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What changed in Claritev Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Claritev Corp's 2023 and 2024 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 2024 report.

+697 added−654 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-29)

Top changes in Claritev Corp's 2024 10-K

697 paragraphs added · 654 removed · 513 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

161 edited+58 added−50 removed70 unchanged
Biggest changeSurprise Billing Services. Introduced in 2021, our surprise billing services help Payors comply, or help their employer/plan sponsor customers comply, with the federal No Surprises Act ("NSA"), which became effective on January 1, 2022.
Biggest changeIntroduced in 2021, our surprise billing services help payors comply, or help their employer/plan sponsor clients comply, with the NSA, which became effective on January 1, 2022 and requires healthcare providers to give patients who do not have certain types of healthcare coverage or who are not using certain types of healthcare coverage an estimate of their bill for healthcare items and services before those items or services are provided.
They feature proprietary algorithms and machine learning/AI to allow claims to be processed quickly and accurately. Reference-Based Pricing ("RBP") . RBP provides Payors with a recommended payment amount for out-of-network claims based on a reference point. Most RBP programs in the market uses Medicare as the reference point.
They feature proprietary algorithms and AI/machine learning ("ML") to allow claims to be processed quickly and accurately. Reference-Based Pricing ("RBP") . RBP provides payors with a recommended payment amount for out-of-network claims based on a reference point. Most RBP programs in the market uses Medicare as the reference point.
Property and Casualty This market segment includes Payors of the medical services arising from work-related injuries and auto accidents, as well as other types of property and casualty insurance. There is little overlap between the commercial and government Payors and those in this segment.
Property and Casualty Healthcare Payors This market segment includes payors of the medical services arising from work-related injuries and auto accidents, as well as other types of property and casualty insurance. There is little overlap between the commercial and government payors and those in this segment.
Our ability to offer flexible packages of solutions to all segments of the market, ranging from a point solution to fuller configurations, enables us to meet the diverse needs of our customers, who serve plan sponsors with widely varying health plan sizes and health benefit needs. ◦ A nationwide network of over 1.4 million contracted providers – Our provider network was developed discretely over the course of 40+ years and is supported by our credentialing and data management expertise, sophisticated matching engine, and a network development team consisting of over 100 professionals.
Our ability to offer flexible packages of solutions to all segments of the market, ranging from a point solution to fuller configurations, enables us to meet the diverse needs of our clients, who serve plan sponsors with widely varying health plan sizes and health benefit needs. ◦ A nationwide network of over 1.4 million contracted providers – Our provider network was developed discretely over the course of 40+ years and is supported by our credentialing and data management expertise, sophisticated matching engine, and a network development team consisting of over 100 professionals.
For those claims that are not automatically negotiated, MultiPlan works directly with the provider's office through our negotiations staff, which is aided by extensive workflow and benchmarking tools. Financial negotiation services are used by all types of Payors, most notably Blue Cross and Blue Shield plans, provider-sponsored and independent health plans. They are priced at a percentage of savings identified.
For those claims that are not automatically negotiated, Claritev works directly with the provider's office through our negotiations staff, which is aided by extensive workflow and benchmarking tools. Financial negotiation services are used by all types of payors, most notably Blue Cross and Blue Shield plans, provider-sponsored and independent health plans. They are priced at a percentage of savings identified.
As with MA, following our acquisition of BST, we expect to use our Risk Analytics & Insights services to help Payors in this segment manage their risks. Other Programs. We have a history of developing custom networks for TRICARE and Veterans Administration programs. These are RFP driven, and MultiPlan partners with one or more Payors bidding on the business.
As with MA, following our acquisition of BST, we expect to use our Risk Analytics & Insights services to help payors in this segment manage their risks. Other Programs. We have a history of developing custom networks for TRICARE and Veterans Administration programs. These are RFP driven, and Claritev partners with one or more payors bidding on the business.
These economies of scale allow us to produce valuable services for our customers at lower unit costs than our competitors and to make significant investments in these services on behalf of our customers. • Unique products and capabilities, including: ◦ Broad range of out-of-network solutions – We believe no single competitor currently offers the same breadth of out-of-network cost management services that we provide.
These economies of scale allow us to produce valuable services for our clients at lower unit costs than our competitors and to make significant investments in these services on behalf of our clients. • Unique products and capabilities, including: ◦ Broad range of out-of-network solutions – We believe no single competitor currently offers the same breadth of out-of-network cost management services that we provide.
These claims include those in which the proposed negotiated amount is generated by algorithms and automatically transmitted to the provider’s office, and/or that are electronically accepted and signed by the provider. Certain providers also choose to set up an arrangement with MultiPlan for pre-determined levels of discount to be automatically deducted on claims that would otherwise be individually negotiated.
These claims include those in which the proposed negotiated amount is generated by algorithms and automatically transmitted to the provider’s office, and/or that are electronically accepted and signed by the provider. Certain providers also choose to set up an arrangement with Claritev for pre-determined levels of discount to be automatically deducted on claims that would otherwise be individually negotiated.
These services support virtually all types of Payors, including: employers, brokers and TPAs; medical, supplemental and stop-loss carriers; and benefit administrators and professional employer organizations ("PEOs"). The Company currently reports revenues from Data and Decision Science Services in Analytics-based Services, and will likely do so until revenues from this service line become more significant. PlanOptix ™.
These services support virtually all types of payors including: employers, brokers and TPAs; medical, point solutions, supplemental and stop-loss carriers; and benefit administrators and professional employer organizations ("PEOs"). The Company currently reports revenues from Data and Decision Science Services in Analytics-based Services and will likely do so until revenues from this service line become more significant. PlanOptix®.
These plans favor MultiPlan’s Analytics-Based Services, and in particular RBP, over Network-Based Services. We work with self-insured plans primarily through their plan administrators, which include the same types of companies as well as TPAs and sometimes the employers/plan sponsors themselves. Over 85% of our 2023 revenues are attributed to self-insured plans that we service through their Payors or directly.
These plans favor Claritev’s Analytics-Based Services, and in particular RBP, over Network-Based Services. We work with self-insured plans primarily through their plan administrators, which include the same types of companies as well as TPAs and sometimes the employers/plan sponsors themselves. Over 85% of our 2023 revenues are attributed to self-insured plans that we service through their payors or directly.
Further, we are subject to affirmative legal obligations, as well as contractual requirements with our customers, to check the exclusion status of the individuals and entities we employ against lists of excluded individuals and entities prior to entering into employment or contractual relationships with them, and to periodically re-check such lists thereafter, or run the risk of liability under civil monetary penalties laws or a breach of our contractual obligations.
Further, we are subject to affirmative legal obligations, as well as contractual requirements with our clients, to check the exclusion status of the individuals and entities we employ against lists of excluded individuals and entities prior to entering into employment or contractual relationships with them, and to periodically re-check such lists thereafter, or run the risk of liability under civil monetary penalties laws or a breach of our contractual obligations.
We also offer this option, but most customers elect to use our Data iSight program which uses facility cost as the facility reference point and median reimbursed amounts as the professional reference point. The facility pricing methodology features a patented benchmarking process that determines the cost of a group of like claims from like providers in the same geography.
We also offer this option, but most clients elect to use our Data iSight program which uses facility cost as the facility reference point and median reimbursed amounts as the professional reference point. The facility pricing methodology features a patented benchmarking process that determines the cost of a group of like claims from like providers in the same geography.
Our complementary networks provide customers with access to our national network of healthcare providers that offer discounts under the health plan’s out-of-network benefits, or otherwise can be accessed secondary to another network. Payors use the network to expand provider choice for consumers, and to achieve contracted price reductions with member protections on more claims.
Our complementary networks provide clients with access to our national network of healthcare providers that offer discounts under the health plan’s out-of-network benefits, or otherwise can be accessed secondary to another network. Payors use the network to expand provider choice for consumers, and to achieve contracted price reductions with member protections on more claims.
We formed this new service category in 2023 and accelerated its development through the acquisition of BST. Additionally, in 2023 MultiPlan entered into a joint marketing and services agreement with ECHO Health, Inc. ("ECHO") that adds payment processing of healthcare provider claims as well as payments made to other service providers.
We formed this new service category in 2023 and accelerated its development through the acquisition of BST. Additionally, in 2023 Claritev entered into a joint marketing and services agreement with ECHO Health, Inc. ("ECHO") that adds payment processing of healthcare provider claims as well as payments made to other service providers.
The service is priced based on a percentage of savings identified. Customers most commonly include large commercial insurers, property and casualty carriers via their bill review vendors, Taft-Hartley plans, provider-sponsored and independent health plans, and some TPAs. Other Network Services. We also offer network build and network management services.
The service is priced based on a percentage of savings identified. Clients most commonly include large commercial insurers, property and casualty carriers via their bill review vendors, Taft-Hartley plans, provider-sponsored and independent health plans, and some TPAs. Other Network Services. We also offer network build and network management services.
We operate within an ecosystem that consists of over 700+ customers, more than 100,000 employers and other plan sponsors that actively use our services through these Payors, and we estimate that over 60 million consumers have access to our services through these plan sponsors, and approximately 1.4 million contracted providers within our propriety provider network.
We operate within an ecosystem that consists of over 700+ clients, more than 100,000 employers and other plan sponsors that actively use our services through these payors, and we estimate that over 60 million consumers have access to our services through these plan sponsors, and approximately 1.4 million contracted providers within our propriety provider network.
