Company: HUM
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000049071-25-000007
Chunk: 87

Company: HUMANA INC
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1
Chunk 87
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 providers a continuum of opportunities to increase the integration of care and offer assistance to providers in transitioning from a fee-for-service to a value-based arrangement. These include performance bonuses, shared savings and shared risk relationships. For some of our medical membership, we share risk with providers under capitation contracts where physicians and hospitals accept varying levels of financial risk for a defined set of membership. Under the typical capitation arrangement, we prepay these providers a monthly fixed-fee per member, known as a capitation (per capita) payment, to cover all or a defined portion of the benefits provided to the capitated member.

We believe these value-based arrangements represent a key element of our integrated care delivery model at the core of our strategy. Our health plan subsidiaries may enter into these value-based arrangements with third-party providers or our owned provider subsidiaries.

At December 31, 2024, approximately 2,361,500 members, or 14.4%, of our medical membership, were covered under shared risk value-based arrangements, which provide all member benefits, including 2,114,900 individual Medicare Advantage members, or 38.0%, of our total individual Medicare Advantage membership. 

Physicians under capitation arrangements typically have stop loss coverage so that a physician’s financial risk for any single member is limited to a maximum amount on an annual basis. We typically process all claims and measure the financial performance of our capitated providers and require guarantees in certain instances. However, 

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we delegated claim processing functions under capitation arrangements covering approximately 304,400 members, including 303,500 individual Medicare Advantage members, or 14.4%, of the 2,114,900 individual Medicare Advantage members covered under shared risk value-based contracts at December 31, 2024, with the provider assuming substantially all the risk of coordinating the members’ health care benefits. Capitation expense under delegated arrangements for which we have a limited view of the underlying claims experience was approximately $3.6 billion, or 3.6%, of total benefits expense, for the year ended December 31, 2024. We remain financially responsible for health care services to our members in the event our providers fail to provide such services.

Accreditation Assessment

Our accreditation assessment program consists of several internal programs, including those that credential providers and those designed to meet the audit standards of federal and state agencies as well as external accreditation standards. We also offer quality and outcome measurement and improvement programs such as the Health Care Effectiveness Data and Information Set, or H