agilon health, inc. (agilon) engages in transforming healthcare by empowering the primary care physicians (PCP) to be the agents for change in the communities they serve.
Through the company's combination of the agilon platform, a long-term partnership model with existing physician groups, and a growing network of like-minded physicians, it is poised to revolutionize healthcare for seniors across communities throughout the United States (U.S.). Its purpose-built model provides the necessary cap...
agilon health, inc. (agilon) engages in transforming healthcare by empowering the primary care physicians (PCP) to be the agents for change in the communities they serve.
Through the company's combination of the agilon platform, a long-term partnership model with existing physician groups, and a growing network of like-minded physicians, it is poised to revolutionize healthcare for seniors across communities throughout the United States (U.S.). Its purpose-built model provides the necessary capabilities, capital and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. The company's model operates by primarily forming risk-bearing entities (RBEs) within local geographies, that enter into arrangements with payors providing for monthly payments to manage the total healthcare needs of its physician partners’ attributed patients (or global capitation arrangements).
The company's ability to rapidly build scaled positions in local communities has allowed it to grow to 29 anchor physician groups and 30 geographies as of December 31, 2024. As of December 31, 2024, the PCPs on the company's platform serve approximately 526,500 MA members and 132,100 Medicare fee-for-service, or FFS, beneficiaries through ten Accountable Care Organizations (ACOs) through its participation in the Centers for Medicare & Medicaid Services’ (CMS) Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model and Medicare Shared Savings Program (‘MSSP’, and together with ACO REACH, the ‘CMS ACO Models’) through its equity method investments.
The company's business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: agilon’s platform, agilon’s long-term physician partnership approach, and agilon’s network.
The agilon Platform: The agilon platform is holistic in supporting the rapid transition to a Total Care Model with technology, people, processes, and capital. The company's purpose-built platform comprises an integrated set of capabilities designed to continuously improve, helping its anchor physician groups to identify gaps in care, integrate seamlessly with payors, sustain their practices, and identify untapped opportunities for improved outcomes. The company’s platform is delivered to its anchor physician groups through a long-term partnership model to support the adoption and success of a Medicare-centric, globally capitated line of business.
agilon’s Long-term Physician Partner Model: The company built the agilon platform to be deployed through an aligned long-term partnership model with community-based physician groups to move healthcare closer to the physician, be outcome-centric and optimize the long-term sticky relationship between a patient and their existing physician. Through this partnership, the company's physician partners’ existing MA patient panels are attributed to its platform through the company's subscription-like per-member per-month (PMPM) agreements with payors. The combination of these subscription-like agreements, the sticky patient-physician relationship, and the company's long-term partnership model, which is typically 20 years in duration, results in a growing and recurring revenue stream and provides visibility into the near-term and long-term financial trajectory for both agilon and the company’s anchor physician groups.
agilon’s Network: Enhancing the power and growth of the agilon platform are leading community-based physician partners, functioning as a collaborative group through the agilon network. The value of this network is demonstrated by the company’s ability to add new physician partners and to attract additional PCPs to its physician partners. The ability to share best practices, influence the development of the platform, compare notes on the transition to a Total Care Model and learn from one another represents a valuable opportunity for physicians.
Physician and Payor Contractual Relationships
Physicians
The company's business model combines the agilon platform, a network of like-minded physicians, and a long-term partnership model to provide physician groups with the necessary capabilities, capital, and business model to create a Medicare-centric, globally capitated line of business. It seeks to partner with leading community-based physician groups under a Total Care Model. The company has formed long-term partnerships with diverse leading community-based physician groups in geographies such as Connecticut, Georgia, Kentucky, Maine, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas.
Under the Total Care Model, the company typically operates by forming risk-bearing entities (RBEs) within local geographies. These wholly-owned RBEs enter into risk-bearing, global capitation agreements with payors, contract with agilon to perform certain functions, and enter into long-term professional service agreements with one or more partner primary care physician groups, multi-specialty practices, independent practice associations, and hospital physician groups within systems. The company refers to these groups as its ‘anchor physician groups’. Individual MA members whose care is provided by PCPs employed or affiliated with the company's anchor physician groups are attributed to the RBE, which bears financial responsibility for the associated medical costs of such members. The company has entered into long-term professional services agreements with its anchor physician groups, which typically have a contractual duration of 20 years.
In addition to its contractual arrangements with its physician partners, the company also maintains relationships with other providers who care for its members, including hospitals, specialists, and ancillary providers. Such providers either contract with agilon or directly with payors. The company and its physician partners maintain effective working relationships with the majority of the higher-volume providers in their geographies to retain insight into the provision of care to its members and ensure care is rendered effectively and in a manner that supports the achievement of appropriate clinical outcomes.
