Company: PIII
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015305
Chunk: 171

Company: P3 Health Partners Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 171
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 the achievement of certain clinical quality metrics as contracted with payors.Capitated revenue is recognized based on a PMPM transaction price to transfer the service for a distinct increment of the series (e.g., month), net of projected acuity adjustments and performance incentives or penalties. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term. The capitation amount is subject to possible retroactive premium risk adjustments based on the member’s individual acuity. Premium risk adjustments recorded in 2024 and 2023, which increased capitation revenue, were $33.5 million and $27.7 million, respectively. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient not to adjust for the effects of a significant financing component.The Company’s contracts with health plans may include core functions and services for managing assigned patients’ medical care, the combination of which is offered as a single solution. Capitation contracts have a single performance obligation that is a stand ready obligation to perform healthcare services to the population of enrolled members and constitutes a series for the provision of managed healthcare services for the term of the contract, which is deemed to be one month since the mix of patients-customers can change month over month. The Company does not offer nor price each individual function as a standalone service to health plans.Monthly, each plan is contractually obligated to reserve for payment of medical claims equal to a defined POP attributable to members assigned to the Company. In turn, the Company administers medical claims for contractually covered services for assigned health plan members from that health plan’s reserve. On a quarterly or monthly basis, health plans conduct a settlement of the reserve to determine any surplus or deficit amount. The reconciliation and distribution of the reserve occur within 120 days following the end of each quarter. An annual settlement reconciliation and distribution occur within the period specified by the individual health plan’s contract (which can be up to 21 months following each year-end).Revenue recognized from the balance of deferred revenue as of December 31, 2023 was $12.7 million during the year ended December 31, 2024.

Three health plan customers accounted for 10% or more of total health plan receivable each as of December 31, 2024 and 2023. 

As of December 31, 2024 and 2023, Management has deemed the Company’s settlement receivables to be fully collectible from those health plans where the