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What changed in Privia Health Group, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Privia Health Group, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+501 added−493 removedSource: 10-K (2024-02-27) vs 10-K (2023-03-01)

Top changes in Privia Health Group, Inc.'s 2023 10-K

501 paragraphs added · 493 removed · 374 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

93 edited+12 added−9 removed317 unchanged
Biggest changeWe cannot predict how employers, commercial payers or persons buying insurance might 23 Table of Contents react to federal and state healthcare reform legislation, whether already enacted or enacted in the future, nor can we predict what form many of these regulations will take before implementation.
Biggest changeWe cannot predict how employers, commercial payers or persons buying insurance might react to federal and state healthcare reform legislation, whether already enacted or enacted in the future, nor can we predict what form many of these regulations will take before implementation. 23 Table of Contents As part of the Federal government’s omnibus funding legislation passed at the end of 2022, Congress again reduced Medicare’s scheduled reductions to physician reimbursement, which went from a scheduled 8.5% reimbursement cut to a 2% cut in physician reimbursement in 2023 and at least a 1.25% reimbursement cut in 2024.
Our Non-Owned Medical Group Privia Physicians, who owned their own practices prior to joining Privia, continue to own their historical practice entities (“Affiliated Practices”) but those Affiliated Practices no longer furnish healthcare services and Privia Physicians are contractually obligated to furnish all healthcare services through their Medical Group.
Our Owned and Non-Owned Medical Group Privia Physicians, who owned their own practices prior to joining Privia, continue to own their historical practice entities (“Affiliated Practices”) but those Affiliated Practices no longer furnish healthcare services and Privia Physicians are contractually obligated to furnish all healthcare services through their Medical Group.
Single-TIN Medical Group: In each of our markets, we establish a primary care centric single-TIN Medical Group that facilitates payer negotiation, clinical integration and alignment of financial incentives. Our Medical Group governance structure allows Privia Providers to build a clinical culture that adapts to consumers’ and a region’s unique and evolving needs.
Single-TIN Medical Group: In each of our Privia Medical Group markets, we establish a primary care centric single-TIN Medical Group that facilitates payer negotiation, clinical integration and alignment of financial incentives. Our Medical Group governance structure allows Privia Providers to build a clinical culture that adapts to consumers’ and a region’s unique and evolving needs.
We do this through five key elements of our platform: (i) focusing on technology and population health, (ii) establishing a single-TIN Medical Group and governance model in each geographic market, (iii) owning and operating an MSO in each local market, (iv) building ACOs to capture VBC opportunities, and (v) offering a high quality, low cost provider network for purchasers and payers.
For our Privia Medical Group model, we do this through five key elements of our platform: (i) focusing on technology and population health, (ii) establishing a single-TIN Medical Group and governance model in each geographic market, (iii) owning and operating an MSO in each local market, (iv) building ACOs to capture VBC opportunities, and (v) offering a high quality, low cost provider network for purchasers and payers.
ITEM 1. BUSINESS Overview Privia Health Group, Inc. (“Privia Health”, “we”, “our”, the “Company”) is a technology-driven, national physician-enablement company that collaborates with medical groups, health plans, and health systems to optimize physician practices, improve patient experiences, and reward doctors for delivering high-value care in both in-person and virtual care settings (the “Privia Platform”).
ITEM 1. BUSINESS Overview Privia Health Group, Inc. (“Privia Health”, “we”, “our”, or the “Company”) is a technology-driven, national physician-enablement company that collaborates with medical groups, health plans, and health systems to optimize physician practices, improve patient experiences, and reward doctors for delivering high-value care in both in-person and virtual care settings (the “Privia Platform”).
Physician culture begins at selection of high performing, well-respected practices in their communities to join Privia, and continues with on boarding and implementation, continuous education on VBC, physician led PODS and participation at both the market and national executive and clinical leadership levels. Our Impact • Patients: Privia currently serves over 4 million patients across the continuum of care.
Physician culture begins at selection of high performing, well-respected practices in their communities to join Privia, and continues with on boarding and implementation, continuous education on VBC, physician led PODS and participation at both the market and national executive and clinical leadership levels. Our Impact • Patients: Privia currently serves over 4.8 million patients across the continuum of care.
Moving Markets to VBC • Focus on same store growth of patients attributed to value-based contracts in each existing geographic market (e.g. we currently have over 195,000 patients aging into Medicare over the next five years); • Increase our revenue opportunity on a per patient basis by continuing to improve performance and continuing to take increasing levels of risk in existing value-based programs across commercial, MSSP, Medicare Advantage, Medicaid and other existing and emerging direct payer and employer contracting programs; and • Develop new products and programs in partnership with aligned payers that are built with and around the Privia network of physicians and providers.
Moving Markets to VBC • Focus on same store growth of patients attributed to value-based contracts in each existing geographic market (e.g. we currently have over 224,000 patients aging into Medicare over the next five years); • Increase our revenue opportunity on a per patient basis by continuing to improve performance and continuing to take increasing levels of risk in existing value-based programs across commercial, MSSP, Medicare Advantage, Medicaid and other existing and emerging direct payer and employer contracting programs; and • Develop new products and programs in partnership with aligned payers that are built with and around the Privia network of physicians and providers.
Privia’s capital-efficient operations are portable and replicable across geographic markets : We enter a market with an asset-light operating model and employ a disciplined, uniform approach to market structure and development.
Privia’s capital-efficient operations are portable and replicable across geographic markets : We generally enter a market with an asset-light operating model and employ a disciplined, uniform approach to market structure and development.
Serving Our Communities We encourage and actively support our employees who want to have a meaningful and positive impact on their communities and charitable causes by giving their time, talents and resources. In 2022, the Company supported various charitable organizations throughout the year, focused on heart health, food disparities across our geographies, and holiday donations for underserved communities.
Serving Our Communities We encourage and actively support our employees who want to have a meaningful and positive impact on their communities and charitable causes by giving their time, talents and resources. The Company supported various charitable organizations throughout the year, focused on heart health, food disparities across our geographies, and holiday donations for underserved communities.
The Privia Platform is powered by the Privia Technology Solution, which optimizes provider workflow across the full continuum of reimbursement arrangements. The platform supports multiple provider types (55 specialties currently represented), enables scalable operations, and delivers patient centric in-person and virtual access to care, attractive quality metrics, and lower cost of care.
The Privia Platform is powered by the Privia Technology Solution, which optimizes provider workflow across the full continuum of reimbursement arrangements. The platform supports multiple provider types (56 specialties currently represented), enables scalable operations, and delivers patient centric in-person and virtual access to care, attractive quality metrics, and lower cost of care.
In an effort to make a greater impact, will be focusing corporate charitable giving on healthcare organizations and those that benefit historically underserved and underrepresented communities nationally. In 2023, we will continue to maximize our impact and give back to the communities in which we serve.
In an effort to make a greater impact, will be focusing corporate charitable giving on healthcare organizations and those that benefit historically underserved and underrepresented communities nationally. In 2024, we will continue to maximize our impact and give back to the communities in which we serve.
During 2022, several Privia Care Partners’ providers transitioned to our Privia Medical Group model, which demonstrates the flexibility of our operating model and technology platform, as well as the ability to support physicians wherever they are in their transition value-based care.
During 2023, several Privia Care Partners’ providers transitioned to our Privia Medical Group model, which demonstrates the flexibility of our operating model and technology platform, as well as the ability to support physicians wherever they are in their transition value-based care.
We also build in unwind provisions that typically allow us to continue to operate in a market after termination of our underlying relationship with an anchor group. The term of our in-market new provider physician member services agreements and support services agreement is typically three years and automatically renews unless either the practice or we decide not to renew.
We also build in unwind provisions that typically allow us to continue to operate in a market after termination of our underlying relationship with an anchor group. 24 Table of Contents The term of our in-market new provider physician member services agreements and support services agreement is typically three years and automatically renews unless either the practice or we decide not to renew.
Physicians and providers join our single-TIN Medical Group in each geographic market while maintaining significant autonomy and retaining ownership of their legacy practice assets. Physicians and providers are able to join our platform regardless of whether they are independent, affiliated or employed by a larger provider entity, such as a health system, large medical group, or other captive physician models.
Physicians and providers join our single-TIN Medical Group in geographic markets while maintaining significant autonomy and retaining ownership of their legacy practice assets. Physicians and providers are able to join our platform regardless of whether they are independent, affiliated or employed by a larger provider entity, such as a health system, large medical group, or other captive physician models.
In addition, we currently have over 195,000 patients aging into Medicare over the next five years. Our confidence in our business model is based on our belief that the Privia Platform works across all geographies and will allow us to enter many new markets across the country over the coming decades and fundamentally move those markets to VBC.
In addition, we currently have over 224,000 patients aging into Medicare over the next five years. Our confidence in our base business model is based on our belief that the Privia Platform works across all geographies and will allow us to enter many new markets across the country over the coming decades and fundamentally move those markets to VBC.
Similarly, although North Carolina does not prohibit percentage based management fees in physician arrangements specifically by statute, the North Carolina Medical Board has taken the position that a physician cannot share revenue on a percentage basis with a non-physician. Accordingly, we have adopted a flat administrative fee based upon the Privia Physicians’ collections for health care services.
Similarly, although North Carolina does not prohibit percentage based management fees in physician arrangements specifically by statute, the North Carolina Medical Board has taken the position that a physician cannot share revenue on a percentage basis with a non-physician. Accordingly, we have adopted a fixed administrative fee schedule based upon the Privia Physicians’ collections for health care services.
In addition, entities may be subject to additional civil penalties per violation, repayments of up to three times the total payments between the parties to the arrangement and suspension from future participation in Medicare and Medicaid. 18 Table of Contents Court decisions have held that the statute may be violated even if only one purpose of remuneration is to induce referrals.
In addition, entities may be subject to additional civil penalties per violation, repayments of up to three times the total payments between the parties to the arrangement and suspension from future participation in Medicare and Medicaid. Court decisions have held that the statute may be violated even if only one purpose of remuneration is to induce referrals.
Term and Termination The term of our strategic anchor partnership arrangement is typically between five to ten years and automatically renews unless either the anchor partner or we decide not to renew. These agreements further have other custom rights, non-solicitation, exclusivity, 24 Table of Contents termination and post termination provisions terms that are unique to each situation.
Term and Termination The term of our strategic anchor partnership arrangement is typically between five to ten years and automatically renews unless either the anchor partner or we decide not to renew. These agreements further have other custom rights, non-solicitation, exclusivity, termination and post termination provisions terms that are unique to each situation.
Annually, the People Operations team reviews and enhances our policies, 25 Table of Contents processes, and benefits to address a variety of opportunities including, but not limited to, universal parental leave, transgender workplace transition guidance and a gender-neutral dress code. We champion and seek to continually improve the representation of all members of the populations we serve within our workforce.
Annually, the People Operations team reviews and enhances our policies, processes, and benefits to address a variety of opportunities including, but not limited to, universal parental leave, transgender workplace transition guidance and a gender-neutral dress code. We champion and seek to continually improve the representation of all members of the populations we serve within our workforce.
The operations of our Owned Medical Groups, owned ACOs, owned MSOs and Friendly Medical Groups (as defined below) are reflected within our consolidated financial results. Who We Are Privia Health is a technology-driven, national physician-enablement company designed to transform the healthcare delivery experience for physicians and patients, while increasing value to payers.
The operations of our Owned Medical Groups, owned ACOs, owned MSOs and Friendly Medical Groups are reflected within our consolidated financial results. Who We Are Privia Health is a technology-driven, national physician-enablement company designed to transform the healthcare delivery experience for physicians and patients, while increasing value to payers.
The Privia Platform has the following key attributes: • Addresses a Large Total Addressable Market (“TAM”): Targets a large and growing TAM (physician enablement market estimated to be $1.9 trillion, with an ability to serve over 1 million providers in the U.S.). • Purpose-Built to Scale Nationally: Flexible model to enter new markets with multiple types of physician practices (more than 485,000 primary care physicians and more than 535,000 physician specialists in the U.S.). • Powered by the Privia Technology Solution: Comprehensive cloud-based technology-enabled platform designed to optimize provider workflow across the full continuum of reimbursement environments as well as both virtual and in-person care settings (eliminates the need to buy and integrate more than 30 point solutions) . 2 Table of Contents • Establishes Provider Density in Local Markets: Supports a proven expansion strategy resulting in increased relevance with payers and patients (over 950 care center locations across nine states and the District of Columbia, targeting over 130 metropolitan statistical areas (“MPSAs”) located within those geographical markets). • Designed to Transform Care Delivery: Designed to transition care delivery in each market from FFS to VBC and to enhance the care model and ability of Privia Providers to manage higher risk patients (more than $740 million total savings generated across Commercial, Medicare Advantage, Medicare Shared Savings, and Medicaid since 2014; patient NPS of 84). • Demonstrates Physician Value Proposition Consistently: Reduces administrative burden and generally increases provider profitability (95% Privia Provider retention rate over the past five years in addition to a seven-time (2016-2022) HFMA MAP Award recipient for high performance in revenue cycle). • Generates Attractive Financial Results: Has an established scale, diversified revenue mix with no single payer or individual practice concentration, and is profitable and capital efficient with attractive growth ( for the year ended December 31, 2022, approximately $1.36 billion in revenue and more than $2.42 billion total practice collections, high return on invested capital with superior unit economics and high free cash flow conversion ).
The Privia Platform has the following key attributes: • Addresses a Large Total Addressable Market (“TAM”): Targets a large and growing TAM (physician enablement market estimated to be $1.9 trillion, with an ability to serve over 1 million providers in the U.S.). • Purpose-Built to Scale Nationally: Flexible model to enter new markets with multiple types of physician practices (more than 485,000 primary care physicians and more than 535,000 physician specialists in the U.S.). • Powered by the Privia Technology Solution: Comprehensive cloud-based technology-enabled platform designed to optimize provider workflow across the full continuum of reimbursement environments as well as both virtual and in-person care settings (eliminates the need to buy and integrate more than 30 point solutions) . 2 Table of Contents • Establishes Provider Density in Local Markets: Supports a proven expansion strategy resulting in increased relevance with payers and patients (over 1,090 care center locations across 13 states and the District of Columbia, targeting over 160 metropolitan statistical areas (“MPSAs”) located within those geographical markets). • Designed to Transform Care Delivery: Designed to transition care delivery in each market from FFS to VBC and to enhance the care model and ability of Privia Providers to manage higher risk patients (more than $937 million total savings generated across Commercial, Medicare Advantage, Medicare Shared Savings, and Medicaid since 2014; patient NPS of 85). • Demonstrates Physician Value Proposition Consistently: Reduces administrative burden and generally increases provider profitability (96% Privia Provider retention rate over the past five years in addition to a seven-time (2016-2022) HFMA MAP Award recipient for high performance in revenue cycle). • Generates Attractive Financial Results: Has an established scale, diversified revenue mix with no single payer or individual practice concentration, and is profitable and capital efficient with attractive growth ( for the year ended December 31, 2023, approximately $1.66 billion in revenue and more than $2.84 billion total practice collections, high return on invested capital with superior unit economics and high free cash flow conversion ).
We follow a proven process to move providers and markets to value through the following: • High-Performing Medical Groups: Privia forms high performing medical groups in each of its markets. Our structure allows providers to practice medicine as part of a larger clinically and financially integrated medical group while maintaining their legacy ownership structure and affiliations.
We follow a proven process to move providers and markets to value through the following: • High-Performing Medical Groups: Privia forms high performing medical groups in almost all of its markets. Our structure allows providers to practice medicine as part of a larger clinically and financially integrated medical group while maintaining their legacy ownership structure and affiliations.
Should a disaster occur that impacts employees in any of our geographies, the Privia Employee Disaster Relief Fund, originally established in August, 2017, is reopened. Through donations to the relief fund, employees are able to support their colleagues who applied for help. 26 Table of Contents
Should a disaster occur that impacts employees in any of our geographies, the Privia Employee Disaster Relief Fund, originally established in August, 2017, is reopened. Through donations to the relief fund, employees are able to support their colleagues who applied for help.
Our technology-enabled platform enables us to scale operations across over 3,600 implemented providers in multiple markets, enhance performance across multiple payer contracts and deliver superior quality care to patients across the demographic spectrum. Our technology-enabled platform supports providers by leveraging machine learning and artificial intelligence to reduce or automate tasks that needlessly create administrative burden.
Our technology-enabled platform enables us to scale operations across over 4,300 implemented providers in multiple markets, enhance performance across multiple payer contracts and deliver superior quality care to patients across the demographic spectrum. Our technology-enabled platform supports providers by leveraging machine learning and artificial intelligence to reduce or automate tasks that needlessly create administrative burden.
Our analytics team enables our Privia Providers to make more data-driven decisions on financial, 7 Table of Contents operational, and clinical initiatives, resulting in same store practice growth across both FFS and VBC programs. Our clinical operations and informatics team ensures the “doctor’s voice” is present in our technology solutions to drive savings and optimize patient outcomes.
Our analytics team enables our Privia Providers to make more data-driven decisions on financial, operational, and clinical initiatives, resulting in same store practice growth across both FFS and VBC programs. Our clinical operations and informatics team ensures the “doctor’s voice” is present in our technology solutions to drive savings and optimize patient outcomes.
From 2015 to 2022, we have averaged a 29% annual growth rate in providers joining our platform, which has resulted in a total attributed lives growth rate of 30%. Total Attributed Lives in Value-Based Programs Growth We define attributed lives as patients that a payer identifies in any VBC program that a Privia Medical Group is specifically responsible for managing.
From 2015 to 2023, we have averaged a 28% annual growth rate in providers joining our platform, which has resulted in a total attributed lives growth rate of 30%. Total Attributed Lives in Value-Based Programs Growth We define attributed lives as patients that a payer identifies in any VBC program that a Privia Medical Group is specifically responsible for managing.
As a result, the Privia Platform has grown significantly over the past few years, scaling from more than 250 implemented providers in 2014 to over 3,600 implemented providers on the platform today. • Health Systems: Our physician expertise, top talent, and technology helps health systems navigate complex policies, competing priorities, and the changing healthcare landscape.
As a result, the Privia Platform has grown significantly over the past few years, scaling from more than 250 implemented providers in 2014 to over 4,300 implemented providers on the platform today. • Health Systems: Our physician expertise, top talent, and technology helps health systems navigate complex policies, competing priorities, and the changing healthcare landscape.
