We are performing in line with our expectations on medical costs with a year-to-date, medical cost ratio of 89.9% excluding prior-period items. Solid performance on our book of business with a high concentration of underserved and special needs consumers. Our Medicare Advantage team has been working for some time now on initiatives to drive improved utilization metrics and lower medical costs. We have seen the benefits of these efforts with utilization down approximately 10% year-over-year across the book, and operational improvements that have resulted in claims inventory down approximately 50%. In the third quarter, we also continued to make significant progress on the wind down of our ACA insurance business. Our claims inventory has continued to decline consistent with our expectations, and we have clear visibility to the remaining obligations in the business.
We were pleased to announce in September that we paid down 80% of our final risk-adjustment obligations for the business and that our insurance subsidiaries entered into repayment agreements with CMS in four states to satisfy the remaining risk adjustment obligations. Jay will provide additional details on the repayment agreements, our current capital position, anticipated remaining costs and expected net obligations for the business. I’ll now hand it over to Jay to provide additional details on our third quarter performance and our updated outlook.
Jay Matushak: Thank you, Mike, and good morning, everyone. I’ll start with a discussion of our third quarter performance, provide an update on the wind down of our ACA insurance business and go over our balance sheet. I will then provide a review of our 2023 outlook. Bright Health Group Enterprise earnings for the thrid quarter was $269 million, with strength in care delivery segment capitated revenue offset by lower ACO Reach revenue, based on an expected revision to ACO reach benchmarks. Care delivery segment revenue was $67.1 million in the third quarter. We have had strong performance from a medical cost management perspective year-to-date and expect that we will realize the upside incentives on certain contracts in 2023.
As a result, we started booking a prudent amount of surplus share in the third quarter. This positive momentum was partially offset by consumer attrition in some payer relationships consistent with our expectations. Net positive outcome in capitated revenue more than offset modestly lower service revenue and a small decline in ACO Reach distributable surplus to our own provider assets. Medical costs and operating costs were approximately in line with expectations and excluding the impact of goodwill impairment recognized in the quarter, the care delivery segment delivered operating income of $10.6 million in Q3. Results in our cash solutions segment are largely driven by our ACO Reach business. In our ACO Reach business, we contracted CMS and take on the risk related to our provider partners attributed Medicare fee-for-service members, medical cost performance relative to a blended regional and historical benchmark.
To the extent the medical costs were attributed [indiscernible] lower than the blended benchmark, our ACO earned surplus from CMS. Medical costs exceed the blended benchmark, the ACO was adjusted to CMS. We also entered into downstream contracts with our provider partners that have varying levels of risk sharing relative the surpluses earned and deficits incurred. As Mike previously noted, due to Babylon bankruptcies, we have established a reserve against our receivable creating a bad debt charge of $22.4 million for the quarter. Additionally, with the end of the Babylon relationship, we now expect to retain full responsibility for the deficits of their attributed members for the balance of 2023, which negatively impacted third quarter medical costs and will be reflected as additional medical costs within our ACO in Q4.
The bad debt expense and the additional Babylon assets are excluded from our adjusted EBITDA, these are one-time items that don’t reflect the ongoing expectations for the business. Year-to-date we have seen solid performance in our ACO Reach business. And assets of Babylon impact in net contribution continues to perform in line with our expectations. Care solutions segment revenue in the third quarter was $200.8 million. Third quarter revenue was impacted by the [indiscernible] adjustment for an expected revision to the full year ACO Reach program benchmark, and we revised our full-year revenue outlook based on the new benchmark forecasts. Revised revenue forecast was offset by lower medical costs which our most recent and current cost estimates.
