of the better care planning on MedEx and not from something like risk adjustment.

Okay, and then just one quick one on modeling. A couple of other companies have called out some stuff around MCR seasonality from COVID. I am just wondering if there's anything that you guys have seen in your population so far that would be notable if you're thinking about modeling out '22. Thanks.

Yes, I think one thing that I think will, the data is publicly available now, but it's a look, we're set up a little bit different in the sense of, but we look on the MA side. So a significant percentage of our members are in New Jersey. And so when you look at publicly available data, so you look at 2021 and even into January of this year, and you go back to 2020, as well. The state of New Jersey ranked number two in the country, just behind New York, of highest per capita COVID Medicare costs, divided by total per capita Medicare costs. I think it was a few hundred basis points above the median. I know we've gotten a lot of questions over prior earnings calls around, how is New Jersey different? Well, the data is now kind of pretty loud, that it is pretty different in terms of experience. We don't exactly know kind of the entire deprivation of that. So I think it's a little bit harder for us to sort of map to COVID seasonality. Given that, and we don't know what this year is going to hold versus last year, we assume it's going to be a little bit of a less impact.

Got it, thanks.

At this time, I would be happy to return the call to Derrick Nueman for the Reddit portion. Great, we have time for a couple of Reddit questions. The first question is when will Clover announce a permanent CFO Vivek?

So we have got the meetings with great candidates. I think a couple of things as we're thinking about is we're obviously looking for someone to be with us for a long time. We're being pretty patient with our choice, and we're creating a pretty high bar. At the same time, Mark has done a great job; he is in the room, and I think has given us the luxury of time of being able to be pretty patient with the choice. And at the same time, we've been able to bring on some great talent into the organization over the last few months outside of the CFO as well. And we created a really strong finance team over the last kind of six months to a year underneath Mark. Right.

Next question, what other possible business pivots, fee-for-service licensing software expanding to new healthcare markets? Are you looking at Andrew?

I wouldn't describe it as a pivot. We are quite confident in our position within the Medicare space right now. However, there is significant potential for growth as we aim for that trillion-dollar total addressable market we’ve discussed. Our objective is to become the leading physician enablement platform within Medicare for value-based care. We started with Medicare Advantage and have successfully expanded into fee-for-service, utilizing our software platform to assist physicians in transitioning to value-based care in that area. There are also opportunities in other areas, such as different Medicare Advantage plans or Medicaid, which are closely related to Medicare. Thus, there is ample opportunity for us to explore new models while remaining focused on building upon our existing successes.

The sign-up question from Reddit, given our time constraints, what new enhancements are being added to Clover Assistant in the near future? And then we'll turn it over to you back for closing remarks.

Yes, so there are big features and there are small features. So what we're always doing is like, just top of mind for me is constantly iterating and doing tests to see like everything down to the smallest things. For example, I know we're looking at stuff right now, where we're making it easier for physicians to see data points that didn't come from their own practice, maybe there's our lab reports, or maybe those are from other physician practices. And they want to use that information to be able to aid in their own decision-making. We're making more of that data available, we're constantly building more integrations, to pull that stuff in and then making sure that’s very easy to access in CA. That's core to what we do, but even just saying something as simple as that there are dozens of different sub-features underneath that, that we could build in the purpose to serve that particular need. But really excited about that, we're constantly iterating, trying new things. And then we'll launch major new features probably like two or three times a year.

Great. Vivek?

Thanks Derrick. To just close, we appreciate everyone's time today. In summary, we feel really, really good about where we are today, particularly our team, our growth improvements, MCR, and in particular, lowering our OpEx as a percentage of revenues expected in 2022. And just reiterating what I said earlier, there's a ton of great work being done this year to drive further margin improvements. And because of that, if a number of things do fall into place, it is even possible we may be profitable next year on a non-GAAP basis when excluding non-cash expenses and non-recurring expenses. But enabling this is Clover Assistant and that's providing as a true and growing technology mode, while we're making a meaningful and positive impact on health equity on our mission of improving everyday life. Thank you again, everyone.

This does conclude today's program. You may now disconnect your lines, and everyone have a great day.