Capitated revenue is generated through what is typically known as an “at-risk contract.” At-risk capitation refers to a model in which the Company is entitled to fixed monthly fees from the third-party payer in 5 Table of Contents exchange for providing healthcare services to attributed beneficiaries in Medicare Advantage plans.
Capitated revenue is generated through what is typically known as an “at-risk contract.” At-risk capitation refers to a model in which the Company is entitled to fixed monthly fees from the third-party payer in exchange for providing healthcare services to attributed beneficiaries in Medicare Advantage plans.
Virtual visit volume increased rapidly, from approximately 0.3% of all visits prior to the COVID outbreak to more than 45% by the beginning of April 2020. Over 3,300 Privia Providers, representing more than 50 medical specialties, continued delivering care to patients via our proprietary telehealth platform through 2022.
Virtual visit volume increased rapidly, from approximately 0.3% of all visits prior to the COVID outbreak to more than 45% by the beginning of April 2020. Privia Providers representing more than 50 medical specialties continued delivering care to patients via our proprietary telehealth platform through 2023.
In addition to these on-demand services, we also offer Mental Health First Aid certification so our managers can recognize and respond to a person experiencing a mental health emergency. Diversity, Equity and Inclusion Our mission is to develop and retain the best and brightest talent from diverse backgrounds.
In addition to these on-demand services, we also offer Mental Health First Aid certification so our managers can recognize and respond to a person experiencing a mental health emergency. Diversity, Equity and Inclusion 25 Table of Contents Our mission is to develop and retain the best and brightest talent from diverse backgrounds.
Our payer contracting team works with multiple private and government payers across markets to construct and participate in VBC programs. As a seven-time consecutive recipient of the prestigious HFMA MAP Award, our RCM team meets the high standards for financial results and patient satisfaction.
Our payer contracting team works with multiple private and government payers across markets to construct and participate in VBC programs. As a seven-time recipient of the prestigious HFMA MAP Award, our RCM team meets the high standards for financial results and patient 7 Table of Contents satisfaction.
Once we enter a market with an anchor medical group or health system, we establish provider density using an in-market and national sales and marketing team. We accelerate our go-to-market strategy using on the ground market intelligence and a data driven approach to add new practices to our medical group.
Under our standard Privia Medical Group model, we establish provider density using an in-market and national sales and marketing team once we enter a market with an anchor medical group or health system. We accelerate our go-to-market strategy using on the ground market intelligence and a data driven approach to add new practices to our medical group.
Our framework focuses on: (i) expanded access through our more than 950 care center locations or virtually (ii) proactive referral management (iii) chronic care management and behavioral health and (iv) complex care management and palliative care.
Our framework focuses on: (i) expanded access through our more than 1,090 care center locations or virtually (ii) proactive referral management (iii) chronic care management and behavioral health and (iv) complex care management and palliative care.
Our existing provider penetration and market share provides us with significant opportunity to grow in both our existing and new geographies.
Our existing provider relationships and market share provides us with significant opportunity to grow in both our existing and new geographies.
Providers participating in Privia Care Partners will be clinically integrated to allow for joint contracting with payers. We will continue to furnish population health services, reporting and analytics to such providers along with a menu of management services from which providers may choose.
Providers participating in Privia Care Partners are clinically integrated to allow for joint contracting with payers, and we furnish population health services, reporting and analytics to such providers along with a menu of management services from which providers may choose.
We believe our practice model and breadth of services offered to all patient types is unique and we therefore compete with different companies across certain lines of business, including companies with: dedicated brick-and-mortar locations which often target patients covered by Medicare Advantage plans (such as Oak Street Health); dedicated, direct primary care locations which often target a commercial or employer-based patient population (such as One Medical); the ability to organize providers into accountable care organizations, allowing physicians to participate in VBC arrangements (such as Aledade); and the ability to partner with physicians groups to enable better care delivery primarily for seniors (such as Agilon Health).
We believe our practice model and breadth of services offered to all patient types is unique and we therefore compete with different companies across certain lines of business, including companies with: dedicated brick-and-mortar locations which often target patients covered by Medicare Advantage plans; dedicated, direct primary care locations which often target a commercial or employer-based patient population; the ability to organize providers into accountable care organizations, allowing physicians to participate in VBC arrangements; and the ability to partner with physicians groups to enable better care delivery primarily for seniors.
A recently enhanced Employee Assistance Program (“EAP”) also provides support to all employees and their family members who may be experiencing times of crisis. Additionally, we have access to management training on important topics like helping parents return to work or identifying burnout.
Our Employee Assistance Program (“EAP”) provides support to all employees and their family members who may be experiencing times of crisis. Additionally, we have access to management training on important topics like helping parents return to work or identifying burnout.
Privia Connect, our proprietary provider community application, is a resource hub and training platform for all provider needs. • Capabilities: Patient Portal, Patient Satisfaction Surveys, PRQD, Automated Patient Outreach, Care Plans, Care Management Application, Analytics Platform • Outcomes: • Privia conducts approximately 55,000 patient surveys per week • 9% survey response rate • Remediation of any negative feedback commenced within 24 hours • Over 75% email open rate on all emails sent to patients; more than 41,000 gaps closed in 2019 • 96% provider adoption of Privia Connect application; over 5,600 self-service knowledge-based articles; over 230 online courses available 9 Table of Contents Virtual Visit Capabilities Legacy telehealth platforms have traditionally offered virtual visits as an isolated encounter between a patient and a medical provider who do not have an existing relationship.
Privia Connect, our proprietary provider community application, is a resource hub and training platform for all provider needs. • Capabilities: Patient Portal, Patient Satisfaction Surveys, PRQD, Automated Patient Outreach, Care Plans, Care Management Application, Analytics Platform • Outcomes: • Privia conducts approximately 67,000 patient surveys per week • 13% survey response rate • Remediation of any negative feedback commenced within 24 hours • Over 75% email open rate on all emails sent to patients; more than 49,000 gaps closed in 2023 • 96% provider adoption of Privia Connect application; ~3,500 self-service knowledge-based articles; over 620 online courses available 9 Table of Contents Virtual Visit Capabilities Legacy telehealth platforms have traditionally offered virtual visits as an isolated encounter between a patient and a medical provider who do not have an existing relationship.
Because we are paid a percentage of our practices’ revenues, our fees are aligned with our Privia Physician practices’ revenue streams, including both FFS and VBC reimbursements, and particularly the latter as we continue moving into successful long term value-based arrangements. We sign multiyear contracts with our Privia Physicians, creating highly predictable and recurring revenue.
Our fees are aligned with our Privia Physician practices’ revenue streams, including both FFS and VBC reimbursements, and particularly the latter as we continue moving into successful long term value-based arrangements. We sign multiyear contracts with our Privia Physicians, creating highly predictable and recurring revenue.
Our platform allows providers to proactively identify patient attribution, open quality gaps, open coding gaps, assess patient risk level and determine care management eligibility. • Capabilities: Interoperability, Interface Management, Patient Portal, Online Check-In, Kiosks, Huddle Reports, and Chart Preparation • Outcomes: approximately 8 million messages in athenaNet interfaces monthly, ~3,000 file exchanges with payers per month on average, over 65% patient portal adoption rate During Visit: Whether an appointment is in-person at one of our more than 950 care centers or through our leading telehealth platform, our platform ensures a streamlined provider and patient interaction.
Our platform allows providers to proactively identify patient attribution, open quality gaps, open coding gaps, assess patient risk level and determine care management eligibility. • Capabilities: Interoperability, Interface Management, Patient Portal, Online Check-In, Kiosks, Huddle Reports, and Chart Preparation • Outcomes: over 1,000 file exchanges with payers per month on average, over 65% patient portal adoption rate During Visit: Whether an appointment is in-person at one of our more than 1,090 care centers or through our leading telehealth platform, our platform ensures a streamlined provider and patient interaction.
Our tools empower patients to access personal health information and stay connected with their providers by equipping physicians with the tools they need to deliver quality, affordable care when, where, and how patients need it. • Capabilities : Practice Websites with Online Reputation Management (ORM) and Search Engine Optimization (SEO), Online Self-Scheduling and Physician Search, Mobile App, Online Check-in, Appointment Reminders, Secure Patient Messaging, 24/7 Nurse Triage Call Center, and 24/7 On-demand Virtual Visits for immediate or primary care. • Outcomes: approximately 460 practice websites managed with approximately 560,000 monthly unique visits; approximately 2,000 providers on online scheduling; approximately 200,000 mobile app users monthly, over 90% mobile and 80% email collection rates; over 75% email open rate; and over 40% gap campaign closure rate.
Our tools empower patients to access personal health information and stay connected with their providers by equipping physicians with the tools they need to deliver quality, affordable care when, where, and how patients need it. • Capabilities : Practice Websites with Online Reputation Management (ORM) and Search Engine Optimization (SEO), Online Self-Scheduling and Physician Search, Mobile App, Online Check-in, Appointment Reminders, Secure Patient Messaging, 24/7 Nurse Triage Call Center, and 24/7 On-demand Virtual Visits for immediate or primary care. • Outcomes: approximately 570 practice websites managed; approximately 2,000 providers on online scheduling; approximately 390,000 distinct mobile app users annually, over 90% mobile and 80% email collection rates; over 75% email open rate.
That is, even if a business arrangement is for a legitimate purpose, it can still be found to violate the Anti-Kickback Statute if a secondary purpose is to induce referrals.
That is, even if a business arrangement is for a legitimate purpose, it can still be found to violate the Anti-Kickback Statute if a secondary purpose is 18 Table of Contents to induce referrals.
(NASDAQ: PRVA) (“we”, “our”, the “Company”) was incorporated in Delaware in 2016 and became the sole shareholder of PH Group Holdings Corp. (“PH Holdings”) (formerly Brighton Health Services Holding Corporation) effective August 11, 2016. Our Telephone number is (571) 366-8850. Our website is priviahealth.com.
(NASDAQ: PRVA) (“we”, “our”, the “Company”) was incorporated in Delaware in 2016 and became the sole shareholder of PH Group Holdings Corp. (“PH Holdings”) effective August 11, 2016. Our Telephone number is (571) 366-8850. Our website is priviahealth.com.
We further launched our 24/7 Virtual Clinic, providing on demand access to Privia Providers for immediate care if a patient’s primary care provider is not available. As of December 31, 2022, over 900,000 distinct Privia patients have completed over 2.3 million virtual visits.
We further launched our 24/7 Virtual Clinic, providing on demand access to Privia Providers for immediate care if a patient’s primary care provider is not available. As of December 31, 2023, over 1.0 million distinct Privia patients have completed over 3.0 million virtual visits.
We currently operate in nine states and the District of Columbia, with over 3,600 implemented physicians and providers, covering over 4 million patients. We believe we address a market opportunity of more than $1.9 trillion. We understand that healthcare is local and that providers understand the unique needs of their patients and their community.
We operate in 13 states and the District of Columbia, with over 4,300 implemented physicians and providers, covering over 4.8 million patients. We believe we address a market opportunity of more than $1.9 trillion. We understand that healthcare is local and that providers understand the unique needs of their patients and their community.
As of December 31, 2022 we now have more than 3,600 service professionals on our platform who are credentialed and bill for medical services, in both Owned and Non-Owned Medical Groups (as defined below), (“implemented providers”).
As of December 31, 2023 we now have more than 4,300 service professionals on our platform who are credentialed and bill for medical services, in both Owned and Non-Owned Medical Groups (as defined below), (“implemented providers”).
Once a provider signs an agreement to join Privia, there is a five-to-eight month period on average before that provider is implemented on our platform. This time lag between signing and implementing a provider gives us very high visibility into total practice collections over a forward twelve-month period.
Once a provider signs an agreement to join Privia, there is a five-to-eight month period on average before that provider is implemented on our platform. This time lag between signing and implementing a provider gives us very high visibility into total practice collections over a forward twelve-month period. Our implemented providers operate in over 1,090 care center locations.
Privia is also recognized for being in the top 20th percentile of comparable MSSP ACOs nationally in quality measures such as fall risk screening, controlling high blood pressure, and HbA1c control for diabetic patients. 12 Table of Contents We provide the benefit of scale while also offering flexibility with ownership structures .
Privia is also recognized for being in the top 20th percentile of comparable MSSP ACOs nationally in HbA1c control for diabetic patients and in the top 30th percentile for quality measures such as fall risk screening, colorectal cancer screening, and breast cancer screening. 12 Table of Contents We provide the benefit of scale while also offering flexibility with ownership structures .
None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good and we have not experienced any work stoppages or reductions in force. We believe our geographically dispersed employees are a competitive advantage. While certain employees work onsite, the majority of our workforce is remote.
None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good and we have not experienced any work stoppages or reductions in force. We believe our geographically dispersed employees are a competitive advantage.
During the year ended December 31, 2022, approximately 10% of our visit volume was delivered virtually across our markets and specialties and we anticipate that to hold steady post-COVID.
During the year ended December 31, 2023, approximately 10% of our visit volume was delivered virtually across our markets and specialties and we anticipate that to hold steady in the post-COVID 19 PHE landscape.
The Privia Platform is powered by our proprietary end-to-end, cloud-based technology solution that integrates both Privia-developed and third-party applications into a seamless interface and workflow that manages all aspects of our Privia Providers’ provision of healthcare services (the “Privia Technology Solution”).
The Privia Platform is powered by our Privia Technology Solution that integrates both Privia-developed and third-party applications into a seamless interface and workflow that manages all aspects of our Privia Providers’ provision of healthcare services.
In those markets in which state regulations do not allow us to own Medical Groups, the Non-Owned Medical Groups are owned either (a) 100% owned by the Privia Physicians or (b) majority owned, indirectly through a professional entity (“Nominee PC”), by a licensed physician holding a Privia leadership position (such physician leader, a “Nominee Physician” and each such Non-Owned Medical Group owned in this manner, a “Friendly Medical Group”).
In those markets in which state regulations do not allow us to own Medical Groups, the Non-Owned Medical Groups are either (a) 100% owned by the Privia Physicians or (b) majority owned, indirectly through a professional entity (“Nominee PC”), by a licensed physician holding a Privia leadership position (such physician leader, a “Nominee Physician” and each such Non-Owned Medical Group owned in this manner, a “Friendly Medical Group”), and in those markets where we partner with health systems, our health system partner owns a majority interest in the Non-Owned Medical Groups, with Privia Physicians owning a minority interest.
National health expenditures are projected to reach $16 trillion or 32% of GDP by 2030, according to CMS, outpacing both GDP and inflation expectations. Privia’s solutions help rein in healthcare costs, while improving patient experience and provider efficiency.
National health expenditures are projected to reach $7.2 trillion or 19.6% of GDP by 2031, according to CMS, outpacing both GDP and inflation expectations. Privia’s solutions help rein in healthcare costs, while improving patient experience and provider efficiency.
Additionally, we hold the provider contracts, maintain the patient records, set reimbursement rates, and negotiate payer contracts on behalf of the Owned Medical Groups. 3 Table of Contents We principally derive our revenues from the following three sources: (i) FFS-patient care revenue generated from providing healthcare services to patients through Privia Providers of Owned Medical Groups and Friendly Medical Groups, in addition to management and administrative services earned for administrative services provided through to Non-Owned Medical Groups (“FFS-administrative services”), (ii) VBC revenue collected on behalf of our Privia Providers in the form of management and administrative fees, which, at this time, are primarily in the form of capitation revenue, shared savings, which includes quality bonuses, and per member per month (“PMPM”) care management fees, and (iii) other revenue from additional services offered by Privia to its Privia Providers or directly to patients or employers.
We principally derive our revenues from the following three sources: (i) FFS-patient care revenue generated from providing healthcare services to patients through Privia Providers of Owned Medical Groups and Friendly Medical Groups, in addition to management and administrative services earned for administrative services provided to Non-Owned Medical Groups (“FFS-administrative services”), (ii) VBC revenue collected on behalf of our Privia Providers in the form of (a) capitated revenue and (b) management and administrative fees, which, at this time, are primarily in the form of shared savings, which includes quality bonuses, and per member per month (“PMPM”) care management fees, and (iii) other revenue from additional services offered by Privia to its Privia Providers or directly to patients or employers.
Similarly, California courts have found that management fees based on a percentage of revenue do not violate the state’s various fee splitting prohibitions so long as the services are commensurate with the value of management services furnished to the physicians.
Although Texas has a fee splitting prohibition, percentage fees for companies that charge management fees are not expressly forbidden. Similarly, California courts have found that management fees based on a percentage of revenue do not violate the state’s various fee splitting prohibitions so long as the services are commensurate with the value of management services furnished to the physicians.
Our system sends secure messages to patients within the patient portal and messages are sent on behalf of the provider and care team. Our proprietary care team application is integrated within the EMR and patient portal enabling clinical assessments and templates to guide care team’s workflows.
We also use patient-satisfaction feedback to increase practices’ online visibility. Our system sends secure messages to patients within the patient portal and messages are sent on behalf of the provider and care team. Our proprietary care team application is integrated within the EMR and patient portal enabling clinical assessments and templates to guide care team’s workflows.
Rising Healthcare Costs Healthcare spending in the United States reached nearly $4.1 trillion in 2020 or $12,530 per person, according to Centers for Medicare and Medicaid Services (“CMS”), representing approximately 19.7% of U.S. GDP. This is more than any other country in the world and twice the OECD average.
Rising Healthcare Costs Healthcare spending in the United States reached nearly $4.5 trillion in 2022 or $13,493 per person, according to Centers for Medicare and Medicaid Services (“CMS”), representing approximately 17.3% of U.S. GDP. This is more than any other country in the world and twice the OECD average.
Privia currently operates in nine states and the District of Columbia, covering over 130 target MPSAs (including 39 out of the largest 100 MPSAs). We aim to build relevance in each of our markets with all key constituents (physicians, non-physician clinicians, patients, government programs, commercial payers and employers).
Privia operates in 13 states and the District of Columbia, covering over 160 target MPSAs (including 54 out of the largest 100 MPSAs), not including our planned exit from Delaware. We aim to build relevance in each of our markets with all key constituents (physicians, non-physician clinicians, patients, government programs, commercial payers and employers).
As of January 1, 2023, approximately 350 providers with more than 42,000 attributed lives are participating in the Privia Care Partners model.