Among other features, Risk Analytics & Insights services can utilize MultiPlan’s prepayment claims flows to help identify emergent risks by individual, group, or condition and to prescribe financial and clinical program enhancements that help manage these risks. These services are used by commercial, MA, managed Medicaid and state Medicaid Payors. Supplemental Carrier Services.
Among other features, Risk Analytics & Insights services can utilize Claritev’s prepayment claims flows to help identify emergent risks by individual, group, or condition and to prescribe financial and clinical program enhancements that help manage these risks. These services are used by commercial, MA, managed Medicaid and state Medicaid payors. Supplemental Carrier Services.
At the same time, our service offerings are delivered from our common platform and are often bundled together to provide a comprehensive cost management solution for each individual customer. As such, we manage our service offerings as integrated components of a holistic value proposition, rather than as distinct service lines.
At the same time, our service offerings are delivered from our common platform and are often bundled together to provide a comprehensive cost management solution for each individual client. As such, we manage our service offerings as integrated components of a holistic value proposition, rather than as distinct service lines.
Our platform offers these Payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan customers, by managing the utilization of medical services, lowering the per-unit cost of medical services incurred, and producing fair and efficient reimbursements.
Our platform offers these payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan clients, by managing the utilization of medical services, lowering the per-unit cost of medical services incurred, and producing fair and efficient reimbursements.
The evolutionary path we have taken and the significant investments we have made to realize this ambition have provided MultiPlan with distinctive assets that allow us to more holistically help stakeholders in the healthcare system address the growing cost, risk and complexity of healthcare across both commercial and government markets.
The evolutionary path we have taken and the significant investments we have made to realize this ambition have provided Claritev with distinctive assets that allow us to more holistically help stakeholders in the healthcare system address the growing cost, risk and complexity of healthcare across both commercial and government markets.
Customers mainly include provider-sponsored and independent health plans; Taft-Hartley plans and TPAs, as it is more cost effective for these Payors to outsource this function than to incur the expense of developing and maintaining their own network of thousands of doctors and hospitals. Complementary Networks.
Clients mainly include provider-sponsored and independent health plans, Taft-Hartley plans and TPAs, as it is more cost effective for these payors to outsource this function than to incur the expense of developing and maintaining their own network of thousands of doctors and hospitals. Complementary Networks.
Through our HST subsidiary we also work with employers directly and through their brokers/consultants. We indirectly serve the consumers accessing healthcare services through these diverse channels. We believe we have strong relationships with our customers, which include substantially all of the largest health plans and their ASO platforms.
("HST") subsidiary we also work with employers directly and through their brokers/consultants. We indirectly serve the consumers accessing healthcare services through these diverse channels. We believe we have strong relationships with our clients, which include substantially all of the largest health plans and their ASO platforms.
They are most commonly priced at a percentage of savings identified. Financial Negotiation. Our financial negotiation services assist Payors with pricing out-of-network claims from providers with whom neither the Payor nor MultiPlan have been able to secure a contractual discount.
They are most commonly priced at a percentage of savings identified. Financial Negotiation. Our financial negotiation services assist payors with pricing out-of-network claims from providers with whom neither the payor nor Claritev have been able to secure a contractual discount.
We offer a number of additional choices of reference point, including: median contracted rates (adjusted to the Qualifying Payment Amount for certain surprise bill claims), and usual and customary charges. Our Reference-Based Pricing services are used by all types of Payors, most notably large commercial insurers, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans.
We offer a number of additional choices of reference point, including: median contracted rates (adjusted to the Qualifying Payment Amount (as defined below) for certain surprise bill claims), and usual and customary charges. Our Reference-Based Pricing services are used by all types of payors, most notably large commercial insurers, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans.
Customers of this custom build/access service include MA and Medicaid health plans seeking assistance with expansion plans or help maintaining the required network adequacy. Network management services enable health plans to outsource key steps in their claim adjudication.
Clients of this custom build/access service include MA and Medicaid health plans seeking assistance with expansion plans or help maintaining the required network adequacy. Network management services enable health plans to outsource key steps in their claim adjudication.
The network development team manages a sophisticated program of data mining, profiling, recruiting and ultimately contracting with new providers to increase the value provided to customers. An incentive driven pay-for-performance plan measures and rewards the success of our network development team.
The network development team manages a sophisticated program of data mining, profiling, recruiting and ultimately contracting with new providers to increase the value provided to clients. An incentive driven pay-for-performance plan measures and rewards the success of our network development team.
The top 10 carriers make up over 80% of this market, and, through our acquisition of BST, MultiPlan contracts with 6 of the Top 10 carriers. Products sold by these carriers include Accident, Critical Illness, Hospital Indemnity, Cancer, and other miscellaneous policies.
The top 10 carriers make up over 80% of this market, and, through our acquisition of BST, Claritev contracts with 6 of the Top 10 carriers. Products sold by these carriers include Accident, Critical Illness, Hospital Indemnity, Cancer, and other miscellaneous policies.
As an FDR to these customers, we are subject to requirements which prohibit an individual or entity who has been convicted of program-related crimes or other violations from providing services to, or receiving payment from, government healthcare programs.
As an FDR to these clients, we are subject to requirements which prohibit an individual or entity who has been convicted of program-related crimes or other violations from providing services to, or receiving payment from, government healthcare programs.
This healthcare price transparency software suite enables customers to quickly query and navigate over 500 billion records of machine-readable files ("MRF") with payor and provider pricing data across top national and regional payor organizations.
This healthcare price transparency software suite enables clients to quickly query and navigate over 500 billion records of machine-readable files ("MRF") with payor and provider pricing data across top national and regional payor organizations.
In California, the CCPA, as amended by CPRA, provides California residents with a number of privacy-related rights and is more stringent in many respects than other state laws currently in effect in the United States.
In California, the California Consumer Privacy Act ("CCPA"), as amended by the California Privacy Rights Act ("CPRA"), provides California residents with a number of privacy-related rights and is more stringent in many respects than other state laws currently in effect in the United States.
The breadth of our provider network enables us to offer extensive, flexible network configurations to our customers. ◦ Proprietary claim pricing methodologies that in some cases are supported by a patented benchmarking process and that produce high levels of provider acceptance based on their rigor, transparency, independence, and track record of producing fair and efficient reimbursements. ◦ A team of over 400 expert claims negotiators and knowledge workers which solve the most complex repricing, payment integrity and subrogation cases at scale, supported by best in class data and analytics tools and AI-driven workflows. ◦ Next generation data and decision science capabilities – Supported by an elite team of data scientists with healthcare domain expertise, we offer next generation, healthcare-focused data and advanced analytics that Tabl e of Contents applies descriptive, predictive, and prescriptive analytic solutions to help customers optimize decision-making, plan performance, network configuration, and competitive positioning. • Flexibility to respond to market changes and customer needs, supported by dynamic capabilities – We have developed capabilities that allow us to reconfigure, build, and integrate internal and external resources and competencies in response to changes in the markets in which we operate.
The breadth of our provider network enables us to offer extensive, flexible network configurations to our clients. ◦ Proprietary claim pricing methodologies that in some cases are supported by a patented benchmarking process and that produce high levels of provider acceptance based on their rigor, transparency, independence, and track record of producing fair and efficient reimbursements. 9 Table of Contents ◦ A team of over 400 expert claims negotiators and knowledge workers which solve the most complex repricing, payment integrity and subrogation cases at scale, supported by best in class data and analytics tools and AI-driven workflows. ◦ Next generation data and decision science capabilities – Supported by an elite team of data scientists with healthcare domain expertise, we offer next generation, healthcare-focused data and advanced analytics that applies descriptive, predictive, and prescriptive analytic solutions to help clients optimize decision-making, plan performance, network configuration, and competitive positioning. • Flexibility to respond to market changes and client needs, supported by dynamic capabilities – We have developed capabilities that allow us to reconfigure, build, and integrate internal and external resources and competencies in response to changes in the markets in which we operate.
We handle these claims on an individual basis and attempt to negotiate with the provider an acceptable payment amount for a specific claim that includes member protections from balance billing. Negotiation agreements protect the health plan member from balance billing. Approximately half of the successfully negotiated claims are completed in a fully automated manner.
We handle these claims on an individual basis and attempt to negotiate with the provider an acceptable payment amount for a specific claim that includes member protections from balance billing. Negotiation agreements protect the health plan member from balance billing. 11 Table of Contents Approximately half of the successfully negotiated claims are completed in a fully automated manner.
We load proprietary or third-party network demographic and rate information and perform claim pricing as well as optional credentialing and data management services for claims associated to networks that aren’t owned by MultiPlan.
We load proprietary or third-party network demographic and rate information and perform claim pricing as well as optional credentialing and data management services for claims associated to networks that aren’t owned by Claritev.
We believe investing in our employees’ physical, mental, and financial health to promote their overall well-being is both our ethical obligation and important to helping our employees contribute to our organizational mission and goals. In 2023, we launched an employee stock purchase program ("ESPP") for eligible employees to support our objective of attracting, retaining and motivating talented employees.
We believe investing in our employees' physical, mental, and financial health to promote their overall well-being is both our ethical obligation and important to helping our employees contribute to our organizational mission and goals. We maintain an employee stock purchase program ("ESPP") for eligible employees to support our objective of attracting, retaining and motivating talented employees.
These services complement existing actuarial-based modeling with next generation predictive and prescriptive analytics, including: risk models and Smart Cards that identify and address emerging issues; automated underwriting to improve plan pricing; and other analytics that enable insights and recommendations for government and commercial health plans of all sizes.