Health Plan Payors
The company enters into contractual agreements with health plan payors in each of its geographies, under which it is financially responsible for its physician partners’ provision of a defined spectrum of healthcare services to its members, in exchange for a defined PMPM fee for each of its members, which is also referred to as global capitation. The healthcare services for which the company is responsible under such arrangements generally include all healthcare costs which CMS considers as Part A and B costs, including hospitalization and facility costs, primary and specialty care provider costs, and ancillary services costs. In certain of its payor arrangements, the company is also financially responsible for Medicare Part D pharmaceutical costs for prescriptions rendered to its members. Through these payor agreements, the company helps to create access for its physician partners to value-based care reimbursement structures through its Total Care Model, which allows its physician partners to focus on the improvement of the quality of care provided to their patients, and to share in the financial surplus created to the extent premiums received exceed the cost of medical care and certain operating costs.
The global capitation fees the company is entitled to receive from its health plan payor contracts are typically based on a defined percentage of the corresponding monthly premium payments which the payor receives from CMS for members attributed to its PCPs and covered under such contracts.
The company has developed local contracts across multiple payors, along with national form contracts with certain key payors, which provide consistency of non-financial contract terms, data sharing, operational processes, and governance structures and support portability of the agilon platform. It typically maintains various contracts with a single national payor to reflect varying economic terms across its geographies. The distinct subsidiary entities of the company and the national payor are the parties to these contracts. Payors with which the company contracts include large national health plans, as well as smaller local and regional insurers.
The agreements with its payors outline the range of healthcare services for which the company is financially responsible and at risk, as well as the services for which it is contracted to perform on the payor’s behalf and the key financial terms. The company's contracts with payors generally have terms of one to three years and are typically renewed for one-year periods unless terminated in accordance with the terms of such agreements. When the company enters into a new payor contract, it is typically required by the payor to contribute risk-bearing capital to the local operating subsidiary. This typically takes the form of letters of credit, surety bonds, or restricted deposits, or the payor may retain a percentage of the capitation payments due under the applicable contract. Risk-bearing capital required by payors varies by payor and geography, but typically averages between 1.0-3.0% of projected annual gross revenue attributable to the corresponding agreement.
The company's payor agreements also typically incorporate various termination rights, which are negotiated based on the scope of the market-facing solutions that the payor has adopted and the duration of the contract. Most of the company’s contracts include cure periods during which time it may attempt to resolve any issues that would trigger a payor’s ability to terminate the contract. However, certain of the company’s contracts are also terminable immediately upon the occurrence of certain events.
The contracts with the company’s payors impose other obligations on it. For example, the company typically agrees that all services provided under its contract and all employees, including affiliated and contracted providers, providing such services will comply with such payor’s policies and procedures. The company also typically agrees to indemnify its payors against certain third-party claims.
CMS ACO Models
The company, in conjunction with some of its physician partners, participated in the ACO REACH Model and MSSP in certain geographies, through 10 approved ACOs. Both the ACO REACH Model and MSSP are voluntary payment model options established by CMS aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in traditional Medicare FFS.
Under both the ACO REACH Model and MSSP, CMS contracts directly with each ACO pursuant to participation agreements, in which such ACO selects risk-sharing and fee payment options. The participation agreements include various terms and conditions each ACO must comply with, including meeting certain operational requirements. In ACO REACH, each of the ACOs selected the Global risk-sharing option, in which the ACO assumes accountability for the total cost of care of the FFS beneficiaries aligned to such ACO. In addition, each of the company’s REACH ACOs selected the Primary Care Capitation Payment, or PCC, option. Both of its MSSP ACOs selected the Enhanced Track, in which the ACO assumes partial accountability for the total cost of care of the aligned FFS beneficiaries.
In ACO REACH, the annual participation agreements between the company's ACOs and CMS expire two years after the Model Performance Period established by CMS, which lasts from April 1, 2021, through December 31, 2026. The ACO may terminate its participation agreement with CMS at any time upon advance written notice. CMS has certain additional termination rights, including in connection with the termination of the ACO REACH Model or non-compliance of the ACO. Additionally, CMS has the right to amend a participation agreement without the consent of the ACO for good cause, or as necessary to comply with applicable federal or state law, regulatory requirements, accreditation standards, or licensing guidelines or rules.
The ACOs operate in partnership pursuant to participating medical group agreements with one or more of the company's physician partners in certain geographies. In ACO REACH, the company's contracted physician partners provide Medicare services to their aligned beneficiaries and bill CMS on a FFS basis for such services. In turn, in accordance with the PCC option, CMS compensates each physician partner for a portion of their billed services based on the applicable rate, and the remaining portion is paid to each ACO on a per Medicare beneficiary per month, or PBPM, basis based on a prospective estimate of such remaining portion of billed services. By 2025, CMS has indicated that it will no longer pay any portion to such physician partners. The company's ACOs participating medical group agreements provide for mutual indemnification rights and have an initial term through December 31, 2026, unless earlier terminated.