As of January 1, 2024, approximately 1,350 providers with approximately 200,000 attributed lives are participating in the Privia Care Partners model.
Intellectual Property We believe that our intellectual property rights are important to our business. We rely on a combination of trademarks, service marks, copyrights and trade secrets to protect our proprietary technology and other intellectual property. As of December 31, 2022, we exclusively own six (6) registered trademarks in the United States, including Privia Health.
We rely on a combination of trademarks, service marks, copyrights and trade secrets to protect our proprietary technology and other intellectual property. As of December 31, 2023, we exclusively own six (6) registered trademarks in the United States, including Privia Health. In addition, we have registered domain names for websites that we use or may use in our business.
Under our standard model, Privia Physicians join the Medical Group in their geographic market as an owner of the Medical Group. We own a majority interest in certain of our Medical Groups (each, an “Owned Medical Group”), with Privia Physicians collectively owning a minority interest, and we own no interest in certain other Medical Groups (each, a “Non-Owned Medical Group”).
We own a majority interest in certain of our Medical Groups (each, an “Owned Medical Group”), with Privia Physicians collectively owning a minority interest, and we own no interest in certain other Medical Groups (each, a “Non-Owned Medical Group”).
Further, we anticipate that the greater flexibility and certainty allowed by the final regulations could give rise to more competition for physicians in our various markets and may make competitors more attractive to our physicians with less integrated and operationally cheaper business models. 19 Table of Contents Although the pace of the CMS’ modernization of health care regulations has slowed under the Biden administration, every annual payment update from CMS includes substantive changes in regulations that potentially impact our business, operations and financial condition, Such regulatory changes, changes in law or judicial decisions changing interpretations of existing laws or regulations may cause OIG, CMS or other regulators to change the parameters of rules and regulations that we must follow and thus impact our business, results of operations and financial condition.
Although the pace of the CMS’ modernization of health care regulations has slowed under the Biden administration, every annual payment update from CMS includes substantive changes in regulations that potentially impact our business, operations and financial condition, such regulatory changes, changes in law or judicial decisions changing interpretations of existing laws or regulations may 19 Table of Contents cause OIG, CMS or other regulators to change the parameters of rules and regulations that we must follow and thus impact our business, results of operations and financial condition.
Our existing provider penetration and market share provides us with significant opportunity to grow in both our existing and new geographies. Our growth strategy is centered on capturing whitespace opportunity in existing markets and entering multiple new markets nationally over the next decade.
Our Market Opportunity We believe there are approximately 1,000,000 total physicians and providers in the U.S. Our existing provider relationships provides us with significant opportunity to grow in both our existing and new geographies. Our growth strategy is centered on capturing whitespace opportunity in existing markets and entering multiple new markets nationally over the next decade.
The patients that our providers serve are generally happier as well, as evidenced by a net patient satisfaction score of 84 for 2022. Our pipeline of signed providers who have yet to be implemented, high provider satisfaction and retention, and high patient satisfaction all contribute to more than 90% practice collections predictability on a rolling twelve month forward basis.
Our pipeline of signed providers who have yet to be implemented, high provider satisfaction and retention, and high patient satisfaction all contribute to more than 90% practice collections predictability on a rolling twelve month forward basis.
In addition, we have registered domain names for websites that we use or may use in our business. We seek to control access to and distribution of our proprietary information, including our algorithms, source and object code, designs, and business processes, through security measures and contractual restrictions.
We seek to control access to and distribution of our proprietary information, including our algorithms, source and object code, designs, and business processes, through security measures and contractual restrictions.
This has enabled us to successfully continue to operate through the restrictions imposed by the COVID-19 pandemic. Talent Development and Engagement At Privia Health, we value all of our employees and the exceptional talent they bring to our organization, in order to support our physicians, providers, care center staff, and patients.
Talent Development and Engagement At Privia Health, we value all of our employees and the exceptional talent they bring to our organization, in order to support our physicians, providers, care center staff, and patients.
Given the size of the healthcare industry, we expect additional competition, including potentially from new companies, smaller emerging companies which could introduce new solutions and services, as well as other incumbent players in the healthcare industry or from broader industry who could develop their own offerings and may have substantial resources and relationships to leverage. 15 Table of Contents With the emergence of new technologies and market entrants, we expect to face increasing competition over time, which we believe will generally increase awareness of the need for modernized care models and other innovative solutions.
Given the size of the healthcare industry, we expect additional competition, including potentially from new companies, smaller emerging companies which could introduce new solutions and services, as well as other incumbent players in the healthcare industry or from broader industry who could develop their own offerings and may have substantial resources and relationships to leverage.
Acquisitions and Investments in Full Service Care Models • Our growth playbook also factors in the opportunity to acquire minority or majority ownership of provider groups in existing and new markets; and • In the future, we may also open de-novo, wholly or partially owned, sites of care focused on Medicare Advantage, ACO REACH, and fully capitated contracts in existing and new markets if or when it makes business and economic sense.
Acquisitions and Investments in Full Service Care Models • Our growth playbook also factors in the opportunity to acquire minority or majority ownership of provider groups or clinically integrated networks in existing and new markets and we may also open de-novo, wholly or partially owned, sites of care in existing and new markets.
Our implemented providers operate in over 950 care center locations providing care to over 4 million patients, including approximately 500,000 commercial patients who have selected one of our Medical Groups as their provider of primary care services, as measured at the end of a particular period (“attributed lives”), approximately 117,000 Medicare Advantage attributed lives, 166,000 Medicare Shared Savings / Maryland CPC+ Program attributed lives, and over 72,000 Medicaid attributed lives.
Privia cares for over 4.8 million patients, including approximately 683,000 commercial patients who have selected one of our Medical Groups as their provider of primary care services, as measured at the end of a particular period (“attributed lives”), approximately 155,000 Medicare Advantage attributed lives, 197,000 Medicare Shared Savings / Maryland PCP+ Program attributed lives, and approximately 85,000 Medicaid attributed lives.
We currently operate in nine states and the District of Columbia with over 3,600 implemented providers and more than 950 care center locations, targeting over 130 MPSAs (including 39 out of the largest 100 MPSAs), and an addressable population of over 135 million.
We operate in 13 states and the District of Columbia with over 4,300 implemented providers and more than 1,090 care center locations, targeting over 160 MPSAs (including 54 out of the largest 100 MPSAs), and an addressable population of over 167 million.
As each geographic market evolves in its shift towards VBC, with our experience working in all reimbursement environments, Privia meets providers where they are on their transformative journey and enables them to accelerate and succeed in their transition. In February 2023, the Company announced that its capitated payer arrangements now include approximately 40,600 Medicare Advantage beneficiaries effective January 1, 2023.
As each geographic market evolves in its shift towards VBC, with our experience working in all reimbursement environments, Privia meets providers where they are on their transformative journey and enables them to accelerate and succeed in their transition.
In 2018, our current CEO, Shawn Morris joined and we also launched our Women’s Health specialty vertical. In 2019, we launched our Florida market and in 2020, we launched in Tennessee, started the Privia Pediatrics vertical, and announced a strategic alliance with a prominent children’s hospital in Texas.
In 2019, we launched our Florida market and in 2020, we launched in Tennessee, started the Privia Pediatrics vertical, and announced a strategic alliance with a prominent children’s hospital in Texas. In 2021, we launched Privia Health in the California market and opened our third Medical Group in the State of Texas.
Our approach has been successful across Commercial, Medicare Advantage, MSSP, and Medicaid, from simpler pay-for-performance programs to more complex partial capitation and risk-based programs. In 2022, Privia operated seven ACOs that included more than 1,900 providers caring for over 160,000 Medicare beneficiaries.
Our approach has been successful across Commercial, Medicare Advantage, MSSP, and Medicaid, from simpler pay-for-performance programs to more complex partial capitation and risk-based programs.
Our weighted average outpatient facility spend was 25% lower than the median MSSP ACO and 35% lower than total FFS Medicare. Our weighted average inpatient facility spend was 22% lower than the median MSSP ACO and 28% lower than total FFS Medicare.
Our weighted average emergency room utilization was 20% lower than the median MSSP ACO and 27% lower than total FFS Medicare. Our weighted average outpatient facility spend was 19% lower than the median MSSP ACO and 34% lower than total FFS Medicare.
We have national committees that distribute quality guidance, and we employ Chief Medical Officers who provide clinical oversight and direction over the clinical affairs of the Owned Medical Groups.
We have national committees that distribute quality guidance, and we employ Chief Medical Officers who provide clinical oversight 3 Table of Contents and direction over the clinical affairs of the Owned Medical Groups. Additionally, we hold the provider contracts, maintain the patient records, set reimbursement rates, and negotiate payer contracts on behalf of the Owned Medical Groups.
In aggregate, the Privia ACOs include more than 2,700 providers delivering care to over 198,000 Medicare beneficiaries. Network for Purchasers and Payers: Privia strives to bring all parts of the care delivery system together for an integrated care plan that is designed to lead to improved outcomes at lower cost.
Five of the nine ACOs are participating in the MSSP Enhanced Track in the 2024 MSSP performance year. Network for Purchasers and Payers: Privia strives to bring all parts of the care delivery system together for an integrated care plan that is designed to lead to improved outcomes at lower cost.
In the first two months of 2023, Privia expanded to a total of 10 ACOs serving beneficiaries across the District of Columbia and eleven states, including California, Connecticut, Delaware, Florida, Georgia, Maryland, Montana, North Carolina, Tennessee, Texas, and Virginia. Out of the ten ACOs five are now participating in the MSSP Enhanced Track with potential upside and downside financial risk.
Privia expanded its number of ACOs in 2023, with a total of ten ACOs serving over 198,000 Medicare beneficiaries across the District of Columbia and eleven states, including California, Connecticut, Delaware, Florida, Georgia, Maryland, Montana, North Carolina, Tennessee, Texas, and Virginia.
State statutes and regulations vary from state to state and these laws and regulations in many cases are more restrictive than HIPAA and its implementing rules.
Numerous other federal and state laws and regulations protect the confidentiality, privacy, availability, integrity and security of health information and other types of personal information. State statutes and regulations vary from state to state and these laws and regulations in many cases are more restrictive than HIPAA and its implementing rules.
We recently began offering Privia Care Partners, a more flexible provider affiliation model, to providers who do not desire to join one of our Medical Groups. This model will initially aggregate providers in certain of our existing markets as well as new markets who are looking solely for VBC solutions without the necessity of changing EMR platforms.
In some instances, we also move into and expand in new and existing markets through our Privia Care Partners model. Privia Care Partners offers a more flexible affiliation model to providers who are looking solely for VBC solutions without the necessity of joining one of our Medical Groups and changing EMR platforms.
As of December 31, 2022, our virtual visit platform had logged over 2.3 million visits, conducted by over 3,300 providers, across more than 50 medical specialties. The Privia Technology Solution is the cornerstone to our Medical Groups and ACOs’ ability to succeed across patient demographic cohorts and multiple lines of business (Medicare, Medicare Advantage, MSSP, commercial, etc.).
The Privia Technology Solution is the cornerstone to our Medical Groups and ACOs’ ability to succeed across patient demographic cohorts and multiple lines of business (Medicare, Medicare Advantage, MSSP, commercial, etc.).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary The following is a summary of risks factors that could materially and adversely affect our business, financial conditions and results of operations. • we conduct business in a heavily regulated industry, and if we fail to comply with applicable healthcare laws and government regulations, which may change from time to time, we could incur financial penalties, become excluded from participating in government health care programs, and be required to make significant operational changes or experience adverse publicity, which could harm our business; • our business model could be challenged and, if any challenges are successful, we could incur financial penalties, become excluded from participating in government health care programs, be required to make significant operational changes or experience adverse publicity, which could harm our business; • our actual or perceived failure to adequately protect the privacy and security of our patients’ information, or a breach of our patient’s information could result in financial penalties, require us to incur significant costs to mitigate such, and result in adverse publicity, which could harm our business; • our history of net losses, and our ability to achieve or maintain profitability in an environment of increasing expenses; • evolving government regulations may increase costs or negatively impact our results of operations; • the COVID-19 pandemic may continue to, or other national or global issues may arise that could, have an adverse impact on our business, operations, and the markets and communities in which we operate; • the impact on our business of security breaches, loss of data or other disruptions causing the compromise of sensitive information or preventing us from accessing critical information, put our patient data at risk, and result in financial penalties and require us to incur significant costs to mitigate such, and result in adverse publicity, which could harm our business; • our ability to compete in the healthcare industry; • our dependence on reimbursements by third-party payers and payments by individuals; • our reliance on third-party vendors to host and maintain the Privia Technology Solution; • failure to maintain and renew existing physician practices, Privia Physicians, health system or hospital partners, or commercial payer customers do not continue to renew their contracts with us; • failure to adequately expand our direct sales force and our business development staff; • the viability of our growth strategy and our ability to realize expected results; • the impact on our business of disruptions in our disaster recovery systems or management continuity planning; • our ability to develop and maintain proper and effective internal control over financial reporting; • the potential adverse impact of legal proceedings and litigation; • our ability to maintain and enhance our reputation and brand recognition; • our ability to properly structure and perform under our value-based care programs; • our ability to retain senior management team and other key employees given the current labor market, escalating inflation and salary demands; and • overall business results may suffer from an economic downturn. 27 Table of Contents Risks Related to Government Regulation, Our Business and Our Industry We conduct business in a heavily regulated industry, and if we fail to comply with applicable healthcare laws and government regulations, we could incur financial penalties, become excluded from participating in government health care programs, be required to make significant operational changes or experience adverse publicity, which may adversely affect our business.
Biggest changeRisk Factor Summary The following is a summary of risks factors that could materially and adversely affect our business, financial condition and results of operations. • we conduct business in a heavily regulated industry, which increases our costs and could restrict the conduct of our business, and if we fail to comply with applicable healthcare laws and government regulations, which may change from time to time, we could incur financial penalties, become excluded from participating in government health care programs, be required to make significant operational changes or experience adverse publicity, which may adversely affect our business; • our business model is unique and could be challenged, and if any challenges were to be successful, we could incur financial penalties, affected Medical Groups could be excluded from participation in federal health care programs, we could be required to make significant operational changes, which could negatively impact our financial performance and threaten existing relationships with Privia Physicians, and we could experience negative publicity, which could slow our growth projections; • our revenues and profits could be diminished if we fail to retain our Privia Physicians or fail to recruit new Privia Physicians to affiliate with our Medical Groups; • we are dependent on our relationships with Medical Groups, some of which we do not own, to furnish Privia Providers, to provide professional services to patients on behalf of federal health care programs and commercial payers, and our business could be adversely affected by our Medical Groups failure to maintain relationships with Privia Providers and/or recruit new and replacement Privia Providers; • as more of our revenue transitions from fee-for-service to value-based reimbursement models such transitions may change the nature of our legal and regulatory risks, increase the costs necessary for our Medical Groups to furnish such care, and place a 26 Table of Contents greater portion of our current revenue at risk for costs that we may not always have the ability to control, all of which may have a material adverse effect on our financial condition and operations; • we are dependent on our EMR vendor, athenahealth, Inc., which our Privia Technology Solution is integrated and built upon, and our business could be adversely affected if that relationship were disrupted; • we have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to maintain profitability; • security breaches, loss of data and other disruptions could compromise sensitive information related to our business or our patients, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, operations and our reputation; • the costs of complying with, or our failure to comply with, U.S. and foreign laws related to privacy, data security and data protection could adversely affect our financial condition, operating results and reputation; • the healthcare industry is highly competitive; • thee impact on us of recent healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations; • if reimbursement rates paid by third-party payers are reduced or if such payers otherwise restrain our ability to provide services to their enrollees through narrow network products or otherwise, our business could be harmed; • the success of our business depends on the execution of our growth strategy, which may not prove viable and we may not realize expected results; • we rely on third-party vendors for many of our services, including our Patient Technology Solution, and any failure or interruption in the services, or failure to protect the privacy and security of our information during the provision of such services could expose us to litigation, result in a reduction of our management fees or the imposition of financial penalties on our management services organizations, and hurt our reputation and relationships with our Privia Physicians, our Medical Groups, and their patients; • we may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and results of operations; • our overall business results may suffer from an economic downturn, including the ability to attract and retain qualified personnel at competitive rates; • our use and disclosure of personal information, including health-related information, is subject to the federal Health Insurance Portability and Accountability Act of 1996, as amended from time to time (collectively HIPAA), other federal and state privacy and security regulations, and contractual obligations and our actual or perceived failure to comply with such could result in significant liability or reputation harm and, in turn a material adverse effect on our patient base and operations; • we may not be able to maintain effective internal control over our financial reporting, accurately report our financial results or report them in a timely manner, which may adversely affect investor confidence in us; • negative publicity relating to our business, industry, Medical Groups or Privia Providers may have a material adverse effect on our financial results; and • our operating results and stock price may be volatile, and the market price of our common stock may drop below the price you pay.
These ACOs participate in the MSSP, and are subject to ACO program methodologies and participation requirements that are updated by CMS for each performance year. We and our Medical Groups as ACO participants are expected to comply with such program requirements and are required to report to CMS on performance after the close of the year.
These ACOs participate in the MSSP, and are subject to ACO program methodologies and participation requirements that are updated by CMS for each performance year. We and our Medical Groups as ACO participants are expected to comply with such program requirements and are required to report to CMS on performance after the close of each year.
Because of the sensitivity of the PHI, other personal information and other sensitive information we, our Medical Groups and their legacy practices collect, store, transmit, and otherwise process, the security of our technology-enabled platform and other aspects of our services, including those provided or facilitated by our third-party service providers, are critical to our operations and business strategy.
Because of the sensitivity of the PHI, other personal and/or sensitive information we, our Medical Groups and their legacy practices collect, store, transmit, and otherwise process, the security of our technology-enabled platform and other aspects of our services, including those provided or facilitated by third-party service providers, are critical to our operations and business strategy.
These changes include reductions in reimbursement levels and new or modified demonstration projects authorized pursuant to Medicaid waivers. Some of these changes have decreased, or could decrease, the amount of money our Medical Groups receive for furnishing patient care services relating to these programs.
These changes could include reductions in reimbursement levels and new or modified demonstration projects authorized pursuant to Medicaid waivers. Some of these changes have decreased, or could decrease, the amount of money our Medical Groups receive for furnishing patient care services relating to these programs.