These services complement existing actuarial-based modeling with next generation predictive and prescriptive analytics, including: risk models and Smart Cards that identify and address emerging issues; automated underwriting to improve plan pricing; and other analytics that enable insights and recommendations for government and 14 Table of Contents commercial health plans of all sizes.
Virtually all payment integrity competitors originated as post-payment specialists and to varying degrees have migrated services to a pre-payment modality, while our services were built to focus on examining claims before payment occurs and now, with the 2021 acquisition of DHP, we have a broader capability to address post-payment integrity.
Virtually all payment integrity competitors originated as post-payment specialists and to varying degrees have migrated services to a pre-payment modality, while our services were built to focus on examining claims before payment occurs and now, with the 2021 acquisition of Discovery Health Partners ("DHP"), we have a broader capability to address post-payment integrity.
Our Revenue Integrity services compete on the basis of identification of and assistance in restoration and preservation of underpaid premiums from Tabl e of Contents CMS caused by member eligibility and status errors. Our competitors for these services typically include Optum, Conduent, Cotiviti, Inc., SCIO and The Rawlings Group. Data & Decision Science Services .
Our Revenue Integrity services compete on the basis of identification of and assistance in restoration and preservation of underpaid premiums from CMS caused by member eligibility and status errors. Our competitors for these services typically include Optum, Conduent, Cotiviti, Inc., SCIO and The Rawlings Group. Data & Decision Science Services .
We believe our platform is among our most differentiated competitive advantages, and leveraging our platform to expand our suite of products and solutions and to add more value to the significant volumes of in-network, Medicare Advantage and Managed Medicaid claims flows already processed through our platform is a critical objective within our growth strategy.
We believe our platform is among our most differentiated competitive advantages, and leveraging our platform to expand our suite of products and solutions and to add more value to the significant volumes of in-network, MA and Managed Medicaid claims flows already processed through our platform is a critical objective within our growth strategy.
We are a "Business Associate" (as defined by HIPAA) of our customers. As such, we must comply with all applicable provisions of HIPAA, including the HIPAA Security Rule and applicable provisions of the HIPAA Privacy Rule and the Breach Notification Rule.
We are a "Business Associate" (as defined by HIPAA) of our clients. As such, we must comply with all applicable provisions of HIPAA, including the HIPAA Security Rule and applicable provisions of the HIPAA Privacy Rule and the Breach Notification Rule.
Plans are required to provide these comparative analyses to the Department of Labor upon request, and the Department of Labor is required to review at least 20 health plans for mental health parity each year. In 2021, the Department of Labor reviewed over 100 plans, and determined that none of the comparative analyses were sufficient as initially submitted.
Plans are required to provide these comparative analyses to the Department of Labor ("DOL") and HHS upon request, and the DOL and HHS are required to review at least 20 health plans for mental health parity each year. In 2021, the DOL reviewed over 100 plans, and determined that none of the comparative analyses were sufficient as initially submitted.
In addition, we are committed to supporting our customers in meeting their regulatory obligations, so we work cooperatively with them in establishing processes and procedures that comply with applicable requirements.
In addition, we are committed to supporting our clients in meeting their regulatory obligations, so we work cooperatively with them in establishing processes and procedures that comply with applicable requirements.
We believe our B2B payments offering has the potential to enhance the value we provide across each of our primary service categories. The breadth of our service offerings allows our customers the flexibility to tailor solutions for a wide range of plan sponsors with varying plan sizes and benefit needs.
We believe our business-to-business ("B2B") payments offering has the potential to enhance the value we provide across each of our primary service categories. The breadth of our service offerings allows our clients the flexibility to tailor solutions for a wide range of plan sponsors with varying plan sizes and benefit needs.
The Federal Trade Commission has also interpreted existing consumer protection laws to impose standards for the collection, storage, processing, use, retention, disclosure, transfer, disposal, and security of information about individuals, including health-related information. State privacy laws are changing rapidly.
The Federal Trade Commission has also interpreted existing consumer protection laws to impose standards for the collection, storage, processing, use, retention, disclosure, transfer, disposal, and security of information about 22 Table of Contents individuals, including health-related information. State privacy laws are changing rapidly.
The services we provide are often governed by contracts with multi-year terms in the case of our larger customers, or one-year terms with automatic renewals in the case of most of our smaller customers.
The services we provide are often governed by contracts with multi-year terms in the case of our larger clients, or one-year terms with automatic renewals in the case of most of our smaller clients.
EthicsPoint is MultiPlan’s hotline for reporting any concerns that employees do not feel comfortable reporting through other channels. While MultiPlan receives high survey scores pertaining to employees’ level of comfort reporting their concerns to management, we believe it is important that employees have multiple avenues for raising, reviewing and resolving concerns in a way they are most comfortable, including confidentially.
EthicsPoint is Claritev’s hotline for reporting any concerns that employees do not feel comfortable reporting through other channels. While Claritev receives high survey scores pertaining to employees’ level of comfort reporting their concerns to management, we believe it is important that employees have multiple avenues for raising, reviewing and resolving concerns in a way they are most comfortable, including confidentially.
The MRF data ingested by the software is enriched using MultiPlan and external data sources, including demographic and affiliate data derived from MultiPlan’s network of 1.4 million contracted providers. The software can be used by Payors and other health plan administrators to negotiate provider contracts, audit and research claims, gain insights into network performance, and make data-driven, actionable decisions.
The MRF data ingested by the software is enriched using Claritev and external data sources, including demographic and affiliate data derived from Claritev’s network of 1.4 million contracted providers. The software can be used by payors and other health plan administrators to negotiate provider contracts, audit and research claims, gain insights into network performance, and make data-driven, actionable decisions.
Network build services comprise custom development of and/or access to primary network contracts, leveraging our extensive network development team and Tabl e of Contents analytic tools, including a tool combining internal provider data with public sources to enable strategic targeting of providers to be contracted.
Network build services comprise custom development of and/or access to primary network contracts, leveraging our extensive network development team and analytic tools, including a tool combining internal provider data with public sources to enable strategic targeting of providers to be contracted.
The services rely heavily on our internal and other data sources, advanced analysis, machine learning and transaction processing technology, as well as clinical expertise to aid in the identification and selection of issues to be addressed with the least provider abrasion. Clinical Negotiation .
The services rely heavily on our internal and other data sources, advanced analysis, ML, and transaction processing technology, as well as clinical expertise to aid in the identification and selection of issues to be addressed with the least provider abrasion. Clinical Negotiation .
These investments, which include over $600 million in capitalized software development cumulatively, have created a data and technology platform that is deeply integrated with many of our customers' information technology environments in a highly customized manner and that occupies a unique position in our customers' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment").
These investments, which include over $700 million in capitalized software development cumulatively, have created a data and technology platform that is deeply integrated with many of our clients' information technology environments in a highly customized manner and that occupies a unique position in our clients' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment").
This Code embodies our company’s principles and the way we do business, which include giving equal opportunities to all employees and job candidates, and compliance with all laws, rules, and regulations applicable to our business. This important document can be found on our Investor section of our website at https://investors.multiplan.us/governance/governance-documents/default.aspx.
This Code embodies our company’s principles and the way we do business, which include giving equal opportunities to all employees and job candidates, and compliance with all laws, rules, and regulations applicable to our business. This important document can be found on our Investor section of our website at https://investors.claritev.com/governance/governance-documents/default.aspx.
MultiPlan performs all five steps in an end-to-end service or makes each step available as components to meet the specific needs of each Payor.
Claritev performs all five steps in an end-to-end service or makes each step available as components to meet the specific needs of each payor.
These services are applied prior to the payment of the claim and are typically processed within a day of receipt; • Payment and Revenue Integrity Services : data, technology, and clinical expertise deployed to identify and remove improper and unnecessary charges before or after claims are paid, or to identify and help restore and preserve underpaid premium dollars; and • Data and Decision Science Services : a suite of solutions that apply modern methods of data science to produce descriptive, predictive and prescriptive analytics that drive optimized benefit plan design, support decision-making, improve clinical outcomes, and reduce the total cost of care.
These services are applied prior to the payment of the claim and are typically processed within a day of receipt; • Payment and Revenue Integrity Services : data, technology, and clinical expertise deployed to identify and remove improper and unnecessary charges before or after claims are paid, or to identify and help restore and preserve underpaid premium dollars; and • Data and Decision Science Services : a suite of solutions that apply innovative methods of data science to produce descriptive, predictive and prescriptive analytics that drive optimized benefit plan design for employers, support decision-making for payors and providers, improve clinical outcomes, and reduce the total cost of care.
We expect additional guidance and regulations that may continue to change our understanding of the obligations of our customers under the NSA, such as a substantial IDR Operations proposed rule addressing aspects of the IDR process that is likely to be finalized in 2024, which will require updates to processes and impose additional compliance obligations for our Payor customers.
We expect additional guidance and regulations that may continue to change our understanding of the obligations of our clients under the NSA, such as a substantial IDR operations proposed rule addressing aspects of the IDR process that is likely to be finalized in 2025, which will require updates to processes and impose additional compliance obligations for our payor clients.
With the growth this segment has and continues to see, there is heightened competition among Payors, which also drives the need for assistance in building network access. Today, these Payors use MultiPlan’s payment and revenue integrity services. They may also outsource some portion of their provider network development to MultiPlan.
With the growth this segment has and continues to see, there is heightened competition among payors, which also drives the need for assistance in building network access. Today, these payors use Claritev’s payment and revenue integrity services. They may also outsource some portion of their provider network development to Claritev.
We have made significant investments in our IT infrastructure to enable us to automatically process significantly more transactions with greater accuracy and greatly improve our capacity to continuously serve our customers. In 2023, our prepayment Payment Integrity and reference-based pricing services returned 99% and 97%, respectively, of claims within one day.