All ACO REACH entities continue to be subject to the following requirements in 2025: implementation of a robust health equity plan to identify and better serve underserved communities; 75% control of each ACOs governing body must be held by participating providers or their designated representatives, and each ACO must have at least two beneficiary representatives on its governing board, including at least one Medicare beneficiary and at least one consumer advocate, both of whom must hold voting rights. In addition, as in previous years, the CMS Innovation Center announced that ACO REACH would include technical adjustments to the model’s parameters, including changes to benchmark calculations, and the adjustments will continue into 2025. The overall effect of these changes on the company's ACOs financial performance is expected to be minimal.
Marketing and Distribution
The company's focus is on outreach to existing community-based physician groups to join its platform, establishing and maintaining its local branding, and strategies to support education for its Medicare-eligible members in evaluating their Medicare options.
Through its long-term partnership model, the company partners with leading community-based physician groups in its existing geographies and aims to expand its geographic reach by partnering with community-based physician groups in new geographies across the United States. Its growth strategy is supported by a dedicated business development team that works closely with physician groups, senior management, and key stakeholders to identify potential physician groups to partner with and integrate onto its platform and into its network. Additionally, the company’s network of like-minded physician partners also attracts new physicians to join, as access to cross-market know-how and best practices encourages success in a Total Care Model.
The company's enterprise marketing team develops branding strategies and identities in its geographies and supports the development of communication and branding materials to foster the local growth of its physician partners and their Medicare patient population. This begins with the company's entry into a new geography. It creates a local brand that embodies the value of the Total Care Model for patients and its physician partner’s commitment to quality care. Each geography typically includes the anchor partner’s name and ‘Senior Health Connect’ as part of the naming convention to help reinforce the value of its national network to payors and other industry constituents. To empower patients to make informed decisions about their coverage options, educational opportunities and materials are offered throughout the year.
Intellectual Property
The company has registered ‘agilon health’ and ‘Medicare Quick Thinking’ as trademarks in the United States, which expire in 2028 and 2034, respectively. The company also has filed other trademark applications that are meaningful to its business in the U.S. across various states and local jurisdictions, including for the use of the local brand created within each of its geographies.
The company is the registered holder of a variety of domain names that include ‘agilon’ and similar variations.
The company has proprietary technology and processes that support its operational programs and clinical insights, including its ‘CORE’ technology platform, HCC Manager risk adjustment software application, and Minerva clinical data platform, all of which are proprietary systems that aid in the aggregation and analysis of third-party data it collects. Its technology is continuously refined to support the needs of its platform and partners.
Healthcare and Other Applicable Regulatory Matters
The company's operations and relationships with healthcare plans and providers are subject to extensive and increasing regulation by numerous federal, state, and local government agencies, including the Office of Inspector General, or (OIG), the Department of Justice, or (DOJ), CMS, the Office of Civil Rights, or OCR, and various other authorities.
The company has endeavored to structure its business arrangements with healthcare providers to comply with the Anti-Kickback Statute (AKS) or fit within an AKS safe harbor. It has also endeavored to structure its participation in the ACO REACH Model to comply with waivers of the AKS issued by the Secretary of the U.S. Department of Health and Human Services (HHS).
Section 1876 of the Social Security Act prohibits MA plans and their downstream entities from entering into compensation arrangements with physicians that may directly or indirectly have an effect of reducing or limiting services to individual members. The company has sought to structure its compensation arrangements with physicians to ensure compliance with this requirement.
The company is subject to various federal, state, and local laws and rules regarding the use, security, and disclosure of PHI, personally identifiable information ('PHI'), de-identified data, and other categories of confidential or legally protected data that its businesses may handle. Such laws and rules include, without limitation, the Health Insurance Portability and Accountability Act of 1996, (HIPAA), the Federal Trade Commission Act, 15 U.S.C. § 45, or FTC Act, and the California Consumer Privacy Act, the California Privacy Rights Act, and other applicable state and international privacy and security laws, including those in Brazil and India. Privacy and security laws and regulations often change due to new or amended legislation, regulations, or administrative interpretation.
The company is also subject to a provision of the federal 21st Century Cures Act that is intended to facilitate the appropriate exchange of health information.
The company is subject to numerous statutes that govern competition in its industry, including the Sherman Act, the FTC Act, and the Clayton Act. The Sherman Act outlaws every contract, combination, or conspiracy in restraint of trade, and any monopolization, attempted monopolization, or conspiracy or combination to monopolize.
The U.S. Foreign Corrupt Practices Act, as amended, 15 U.S.C. §§ 78dd-1, et seq. (‘FCPA’) prohibits offering, promising, providing or authorizing others to give anything of value to a foreign government official to obtain or retain business or otherwise secure a business advantage. The FCPA also requires public companies to maintain sufficient internal controls to prevent and detect FCPA violations and to keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company. In addition, agilon is subject to various foreign anticorruption laws in locations in which it operates, including Brazil’s Clean Companies Act and India’s Prevention of Corruption Act, 1988.
History
The company was founded in 2016. It was incorporated in 2017. The company was formerly known as Agilon Health Topco, Inc. and changed its name to agilon health, inc. in March 2021.
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