This competition may intensify due to the ongoing consolidation in the healthcare industry, which may increase our costs to pursue such opportunities; • we may not be able to recruit or retain a sufficient number of new Medical Groups or Privia Physicians or patients to execute our growth strategy, and we may incur substantial costs to recruit Privia Physicians or new patients and we may be unable to recruit a sufficient number of Privia Physicians and/or new patients to offset those costs; • we may not be able execute physician services agreements with a sufficient number of Privia Physicians and may fail to integrate new Privia Physicians, their support staff, or our employees into our operating model; 43 Table of Contents • when expanding our business into new markets, we may be required to comply with laws and regulations that may differ from states in which we currently operate and compliance with such laws may slow our expected growth or limit our potential market of available physicians; and • depending upon the nature of the new geographical market, we may not be able to fully implement our Privia operating model in every geographical market that we enter, which could negatively impact our revenues and financial condition.
This competition may intensify due to the ongoing consolidation in the healthcare industry, which may increase our costs to pursue such opportunities; • we may not be able to recruit or retain a sufficient number of new Medical Groups or Privia Physicians or patients to execute our growth strategy, and we may incur substantial costs to recruit Privia Physicians or new patients and we may be unable to recruit a sufficient number of Privia Physicians and/or new patients to offset those costs; 43 Table of Contents • we may not be able execute physician services agreements with a sufficient number of Privia Physicians and may fail to integrate new Privia Physicians, their support staff, or our employees into our operating model; • when expanding our business into new markets, we may be required to comply with laws and regulations that may differ from states in which we currently operate and compliance with such laws may slow our expected growth or limit our potential market of available physicians; and • depending upon the nature of the new geographical market, we may not be able to fully implement our Privia operating model in every geographical market that we enter, which could negatively impact our revenues and financial condition.
Further, a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it; • federal and state civil and criminal false claims laws, including the False Claims Act, or FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal health care programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
Further, a person or entity can be found guilty of violating the AKS without actual knowledge of the statute or specific intent to violate it; • federal and state civil and criminal false claims laws, including the False Claims Act, or FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal health care programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
In such instances, (i) we generally appoint a Privia Physician licensed in the market to the governing board of such Non-Owned Medical Groups but we have little in the way of governance control of the Non-Owned Medical Groups other than through our MSAs; or (ii) alternatively, in certain markets, we have begun to have certain licensed physicians with Privia leadership positions form professional entities to own the majority interest in Friendly Medical Groups.
In such instances, (i) we generally appoint a Privia Physician licensed in the market to the governing board of such Non-Owned Medical Groups but we have little in the way of governance control of the Non-Owned Medical Groups other than through our MSAs; or (ii) alternatively, in certain markets, we have certain licensed physicians with Privia leadership positions form professional entities to own the majority interest in Friendly Medical Groups.
Further, in our deals with certain Medical Groups where we have post-termination non-compete obligations and other restrictive covenants that prohibit our Privia Providers from working with a competitor of ours, there can be no assurance that such non-compete agreements when asserted against a departing Privia Provider will be found enforceable if challenged in certain states.
Further, in our deals with certain Medical Groups where we have post-termination non-compete obligations and other restrictive covenants that prohibit our Privia Providers from working with a competitor of ours, there can be no assurance that such non-compete agreements, when asserted against a departing Privia Provider will be found enforceable if challenged.
Based on a recent final rule issued by CMS in January 2023, although 2011 to 2017 plan years are still subject to audit, overpayments to MA plans that are identified as a result of a Risk Adjustment Data Validation, or RADV, audit will only be subject to extrapolation for plan year 2018 and any subsequent plan year.
Based on a final rule issued by CMS in January 2023, although 2011 to 2017 plan years are still subject to audit, overpayments to MA plans that are identified as a result of a Risk Adjustment Data Validation, or RADV, audit will only be subject to extrapolation for plan year 2018 and any subsequent plan year.
Of particular importance are: • state laws that prohibit general business corporations, such as us, from practicing medicine, controlling Privia Physicians’ medical decisions or engaging in practices such as splitting professional fees with Privia Physicians; • federal and state laws pertaining to non-physician clinicians, such as nurse practitioners and physician assistants, including requirements for physician supervision of such practitioners and reimbursement-related requirements; • the federal physician self-referral law, commonly referred to as the Stark Law, which, subject to certain exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services”, or DHS, such as laboratory and other ancillary health care services if the physician or a member of the physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare or Medicaid for such DHS; • the federal Anti-Kickback Statute, or AKS, which, subject to certain exceptions known as “safe harbors,” prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration, directly or indirectly, overtly or covertly in cash or in kind, to induce, or in return for, either the referral of an individual, or the lease, purchase, order or recommendation of, items or services covered, in whole or in part, by government healthcare programs such as Medicare and Medicaid.
Of particular importance are: • state laws that prohibit general business corporations, such as us, from practicing medicine, controlling Privia Physicians’ medical decisions or engaging in practices such as splitting professional fees with Privia Physicians; 27 Table of Contents • federal and state laws pertaining to non-physician clinicians, such as nurse practitioners and physician assistants, including requirements for physician supervision of such clinicians and reimbursement-related requirements; • the federal physician self-referral law, commonly referred to as the Stark Law, which, subject to certain exceptions, prohibits physicians from referring Medicare patients to an entity for the provision of certain “designated health services”, or DHS, such as laboratory and other ancillary health care services if the physician or a member of the physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare for such DHS; • the federal Anti-Kickback Statute, or AKS, which, subject to certain exceptions known as “safe harbors,” prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration, directly or indirectly, overtly or covertly in cash or in kind, to induce, or in return for, either the referral of an individual, or the lease, purchase, order or recommendation of, items or services covered, in whole or in part, by government healthcare programs such as Medicare and Medicaid.
Our level of indebtedness may place us at a competitive disadvantage to our competitors that are not as highly leveraged. Fluctuations in interest rates can increase borrowing costs. Increases in interest rates may directly impact the amount of interest we are required to pay and reduce earnings accordingly.
Our level of indebtedness may place us at a competitive disadvantage to our competitors that are not as highly leveraged. Fluctuations in interest rates can increase borrowing costs. Such increases in interest rates directly impact the amount of interest we are required to pay and reduce earnings accordingly.
Measures taken to protect our systems, those of our contractors or third-party service providers, or the PHI, other personal information, or other sensitive information we or contractors or third-party service providers process or maintain, may not adequately protect us from the risks associated with the collection, storage, processing and transmission of such sensitive data and information.
Measures taken to protect our systems, those of our contractors or third-party service providers, or the PHI, other personal and/or sensitive information we or contractors or third-party service providers process or maintain, may not adequately protect us from the risks associated with the collection, storage, processing and transmission of such information.
In May 2020, the United States Department of Health and Human Services Office of the National Coordinator for Health Information Technology and CMS issued complementary new rules that are intended to clarify provisions of the 21st Century Cures Act regarding interoperability and information blocking and include, among other things, requirements surrounding information blocking, changes to ONC’s health IT certification program and requirements that CMS regulated payors make relevant claims/care data and provider directory information available through standardized patient access and provider directory application programming interfaces, or APIs, that connect to provider electronic health record systems, or EHRs.
In May 2020, the United States Department of Health and Human Services Office of the National Coordinator for Health Information Technology and CMS issued complementary new rules that are intended to clarify provisions of the 21st Century Cures Act regarding interoperability and information blocking and include, among other things, requirements surrounding information blocking, changes to ONC’s health IT certification program and requirements that CMS regulated payers make relevant claims/care data and provider directory information available through standardized patient access and provider directory application programming interfaces, or APIs, that connect to provider electronic health record systems, or EHRs.
In the event that we are subject to or affected by the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or affected by the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
Despite our implementation of a variety of security measures, our information technology systems could be subject to physical or electronic break-ins, and similar disruptions from unauthorized tampering or any weather-related disruptions where our headquarters is located.
Despite our implementation of a variety of security measures, our information technology systems could be subject to physical or electronic break-ins, and similar disruptions from unauthorized tampering, any weather-related disruptions or fires where our headquarters is located.
If our costs of insurance and claims increase, then our earnings could decline. Our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems.
If our costs of insurance and claims increase, then our earnings could decline. Our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation, data integrity and security of our information technology and other business systems.
A breach of the covenants or restrictions under the Credit Agreement could result in an event of default under such document. Such a default may allow the creditors to accelerate the related debt, which may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
A breach of the covenants or restrictions under the Revolving Credit Agreement could result in an event of default under such document. Such a default may allow the creditors to accelerate the related debt, which may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
We have structured these arrangements, often with the knowledge and support of payers, to either have significant clinical integration or share significant financial risk so as to allow for single signature contracting authority with payers.
We believe we have structured these arrangements, often with the knowledge and support of payers, to either have significant clinical integration or share significant financial risk so as to allow for single signature contracting authority with payers.
Our management team has limited experience managing a public company. Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
These obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
Collections, refunds and payor retractions typically continue to occur for up to three years and longer after our Medical Groups’ services are provided. If our estimates of revenues are materially inaccurate, it could impact the timing and the amount of our revenues recognition and have a material adverse effect on our business, results of operations, financial condition and cash flows.
Collections, refunds and payer retractions typically continue to occur for up to three years and longer after our Medical Groups’ services are provided. If our estimates of revenues are materially inaccurate, it could impact the timing and the amount of our revenues recognition and have a material adverse effect on our business, results of operations, financial condition and cash flows.
If a substantial number of data providers were to withdraw or restrict their data, or if they fail to adhere to our quality control standards, and if we are unable to identify and contract with suitable alternative data suppliers and integrate these data sources into our service offerings, our ability to provide appropriate services to our Privia Physicians, Medical Groups, health system or hospital partners, patients, and commercial payer customers could be materially adversely impacted, which could have a material adverse effect on our business, financial condition and results of operations.
If a substantial number of data providers were to withdraw or restrict their data, or if they fail to adhere to our quality control standards, and if we are unable to identify and contract 49 Table of Contents with suitable alternative data suppliers and integrate these data sources into our service offerings, our ability to provide appropriate services to our Privia Physicians, Medical Groups, health system or hospital partners, patients, and commercial payer customers could be materially adversely impacted, which could have a material adverse effect on our business, financial condition and results of operations.
In addition to a sufficiently large TAM to allow us to affiliate with a sufficiently large number of physicians to make the market economically viable, each market is evaluated to determine if there is sufficient reimbursement variation in fee schedules paid 52 Table of Contents by commercial payers to physicians to create sufficient economic opportunity to allow such physicians to embrace our Privia operating model.
In addition to a sufficiently large TAM to allow us to affiliate with a sufficiently large number of physicians to make the 53 Table of Contents market economically viable, each market is evaluated to determine if there is sufficient reimbursement variation in fee schedules paid by commercial payers to physicians to create sufficient economic opportunity to allow such physicians to embrace our Privia operating model.
Our ability to conduct business in each state is dependent upon that specific state’s treatment of each component of the Privia operating model under such state’s laws, regulations and policies governing the practice of medicine, physician fee splitting prohibitions, state restrictions on the use and disclosure of patient health information and other confidential information among the various components of our operating model, restrictions on the types of provider entities that can take financial risk or the types of 31 Table of Contents financial risks that can be assumed by providers before triggering the state’s insurance laws requiring licensure from the state’s insurance department or agency.
Our ability to conduct business in each state is dependent upon that specific state’s treatment of each component of the Privia operating model under such state’s laws, regulations and policies governing the practice of medicine, physician fee splitting prohibitions, state restrictions on the use and disclosure of patient health information and other confidential information among the various components of our operating model, restrictions on the types of provider entities that can take financial risk or the types of financial risks that can be assumed by providers before triggering the state’s insurance laws requiring licensure from the state’s insurance department or agency.
Any such outcome could damage our reputation, jeopardize our existing business arrangements, and could have a material adverse effect on our business, financial condition and the results of operations. Even a successful defense of an antitrust claim can be very expensive, may distract key management, and can damage our reputation and impair our ability to recruit new physicians.
Even a successful defense of an antitrust claim can be very expensive, may distract key management and impair our ability to recruit new physicians. Any such action or outcome could damage our reputation, jeopardize our existing business arrangements, and could have a material adverse effect on our business, financial condition and the results of operations.
Our ability to compete successfully varies from location to location and depends on a number of factors, including the number of competing medical practices in the local market and the types of services available at those facilities, our local reputation for quality care of patients, the commitment and expertise of our Privia Physicians, our ability to obtain competitive reimbursement rates with commercial payers, our local service offerings and the success of physician sales efforts, the cost of care in each locality, and the physical appearance, location, age and condition of the various locations at which our Privia Physicians furnish patient care services.
Our ability to compete successfully varies from location to location and depends on a number of factors, including the number of competing medical practices in the local market and the types of services available at those facilities, our local reputation for quality 36 Table of Contents care of patients, the commitment and expertise of our Privia Physicians, our ability to obtain competitive reimbursement rates with commercial payers, our local service offerings and the success of physician sales efforts, the cost of care in each locality, and the physical appearance, location, age and condition of the various locations at which our Privia Physicians furnish patient care services.
Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our services or require us to stop serving certain patients or geographies, all of which could negatively impact our geographical expansion and revenue growth.
Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our services or require us to stop serving certain patients or geographies, all of which could negatively impact our geographical expansion and revenue growth.
The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium to the market price, and materially adversely affect the market price and the voting and other rights of the holders of our common stock. 63 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium to the market price, and materially adversely affect the market price and the voting and other rights of the holders of our common stock. 62 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Changes in federal health care programs may reduce the reimbursement we receive and could adversely impact our business and results of operations. As federal healthcare expenditures continue to increase, and state governments continue to face budgetary shortfalls, federal and state governments have made, and continue to make, significant changes in the Medicare and Medicaid programs.
Changes in federal health care programs may reduce the reimbursement we receive and could adversely impact our business and results of operations. As healthcare costs continue to increase, and federal and state governments continue to face budgetary shortfalls, federal and state governments have made, and may continue to make, significant changes in the Medicare and Medicaid programs.
Additionally, the Center for Medicare and Medicaid Innovation continues to test an array of value-based alternative payment models, including the recent replacement of the Global and Professional Direct Contracting, or GPDC, Model with the ACO Reach program as of January 1, 2023, through which providers can negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
Additionally, the Center for Medicare and Medicaid Innovation (or more recently the CMS Innovation Center) continues to test an array of value-based alternative payment models, including the recent replacement of the Global and Professional Direct Contracting, or GPDC, Model with the ACO Reach program as of January 1, 2023, through which providers can negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
For example, of the jurisdictions in which we currently operate, Virginia, Texas, Florida and the District of Columbia are not members of the Interstate Medical Licensure Compact, which streamlines the process by which physicians licensed in one state are able to practice in other participating states.
For example, of the jurisdictions in which we currently operate, Virginia, Texas, Florida, North Carolina and the District of Columbia are not members of the Interstate Medical Licensure Compact, which streamlines the process by which physicians licensed in one state are able to practice in other participating states.
A substantial portion of our revenue is driven by our medical practices in Virginia, Maryland, the District of Columbia, Texas, Tennessee, Florida, Georgia, and California. As a result, our exposure to many of the risks described herein are not mitigated by a diversification of geographic focus.
A substantial portion of our revenue is driven by our medical practices in Virginia, Maryland, the District of Columbia, Texas, Florida, and Georgia. As a result, our exposure to many of the risks described herein are not mitigated by a diversification of geographic focus.
We rely, in part, on non-disclosure, confidentiality and assignment-of-invention agreements with our employees, independent contractors, consultants, customers and other companies with which we conduct business to protect our trade secrets, know-how and other intellectual property and internally developed information.
We rely, in part, on non-disclosure, confidentiality and assignment-of-invention agreements with our employees, independent contractors, and consultants with which we conduct business to protect our trade secrets, know-how and other intellectual property and internally developed information.
Future sales and issuances of our outstanding shares could cause the market price of our common stock to drop significantly, even if our business is doing well. Sales of a substantial number of shares of our common stock in the public market could occur at any time.
Future sales and issuances of our outstanding shares could cause the market price of our common stock to drop significantly, even if our business is doing well. Sales of a substantial number of shares of our common stock in the public market have occurred and could occur at any time.
In addition, shares of our common stock issued or issuable under our equity incentive plans to employees and directors have been registered on a Form S-8 registration statement and may be freely sold in the public market upon issuance, except for shares held by affiliates who have certain restrictions on their ability to sell.
In addition, shares of our common stock issued or issuable under our equity incentive plans to employees and directors have been registered on a Form S-8 registration statement and may be 61 Table of Contents freely sold in the public market upon issuance, except for shares held by affiliates who have certain restrictions on their ability to sell.
Reimbursement rates are generally higher for VBC than they are under traditional FFS arrangements, and 39 Table of Contents VBC provides us with an opportunity to capture any additional surplus we create by investing in population health services to better manage a particular patient’s care, which, in turn, should reduce the total cost of care.
Reimbursement rates are generally higher for VBC than they are under traditional FFS arrangements, and VBC provides us with an opportunity to capture any additional surplus we create by investing in population health services to better manage a particular patient’s care, which, in turn, should reduce the total cost of care.
Additionally, in recent years, individuals and groups have begun acquiring intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from companies like ours. We may also face allegations that our employees have misappropriated the intellectual property or proprietary rights of their former employers or other third parties.
Additionally, in recent years, individuals and groups have begun acquiring intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from companies like ours. We may also face allegations that our employees have 48 Table of Contents misappropriated the intellectual property or proprietary rights of their former employers or other third parties.
Such Privia Physicians may not renew their contracts, seek to terminate their relationship with us or renew on less favorable terms. Moreover, negative publicity related to our Privia Physician relationships, regardless of its accuracy, may further damage our business by affecting our reputation or ability to compete for new Privia Physicians in the market.
Such Privia Physicians may not renew their contracts, seek to terminate their relationship with us or renew on less favorable terms. Moreover, negative publicity related to our Privia Physician relationships, regardless of its accuracy, may further damage our business 41 Table of Contents by affecting our reputation or ability to compete for new Privia Physicians in the market.
If downstream risk- 32 Table of Contents sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payer as the party to such a downstream risk-sharing arrangement. Such oversight is accomplished via contract and may include the imposition of reserve requirements, as well as reporting obligations.