We have made significant investments in our IT infrastructure to enable us to automatically process significantly more transactions with greater accuracy and greatly improve our capacity to continuously serve our clients. In 2024, our prepayment Payment Integrity and reference-based pricing services returned 99% and 97%, respectively, of claims within one day.
We have implemented connectivity via Electronic Data Interchange ("EDI") or direct integration using web services with all of our top customers. During 2023, the majority of claims processed in our system were received via EDI or direct web service integration, with some claims now being received via Fast Healthcare Interoperability Resources ("FHIR") Application Programming Interface ("API").
We have implemented connectivity via Electronic Data Interchange ("EDI") or direct integration using web services with all of our top clients. During 2024, the majority of claims processed in our system were received via EDI or direct web service integration, with some claims now being received via Fast Healthcare Interoperability Resources ("FHIR") Application Programming Interface ("API").
Clinical Negotiation also is integrated into MultiPlan's network pricing so the majority of customers benefit from this pre-payment integrity service. Pre-Payment Clinical Reviews . Pre-payment claims utilize payment integrity analytics, which may include any of the following additional reviews: medical coder, clinician, medical record or itemized bill. Claims are returned with recommended corrections.
Clinical Negotiation also is integrated into Claritev's network pricing so the majority of clients benefit from this pre-payment integrity service. Pre-Payment Clinical Reviews . Pre-payment claims utilize payment integrity analytics, which may include any of the following additional reviews: medical coder, clinician, medical record or itemized bill. Claims are returned with recommended corrections.
The services use data, technology and highly experienced staff to identify cases, validate coverage status, report or recover dollars paid in error, and assist with root cause correction to avoid future potential overpayments. Subrogation services are also available in a Software-as-a-Service ("SaaS") model.
The services use data, technology and highly experienced staff to identify cases, validate coverage status, report or recover dollars paid in error, and assist with root cause correction to avoid 13 Table of Contents future potential overpayments. Subrogation services are also available in a Software-as-a-Service ("SaaS") model.
Consistent with this strategy, in 2023, the Company expanded the capabilities of its platform into data and decision science services through the acquisition of Benefits Science LLC ("BST"), a next generation, healthcare-focused data and advanced analytics company that applies descriptive, predictive, and prescriptive analytic solutions to client data and claims flows to help customers optimize decision-making, plan performance, network configuration, and competitive positioning.
Consistent with this strategy, in 2023, the Company expanded the capabilities of its platform into data and decision science services through the acquisition of Benefits Science LLC ("BST"), a 7 Table of Contents next generation, healthcare-focused data and advanced analytics company that applies descriptive, predictive, and prescriptive analytic solutions to client data and claims flows to help clients optimize decision-making, plan performance, network configuration, and competitive positioning.
As we process more claims through EDI, direct web service integration, and APIs, our substantial back-office interconnectivity significantly reduces complexity and the number of processing errors. We process approximately 25 million claims every month, continuously growing our data assets and enhancing our ability to meet the needs of our customers.
As we process more claims through EDI, direct web service integration, and APIs, our substantial back-office interconnectivity significantly reduces complexity and the number of processing errors. We process approximately 27 million claims every month, continuously growing our data assets and enhancing our ability to meet the needs of our clients.
Government Regulations We believe that each of MultiPlan's service offerings bears less regulatory risk than other healthcare businesses that bear insurance risk and bill federal healthcare programs or directly provide care. While we support customers that are regulated entities, we generally are not directly regulated and face significantly lower levels of regulatory complexity.
Government Regulations We believe that each of Claritev's service offerings bears less regulatory risk than other healthcare businesses that bear insurance risk and bill federal healthcare programs or directly provide care. While we support clients that are regulated entities, we generally are not directly regulated and face significantly lower levels of regulatory complexity.
Recent trends in medical cost inflation have become a major driver in the overall cost growth for workers' compensation insurers. As of 2022, medical services accounted for about 50% of workers' compensation claims costs compared to 40% in the early 1980s. Rising medical costs have increased focus on cost management measures for the medical portion of workers' compensation insurance claims.
Recent trends in medical cost inflation have become a major driver in the overall cost growth for workers' compensation insurers. As of 2024, medical services accounted for about 60% of workers' compensation claims costs compared to 40% in the early 1980s. Rising medical costs have increased focus on cost management measures for the medical portion of workers' compensation insurance claims.
As a result, our revenues are typically recurring, allowing us to engage and invest in longer-term strategic, operational, and financial relationships that benefits both our customers and the Company. • Our platform is deeply integrated with our customers’ IT environments – Developed over time from our industry-leading provider network and over $600 million of cumulative capitalized software development, our platform is deeply integrated with many of our customers' information technology environments in a highly customized manner and occupies a differentiated position in our customers' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment").
As a result, our revenues are typically recurring, allowing us to engage and invest in longer-term strategic, operational, and financial relationships that benefits both our clients and the Company. • Our platform is deeply integrated with our clients’ IT environments – Developed over time from our industry-leading provider network and over $700 million of cumulative capitalized software development, our platform is deeply integrated with many of our clients' information technology environments in a highly customized manner and occupies a differentiated position in our clients' workflow by accessing and processing claims prior to payment of those claims to providers.
Also, as described above, in 2023 we introduced our Balance Bill Protection™ product, which enables customers of our VDHP services to take advantage of our RBP solution while generally eliminating balance bills and alleviating abrasion between plan members, employers and providers. VDHP services are sold to employers directly using the broker/consultant channel, or through Third-Party Administrators ("TPAs").
Also, as described above, in 2023 we introduced our Balance Bill Protection™ product, which enables clients of our VDHP services to take advantage of our RBP solution while generally eliminating balance bills and alleviating abrasion between plan members, employers and providers. VDHP services are sold to employers directly using the broker/consultant channel, or through TPAs.
Our services Tabl e of Contents may directly or indirectly be subject to state regulations specifically covering certain categories of customers, such as workers compensation insurers and auto medical insurers. We regularly monitor legislative and regulatory activity in all states and at the federal level that could impact any of the products we offer in all relevant market segments.
Our services may directly or indirectly be subject to state regulations specifically covering certain categories of clients, such as workers compensation insurers and auto medical insurers. We regularly monitor legislative and regulatory activity in all states and at the federal level that could impact any of the products we offer in all relevant market segments.
We function as a transaction processor and we believe we have limited risk for services or billing. MultiPlan does not deliver healthcare services; provide or manage healthcare services; or provide care or care management. Our business is compensated directly by private Payor customers, not by Medicare, Medicaid or other government healthcare programs.
We function as a transaction processor and we believe we have limited risk for services or billing. Claritev does not deliver healthcare services; provide or manage healthcare services; or provide care or care management. Our business is compensated directly by private payor clients, not by Medicare, Medicaid or other government healthcare programs.
In risk modeling and digital underwriting, we compete with solutions offered by Milliman, Gradient AI, 3M and John Hopkins ACG. Our digital claiming service competes with solutions offered by Nayya and Alight. Our advanced analytics solutions compete with solutions offered by Milliman. Human Capital Our employees are among our most critical assets.
In risk modeling and digital underwriting, we compete with solutions offered by Milliman, Gradient AI, 3M and John Hopkins ACG. Our digital claiming service competes with solutions offered by Nayya and Alight. Our advanced analytics solutions compete with solutions offered by Milliman. 19 Table of Contents Human Capital Our employees are among our most critical assets.
Above all, these distinctive assets include strong relationships with our customers and a proprietary data and technology platform. These assets are comprised of difficult to replicate resources that have competitively differentiated attributes: • Leading position with healthcare payors and a large, established distribution channel – Over many decades, we have cultivated relationships with over 700+ Payors.
Above all, these distinctive assets include strong relationships with our clients and a proprietary data and technology platform. These assets are comprised of difficult to replicate resources that have competitively differentiated attributes: 8 Table of Contents • Leading position with healthcare payors and a large, established distribution channel – Over many decades, we have cultivated relationships with over 700+ payors.
Their talent, expertise, and dedication help us achieve our mission of bringing a more fair, efficient, and affordable system to the U.S. healthcare industry. As of December 31, 2023, we had approximately 2,800 employees, substantially all of whom are full time employees and none of whom are covered by unions.
Their talent, expertise, and dedication help us achieve our mission of bringing a more fair, efficient, and affordable system to the U.S. healthcare industry. As of December 31, 2024, we had approximately 2,700 permanent employees, substantially all of whom are full-time employees and none of whom are covered by unions.
Also included in this category is our Value-Driven-Health Plan services, which bundles reference-based pricing and member and provider engagement tools, enabling employers and other health plan sponsors to offer low-cost health plans; • Network-Based Services: contracted discounts with healthcare providers to form one of the largest independent preferred provider organizations ("PPO") in the United States, as well as outsourced network development and/or management services.
Also included in this category is our Value-Driven Health Plan ("VDHP") services, which bundles reference-based pricing and member and provider engagement tools, enabling employers and other health plan sponsors to offer low-cost health plans; • Network-Based Services : contracted discounts with healthcare providers to form one of the largest PPOs in the United States, as well as outsourced network development and/or management services.
We offer a variety of network configurations to support all types and sizes of health plans, generally used as either the primary network, or as a complement to another primary network. Primary Networks.
We offer a variety of network configurations to support 12 Table of Contents all types and sizes of health plans, generally used as either the primary network, or as a complement to another primary network. Primary Networks.
