Adam Ron: And then in terms of your normalized tax structure comment, I noticed that your tax rate is kind of higher than any other company we really cover and I wasn’t sure if that was because you were in California but it sounds like some of it is like structural and that you see — that there was ways to actually produce that. So most of the managed care companies then kind of hover around mid-20s tax rate. Is that something you see as achievable? Or just what reference would be like a reasonable target?
Chan Basho: Yes, I’d say it’s closer to low to mid-30s.
Adam Ron: And that’s really the only thing driving down your net income guidance to the lower end of the range which is higher taxes than expected for the future?
Chan Basho: That’s correct.
Adam Ron: And then one of your competitors had 2 interesting comments. One, saying that direct contracting was coming in better than they had expected based on data they were getting from CMS, I guess, like a positive retro trend adjustment or perhaps to its growth expectations. So is that at all factored in your guidance or results here that direct contracting is coming in better than expected?
Brandon Sim: For the guidance today, we’re not assuming any positive incremental impacts for either direct contracting from last year or ACO reach for this year. That does remain a possibility, certainly. But in the spirit of conservatism, we have not accrued or incorporated any positive impact from those 2 programs, again, either from a true-up from 2022 which we’ll know by August or ongoing operations in the ACO reach this year into our full year projections.
Adam Ron: And if there any — but is there any data that you’re getting from CMS that’s like positive one way or the other? Are you saying it’s just too early to make that call?
Brandon Sim: On the Direct Contracting Entity program from 2022, we have not got any information from CMS that would suggest any differences relative to information we already had at the end of the year. And that final report, we do expect to come sometime this month or early next from CMS relating to the final true-up for the DCE program last year. If you’re asking about the ACO reach program for this year, we are getting monthly reports around the retroactive benchmark adjustment that has been around in line with expectations, not noticeably positive impact.
Adam Ron: And another comment they made that was interesting was that they had got in discussions with payers now that the MA payers have submitted their base for 2024, they were able to see the supplemental benefit cuts. And especially they were larger than expected just because of the rate pressure that MA plans are seeing. And so I’m wondering if you were able to get visibility into your payer partners and what you’re seeing in terms of supplemental benefits customer next year and how you think that will impact your numbers and if it gives you more confidence in your ability to manage through that rate headwind for next year.
Brandon Sim: Yes. I think that’s accurate on average across the board. Of course, each plan is going to look a little different but I think on average, that is also the trend that we are seeing due to their — due to payers’ management of some of the risk adjustment changes, premium changes and star rating changes on their end. So I think what you’re saying is accurate and we’re seeing it as well. I think given the longevity of our model and the fact that we’re already providing a lot of the items that may or may not have been included in supplementary benefits from some of the plans and we’re going to continue providing those services which we always have. I think we have a good shot. We think we’re — or we expect our model to be able to weather through that pretty consistently as we have with decades of supplementary benefit changes up and down. We haven’t seen that impact our financials or our care ability to do over care at all.