If downstream risk-sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payer as the party to such a downstream risk-sharing arrangement. Such oversight is accomplished via contract and may include the imposition of reserve requirements, as well as reporting obligations.
In other states, such as California, Texas and Tennessee, we are prohibited from having any ownership interest or governance control in our Medical Groups and these are structured as Non-Owned Medical Groups.
In other states, such as California, Texas, North Carolina and Tennessee, we are prohibited from having any ownership interest or governance control in our Medical Groups and these are structured as Non-Owned Medical Groups.
If reimbursement rates paid by commercial payers are reduced or if commercial payers otherwise restrain our ability to provide services to their enrollees through narrow network products or otherwise, our business could be harmed.
If reimbursement rates paid by third-party payers are reduced or if commercial payers otherwise restrain our ability to provide services to their enrollees through narrow network products or otherwise, our business could be harmed.
When permitted under state law, these are structured as Owned Medical Groups and we own a majority interest in all of our Owned Medical Groups but, even in such markets, we and our MSOs are still prohibited from controlling any aspect of the practice of medicine, including, without limitation, decisions regarding professional medical judgment, diagnosis and treatment of patients and supervisory responsibility for all licensed non-physician clinicians, unlicensed individuals to whom the physician delegates nondiscretionary duties and any other individual providing any service that could constitute the practice of medicine.
When permitted 31 Table of Contents under state law, these may be structured as Owned Medical Groups and we own a majority interest in all of our Owned Medical Groups but, even in such markets, we and our MSOs are still prohibited from controlling any aspect of the practice of medicine, including, without limitation, decisions regarding professional medical judgment, diagnosis and treatment of patients and supervisory responsibility for all licensed non-physician clinicians, unlicensed individuals to whom the physician delegates nondiscretionary duties and any other individual providing any service that could constitute the practice of medicine.
Commercial payers often use plan structures, such as narrow networks or tiered networks, to encourage or require members to use in-network providers. In-network providers typically provide services through commercial payers for a negotiated lower rate or other less 38 Table of Contents favorable terms and achieve their margins by increased volume of services.
Commercial payers often use plan structures, such as narrow networks or tiered networks, to encourage or require members to use in-network providers. In-network providers typically provide services through commercial payers for a negotiated lower rate or other less favorable terms and achieve their margins by increased volume of services.
In addition, if our data suppliers choose to discontinue support of the licensed technology in the future, we might not be able to modify or adapt our own solutions. 49 Table of Contents Our use of “open source” software could adversely affect our ability to offer our services and subject us to possible litigation.
In addition, if our data suppliers choose to discontinue support of the licensed technology in the future, we might not be able to modify or adapt our own solutions. Our use of “open source” software could adversely affect our ability to offer our services and subject us to possible litigation.
If a jurisdiction’s prohibition on the corporate practice of medicine is interpreted in a manner that is inconsistent with our practices, we could be required to restructure or terminate our arrangements with our Non-Owned Medical Groups and Friendly Medical Groups and could result in additional penalties, damages and fines.
If a jurisdiction’s prohibition on the corporate practice of medicine is interpreted in a manner that is inconsistent with our structure or operations, we could be required to restructure or terminate our arrangements with our Non-Owned Medical Groups and Friendly Medical Groups and could result in additional penalties, damages and fines.
Many states in which these new value-based structures are being developed also lack regulatory guidance or a well-developed body of law for these new models and approaches, or may not have updated their laws or enacted legislation yet to reflect the new healthcare reform models.
Many states in which these new value-based structures are being developed also lack regulatory guidance or a well-developed body of law for these new models and approaches, or may not have updated their laws or enacted legislation yet to reflect such new healthcare models.
The requirements for enrollment, licensure, certification, and accreditation may include notification or approval in the event of a transfer or change of ownership or certain other changes. Other agencies or commercial payers with which we have contracts may 44 Table of Contents have similar requirements, and some of these processes may be complex.
The requirements for enrollment, licensure, certification, and accreditation may include notification or approval in the event of a transfer or change of ownership or certain other changes. Other agencies or commercial payers with which we have contracts may have similar requirements, and some of these processes may be complex.
In 48 Table of Contents addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
If our Medical Groups, Privia Physicians, health system or hospital partners, ACO participants and payer customers fail to renew their contracts, renew their contracts upon less favorable terms or at lower fee levels or fail to utilize additional products and services obtained from us, or if we fail to renegotiate contracts with our counterparties on favorable terms or at all, our revenue may decline or our future revenue growth may be constrained.
If our Medical Groups, Privia Physicians, health system or hospital partners, ACO participants and payer customers fail to renew their contracts, renew their contracts upon less favorable terms or at lower fee levels or fail to utilize additional products and services obtained from us, or if we fail to renegotiate contracts with our counterparties on favorable terms or at all, our revenue may decline or 42 Table of Contents our future revenue growth may be constrained.
Increasing regulatory and legislative changes will place additional demands on our information technology infrastructure that could have a direct impact on resources available for other projects tied to our strategic initiatives. In addition, recent trends toward greater patient engagement in health care require new and enhanced technologies, including more sophisticated applications for mobile devices.
Increasing regulatory and legislative changes will place additional demands on our information technology infrastructure that could have a direct impact on resources available for other projects tied to our strategic initiatives. In addition, 47 Table of Contents recent trends toward greater patient engagement in health care require new and enhanced technologies, including more sophisticated applications for mobile devices.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it; • civil monetary penalties laws, which impose civil fines for, among other things, the offering or transferring of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; • federal and state laws that prohibit our Medical Groups from billing and receiving payment from Medicare and Medicaid for services unless the services furnished by our Privia Providers are medically necessary, adequately and accurately documented, timely submitted and billed using codes that accurately reflect the type and level of services rendered; • Medicare and Medicaid regulations, manual provisions, local coverage determinations, national coverage determinations and agency guidance that impose complex and extensive requirements upon healthcare providers, including our Medical Groups and Privia Providers; • state laws that prohibit physicians from splitting professional fees with non-physicians, whether individuals or entities, or place restrictions on how such professional fees may be split with non-physicians, including, for instance, prohibitions on percentage-based management fees; • federal and state laws that regulate healthcare-related debt collection practices, pricing transparency and protecting patients from surprise billings; • a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose, or refund known overpayments; • federal and state antitrust laws that prohibit or limit exclusive contracting relationships with healthcare providers, prohibit or limit the sharing of cost and pricing data, prohibit competitors from taking collective action to set commercial payer reimbursement rates, and determine when a joint venture or health care network is sufficiently integrated, by either sharing substantial financial risk or substantial clinical integration, to jointly contract with commercial payers; • federal and state laws and policies related to healthcare providers’ licensure, certification, accreditation, Medicare and Medicaid program enrollment and reassignment of benefits; • federal and state laws and policies related to the prescribing, administrating and dispensing of pharmaceuticals and controlled substances; • state laws related to the advertising and marketing of services by healthcare providers, including Medical Group and Privia Physicians; • federal laws that impose civil administrative sanctions for, among other violations, inappropriate billing of services to government health care programs or employing or contracting with individuals who are excluded from participation in government health care programs; • laws and regulations limiting the use of funds in health savings accounts for individuals with high deductible health plans; • federal and state laws regarding such telemedicine services, including necessary technological standards to deliver such services, coverage restrictions associated with such services, and the amount of reimbursement for such services; • state laws pertaining to anti-kickback, fee splitting, self-referral and false claims, some of which are not consistent with comparable federal laws and regulations, including, for example, not being limited in scope to relationships involving government health care programs; • federal and state laws pertaining to the collection, use, retention, protection, security, disclosure, transfer and processing of personal data; and 29 Table of Contents • state insurance laws governing what healthcare entities may bear financial risk and the allowable types of financial risks, including direct primary care programs, provider-sponsored organizations, ACOs, independent practice associations, and provider capitation.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it; • civil monetary penalties laws, which impose civil fines for, among other things, the offering or transferring of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; • federal and state laws that prohibit our Medical Groups from billing and receiving payment from Medicare and Medicaid for services unless the services furnished by our Privia Providers are medically necessary, adequately and accurately documented, timely submitted and billed using codes that accurately reflect the type and level of services rendered; 28 Table of Contents • Medicare and Medicaid regulations, manual provisions, local coverage determinations, national coverage determinations and agency guidance that impose complex and extensive requirements upon healthcare providers, including our Medical Groups and Privia Providers; • state laws that prohibit physicians from splitting professional fees with non-physicians, whether individuals or entities, or place restrictions on how such professional fees may be split with non-physicians, including, for instance, prohibitions on percentage-based management fees; • federal and state laws that regulate healthcare-related debt collection practices, pricing transparency and protecting patients from surprise billings; • a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose, or refund known overpayments; • federal and state antitrust laws that prohibit or limit exclusive contracting relationships with healthcare providers, prohibit or limit the sharing of cost and pricing data, prohibit competitors from taking collective action to set commercial payer reimbursement rates, and determine when a joint venture or health care network is sufficiently integrated, by either sharing substantial financial risk or substantial clinical integration, to jointly contract with commercial payers; • federal and state laws and policies related to healthcare providers’ licensure, certification, accreditation, Medicare and Medicaid program enrollment and reassignment of benefits; • federal and state laws and policies related to the prescribing, administrating and dispensing of pharmaceuticals and controlled substances; • state laws related to the advertising and marketing of services by healthcare providers, including Medical Group and Privia Physicians; • federal laws that impose civil administrative sanctions for, among other violations, inappropriate billing of services to federal health care programs or employing or contracting with individuals who are excluded from participation in federal health care programs; • laws and regulations limiting the use of funds in health savings accounts for individuals with high deductible health plans; • federal and state laws regarding the provision of telemedicine services, including necessary technological standards to deliver such services, coverage restrictions associated with such services, and the amount of reimbursement for such services; • state laws pertaining to anti-kickback, fee splitting, self-referral and false claims, some of which are not consistent with comparable federal laws and regulations, including, for example, not being limited in scope to relationships involving government health care programs; • federal and state laws pertaining to the collection, use, retention, protection, security, disclosure, transfer and processing of personal information or health information, including but not limited to HIPAA, HITECH, and the American Recovery and Reinvestment Act of 2009, as well as similar or more stringent state law; • state insurance laws governing what healthcare entities may bear financial risk and the allowable types of financial risks, including direct primary care programs, provider-sponsored organizations, ACOs, independent practice associations, and provider capitation; and • interoperability and prohibitive provisions against information blocking of the 21st Century Cures Act.
Failure to comply with these laws could result in denials of reimbursement for our 30 Table of Contents Privia Providers’ services (to the extent such services are billed), recoupments of prior payments, professional discipline for our Privia Providers and/or civil or criminal penalties against our Medical Groups.
Failure to comply with these laws could result in denials of reimbursement for our Privia Providers’ services (to the extent such services are billed), recoupments of prior payments, professional discipline for our Privia Providers and/or civil or criminal penalties against our Medical Groups.
Our information technology systems and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from physical or electronic break-ins, computer viruses, and malware (e.g., ransomware), malicious code, natural disasters, terrorism, war, telecommunication, attacks by hackers, and employee or contractor error, negligence or malfeasance, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
Our information technology systems and those of our third-parties, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from physical or electronic break-ins, computer viruses, and malware (e.g., ransomware), malicious code, natural disasters, terrorism, war, telecommunication, attacks by hackers, and employee or contractor error, negligence or malfeasance, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside or outside our organization.
In addition to potential changes to the terms of our existing VBC arrangements by the payers, our VBC revenue is also at risk based upon annual fluctuations in payment rates for certain VBC arrangements such as Medicare Advantage payment rates, changes in patient attribution, and changes in plan design by payers.
Reimbursement uncertainty also impacts our VBC revenue. In addition to potential changes to the terms of our existing VBC arrangements by the payers, our VBC revenue is also at risk based upon annual fluctuations in payment rates for certain VBC arrangements such as Medicare Advantage payment rates, changes in patient attribution, and changes in plan design by payers.
As of December 31, 2022, practices on the Privia Platform were converted from approximately 53 different EMR vendors. If we face unanticipated implementation difficulties or Privia Physicians and their support staff are unable to smoothly transition to our operating model, we risk delaying the go live date of our new physician practices, which could negatively impact our revenue.
As of December 31, 2023, practices on the Privia Platform were converted from approximately 50 different EMR vendors. If we face unanticipated implementation difficulties or Privia Physicians and their support staff are unable to smoothly transition to our operating model, we risk delaying the go live date of our new physician practices, which could negatively impact our revenue.
We take certain administrative, physical and technological safeguards to address these risks, such as evaluating such service providers before granting access to PHI or other personal information, and by requiring contractors and other third-party service providers who handle this PHI, other personal information and other sensitive information for us to enter into agreements that contractually obligate them to use reasonable efforts to safeguard such PHI, other personal information, and other sensitive information.
We take certain administrative, physical and technological safeguards to address these risks, such as evaluating such service providers before granting access to PHI or other personal information, and by requiring contractors and other third-party service 34 Table of Contents providers who handle this PHI, other personal and/or sensitive information for us to enter into agreements that contractually obligate them to use reasonable efforts to safeguard such PHI, other personal and/or sensitive information.
Competing medical practices may also offer larger facilities or different programs or services than we do, which, combined with the foregoing factors, may result in our competitors being more attractive to our current patients, potential patients and referral sources.
Competing medical practices may also offer larger facilities or different programs or services than we do including through complementary services, which, combined with the foregoing factors, may result in our competitors being more attractive to our current patients, potential patients and referral sources.
The ability to conduct telehealth services in a particular state is directly dependent upon the applicable laws governing remote healthcare, the practice of medicine and healthcare delivery in general in such jurisdiction, which are subject to new laws and regulations, and changing interpretations of existing laws and regulations.
The ability to conduct telehealth services in a particular state is directly dependent upon the applicable laws governing remote healthcare, the practice of medicine and healthcare delivery in general in such jurisdiction, which may be subject to new laws and regulations, and changing interpretations of existing laws and regulations.
The impact on us of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations. Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy.
The impact on us of any new healthcare legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations. Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy.
Determining applicable primary and secondary coverage for our patients, together with the changes in patient coverage that occur each month, requires complex, resource-intensive processes. Errors in determining the correct coordination of benefits may result in refunds to payers.
Determining applicable primary and secondary coverage for our patients, together with the changes in patient coverage that occur each month, requires complex, resource-intensive processes. Errors in determining the correct coordination of 39 Table of Contents benefits may result in refunds to payers.
We depend on our senior management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business. Our success depends largely upon the continued services of our senior management team and other key employees.
We depend on our senior management team and other key employees, and the loss of one or more of these employees or an inability to attract, recruit, motivate, develop and retain other highly skilled employees could harm our business. Our success depends largely upon the continued services of our senior management team and other key employees.
While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur, it could compromise our 35 Table of Contents networks or data security processes and sensitive information could be made inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur, it could compromise our networks or data security processes and sensitive information could be made inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
Our operating model includes Owned Medical Groups, Non-Owned Medical Groups, MSOs that furnish management services on behalf of our Medical Groups and ACOs, a technology-enabled platform that overlays our Privia Providers’ EMR, and, in most markets, a separate legal entity that serves as an ACO under the MSSP as established by the Patient Protection and Affordable Care Act and a provider network vehicle for VBC on behalf of our Medical Groups as well as, in certain markets, independent, non-Privia Providers.
Our operating model includes Owned Medical Groups, Non-Owned Medical Groups, MSOs that furnish management services on behalf of our Medical Groups and ACOs, a technology-enabled platform that overlays our Privia Providers’ EMR, and, in most markets, a separate legal entity that serves as an ACO under the MSSP as established by the Patient Protection and Affordable Care Act and a provider network vehicle for VBC, such as an independent physician association, or IPA, on behalf of our Medical Groups as well as, in certain markets, independent, non-Privia Providers.
Each of our revenue streams ultimately depends on reimbursements by third-party payers, as well as payments by individuals, which could lead to delays and uncertainties in the reimbursement process. The reimbursement process is complex and can involve lengthy delays.
Each of our revenue streams ultimately depends on reimbursements by third-party payers, as well as payments by individuals, which could lead to delays and uncertainties in the reimbursement process, and periodic changes to our reimbursement rates. The reimbursement process is complex and can involve lengthy delays.
In addition, third-party payers may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for coverage, certain amounts are not reimbursable under plan coverage or were for services provided that were not medically necessary, 36 Table of Contents not adequately documented or after submitting additional supporting documentation requested by the payer.
In addition, third-party payers may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for coverage, certain amounts are not reimbursable under plan coverage or were for services provided that were not medically necessary, not adequately documented or after submitting additional supporting documentation requested by the payer.
All of these changes could adversely affect our financial conditions and results of operations. Our revenues and profits could be diminished if we fail to retain our Privia Physicians or fail to recruit new Privia Physicians to affiliate with our Medical Groups.
All of these changes could adversely affect our financial conditions and results of operations. Our revenues and profits could be diminished if we fail to retain our health system partners or our Privia Physicians or if we fail to recruit new Privia Physicians to affiliate with our Medical Groups.
California residents also have the right to request that a business delete their personal information unless it is necessary for the business to maintain for certain purposes, to direct a business to correct errors in their personal information, and to restrict the use and disclosure of sensitive information.
California residents have the right to request that a business delete their personal information unless it is necessary for the business to maintain for certain purposes, to direct a business to correct errors in their personal information, and to limit the use and disclosure of sensitive information.
If we fail to comply with these and other requirements to maintain our enrollment, Medicare and Medicaid could deny continued future enrollment or revoke our enrollment and billing privileges. Further, Medicare now subjects new locations at which physicians are furnishing services to Medicare beneficiaries to a location site visit to confirm enrollment information.
If we fail to comply with these and other requirements to maintain our enrollment, Medicare and Medicaid could deny continued future enrollment or revoke 44 Table of Contents our enrollment and billing privileges. Further, Medicare now subjects new locations at which physicians are furnishing services to Medicare beneficiaries to a location site visit to confirm enrollment information.
The healthcare industry is subject to changing political, regulatory and other influences. By way of example, the ACA, which was enacted in 2010, made major changes in how healthcare is delivered and reimbursed, and it increased access to health insurance benefits to the uninsured and underinsured populations of the United States.
The healthcare industry is subject to ongoing changing political, regulatory and other influences. By way of example, the ACA, which was enacted in 2010, made major changes in how healthcare is delivered and reimbursed, and it increased access to health insurance benefits to the 37 Table of Contents uninsured and underinsured populations of the United States.