We expect growth in demand for these services will be driven by three major trends: (i) increasing treatment and claims volumes from an aging population, the growth of the insured population in the U.S., and the advent of new treatments, modalities and technologies; (ii) increasing per unit costs related to medical inflation, driven in part by those same treatment, modalities, and technology enhancements; and, (iii) continued complexities of healthcare, including the prevalence of unintended billing complications and increased administrative burden of complying with new healthcare industry regulations.
We expect growth in demand for these services will be driven by three major trends: (i) increasing treatment and claims volumes from: (a) an aging population; (b) the growth of the insured population in the United States; and (c) the advent of new treatments, modalities and technologies; (ii) increasing per unit costs related to medical inflation, driven in part by those same treatment, modalities, and technology enhancements; and (iii) the continued complexities of healthcare delivery in the United States, including the prevalence of unintended billing complications and increased administrative burden of complying with new healthcare industry regulations.
("HST"), in 2023, 2021 and 2020, respectively, other notable acquisitions were BCE Emergis Corporation, in 2004, which extended network access nationally and added a negotiation services platform; Private Healthcare Systems, Inc., in 2006, which added a National Committee for Quality Assurance (NCQA)-accredited, national primary PPO network; Viant Holdings, Inc., in 2010, which added analytics-based services and additional network access including for MA and Medicaid plans; National Care Network, LLC, in 2011, which added the Data iSight pricing service; and Medical Audit and Review Solutions, Inc., in 2014, which added pre-payment integrity services.
In addition to the acquisitions of BST, DHP, and HST, in 2023, 2021, and 2020, respectively, other notable acquisitions were BCE Emergis Corporation, in 2004, which extended network access nationally and added a negotiation services platform; Private Healthcare Systems, Inc., in 2006, which added a NCQA-accredited, national primary PPO network; Viant Holdings, Inc., in 2010, which added analytics-based services and additional network access including for MA and Medicaid plans; National Care Network, LLC, in 2011, which added the Data iSight pricing service; and Medical Audit and Review Solutions, Inc., in 2014, which added pre-payment integrity services.
Contract terms with larger customers are often three years and as many as five years, while mid- to small-sized customer contracts are often annual and typically include automatic one-year renewals. We continue to experience high renewal rates and our top ten customers based on full year 2023 revenues have been customers for an average of over 20 years.
Contract terms with larger clients are often three years and as many as five years, while mid- to small-sized client contracts are often annual and typically include automatic one-year renewals. We continue to experience high renewal rates and our top ten clients based on full year 2024 revenues have been clients for an average of over 20 years.
Consequently, these plans often include Network-Based Services in their service hierarchies and/or use the "standard" VDHP services that integrate the professional PPO network in order to generate savings for both the plan and plan member.
Consequently, these plans often include Network-Based Services in their service hierarchies and/or use the "standard" VDHP services that integrate the 15 Table of Contents professional PPO network in order to generate savings for both the plan and plan member.
In addition, the MultiPlan Scholarship program is offered to children of MultiPlan employees who wish to continue their education after high school to achieve their educational goals. The total amount of new scholarship awards granted in 2023 was $100,000.
In addition, the Claritev Scholarship program is offered to children of Claritev employees who wish to continue their education after high school to achieve their educational goals. The total amount of new scholarship awards granted in 2024 was $100,000.
Our customer relationships are further strengthened by the fact that MultiPlan is electronically integrated with its customers in their time-sensitive claims processing functions, and we support highly flexible benefits offerings to an extensive group of customers who often feature a MultiPlan logo on membership cards when our networks are used.
Our client relationships are further strengthened by the fact that Claritev is electronically integrated with its clients in their time-sensitive claims processing functions, and we support highly flexible benefits offerings to an extensive group of clients who often feature a Claritev logo on membership cards when our networks are used.
Our set of dynamic capabilities enables us to modify our existing operational strategies and processes to be highly responsive to evolving customer and regulatory needs and new market opportunities, as demonstrated by the introduction of our NSA services in 2022 in response to a significant regulatory change.
Our set of dynamic capabilities enables us to modify our existing operational strategies and processes to be highly responsive to evolving client and regulatory needs and new market opportunities, as demonstrated by the introduction of our No Surprises Act ("NSA") services in 2022 in response to a significant regulatory change.
We serve national and regional insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, TPAs, property and casualty insurers, bill review companies and other companies involved in the claims adjudication process on behalf of commercial and government health plans or property and casualty insurance policies.
We serve national and regional insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, TPAs, property and casualty insurers, bill review companies and other companies involved in the claims adjudication process on behalf of commercial and government health plans or property and casualty insurance policies. Through our HSTechnology Solutions, Inc.
Tabl e of Contents Data and Decision Science Services Our Data and Decision Science Services are comprised of next generation, healthcare-focused data and advanced analytics that apply descriptive, predictive, and prescriptive analytic solutions to help customers optimize decision-making about plan design, plan performance, network configuration, and competitive positioning.
Data and Decision Science Services Our Data and Decision Science Services are comprised of next generation, healthcare-focused data and advanced analytics that apply descriptive, predictive, and prescriptive analytic solutions to help clients optimize decision-making about plan design, plan performance, network configuration, and competitive positioning.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs of December 31, 2023, we had total indebtedness (excluding an aggregate of $7.9 million of letters of credit) of $4,600.0 million, which is comprised of $1,275.0 million in aggregate principal amount of Senior Convertible PIK Notes, $1,295.2 million in outstanding term loans under the term loan facility, $979.8 million in aggregate principal amount of 5.750% Notes, $1,050.0 million in aggregate principal amount of 5.50% Senior Secured Notes and $15.0 thousand in non-current finance lease obligations.
Biggest changeOn an as adjusted basis after giving effect to the Refinancing Transaction (as defined in Note 20, Subsequent Events of the Notes to Consolidated Financial Statements), as of December 31, 2024, we had total indebtedness (excluding the aggregate of $9.3 million of letters of credit outstanding) of $4,695.7 million, which is comprised of $420.0 thousand in aggregate principal amount of the 6.00% / 7.00% Convertible Senior PIK Toggle Notes due 2027 ("Senior Convertible PIK Notes"), $325.0 million in New First-Out First Lien Term Loans (as defined below), $1,143.9 million in New Second-Out First Lien Term Loans (as 43 Table of Contents defined below), $130.0 million in the revolving loans borrowed pursuant to the 2025 revolving credit facility (as defined below) ("2025 Revolving Credit Loans"), $5.3 million in aggregate principal amount of the 5.750% Senior Notes due 2028 issued by MPH Acquisition Holdings LLC ("MPH") ("5.750% Notes"), $5.8 million in aggregate principal amount of the 5.50% Senior Notes due 2028 issued by MPH ("5.50% Notes"), $600.2 million in aggregate principal amount of New Second-Out First Lien A Notes (as defined below), $763.1 million in aggregate principal amount of New Second-Out First Lien B Notes (as defined below), $752.5 million in aggregate principal amount of New Third-Out First Lien A Notes (as defined below), $969.4 million in aggregate principal amount of New Third-Out First Lien B Notes (as defined below), and $82.0 thousand in non-current finance lease obligations.
If, for any reason, the benefits we realize from our strategic plans, efficiency measures and improvement initiatives are less than our estimates, or adversely affect our operations or cost more or take longer to implement than we project, or if our assumptions prove inaccurate, our results of operations may be materially adversely affected.
If, for any reason, the benefits we realize from our strategic plans, efficiency measures and improvement initiatives are less than our estimates, or adversely affect our operations or cost more or take longer to implement than we project, or if our assumptions prove inaccurate, our results of operations may be materially and adversely affected.
Significant increases in inflation, particularly those related to wages and and services and, to a lesser extent, goods, can have an adverse impact on our business, financial condition, and results of operations. Specifically, the inflationary pressure on labor costs could lead to a reduction in profitability, as we may face challenges in maintaining our margins.
Significant increases in inflation, particularly those related to wages and services and, to a lesser extent, goods, can have an adverse impact on our business, financial condition, and results of operations. Specifically, the inflationary pressure on labor costs could lead to a reduction in profitability, as we may face challenges in maintaining our margins.
State and federal laws and regulations, including HIPAA, govern the collection, dissemination, use, disclosure, creation, receipt, maintenance, transmission, privacy, confidentiality, security, availability and integrity of certain types of protected information, in particular individually identifiable information and protected health information ("PHI").
State and federal laws and regulations, including HIPAA, govern the collection, dissemination, use, disclosure, creation, receipt, maintenance, transmission, privacy, confidentiality, security, availability and integrity of certain types of protected information, in particular individually identifiable health information and PHI.
The Federal Trade Commission, or FTC, and states' Attorneys General have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act.
The Federal Trade Commission ("FTC") and states' Attorneys General have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act.
Risks Related to Indebtedness Our level of indebtedness and current leverage may materially adversely affect our ability to raise additional capital to fund our operations or growth and limit our ability to react to changes in the economy or our industry.
Risks Related to Indebtedness Our level of indebtedness and current leverage may materially and adversely affect our ability to raise additional capital to fund our operations or growth and limit our ability to react to changes in the economy or our industry.
Our second amended and restated certificate of incorporation provides that certain parties may engage in competitive businesses and renounces any entitlement to certain corporate opportunities offered to the private placement investors or any of their managers, officers, directors, equity holders, members, principals, affiliates and subsidiaries (other than us and our subsidiaries) that are not expressly offered to them in their capacities as our directors or officers.