We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to maintain profitability. We reported net (loss) income of $(8.6) million, $(188.2) million, and $31.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to maintain profitability. We reported net income (loss) of $23.1 million, $(8.6) million, and $(188.2) million for the years ended December 31, 2023, 2022 and 2021, respectively.
These budget deficits at federal, state and local government entities have decreased, and may continue to decrease, spending for federal health care programs, 50 Table of Contents including Medicare, Medicaid and similar programs, which represent significant payer sources for our Medical Groups.
These budget deficits at federal, state and local government entities have decreased, and may continue to decrease, spending for federal health care programs, including Medicare, Medicaid and similar programs, which represent significant payer sources for our Medical Groups.
This complex, dynamic legal landscape regarding privacy, data protection, and information security creates significant compliance issues for us and potentially restricts our ability to collect, use and disclose data and exposes us to additional expense, adverse publicity and liability.
This complex, dynamic legal landscape regarding privacy, data protection, and information security 55 Table of Contents creates significant compliance issues for us and potentially restricts our ability to collect, use and disclose data and exposes us to additional expense, adverse publicity and liability.
Any legislative, regulatory or industry changes that 37 Table of Contents slows or limits that movement or otherwise reduces the non-facility-based healthcare spending could most likely be detrimental to our business, revenue, financial projections and growth.
Any legislative, regulatory or industry changes that slows or limits that movement or otherwise reduces the non-facility-based healthcare spending could most likely be detrimental to our business, revenue, financial projections and growth.
This market volatility, as well as general economic, market 61 Table of Contents or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance.
This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance.
These service interruptions could also cause our platform to be unavailable to our Medical Groups, Privia Providers, patients and network members, and impair our ability to deliver solutions and services and to manage our relationships with new and existing 45 Table of Contents Medical Groups, Privia Providers, patients and network members.
These service interruptions could also cause our platform to be unavailable to our Medical Groups, Privia Providers, patients and network members, and impair our ability to deliver solutions and services and to manage our relationships with new and existing Medical Groups, Privia Providers, patients and network members.
In addition, the uncertainty and fiscal pressures placed upon federal health care programs as a result of, among other things, deterioration in general economic conditions, reduced tax revenue and the funding requirements from the federal healthcare reform legislation, may affect the availability of taxpayer funds for such federal health care program.
In addition, the uncertainty and fiscal pressures placed upon federal health care programs as a result of, among other things, deterioration in general economic conditions, reduced tax revenue and the funding requirements, may affect the availability of taxpayer funds for such federal health care programs.
The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.” As a public company, we incur legal, accounting and other expenses that we did not previously incur as a privately held company.
Risks Related to Our Common Stock The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly since we are no longer an “emerging growth company.” As a public company, we incur legal, accounting and other expenses that we did not previously incur as a privately held company.
Our accumulated deficit is $(216.7) million and $(208.1) million as of December 31, 2022 and 2021, respectively. We expect our aggregate costs will increase substantially in the foreseeable future and we may experience losses as we expect to invest heavily in increasing and expanding our operations, hiring additional employees and operating as a public company.
Our accumulated deficit is $(193.6) million and $(216.7) million as of December 31, 2023 and 2022, respectively. We expect our aggregate costs will increase substantially in the foreseeable future and we may experience losses as we expect to invest heavily in increasing and expanding our operations, hiring additional employees and operating as a public company.
The Medicare shared savings program allows for providers, physicians and other designated health care professionals and suppliers to form ACOs and voluntarily work together to invest in infrastructure and redesign delivery processes to give coordinated high quality care to their Medicare patients, avoid unnecessary duplication of services and prevent medical errors.
The MSSP allows for providers, physicians and other designated health care professionals and suppliers to form, and/or participate in, ACOs and voluntarily work together to invest in infrastructure and redesign delivery processes to give coordinated high quality care to their Medicare patients, avoid unnecessary duplication of services and prevent medical errors.
In recent years, government 46 Table of Contents oversight and law enforcement have become increasingly active and aggressive in investigating and taking legal action against potential fraud and abuse especially in the health care industry.
In recent years, government oversight and law enforcement have become increasingly active and aggressive in investigating and taking legal action against potential fraud and abuse especially in the health care industry.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our headquarters are located in Arlington, Virginia. Our lease on this space expires on September 30, 2026. We have also leased space for our other offices in California, Maryland, Georgia, Texas and Tennessee.
Biggest changeITEM 2. PROPERTIES Our headquarters are located in Arlington, Virginia. Our lease on this space expires on September 30, 2026. We have also leased space for our other offices throughout the United States.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(1) $ 61.24 $ 74.07 $ 76.92 $ 63.28 $ 68.95 $ 83.80 $ 105.84 $ 114.50 $ 98.01 $ 96.35 $ 68.86 $ 65.35 Russell 2000 $ 90.18 $ 91.14 $ 92.28 $ 83.13 $ 83.26 $ 76.41 $ 84.39 $ 82.66 $ 74.74 $ 82.97 $ 84.90 $ 79.39 NASDAQ Health Care $ 71.25 $ 68.71 $ 69.12 $ 60.31 $ 57.81 $ 57.28 $ 60.39 $ 59.03 $ 54.19 $ 59.51 $ 63.31 $ 62.22 (1) $100 invested on April 28, 2021 in shares and in indices The information above shall not be deemed “soliciting material” or to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,as amended, or otherwise subject to the liabilities under that section, and shall not be incorporated by reference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, regardless of any general incorporation language in those filings.
Biggest change(1) $ 79.45 $ 75.14 $ 66.19 $ 66.27 Russell 2000 $ 81.57 $ 85.81 $ 81.41 $ 92.83 NASDAQ Health Care $ 62.61 $ 62.04 $ 58.45 $ 62.73 (1) $100 invested on April 28, 2021 in shares and in indices The information above shall not be deemed “soliciting material” or to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,as amended, or otherwise subject to the liabilities under that section, and shall not be incorporated by reference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, regardless of any general incorporation language in those filings.
The following graph and related information shows a comparison of the cumulative total return for our common stock, Russell 2000 Index, and NASDAQ Health Care Index between April 28, 2021 (the date our common stock commenced trading on the NASDAQ) through December 31, 2022. All values assume an initial investment of $100 and reinvestment of any dividends.
The following graph and related information shows a comparison of the cumulative total return for our common stock, Russell 2000 Index, and NASDAQ Health Care Index between April 28, 2021 (the date our common stock commenced trading on the NASDAQ) through December 31, 2023. All values assume an initial investment of $100 and reinvestment of any dividends.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be set forth in the Proxy Statement and is incorporated into this Annual Report on Form 10-K by reference. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities during the year ended December 31, 2022.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be set forth in the Proxy Statement and is incorporated into this Annual Report on Form 10-K by reference. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities during the year ended December 31, 2023.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the Nasdaq Global Select Market under the symbol “PRVA” since May 3, 2021. Prior to that, there was no public trading market for our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the Nasdaq Global Select Market under the symbol “PRVA” since April 29, 2021. Prior to that, there was no public trading market for our common stock.
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 65 Table of Contents 4/28/2021 5/31/2021 6/30/2021 7/31/2021 8/31/2021 9/30/2021 10/31/2021 11/30/2021 12/31/2021 Privia Health Group, Inc.
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 65 Table of Contents 4/28/2021 6/30/2021 9/30/2021 12/31/2021 Privia Health Group, Inc.
Holders of Record As of the close of business on February 22, 2023, there were approximately 31 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders of Record As of the close of business on February 23, 2024, there were approximately 19 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
We used a portion of the net proceeds from the IPO to voluntarily prepay approximately $33.1 million of indebtedness and accrued interest under the Term Loan Facility in June 2022. 66 Table of Contents Other than the changes noted above there have been no material change in the planned use of proceeds from the IPO from those that were described in the final prospectus filed pursuant to Rule 424(b) under the Securities Act.
Other than the changes noted above, there have been no material changes in the planned use of proceeds from the IPO from those that were described in the final prospectus filed pursuant to Rule 424(b) under the Securities Act. ITEM 6. [RESERVED] 66 Table of Contents
(1) $ 100.00 $ 94.19 $ 127.68 $ 119.42 $ 85.78 $ 67.80 $ 73.96 $ 66.47 $ 74.45 Russell 2000 $ 100.00 $ 100.21 $ 102.15 $ 98.46 $ 100.66 $ 97.69 $ 101.85 $ 97.61 $ 99.79 NASDAQ Health Care $ 100.00 $ 97.71 $ 101.67 $ 98.29 $ 100.36 $ 95.90 $ 94.60 $ 87.82 $ 82.74 1/31/2022 2/28/2022 3/31/2022 4/30/2022 5/31/2022 6/30/2022 7/31/2022 8/31/2022 9/30/2022 10/31/2022 11/30/2022 12/31/2022 Privia Health Group, Inc.
(1) $ 100.00 $ 127.68 $ 67.80 $ 74.45 Russell 2000 $ 100.00 $ 102.15 $ 97.69 $ 99.79 NASDAQ Health Care $ 100.00 $ 101.67 $ 95.90 $ 82.74 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Privia Health Group, Inc.
Added
(1) $ 76.92 $ 83.80 $ 98.01 $ 65.35 Russell 2000 $ 92.28 $ 76.41 $ 74.74 $ 79.39 NASDAQ Health Care $ 69.12 $ 57.28 $ 54.19 $ 62.22 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Privia Health Group, Inc.
Added
We used a portion of the net proceeds from the IPO to voluntarily prepay approximately $33.1 million of indebtedness and accrued interest under the Term Loan Facility in June 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table provides a reconciliation of net (loss) income attributable to the Company, the most closely comparable GAAP financial measure, to Adjusted EBITDA: For the Years Ended December 31, (unaudited and amounts in thousands) 2022 2021 2020 Net (loss) income attributable to Privia Health Group, Inc. $ (8,585) $ (188,230) $ 31,244 Net loss attributable to non-controlling interests (3,479) (2,419) (340) Benefit from income taxes (6,516) (27,857) (7,441) Interest (income) expense, net (542) 1,070 1,917 Depreciation and amortization 4,571 2,464 1,843 Stock-based compensation 67,359 253,531 484 Other expenses (1) 8,044 2,818 1,665 Adjusted EBITDA $ 60,852 $ 41,377 $ 29,372 (1) Other expenses include employer taxes on equity vesting/exercises, legal, severance and certain non-recurring costs.
Biggest changeIn particular, we believe that the use of Adjusted EBITDA and Adjusted EBITDA Margin is helpful to our investors as they are metrics used by management in assessing the health of our business and our operating performance. 73 Table of Contents The following table provides a reconciliation of net income (loss) attributable to the Company, the most closely comparable GAAP financial measure, to Adjusted EBITDA: For the Years Ended December 31, (unaudited and amounts in thousands) 2023 2022 2021 Net income (loss) attributable to Privia Health Group, Inc. $ 23,079 $ (8,585) $ (188,230) Net loss attributable to non-controlling interests (2,051) (3,479) (2,419) Provision for (benefit from) income taxes 7,993 (6,516) (27,857) Interest (income) expense, net (8,372) (542) 1,070 Depreciation and amortization 6,533 4,571 2,464 Stock-based compensation 37,098 67,359 253,531 Other expenses (1) 7,948 8,044 2,818 Adjusted EBITDA $ 72,228 $ 60,852 $ 41,377 (1) Other expenses include employer taxes on equity vesting/exercises, legal, severance and certain non-recurring costs.
As a provider spends a longer time on the Privia Platform, we expect the Platform Contribution from that provider to increase both in terms of absolute dollars as well as a percent of Care Margin.
As a provider spends a longer time on the Privia Platform, we expect the Platform Contribution from that provider to increase both in terms of absolute dollars as well as a percent of Care Margin.
Adjusted EBITDA We define Adjusted EBITDA as net (loss) income excluding interest income, interest expense, non-controlling interest expense / income, depreciation and amortization, stock-based compensation, severance, other one time or non-recurring expenses, employer taxes on equity vesting/exercises and the (benefit from) provision for income taxes.
Adjusted EBITDA We define Adjusted EBITDA as net income (loss) excluding interest income, interest expense, non-controlling interest expense / income, depreciation and amortization, stock-based compensation, severance, other one time or non-recurring expenses, employer taxes on equity vesting/exercises and the provision for (benefit from) income taxes.
For the Years Ended December 31, 2022 2021 Change ($) Change (%) (in thousands) Revenue $ 1,356,660 $ 966,220 $ 390,440 40.4 % Operating expenses: Provider expense 1,051,040 727,827 323,213 44.4 % Cost of platform 170,838 174,731 (3,893) (2.2) % Sales and marketing 19,741 22,750 (3,009) (13.2) % General and administrative 129,592 255,884 (126,292) (49.4) % Depreciation and amortization 4,571 2,464 2,107 85.5 % Total operating expenses 1,375,782 1,183,656 192,126 16.2 % Operating loss (19,122) (217,436) 198,314 (91.2) % Interest (income) expense, net (542) 1,070 (1,612) (150.7) % Loss before benefit from income taxes (18,580) (218,506) 199,926 (91.5) % Benefit from income taxes (6,516) (27,857) 21,341 (76.6) % Net loss (12,064) (190,649) 178,585 (93.7) % Less: Loss attributable to non-controlling interests (3,479) (2,419) (1,060) 43.8 % Net loss attributable to Privia Health Group, Inc. $ (8,585) $ (188,230) $ 179,645 (95.4) % Revenue The following table presents our revenues disaggregated by source: For the Years Ended December 31, (Dollars in Thousands) 2022 2021 Change ($) Change (%) FFS-patient care $ 869,165 $ 772,482 $ 96,683 12.5 % FFS-administrative services 94,929 68,805 26,124 38.0 % Capitated revenue 218,463 — 218,463 — % Shared savings 132,615 83,016 49,599 59.7 % Care management fees (PMPM) 35,541 36,503 (962) (2.6) % Other revenue 5,947 5,414 533 9.8 % Total Revenue $ 1,356,660 $ 966,220 $ 390,440 40.4 % Revenue was $1.36 billion for the year ended December 31, 2022, an increase from $966.2 million for the year ended December 31, 2021.
For the Years Ended December 31, 2022 2021 Change ($) Change (%) (in thousands) Revenue $ 1,356,660 $ 966,220 $ 390,440 40.4 % Operating expenses: Provider expense 1,051,040 727,827 323,213 44.4 % Cost of platform 170,838 174,731 (3,893) (2.2) % Sales and marketing 19,741 22,750 (3,009) (13.2) % General and administrative 129,592 255,884 (126,292) (49.4) % Depreciation and amortization 4,571 2,464 2,107 85.5 % Total operating expenses 1,375,782 1,183,656 192,126 16.2 % Operating loss (19,122) (217,436) 198,314 (91.2) % Interest (income) expense, net (542) 1,070 (1,612) (150.7) % Loss before benefit from income taxes (18,580) (218,506) 199,926 (91.5) % Benefit from income taxes (6,516) (27,857) 21,341 (76.6) % Net loss (12,064) (190,649) 178,585 (93.7) % Less: Loss attributable to non-controlling interests (3,479) (2,419) (1,060) 43.8 % Net loss income attributable to Privia Health Group, Inc. $ (8,585) $ (188,230) $ 179,645 (95.4) % Revenue The following table presents our revenues disaggregated by source: For the Years Ended December 31, (Dollars in Thousands) 2022 2021 Change ($) Change (%) FFS-patient care $ 869,165 $ 772,482 $ 96,683 12.5 % FFS-administrative services 94,929 68,805 26,124 38.0 % Capitated revenue 218,463 — 218,463 — % Shared savings 132,615 83,016 49,599 59.7 % Care management fees (PMPM) 35,541 36,503 (962) (2.6) % Other revenue 5,947 5,414 533 9.8 % Total Revenue $ 1,356,660 $ 966,220 $ 390,440 40.4 % Revenue was $1.36 billion for the year ended December 31, 2022, an increase from $966.2 million for the year ended December 31, 2021.
Interest (income) expense, net Interest income was $0.5 million for the year ended December 31, 2022, compared to interest expense of $1.1 million during the same period in 2021.
Interest (income) expense, net Interest (income) expense was $0.5 million for the year ended December 31, 2022, compared to interest expense of $1.1 million during the same period in 2021.
Significant changes impacting net cash provided by operating activities for the year ended December 31, 2022 compared to the same period in 2021 were as follows: • Decrease in loss of $178.5 million from a loss of $(12.1) million during the year ended December 31, 2022 compared to loss of $(190.6) million during the year ended December 31, 2021, primarily driven by the recognition of stock-based compensation expense related to the modification of vesting terms of options in connection with the Company’s IPO during the year ended December 31, 2021 when compared to the recognition of stock-based compensation for the same period in 2022. • An increase of $(72.2) million in accounts receivable, net, for the year ended December 31, 2022 compared to the same period in 2021 of $(14.6) million, an increase of $(57.6) million.
Significant changes impacting net cash provided by operating activities for the year ended December 31, 2022 compared to the same period in 2021 were as follows: • Decrease in loss of $178.5 million from a loss of $(12.1) million during the year ended December 31, 2022 compared to loss of $(190.6) million during the year ended December 31, 2021, primarily driven by the recognition of stock-based compensation expense related to the modification of vesting terms of options in connection with the Company’s IPO during the year ended December 31, 2021 when compared to the recognition of stock-based compensation for the same period in 2022. • An increase of $(72.2) million in accounts receivable, net, for the year ended December 31, 2022 compared to the same period in 2022 of $(14.6) million, an increase of $(57.6) million.
Investing Activities Net cash used in investing activities was $0.1 million for the year ended December 31, 2022 compared to $32.8 million during the same period in 2021, primarily due to Privia investing in two new markets during the fourth quarter of 2021.
Net cash used in investing activities was $0.1 million for the year ended December 31, 2022 compared to $32.8 million during the same period in 2021, primarily due to Privia investing in two new markets during the fourth quarter of 2021.
The decrease was primarily driven by the reduction of $30.1 million in stock-based compensation expense primarily related to the modification of vesting terms of options in connection with the Company’s IPO during the year ended December 31, 2021, partially offset by an increase in salaries and benefits of $16.4 million related to continued growth, and an increase in EMR and platform technology costs of $6.2 million driven by an increase in FFS claims and an increase in consulting costs of $1.8 million due to continued growth and market expansion, and various other immaterial expenses related to growth and market expansion.
This decrease was primarily driven by the reduction of $30.1 million in stock-based compensation expense primarily related to the modification of vesting terms of options in connection with the Company’s IPO during the year ended December 31, 2021, partially offset by an increase in salaries and benefits of $16.4 million related to continued growth, and an increase in EMR and platform technology costs of $6.2 million driven by an increase in FFS claims and an increase in consulting costs of $1.8 million due to continued growth and market expansion, and various other immaterial expenses related to growth and market expansion.
Shared savings growth was primarily due to more Attributed Lives in Medicare programs as well as continued strong estimated performance in our value based care programs. 76 Table of Contents Operating Expenses For the Years Ended December 31, (Dollars in Thousands) 2022 2021 Change ($) Change (%) Operating Expenses: Provider expense $ 1,051,040 $ 727,827 $ 323,213 44.4 % Cost of platform 170,838 174,731 (3,893) (2.2) % Sales and marketing 19,741 22,750 (3,009) (13.2) % General and administrative 129,592 255,884 (126,292) (49.4) % Depreciation and amortization expense 4,571 2,464 2,107 85.5 % Total operating expenses $ 1,375,782 $ 1,183,656 $ 192,126 16.2 % Provider expenses Provider expenses were $1.05 billion for the year ended December 31, 2022, an increase from $727.8 million during the same period in 2021.
Shared savings growth was primarily due to more Attributed Lives in Medicare programs as well as continued strong estimated performance in our value based care programs. 77 Table of Contents Operating Expenses For the Years Ended December 31, (Dollars in Thousands) 2022 2021 Change ($) Change (%) Operating Expenses: Provider expense $ 1,051,040 $ 727,827 $ 323,213 44.4 % Cost of platform 170,838 174,731 (3,893) (2.2) % Sales and marketing 19,741 22,750 (3,009) (13.2) % General and administrative 129,592 255,884 (126,292) (49.4) % Depreciation and amortization expense 4,571 2,464 2,107 85.5 % Total operating expenses $ 1,375,782 $ 1,183,656 $ 192,126 16.2 % Provider expenses Provider expenses were $1.05 billion for the year ended December 31, 2022, an increase from $727.8 million during the same period in 2021.
This decrease primarily related to the receipt of the net proceeds from the Company’s IPO of $211.0 million during year ended December 31, 2021, and the use of cash to repay the Company’s Term Loan Facility during the year ended December 31, 2022, partially offset by the receipt of proceeds from stock options exercised of $13.4 million.
This decrease was primarily related to the receipt of the net proceeds from the Company’s IPO of $211.0 million during year ended December 31, 2021, and the use of cash to repay the Company’s Term Loan Facility during the year ended December 31, 2022, partially offset by the receipt of proceeds from stock options exercised of $13.4 million.
We expect that this increase will be driven by improving per provider revenue economics over time as well as our ability to generate operating leverage on our in-market infrastructure costs.
We expect that this increase will be driven by improving per provider revenue economics over time as well as our ability to generate leverage on our in-market infrastructure costs.
The Company is paid the financial incentives when, for a given twelve-month measurement period, its performance on quality of care and utilization meets or exceeds the standards set by the 83 Table of Contents payers as outlined in the contracts and when savings are achieved for medical costs associated with the population of attributed members.
The Company is paid the financial incentives when, for a given twelve-month measurement period, its performance on quality of care and utilization meets or exceeds the standards set by the payers as outlined in the contracts and when savings are achieved for medical costs associated with the population of attributed 82 Table of Contents members.
Revenue increases were partially offset by a decrease in care management fee, which decreased $1.0 million as some care management fee revenue was replaced by capitated revenue.
Revenue increases were partially offset by a decrease in care management fees, which decreased $1.0 million as some care management fee revenue was replaced by capitated revenue.
For the years ended December 31, 2022, 2021, and 2020, changes in the Company’s estimates of implicit price concessions and contractual adjustments to expected payments for performance obligations satisfied in prior periods were not significant. FFS-administrative services The Company’s FFS-administrative services business provides administration and management services pursuant to MSAs with Non-Owned Medical Groups.
For the years ended December 31, 2023, 2022, and 2021, changes in the Company’s estimates of implicit price concessions and contractual adjustments to expected payments for performance obligations satisfied in prior periods were not significant. FFS-administrative services The Company’s FFS-administrative services business provides administration and management services pursuant to MSAs with Non-Owned Medical Groups.
Revenue is not recorded until the price can be estimated by the Company and to the extent that it is probable that a significant reversal will not occur once any uncertainty associated with the variable consideration is subsequently resolved. Revenue is recorded during the period when the services were provided during a pre-set twelve-month annual measurement period.
Revenue is not recorded until the price can be estimated by the Company and to the extent that it is probable that a significant reversal will not occur once any uncertainty associated with the variable consideration is subsequently resolved. Revenue is recorded during the period when the services are provided during a pre-set twelve-month annual measurement period.
Growth in FFS-patient care revenue and FFS-administrative services was primarily attributed to an increase in visit volumes as COVID-19 restrictions were lifted in certain states as well as the addition of new providers and the new markets of California and West Texas, which were part of Privia for the full year in 2022.
Growth in FFS-patient care revenue and FFS-administrative services were primarily attributed to an increase in visit volumes as COVID-19 restrictions are lifted in certain states as well as the addition of new providers and the new markets of California and West Texas, which were part of Privia for the full year in 2022.
FFS Revenue We generate FFS-patient care revenue when we collect reimbursements for FFS medical services provided by Privia Providers. Our agreements with our providers have a multi-year term length and we have historically experienced a 95% provider retention rate, both of which lead to a highly predictable and recurring revenue model.
FFS Revenue We generate FFS-patient care revenue when we collect reimbursements for FFS medical services provided by Privia Providers. Our agreements with our providers have a multi-year term length and we have historically experienced a 96% provider retention rate, both of which lead to a highly predictable and recurring revenue model.
Based on current and anticipated levels of operations, we anticipate that net cash provided by operating activities, together with the available cash on hand at December 31, 2021, should be adequate to meet anticipated cash requirements for the short term (next 12 months) and long term (beyond 12 months).
Based on current and anticipated levels of operations, we anticipate that net cash provided by operating activities, together with the available cash on hand at December 31, 2023, should be adequate to meet anticipated cash requirements for the short term (next 12 months) and long term (beyond 12 months).
Our existing provider penetration and market share provides us with significant opportunity to grow in both existing and new geographies, and we believe the number of providers joining Privia is a key indicator of the market’s recognition of the attractiveness of our platform to our providers, patients and payers.
Our existing provider relationships and market share provides us with significant opportunity to grow in both existing and new geographies, and we believe the number of providers joining Privia is a key indicator of the market’s recognition of the attractiveness of our platform to our providers, patients and payers.
We believe that Adjusted EBITDA, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook.
During 2022, several Privia Care Partners’ providers transitioned to our Privia Medical Group model, which demonstrates the flexibility of our operating model and technology platform, as well as the ability to support physicians wherever they are in their transition value-based care.
During 2023, several Privia Care Partners’ providers transitioned to our Privia Medical Group model, which demonstrates the flexibility of our operating model and technology platform, as well as the ability to support physicians wherever they are in their transition value-based care.
If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected. Indebtedness See Note 9 “Note Payable” for discussion on our Credit Facilities.
If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected. Indebtedness See Note 9 “Debt” for discussion on our Credit Facilities.
The decrease was driven by the reduction of $6.2 million in stock-based compensation primarily related to the modification of vesting terms of options in connection with the Company’s IPO during the year ended December 31, 2021, partially offset by an increase in salaries and benefits of $2.1 million.
The decrease was driven by the reduction of $6.2 million in stock-based compensation expense primarily related to the modification of vesting terms of options in connection with the Company’s IPO during the year ended December 31, 2021, partially offset by an increase in sales and benefits of $2.1 million.
Total rent expense under operating leases was $2.7 million, $2.1 million and $2.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. Off Balance Sheet Obligations. We do not have any off-balance sheet arrangements as of December 31, 2022. Commitments and Contingencies. See Note 14 “Commitments and Contingencies” for further discussion on our commitments and contingencies.
Total rent expense under operating leases was $2.7 million for the years ended December 31, 2023 and 2022 and $2.1 million for the years ended 2021. Off Balance Sheet Obligations. We do not have any off-balance sheet arrangements as of December 31, 2023. Commitments and Contingencies. See Note 14 “Commitments and Contingencies” for further discussion on our commitments and contingencies.
Capitated revenue is generated through what is typically known as an “at-risk contract.” At-risk capitation refers to a model in which the Company is entitled to fixed monthly fees from the third-party payer in exchange for providing healthcare services to attributed beneficiaries in Medicare Advantage plans.
Capitated revenue is generated through what is typically known as an “at-risk contract.” At-risk capitation refers to a model in which the Company is 69 Table of Contents entitled to fixed monthly fees from the third-party payer in exchange for providing healthcare services to attributed beneficiaries in Medicare Advantage plans.
We expect that this increase will be driven by improving per provider revenue economics over time as well as our ability to generate operating leverage on our in-market infrastructure costs. Platform Contribution Margin was 48.6% for the year ended December 31, 2022 compared to 45.1% during the same period in 2021 and 44.0% in 2020.
We expect that this increase will be driven by improving per provider revenue economics over time as well as our ability to generate operating leverage on our in-market infrastructure costs. Platform Contribution Margin was 48.3% for the year ended December 31, 2023 compared to 48.6% during the same period in 2022 and 45.1% in 2021.
We continue to make strategic investments to provide better service to both our patients and physicians at a pace slower than the increase in revenue. In addition to our financial results determined in accordance with GAAP, we believe platform contribution, a non-GAAP measure, is useful in evaluating our operating performance.
We continue to make strategic investments to provide better service to both our patients and physicians at a pace slower than the increase in revenue. In addition to our financial results determined in accordance with GAAP, we believe Platform Contribution and Platform Contribution Margin, each, a non-GAAP measure, are useful in evaluating our operating performance.
If the counterparties fail to renew their contracts, renew their contracts upon less favorable 70 Table of Contents terms or at lower fee levels or fail to utilize additional products and services obtained from us, or if we fail to renegotiate contracts with our counterparties on favorable terms or at all, our revenue may decline and our future revenue growth may be constrained.
If the counterparties fail to renew their contracts, renew their contracts upon less favorable terms or at lower fee levels or fail to utilize additional products and services obtained from us, or if we fail to renegotiate contracts with our counterparties on favorable terms or at all, our revenue may decline and our future revenue growth may be constrained.
In particular, we believe that the use of Care Margin is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. The following table provides a reconciliation of operating (loss) income, the most closely comparable GAAP financial measure, to Care Margin.
In particular, we believe that the use of Care Margin is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. The following table provides a reconciliation of gross profit, the most closely comparable GAAP financial measure, to Care Margin.
Platform Contribution Margin We define Platform Contribution Margin as Platform Contribution as a percentage of Care Margin. We consider Platform Contribution Margin to be an important measure to monitor our performance, specific to pricing of our services, direct costs of delivering care, and cost of our platform and associated services.
Platform Contribution Margin 72 Table of Contents We define Platform Contribution Margin as Platform Contribution as a percentage of Care Margin. We consider Platform Contribution Margin to be an important measure to monitor our performance, specific to pricing of our services, direct costs of delivering care, and cost of our platform and associated services.
Depreciation and amortization expense 75 Table of Contents Depreciation and amortization expenses are primarily attributable to our capital investment and consist of fixed asset depreciation and amortization of intangibles considered to have definite lives. We do not allocate depreciation and amortization expenses to other operating expense categories.
Depreciation and amortization expense Depreciation and amortization expenses are primarily attributable to our capital investment and consist of fixed asset depreciation and amortization of intangibles considered to have definite lives. We do not allocate depreciation and amortization expenses to other operating expense categories.
We use Platform Contribution to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook.
We use Platform Contribution to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook.
CARES Act funds received have been recorded within other revenue on the statement of operations through December 31, 2021. No funds were received from the CARES Act for the year ended December 31, 2022.
CARES Act funds received have been recorded within other revenue on the statement of operations through December 31, 2021. No funds were received from the CARES Act for the year ended December 31, 2023 and 2022, respectively.
Adjusted EBITDA increased 47.1% for the year ended December 31, 2022, when compared to the same period in 2021 due to organic growth of our medical practice business, new market entry and a focus on managing the investment in new expenses and increased 40.9% between 2020 and 2021 due to organic growth of our medical practice business.
Adjusted EBITDA increased 18.7% for the year ended December 31, 2023, when compared to the same period in 2022 due to organic growth of our medical practice business, new market entry and a focus on managing the investment in new expenses and increased 47.1% between 2021 and 2022 due to organic growth of our medical practice business.
The Company estimates the transaction price by analyzing the activities during the relevant time period in contemplation of the agreed upon benchmarks, metrics, performance criteria, and attribution criteria based on those and any other contractually defined factors.
The Company estimates the transaction price by analyzing the activities during the relevant time period in contemplation of the agreed upon benchmarks, metrics, performance criteria, inflation trend factors, risk ratio adjustments and attribution criteria based on those and any other contractually defined factors.
See below for more information as to how we define and calculate Care Margin, Platform Contribution, Platform Contribution Margin, Adjusted EBITDA and Adjusted EBITDA Margin and for a reconciliation of income from operations, the most comparable GAAP measure, to Care Margin, income from operations, the most comparable GAAP measure, to Platform Contribution, and net income, the most comparable GAAP measure, to Adjusted EBITDA.
See below for more information as to how we define and calculate Care Margin, Platform Contribution, Platform Contribution Margin, Adjusted EBITDA and Adjusted EBITDA Margin and for a reconciliation of Gross Profit, the most comparable GAAP measure, to Care Margin, Gross Profit the most comparable GAAP measure, to Platform Contribution, and net income (loss), the most comparable GAAP measure, to Adjusted EBITDA.
The increase is primarily due to an increase 80 Table of Contents in shared savings and the commencement of at-risk capitation arrangements during the year ended December 31, 2022, accounting for $28.6 million of the increase.
The increase is primarily due to an increase in shared shavings and the commencement of at-risk capitation arrangements during the year ended December 31, 2022, accounting for $28.6 million of the increase.
Practice Collections increased 49.1% for the year ended December 31, 2022 when compared to the same period in 2021 due mainly to organic growth of our healthcare delivery business, our new at-risk Capitated revenue contracts, as well as a full year of operation in the West Texas and California markets and entrance into the Montana markets and increased 25.0% between 2020 and 2021 due to organic growth of our healthcare delivery business.
Practice Collections increased 17.1% for the year ended December 31, 2023 when compared to the same period in 2022 due mainly to organic growth of our healthcare delivery business, our at-risk Capitated revenue contracts and entrance into the Connecticut and Washington state markets and increased 49.1% between 2021 and 2022 due to organic growth of our healthcare delivery business, new at-risk Capitated revenue contracts, as well as a full year of operation in the West Texas and California markets and entrance into the Montana market.
Platform Contribution increased 38.1% for the year ended December 31, 2022 when compared to the same period in 2021 due to organic growth of our medical practice business and new market entry and increased 30.2% between 2021 and 2020, due to organic growth of our medical practice business.
Platform Contribution increased 16.8% for the year ended December 31, 2023 when compared to the same period in 2022 due to organic growth of our medical practice business and new market entry, and increased 38.1% between 2022 and 2021, due to organic growth of our medical practice business.
As of December 31, 2022, we had cash and cash equivalents of $348.0 million. We received $211.0 million of net proceeds from the Company’s IPO and Anthem private placement on May 3, 2021. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash.
We received $211.0 million of net proceeds from the Company’s IPO and Anthem private placement on May 3, 2021. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash.
GAAP Financial Measures • Revenue was $1,356.7 million, $966.2 million and $817.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. • Operating (loss) income was $(19.1) million, $(217.4) million and $25.4 million for the years ended December 31, 2022, 2021 and 2020, respectively; and • Net (loss) income attributable to Privia Health Group, Inc. was $(8.6) million, $(188.2) million and $31.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
GAAP Financial Measures • Revenue was $1,657.7 million, $1,356.7 million and $966.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. • Operating income (loss) was $20.6 million, $(19.1) million and $(217.4) million for the years ended December 31, 2023, 2022 and 2021, respectively; and • Net income (loss) attributable to Privia Health Group, Inc. was $23.1 million, $(8.6) million and $(188.2) million for the years ended December 31, 2023, 2022 and 2021, respectively.
Adjusted EBITDA Margin was 19.9% for the year ended December 31, 2022 an increase from 17.4% for the same period in 2021 due to organic growth of our medical practice business, 74 Table of Contents new market entry and a focus on managing the investment in new expenses and an increase from 15.7% in 2020, due to organic growth of our medical practice business.
Adjusted EBITDA Margin was 20.1% for the year ended December 31, 2023 an increase from 19.9% for the same period in 2022 due to organic growth of our medical practice business, new market entry and a focus on managing the investment in new expenses and an increase from 17.4% in 2021, due to organic growth of our medical practice business.
FFS arrangements accounted for 79.1%, 91.2% and 89.7% of our practice collections for the years ended December 31, 2022, 2021 and 2020, respectively, while VBC accounted for 20.6%, 8.5% and 8.6% of practice collections for the years ended December 31, 2022, 2021 and 2020, respectively.
FFS arrangements accounted for 76.5%, 79.1% and 91.2% of our practice collections for the years ended December 31, 2023, 2022 and 2021, respectively, while VBC accounted for 23.2%, 20.6% and 8.5% of practice collections for the years ended December 31, 2023, 2022 and 2021, respectively.
Employer taxes on equity vesting/exercises of $3.2 million for the year ended December 31, 2022. Components of Results of Operations Revenue As noted above under “Our Revenue,” revenue is earned in three main categories: FFS revenue, VBC revenue and other revenue.
Employer taxes on equity vesting/exercises of $1.6 million and $3.2 million were recorded for the years ended December 31, 2023 and 2022, respectively. Components of Results of Operations Revenue As noted above under “Our Revenue,” revenue is earned in three main categories: FFS revenue, VBC revenue and other revenue.
Financing Activities Net cash used in financing activities was $19.7 million for the year ended December 31, 2022 compared to net cash provided by financing activities of $213.7 million.