Our second amended and restated certificate of incorporation, as amended, provides that certain parties may engage in competitive businesses and renounces any entitlement to certain corporate opportunities offered to the private placement investors or any of their managers, officers, directors, equity holders, members, principals, affiliates and subsidiaries (other than us and our subsidiaries) that are not expressly offered to them in their capacities as our directors or officers.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters that could expose us to numerous risks. We are subject to changing laws, rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC, the NYSE and the Financial Accounting Standards Board.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters that could expose us to numerous risks. We are subject to changing laws, rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC, the NYSE and the Financial Accounting Standards Board ("FASB").
Department for Health and Human Services Office for Civil Rights and state regulators and lawsuits, including class action lawsuits, by private plaintiffs. Mandatory penalties for HIPAA violations can be significant and OCR and state regulators may require businesses to enter into settlement or resolution agreements and corrective action plans that impose ongoing compliance requirements.
Department for Health and Human Services Office for Civil Rights ("OCR") and state regulators and lawsuits, including class action lawsuits, by private plaintiffs. Mandatory penalties for HIPAA violations can be significant and the OCR and state regulators may require businesses to enter into settlement or resolution agreements and corrective action plans that impose ongoing compliance requirements.
The price of our securities may fluctuate due to a variety of factors, including: • actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry; • changes in the market's expectations about our operating results; • the public's reaction to our press releases, other public announcements and filings with the SEC; • speculation in the press or investment community; • short seller reports and negative public commentary; • actual or anticipated developments in our business, competitors' businesses or the competitive landscape generally; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • our ability to execute on our strategic plans and amount of costs we incur in connection therewith; • changes in financial estimates and recommendations by securities analysts concerning us or the market in general; • the failure of securities analysts to publish research about us, or shortfalls in our operating results compared to levels forecast by securities analysts; • operating and stock price performance of other companies that investors deem comparable to ours; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • any reduction in, or withdrawal of, our credit ratings; • the volume of our Class A common stock available for public sale; • any major change in our Board or management; • sales of substantial amounts of our common stock by our directors, officers or significant stockholders or the perception that such sales could occur; • mergers and strategic alliances in the industry in which we operate; • market prices and conditions in the industry in which we operate; • general economic and political conditions such as recessions, interest rates and "trade wars," inflation, pandemics (such as COVID-19), natural disasters, potential or actual military conflicts or acts of terrorism; • the general state of the securities markets; and • other risk factors listed in this "Risk Factors" section.
The price of our securities may fluctuate due to a variety of factors, including: • actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry; • changes in the market's expectations about our operating results; • the public's reaction to our press releases, other public announcements and filings with the SEC; • speculation in the press or investment community; • short seller reports and negative public commentary; • actual or anticipated developments in our business, competitors' businesses or the competitive landscape generally; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • our ability to execute on our strategic plans and amount of costs we incur in connection therewith; • changes in financial estimates and recommendations by securities analysts concerning us or the market in general; • the failure of securities analysts to publish research about us, or shortfalls in our operating results compared to levels forecast by securities analysts; • operating and stock price performance of other companies that investors deem comparable to ours; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation or governmental investigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • any reduction in, or withdrawal of, our credit ratings; • the volume of our Class A common stock available for public sale; • any major change in our Board or management; • sales of substantial amounts of our common stock by our directors, officers or significant stockholders or the perception that such sales could occur; • mergers and strategic alliances in the industry in which we operate; • market prices and conditions in the industry in which we operate; • general economic and political conditions such as recessions, interest rates and "trade wars," inflation, pandemics, natural disasters, potential or actual military conflicts or acts of terrorism; • the general state of the securities markets; and • other risk factors listed in this "Risk Factors" section.
These provisions provide for, among other things: • the division of our Board into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year; • that directors may only be removed for cause, and only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of stock entitled to vote thereon, voting together as a single class; • the ability of our Board to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change of control; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings; • the right of H&F and Sponsor and certain of their respective affiliates to nominate a number of the members of our Board and the obligation of certain of our the other parties to the Investor Rights Agreement to support such nominees; • certain limitations on convening special stockholder meetings; • that certain provisions of our second amended and restated certificate of incorporation and amended and restated bylaws may be amended only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class; and • an event of default or an acceleration of debt in the event of a change of control.
These provisions provide for, among other things: • the division of our Board of Directors ("Board") into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year; • that directors may only be removed for cause, and only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of stock entitled to vote thereon, voting together as a single class; 48 Table of Contents • the ability of our Board to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change of control; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings; • the right of H&F and Sponsor and certain of their respective affiliates to nominate a number of the members of our Board and the obligation of certain other parties to the Investor Rights Agreement to support such nominees; • certain limitations on convening special stockholder meetings; • that certain provisions of our second amended and restated certificate of incorporation and amended and restated bylaws may be amended only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class; and • an event of default or an acceleration of debt in the event of a change of control.
State Legislation State laws and regulations governing our business vary widely among the states in which we operate, and include laws requiring credentialing of all network providers and "any willing provider" laws requiring networks to accept as participating providers any qualified professional who is willing to meet the terms and conditions of the network.
State laws and regulations governing our business vary widely among the states in which we operate, and include laws requiring credentialing of all network providers and "any willing provider" laws requiring networks to accept as participating providers any qualified professional who is willing to meet the terms and conditions of the network.
To accommodate our past and anticipated future growth and to compete effectively, we will need to continue to integrate our financial information systems and expand, train, manage and motivate our workforce. Furthermore, focusing our financial resources on the expansion of our operations may negatively impact our financial results.
To accommodate our past and anticipated future growth and to compete effectively, we will need to continue to improve and integrate our financial information systems and expand, train, manage and motivate our workforce. Furthermore, focusing our financial resources on the expansion of our operations may negatively impact our financial results.
In addition, we may not be able to prevent incidents of inappropriate use, disclosure or unauthorized access to or acquisition of PHI by our employees or contractors and, on limited occasions in the past, we have been notified of our contractors of immaterial instances of such inappropriate use, disclosure or unauthorized access.
In addition, we may not be able to prevent incidents of inappropriate use, disclosure or unauthorized access to or acquisition of PHI by our employees or contractors and, on limited occasions in the past, we have been notified by our contractors of limited instances of such inappropriate use, disclosure or unauthorized access.
Under our charter, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum will be a state court within the State of Delaware for: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of a fiduciary duty owed by, or any wrongdoing by, any director, officer or employee of ours to us or our stockholders; • any action asserting a claim against us or any director or officer or other employee of ours arising pursuant to any provision of the DGCL or our charter or bylaws (as either may be amended, restated, modified, supplemented or waived from time to time); • any action asserting a claim against us or any director or officer or other employee of ours governed by the internal affairs doctrine; or any action asserting an "internal corporate claim" as that term is defined in Section 115 of the DGCL, shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).
Under our charter, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum will be a state court within the State of Delaware for: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of a fiduciary duty owed by, or any wrongdoing by, any director, officer or employee of ours to us or our stockholders; • any action asserting a claim against us or any director or officer or other employee of ours arising pursuant to any provision of the Delaware General Corporation Law ("DGCL") or our charter or bylaws (as either may be amended, restated, modified, supplemented or waived from time to time); • any action asserting a claim against us or any director or officer or other employee of ours governed by the internal affairs doctrine; or any action asserting an "internal corporate claim" as that term is defined in Section 115 of the DGCL, shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).
Despite our implementation of our cybersecurity risk management programs, processes and practices, our IT environment (and those of third parties on which we rely) may be vulnerable to social engineering, malware, physical break-ins, security flaws, zero day vulnerabilities, attacks by threat actors and other cyber-incidents and disruptive problems caused by employees, contractors, customers, users, vendors or other third parties (including bad actors).
Despite our implementation of our cybersecurity risk management programs, processes, and practices, our IT environment (and those of third parties on which we rely) may be vulnerable to social engineering, malware, physical break-ins, security flaws, zero day vulnerabilities, attacks by threat actors, and other cyber-incidents and disruptive problems caused by employees, contractors, clients, users, vendors or other third parties (including bad actors).
Federal Legislation In recent years, Congress has introduced and, in some cases passed, a number of legislative proposals governing various aspects of the healthcare industry, including initiatives to provide greater government control of healthcare spending, to broaden access to healthcare services, to prohibit, restrict or address "surprise" billing by out-of-network providers, to strengthen obligations for mental health parity in healthcare services, and to change the operating environment for healthcare providers and Payors.
In recent years, Congress has introduced and, in some cases passed, a number of legislative proposals governing various aspects of the healthcare industry, including initiatives to provide greater government control of healthcare spending, to broaden access to healthcare services, to prohibit, restrict or address "surprise" billing by out-of-network providers, to strengthen obligations for mental health parity in healthcare services, and to change the operating environment for healthcare providers and payors.
Numerous other state, federal and foreign laws govern the collection, dissemination, use, disclosure, access to, confidentiality and security of health information and personal data, breaches of such information, and actions that a business must take if it experiences a data breach or cybersecurity incident, such as prompt disclosure to affected customers or individuals or, in the case of a material breach, public disclosure pursuant to the recently enacted cyber security rules and regulations of the SEC.
Numerous other state, federal and foreign laws govern the collection, dissemination, use, disclosure, access to, confidentiality and security of health information and personal data, breaches of such information, and actions that a business must take if it experiences a data breach or cybersecurity incident, such as prompt disclosure to affected clients or individuals or, in the case of a material breach, public disclosure pursuant to the recently enacted cyber security rules and regulations of the SEC.
These covenants limit our and/or certain of our subsidiaries', ability to, among other things: • incur additional indebtedness or issue disqualified or preferred stock; • pay certain dividends or make certain distributions on capital stock or repurchase or redeem capital stock; • make certain loans, investments or other restricted payments; • transfer or sell certain assets; • incur certain liens; • place restrictions on the ability of its subsidiaries to pay dividends or make other payments to us; • guarantee indebtedness or incur other contingent obligations; • prepay junior debt and make certain investments; • consummate any change in control, merger, consolidation or amalgamation, or liquidate, wind up or dissolve ourself or itself (or suffer any liquidation or dissolution), or dispose of all or substantially all of our or such subsidiary's business units, assets or other properties; and • engage in transactions with our affiliates.
These covenants limit our and/or certain of our subsidiaries', ability to, among other things: • incur additional indebtedness or issue disqualified or preferred stock; • pay certain dividends or make certain distributions on capital stock or repurchase or redeem capital stock; • make certain loans, investments or other restricted payments; • transfer or sell certain assets; • incur certain liens; • place restrictions on the ability of its subsidiaries to pay dividends or make other payments to us; • guarantee indebtedness or incur other contingent obligations; • prepay junior debt and make certain investments; • consummate any change in control, merger, consolidation or amalgamation, or liquidate, wind up or dissolve ourself or itself (or suffer any liquidation or dissolution), or dispose of all or substantially all of our or such subsidiary's business units, assets or other properties; and 45 Table of Contents • engage in transactions with our affiliates.
Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business and our ability to attract and retain customers and employees. By way of example, the Affordable Care Act increased the penalties applied under the Federal Sentencing Guidelines for federal healthcare offenses that affect a governmental program.
Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business and our ability to attract and retain clients and employees. By way of example, the Affordable Care Act increased the penalties applied under the Federal Sentencing Guidelines for federal healthcare offenses that affect a governmental program.
Any of the foregoing in the future could adversely affect our revenues and cash flows. Risks Related to Information Technology Systems, Intellectual Property and Cybersecurity Security breaches, loss of data and other cyber incidents or disruptions could compromise sensitive business or patient information and negatively impact our business and reputation, harm both us and our customers and create liability.
Any of the foregoing in the future could adversely affect our revenues and cash flows. Risks Related to Information Technology Systems, Cybersecurity, and Intellectual Property Security breaches, loss of data and other cyber incidents or disruptions could compromise sensitive business or patient information and negatively impact our business and reputation, harm both us and our clients and create liability.
Statements about our ESG related initiatives and goals, and progress towards those goals, may be based on standards that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Further, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions thereto.
Statements about our ESG related initiatives and goals, and progress towards those goals, may be based on standards that are still developing, internal control and processes that continue to evolve, and assumptions that are subject to change in the future. Further, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions thereto.
It is uncertain the extent to which any such judicial, legislative, regulatory or administrative changes, if made, may impact our business or financial condition.
The extent to which any such judicial, legislative, regulatory or administrative changes, if made, may impact our business or financial condition is uncertain.
Risks Related to Our Common Stock H&F and the Sponsor beneficially own a significant equity interest in us and their interests may conflict with us or other shareholders' interests. H&F and the Sponsor collectively control approximately 35% of our voting equity. As a result, they have significant influence over our decisions to enter into any corporate transaction.
Risks Related to Our Common Stock H&F and the Sponsor beneficially own a significant equity interest in us and their interests may conflict with us or other shareholders' interests. H&F and the Sponsor collectively control approximately 33% of our voting equity. As a result, they have significant influence over our decisions to enter into any corporate transaction.
While we maintain safeguards that we believe are reasonable and appropriate to protect the privacy and security of PHI Tabl e of Contents and other personally identifiable information consistent with applicable law and our contractual obligations, we cannot provide assurance regarding how these laws, regulations, and contracts will be interpreted, enforced or applied to our operations; our systems may be vulnerable to physical break-ins, viruses, hackers, and other potential sources of security breaches or incidents and, on limited occasions in the past, we have experienced immaterial breaches.
While we maintain safeguards that we believe are reasonable and appropriate to protect the privacy and security of PHI and other personally identifiable information consistent with applicable law and our contractual obligations, we cannot provide assurance regarding how these laws, regulations, and contracts will be interpreted, enforced or applied to our operations; our systems may be vulnerable to physical break-ins, viruses, hackers, and other potential sources of security breaches or incidents and, on limited occasions in the past, we have experienced immaterial breaches.
If our customers suffer a decline in the number of members of their health plans or reduce the scope of the insurance coverage they provide, fees from the number of claims we match and the amount of PEPM fees we receive may decrease, which may have a material adverse effect on our business, financial condition and results of operations.
If our clients suffer a decline in the number of members of their health plans or reduce the scope of the insurance coverage they provide, fees from the number of claims we match and the amount of PEPM fees we receive may decrease, which may have a material adverse effect on our business, financial condition and results of operations.
Such security or privacy breaches may further: • expose us to liability to the individuals who are the subject of the information, customers that are responsible for the information and/or the parties to whom we are contractually obligated, and subject us to fines or penalties, including liability, fines and penalties under federal and state laws related to the privacy and security of Protected Information; • increase operating expenses as necessary to investigate security breaches and notify affected parties, remediate and/or enhance security controls, comply with federal and state regulations, defend against and resolve actual and potential claims, implement and maintain any additional requirements imposed or adopted by reason of such claims or by government action, and take action to manage public relations issues and preserve our reputation; • harm our reputation and deter or prevent customers from using our products and services, and/or cause customers to find other means to achieve cost savings, including by switching to a competitor or by in-sourcing such services; and • jeopardize the security of confidential information stored in the computer systems of our customers in light of the frequent communication and sharing of files, data and information with our customers.
Such security or privacy breaches may further: • expose us to liability to the individuals who are the subject of the information, clients that are responsible for the information and/or the parties to whom we are contractually obligated, and subject us to fines or penalties, including liability, fines and penalties under federal and state laws related to the privacy and security of protected information; • increase operating expenses as necessary to investigate security breaches and notify affected parties, remediate and/or enhance security controls, comply with federal and state regulations, defend against and resolve actual and potential claims, implement and maintain any additional requirements imposed or adopted by reason of such claims or by government action, and take action to manage public relations issues and preserve our reputation; 32 Table of Contents • harm our reputation and deter or prevent clients from using our products and services, and/or cause clients to find other means to achieve cost savings, including by switching to a competitor or by in-sourcing such services; and • jeopardize the security of confidential information stored in the computer systems of our clients in light of the frequent communication and sharing of files, data and information with our clients.
Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports that will be filed with the SEC.
Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we may be required to include in our periodic reports filed with the SEC.
The termination of a significant number of contracts with our high volume providers, the inability to replace such contracts, or the negotiation of contracts with lower discounts resulting in reduced price concessions would adversely impact our network of providers and thereby reduce the number and value of claims we are able to match and the attractiveness of our network to our customers.
The termination of a significant number of contracts with our high-volume providers, the inability to replace such contracts, or the negotiation of contracts with lower discounts resulting in reduced price concessions would adversely impact our network of providers and thereby reduce the number and value of claims we are able to match and the attractiveness of our network to our clients.
Our health insurance Payor customers may be required to maintain restricted cash reserves and satisfy strict balance sheet ratios promulgated by state regulatory agencies. In addition, the financial stability of our Payor customers may be adversely affected by a variety of factors, including costly litigation or regulatory changes.
Our health insurance payor clients may be required to maintain restricted cash reserves and satisfy strict balance sheet ratios promulgated by state regulatory agencies. In addition, the financial stability of our payor clients may be adversely affected by a variety of factors, including costly litigation or regulatory changes.
Although we did not have any impairment charges following our annual impairment test in the fourth quarter of 2023, we may incur such impairment charges in the future. The current goodwill impairment analysis incorporates our expectations for moderate sales growth and the overall outlook was consistent with our long-term projections.
Although we did not have any goodwill impairment charges following our annual impairment test in the fourth quarter of 2024, we may incur such impairment charges in the future. The current goodwill impairment analysis incorporates our expectations for moderate sales growth and the overall outlook was consistent with our long-term projections.
We depend on uninterrupted computer access for our customers and the reliable operation of our information technology systems; any prolonged delays due to data interruptions or revocation of our software licenses could adversely affect our ability to operate our business and cause our customers to seek alternative service providers.
We depend on uninterrupted computer access for our clients and the reliable operation of our information technology systems; any prolonged delays due to data interruptions or revocation of our software licenses could adversely affect our ability to operate our business and cause our clients to seek alternative service providers.
A failure to adequately meet stakeholders’ expectations may result in loss of business, and an inability to attract and retain customers and talented personnel, which could have a negative impact on our business, results of operations and financial condition, and potentially on the price of our common stock and cost of capital.
A failure to adequately meet stakeholders’ expectations may result in loss of business, and an inability to attract and retain clients and talented personnel, which could have a negative impact on our business, results of operations and financial condition, and potentially on the price of our common stock and cost of capital.
As a provider of healthcare cost management products, services and technology as well as network management services to our customers, and as a subcontractor to contractors with federal and state governments, we are subject to extensive and increasing regulation by a number of governmental entities at the federal, state and local levels with respect to the above laws.
As a provider of healthcare cost management products, services and technology as well as network management services to our clients, and as a subcontractor to contractors with federal and state governments, we are subject to extensive and increasing regulation by a number of governmental entities at the federal, state and local levels with respect to the above laws.
We cannot predict what impact, if any, U.S. federal and Tabl e of Contents state health reforms or other government proposals and activities, which include efforts to change or reform the administration or interpretation of government healthcare programs, laws, regulations or policies, might have on us, but such changes could impose new and more stringent regulatory requirements on our activities, which could adversely affect our business, results of operations and financial condition.