Financing Activities Net cash provided by financing activities was $3.7 million for the year ended December 31, 2023, compared to net cash used in financing activities of $(19.7) million for the same period in 2022.
Operating Expenses Provider expenses Provider expense, previously referred to as “Physician and Practice expense”, are amounts accrued or payments made to physicians, hospitals and other service providers, including Privia physicians, their related physician practices, and providers the Company has contracted with through payer partners.
Operating Expenses Provider expenses Provider expenses are amounts accrued or payments made to physicians, hospitals and other service providers, including Privia physicians, their related physician practices, and providers the Company has contracted with through payer partners.
As a percentage of revenue, Care Margin decreased to 22.5% for the year ended December 31, 2022 from 24.7% and 23.0% for the same periods in 2021 and 2020, respectively, due to the addition of the at-risk capitation arrangements during 2022.
As a percentage of revenue, Care Margin decreased to 21.7% for the year ended December 31, 2023 from 22.5% and 24.7% for the same periods in 2022 and 2021, respectively, due to the addition of the at-risk capitation arrangements during 2022 and 2023 resulting in higher revenues.
Capitated revenue growth is due to the commencement of at-risk capitation arrangements during the first quarter of 2022 resulting in an increase in revenue of $218.5 million.
Capitated revenue growth was due to the commencement of at-risk capitation arrangements during the first quarter of 2022 resulting in increased revenue of $218.5 million.
In particular, we believe that the use of Platform Contribution is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance.
In particular, we believe that the use of Platform Contribution is helpful to our investors as they are metrics used by management in assessing the health of our business and our operating performance.
Key Metrics For the Years Ended December 31, 2022 2021 2020 Implemented Providers (as of end of period) 3,606 3,317 2,550 Attributed Lives (in thousands) (as of end of period) 856 786 682 Practice Collections (1) ($ in millions) $ 2,424.1 $ 1,626.1 $ 1,301.1 71 Table of Contents (1) We define Practice Collections as the total collections from all practices in all markets and all sources of reimbursement (FFS, VBC and other) that we receive for delivering care and providing our platform and associated services.
Key Metrics For the Years Ended December 31, 2023 2022 2021 Implemented Providers (as of end of period) 4,305 3,606 3,317 Attributed Lives (in thousands) (as of end of period) 1,120 856 786 Practice Collections (1) ($ in millions) $ 2,839.0 $ 2,424.1 $ 1,626.1 (1) We define Practice Collections as the total collections from all practices in all markets and all sources of reimbursement (FFS, VBC and other) that we receive for delivering care and providing our platform and associated services.
Care Margin increased 28.2% for the year ended December 31, 2022 when compared to the same period in 2021 due to organic growth of our medical practice business and increased 27.1% between 2021 and 2020, due to organic growth of our medical practice business.
Care Margin increased 17.5% for the year ended December 31, 2023 when compared to the same period in 2022 due to organic growth of our medical practice business which increased 28.2% between 2022 and 2021 due to organic growth of our medical practice business.
Key Metrics and Non-GAAP Financial Measures • Practice Collections was $2.42 billion, $1.63 billion and $1.30 billion for the years ended December 31, 2022, 2021 and 2020, respectively; • Care Margin was $305.6 million, $238.4 million and $187.6 million for the years ended December 31, 2022, 2021 and 2020, respectively; • Platform Contribution was $148.5 million, $107.6 million and $82.6 million for the years ended December 31, 2022, 2021 and 2020, respectively; • Adjusted EBITDA was $60.9 million, $41.4 million and $29.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Key Metrics and Non-GAAP Financial Measures • Practice Collections was $2.84 billion, $2.42 billion and $1.63 billion for the years ended December 31, 2023, 2022 and 2021, respectively; • Care Margin was $359.2 million, $305.6 million and $238.4 million for the years ended December 31, 2023, 2022 and 2021, respectively; • Platform Contribution was $173.5 million, $148.5 million and $107.6 million for the years ended December 31, 2023, 2022 and 2021, respectively; • Adjusted EBITDA was $72.2 million, $60.9 million and $41.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
We believe that our cash and cash equivalents, including the proceeds from the IPO, and borrowings under the Revolving Loan Facility (as defined below) together with cash flows from operations, will provide adequate resources to fund our short-term and long-term operating and capital needs.
We believe that our cash and cash equivalents, including the proceeds from the IPO, together with cash flows from operations, will provide adequate resources to fund our short-term and long-term operating and capital needs.
Other Revenue The remainder of our revenue is derived from leveraging our existing base of providers and patients to deliver value-oriented services such as virtual visits, virtual scribes and coding. Other revenue represented 0.4%, 0.6% and 2.2% of total revenue for the years ended December 31, 2022, 2021 and 2020, respectively.
VBC revenue represented 33.8%, 28.5% and 12.4% of total revenue for the years ended December 31, 2023, 2022 and 2021, respectively. Other Revenue The remainder of our revenue is derived from leveraging our existing base of providers and patients to deliver value-oriented services such as virtual visits, virtual scribes and coding.
For the Years Ended December 31, 2022 2021 2020 (in thousands) Consolidated Statements of Cash Flows Data: Net cash provided by operating activities $ 47,196 $ 55,058 $ 38,891 Net cash used in investing activities (104) (32,775) (380) Net cash (used in) provided by financing activities (19,677) 213,661 (767) Net increase in cash and cash equivalents $ 27,415 $ 235,944 $ 37,744 Operating Activities Net cash provided by operating activities was $47.2 million for the year ended December 31, 2022 compared to $55.1 million for the same period in 2021.
For the Years Ended December 31, 2023 2022 2021 (in thousands) Consolidated Statements of Cash Flows Data: Net cash provided by operating activities $ 80,785 $ 47,196 $ 55,058 Net cash used in investing activities (42,971) (104) (32,775) Net cash provided by (used in) financing activities 3,705 (19,677) 213,661 Net increase in cash and cash equivalents $ 41,519 $ 27,415 $ 235,944 Operating Activities Net cash provided by operating activities was $80.8 million for the year ended December 31, 2023 compared to $47.2 million for the same period in 2022.
The Company’s MSAs with the Non-Owned Medical Groups range from 5 –20 years in duration and outline the terms and conditions of the administration and management services to be provided, which includes RCM services such as billings and collections, as well 82 Table of Contents as other services, including, but not limited to, payer contracting, information technology services and accounting and treasury services.
The Company’s MSAs with the Non-Owned Medical Groups range from 5 –20 years in duration and outline the terms and conditions of the administration and management services to be provided, which includes RCM services such as billings and collections, as well as other services, including, but not limited to, payer contracting, information technology services and accounting and treasury services. 81 Table of Contents In certain MSAs, the Company is paid administrative fees equal to the cost of supplying certain services as outlined in the MSAs, and if applicable, a margin is added to the cost of certain services.
The share-based payments granted or modified prior to April 2021 to employees of the Company do not have quoted market prices, and changes in subjective input assumptions can materially affect the fair value estimate. Since April 2021, the Company has estimated the fair value of the options granted to Company’s employees and contractors using the Black-Scholes option-pricing model.
The share-based payments granted or modified prior to April 2021 to employees of the Company do not have quoted market prices, and changes in subjective input assumptions can materially affect the fair value estimate.
Privia Health launched three new Accountable Care Organizations (ACOs) at the beginning of 2022 and three new ACOs in the first two months of 2023, expanding the total number of Privia-owned ACOs to ten, serving beneficiaries across the District of Columbia and eleven states, including California, Connecticut, Delaware, Florida, Georgia, Maryland, Montana, North Carolina, Tennessee, Texas, and Virginia.
Privia Health launched three new ACOs in the first quarter of 2023, expanding the total number of Privia-owned ACOs to ten, serving beneficiaries across the District of Columbia and eleven states, including California, Connecticut, Delaware, Florida, Georgia, Maryland, Montana, North Carolina, Tennessee, Texas, and Virginia. During 2022 and 2023, we entered into capitated payer arrangements.
Cash Flows Overview The Company’s cash requirements within the next twelve months include physician and practice liabilities, accounts payable and accrued liabilities, current maturities of long-term debt, and purchase commitments and other obligations.
Cash Flows Overview The Company’s cash requirements within the next twelve months include provider liabilities, accounts payable and accrued liabilities, and purchase commitments and other obligations.
The number of Implemented Providers increased 8.7% between December 31, 2021 and 2022 mainly due to due to organic growth in our healthcare delivery business as well as entrance into the Montana market and a full year of operations in the West Texas and California markets.
Implemented Providers increased 8.7% between 2021 and 2022, due to the entrance into the Montana market and a full year of operations in the West Texas and California markets.
Rebates in the amount of $2.8 million have been recorded as of December 31, 2022. No rebates were recorded for years ended December 31, 2021 and 2020.
Rebates of $2.7 million have been recorded for the years ended December 31, 2023 and 2022, respectively. No rebates were recorded for the year ended December 31, 2021.
Expansion to New Markets Based upon our experience to date, we believe Privia can succeed in all reimbursement environments and payment models. The data we collected from older provider cohorts consistently suggest that we improve their performance in both FFS and VBC metrics over time and inform our expectations for our new markets.
The data we collected from older provider cohorts consistently suggest that we improve their performance in both FFS and VBC metrics over time and inform our expectations for our new markets.
Net cash used in investing activities was $32.8 million for the year ended December 31, 2021 compared to $0.4 million during the same period in 2020, primarily due to Privia investing in two new markets during the fourth quarter of 2021.
Investing Activities Net cash used in investing activities was $43.0 million for the year ended December 31, 2023 compared to $0.1 million during the same period in 2022, primarily due to Privia investing in three new markets during 2023.
We consider platform contribution to be an important measure to monitor our performance, specific to pricing of our services, direct costs of delivering care, and cost of our platform and associated services.
The following table provides a reconciliation of gross profit, the most closely comparable GAAP financial measure, to Platform Contribution. We consider Platform Contribution to be an important measure to monitor our performance, specific to pricing of our services, direct costs of delivering care, and cost of our platform and associated services.
In certain MSAs, the Company is paid administrative fees equal to the cost of supplying certain services as outlined in the MSAs, and if applicable, a margin is added to the cost of certain services. The margin, if applicable, is fixed based on the MSAs; however, the cost of supplying certain services can fluctuate during the life of the MSAs.
The margin, if applicable, is fixed based on the MSAs; however, the cost of supplying certain services can fluctuate during the life of the MSAs. In certain MSAs, the Company is paid a percentage of net collections. The percentage is fixed per the MSAs; however, the net collections can fluctuate during the life of the contract.
The revenue is collected in the form of (i) capitated revenue, (ii) shared savings earned based on improved quality and lower cost of care for our attributed patients in VBC arrangements earned primarily through Privia-owned ACOs and (iii) PMPM care management fees to cover costs of services typically not reimbursed under traditional FFS payment models, including population management, care coordination, advanced technology and analytics.
The revenue is primarily collected in the form of (i) Capitated revenue earned by providing healthcare service to Medicare Advantage attributed beneficiaries for a defined group of services including professional, institutional and pharmacy through a contract that is typically known as an “at-risk contract”, (ii) Shared savings earned based on improved quality and lower cost of care for our attributed lives in VBC incentive arrangements and (iii) Care management fees to cover costs of services typically not reimbursed under traditional FFS payment models, including population management, care coordination, advanced technology and analytics.
Interest Expense Interest expense consists primarily of interest payments on our outstanding borrowings under our Term Loan Facility. See “Liquidity and Capital Resources—General and Note Payable.” Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2022 and 2021.
See “Liquidity and Capital Resources—General and Note Payable.” Results of Operations 74 Table of Contents Comparison of the Years Ended December 31, 2023 and 2022 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2023 and 2022.
We generate VBC revenue when our providers are reimbursed through traditional FFS Medicare, MSSP, Medicare Advantage, commercial payers and other existing and emerging direct payer and employer contracting programs.
VBC Revenue Over time, we create incremental value for our provider partners by enabling them to succeed in VBC arrangements. We generate VBC revenue when our providers are reimbursed through traditional FFS Medicare, MSSP, Medicare Advantage, commercial payers and other existing and emerging direct payer and employer contracting programs.
The Company believes that each Non-Owned Medical Group receives the management and administrative services each day and has concluded that an output method is appropriate for recognizing administrative services revenue.
Under each MSA, there is a single performance obligation to provide a series of administration and management services required for the contract period. The Company believes that each Non-Owned Medical Group receives the management and administrative services each day and has concluded that an output method is appropriate for recognizing administrative services revenue.
Attributed Lives increased 8.9% between December 31, 2021 and 2022 due to the launch of Privia Care Partners on January 1, 2022, as well as organic growth in all markets. Attributed Lives increased 15.2% between 2020 and 2021, due to organic growth.
Attributed Lives increased 30.8% between December 31, 70 Table of Contents 2022 and 2023 due primarily to our entrance into the Connecticut and Washington state markets as well as organic growth. Attributed Lives increased 8.9% between 2021 and 2022, due to the launch of Privia Care Partners in January 2022, as well as organic growth in all markets.
Care Margin We define Care Margin as total revenue less the sum of provider expense. Our Care Margin generated from FFS revenue is contractual and recurring in nature, and primarily based on an individually negotiated percentage of collections for each practice that joins Privia.
Our Care Margin generated from FFS revenue is contractual and recurring in 71 Table of Contents nature, and primarily based on an individually negotiated percentage of collections for each practice that joins Privia. Our Care Margin generated from VBC revenue is based on a percentage of care management fees and shared savings collected.
Provider Relief Funds under the CARES Act have been recorded within other revenue on the statement of operation for the years ended December 31, 2021 and 2020. 69 Table of Contents Key Factors Affecting Our Performance Addition of New Providers Our ability to increase our provider base will enable us to deliver financial growth as our providers generate both our FFS and VBC revenue.
Other revenue represented 0.5%, 0.4% and 0.6% of total revenue for the years ended December 31, 2023, 2022 and 2021, respectively. Key Factors Affecting Our Performance Addition of New Providers Our ability to increase our provider base will enable us to deliver financial growth as our providers generate both our FFS and VBC revenue.
In January 2023, we announced a partnership with Beebe Healthcare, a not-for-profit community healthcare system located in Sussex County, Delaware, to launch an ACO in that state. In February 2023, we announced a partnership with Community Medical Group, the largest Clinically Integrated Network (“CIN”) in Connecticut with approximately 1,100 multi-specialty providers, to launch Privia Quality Network of Connecticut.
In February 2023, we announced a partnership with Community Medical Group, the largest Clinically Integrated Network (“CIN”) in Connecticut with approximately 1,100 multi-specialty providers, to launch Privia Quality Network of Connecticut (“PQN-CT”). We acquired a majority ownership in PQN-CT.
Sales and marketing Sales and marketing expenses were $22.7 million for the year ended December 31, 2021, an increase from $11.3 million during the same period in 2020.
Sales and marketing Sales and marketing expenses were $24.7 million for the year ended December 31, 2023, an increase from $19.7 million during the same period in 2022. The increase was driven primarily by an increase in salaries and benefits of $4.3 million.
This increase was driven primarily by higher FFS-patient care revenue and the addition of new providers partially offset by a decrease in physician expense related to CARES Act grant receipts. Cost of platform Cost of platform expenses were $174.7 million for the year ended December 31, 2021, an increase from $105.0 million during the same period in 2020.
This increase was driven primarily by higher FFS-patient care revenue and growth in Implemented Providers and the addition of new capitated arrangements. Cost of platform Cost of platform expenses were $197.7 million for the year ended December 31, 2023, an increase from $170.8 million during the same period in 2022.
Net cash provided by operating activities was $55.1 million for the year ended December 31, 2021 compared to $38.9 million for the same period in 2020.
Net cash used in financing activities was $(19.7) million for the year ended December 31, 2022 compared to net cash provided bv financing activities of $213.7 million for the same period in 2021.
This change was primarily related to investments in new joint venture markets. 77 Table of Contents Comparison of the Years Ended December 31, 2021 and 2020 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2021 and 2020.
This change was primarily due to the decrease in outstanding non-controlling interests generating losses due to the repurchase of non-controlling interests during the year ended December 31, 2023. 76 Table of Contents Comparison of the Years Ended December 31, 2022 and 2021 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2022 and 2021.
Our branding and marketing strategies to drive growth in our practices has continued to result in increased engagement with new and existing patients. We believe our continued success in growing the visibility of the Privia brand will result in increased patient panels per provider and contribute incremental revenue in both FFS and VBC for our practices.
We believe our continued success in growing the visibility of the Privia brand will result in increased patient panels per provider and contribute incremental revenue in both FFS and VBC for our practices. 68 Table of Contents Expansion to New Markets Based upon our experience to date, we believe Privia can succeed in all reimbursement environments and payment models.
General and administrative General and administrative expenses were $255.9 million for the year ended December 31, 2021, an increase from $44.0 million during the same period in 2020.
General and administrative General and administrative expenses were $109.6 million for the year ended December 31, 2023, a decrease from $129.6 million during the same period in 2022.
We define our Attributed Lives as patients who have selected one of our owned or Non-Owned Medical Groups as their provider of primary care services as of the end of a particular period. The number of Attributed Lives is an important measure that impacts the amount of VBC revenue we receive.
Attributed Lives We define Attributed Lives as any patient that a payer deems attributed to Privia to deliver care as part of a value-based care arrangement through a provider of primary care services as of the end of a particular period. The number of Attributed Lives is an important measure that impacts the amount of VBC revenue we receive.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk Our primary market risk exposure is rising interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. Our Credit Agreement bears interest at a floating rate equal to the lesser of LIBOR plus 1.5% or ABR plus 0.5%.
Biggest changeInterest Rate Risk Our primary market risk exposure is rising interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our co ntrol.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA All information required by this item is included in Item 15 of this Annual Report on Form 10-K and is incorporated into this item by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA All information required by this item is included in Item 15 of this Annual Report on Form 10-K and is incorporated into this item by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
As of December 31, 2022, we had no outstanding debt under the Credit Agreement. Inflation Risk Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition.
Inflation Risk Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition. ITEM 8.
Added
Our Credit Agreement bears interest at a base rate plus applicable margin, with the base rate being the higher of the Prime Rate or the Federal Funds Rate plus 0.50%. In no event will the base rate be less than 1.0% A s of December 31, 2023, the Company had no outstanding debt under the Credit Agreement.

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