We cannot predict what impact, if any, U.S. federal and state health reforms or other government proposals and activities, which include efforts to change or reform the administration or interpretation of government healthcare programs, laws, regulations or policies, might have on us, but such changes could impose new and more stringent regulatory requirements on our activities, which could adversely affect our business, results of operations and financial condition.
Where enacted, such laws may adversely affect our non-logo business by limiting our ability to continue this business in existing markets or to expand it into new markets. The inability of our customers to pay for our products and services could decrease our revenue.
Where enacted, such laws may adversely affect our non-logo business by limiting our ability to continue this business in existing markets or to expand it into new markets. The inability of our clients to pay for our products and services could decrease our revenue.
Our customers may further disaggregate the services we provide for them generally or in certain geographical areas, such as individual states, and in doing so may create more competitive pricing conditions for such services. Moreover, some of our customers have acquired or may acquire our competitors.
Our clients may further disaggregate the services we provide for them generally or in certain geographical areas, such as individual states, and in doing so may create more competitive pricing conditions for such services. Moreover, some of our clients have acquired or may acquire our competitors.
HIPAA establishes basic national privacy and security standards for protection of PHI by covered entities such as our customers, and the business associates with whom such entities contract for services, including us. As a business associate, we are also directly liable for compliance with HIPAA.
HIPAA establishes basic national privacy and security standards for protection of PHI by covered entities such as our clients, and the business associates with whom such entities contract for services, including us. As a business associate, we are also directly liable for compliance with HIPAA.
Our success will depend upon our ability to enhance our existing products and services, introduce new products and services on a timely and cost-effective basis to meet evolving customer requirements, achieve market acceptance for new products and services and respond to emerging industry standards and other technological changes.
Our success will depend upon our ability to enhance our existing products and services, introduce new products and services on a timely and cost-effective basis to meet evolving client requirements, achieve market acceptance for new products and services, and respond to emerging industry standards and other technological changes.
Our charter designates a state court within the State of Delaware, to the fullest extent permitted by law, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit the Tabl e of Contents ability of our stockholders to obtain a favorable judicial forum for disputes with us or with our directors, officers or employees and may discourage stockholders from bringing such claims.
Our charter designates a state court within the State of Delaware, to the fullest extent permitted by law, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit the ability of our stockholders to obtain a favorable judicial forum for disputes with us or with our directors, officers or employees and may discourage stockholders from bringing such claims.
Our success is also dependent on our customers' ability to attract individuals to join their health plans. Many individuals receive their coverage through their employer, and thus employers play a large role in selecting which health plan their employees use.
Our success is also dependent on our clients' ability to attract individuals to join their health plans. Many individuals receive their coverage through their employer, and thus employers play a large role in selecting which health plan their employees use.
Our ability to collect fees for our products and services may become impaired if our Payor customers are unable to pay for our products and services because they need to maintain cash reserves, if they fail to maintain required balance sheet ratios or if they become financially unstable or insolvent.
Our ability to collect fees for our products and services may become impaired if our payor clients are unable to pay for our products and services because they need to maintain cash reserves, if they fail to maintain required balance sheet ratios or if they become financially unstable or insolvent.
Such risks could be difficult or impossible to eliminate and could adversely affect our business, financial condition and results of operations. If our ability to expand our network and technology infrastructure is constrained, we could lose customers and that loss could adversely affect our operating results.
Such risks could be difficult or impossible to eliminate and could adversely affect our business, financial condition and results of operations. If our ability to expand our network and technology infrastructure is constrained, we could lose clients, and that loss could adversely affect our operating results.
We and our healthcare customers may also be subject to investigations and proceedings that seek recovery under laws such as federal and state false claims acts, civil monetary penalties laws, and anti-kickback laws applicable to the business of our customers.
We and our healthcare clients may also be subject to investigations and proceedings that seek recovery under laws such as federal and state false claims acts, civil monetary penalties laws, and anti-kickback laws applicable to the business of our clients.
Our success is dependent on our ability to deliver high-quality and uninterrupted access for our customers to our computer system, requiring us to protect our computer equipment, software and the information stored in servers against damage by fire, natural disaster, power loss, telecommunications failures, and other catastrophic events, in addition to the cybersecurity and privacy breaches, noted in the above risk factor.
Our success is dependent on our ability to deliver high-quality and uninterrupted access for our clients to our computer system, requiring us to protect our computer equipment, software, and the information stored in servers against damage by fire, natural disaster, power loss, telecommunications failures, and other catastrophic events, in addition to the cybersecurity and privacy breaches noted in the risk factor immediately above.
A significant security breach or incident of the types described above could result in loss of customers, loss of revenues, damage to our reputation, direct damages, regulatory implications, costs of repair and detection and other unplanned expenses.
A significant security breach or incident of the types described above could result in loss of clients, loss of revenues, damage to our reputation, direct damages, regulatory implications, costs of repair and detection, and other unplanned expenses.
Litigation brought by healthcare providers as well as client members has challenged insurers' claims adjudication and reimbursement decisions, and healthcare cost management providers, such as MultiPlan, are sometimes made party to such suits or involved in related litigation.
Litigation brought by healthcare providers as well as client members has challenged insurers' claims adjudication and reimbursement decisions, and healthcare cost management providers, such as Claritev, are sometimes made party to such suits or involved in related litigation.
Our business is dependent upon our ability to (1) receive, store, retrieve, process, analyze and manage data, (2) maintain and upgrade our data processing capabilities, and (3) deliver high-quality and uninterrupted access for our customers to our computer systems.
Our business is dependent upon our ability to (1) receive, store, retrieve, process, analyze and manage data, (2) maintain and upgrade our data processing capabilities, and (3) deliver high-quality and uninterrupted access for our clients to our computer systems.
While we carry property and business interruption insurance to cover operations, the coverage may not be adequate to compensate us for losses that may occur. Tabl e of Contents Failure to adequately protect the confidentiality of our trade secrets, know-how, proprietary applications, business processes and other proprietary information could adversely affect the value of our technology and products.
While we carry property and business interruption insurance to cover operations, the coverage may not be adequate to compensate us for losses that may occur. Failure to adequately protect the confidentiality of our trade secrets, know-how, proprietary applications, business processes and other proprietary information could adversely affect the value of our technology and products.
A security or privacy breach at one of our customers, vendors or strategic partners may also adversely impact the operation of our business, including as a result of a slowing or cessation of claims sent to us to process.
A security or privacy breach at one of our clients, vendors or strategic partners may also adversely impact the operation of our business, including as a result of a slowing or cessation of claims sent to us to process.
We may be unable to expand or adapt our network infrastructure to implement our growth strategy or otherwise meet additional demand or our customers' changing needs on a timely basis, at a commercially reasonable cost or at all.
We may be unable to expand or adapt our network infrastructure to implement our growth strategy or otherwise meet additional demand or our clients' changing needs on a timely basis, at a commercially reasonable cost or at all.
Investigations or proceedings could subject us or our customers to various civil and criminal penalties and administrative sanctions, which could include terminations of contracts, fines, and suspension and debarment from doing business with the government.
Investigations or proceedings could subject us or our clients to various civil and criminal penalties and administrative sanctions, which could include terminations of contracts, fines, and suspension and debarment from doing business with the government.
Our revenue Tabl e of Contents integrity services compete on the basis of identification of and assistance in restoration and preservation of underpaid premiums from CMS caused by member eligibility and status errors. With respect to our data and decision science services, we face competition with a variety of different vendors for each of the main product categories.
Our revenue integrity services compete on the basis of identification of and assistance in restoration and preservation of underpaid premiums from CMS caused by member eligibility and status errors. With respect to our data and decision science services, we face competition with a variety of different vendors for each of the main product categories.
If we are unable to continue to identify or be successful in attracting, motivating and retaining appropriately qualified personnel in sufficient numbers, our business, financial condition and results of operations would be adversely affected. Tabl e of Contents Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure.
If we are unable to continue to identify or be successful in attracting, motivating and retaining appropriately qualified personnel in sufficient numbers, our business, financial condition, and results of operations would be adversely affected. Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure.
The healthcare providers that constitute our network are integral to our operations. Specifically, a portion of the revenues from our analytics-based services are based on a percentage of the price concessions from these providers that apply to claims of our Payor customers.
The healthcare providers that constitute our network are integral to our operations. Specifically, a portion of the revenues from our analytics-based services are based on a percentage of the price concessions from these providers that apply to claims of our payor clients.
The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations.
The trading prices 50 Table of Contents and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations.
In order to process and analyze data and sensitive information, deliver access to our computer systems to our customers, maintain Protected Information and otherwise operate our business, we operate information systems and maintain connectivity from multiple facilities, including the public cloud as well as access by our distributed and remote-first workforce, and utilize software and services from third parties.
In order to process and analyze data and sensitive information, deliver access to our computer systems to our clients, maintain protected information and otherwise operate our business, we operate information systems and maintain connectivity from multiple facilities, including our data centers and the public cloud as well as access by our distributed and remote-first workforce, and utilize software and services from third parties.
In addition, the Consolidated Appropriations Act, 2021, included the No Surprises Act, which provides new protections for patients from "surprise" bills, creates new processes for payments to non-participating providers and facilities, and necessitates new compliance efforts by group health plans and health insurance issuers offering group or health insurance coverage, as well as non-participating providers and facilities.
In addition, the Consolidated Appropriations Act, 2021, included the NSA, which provides new protections for patients from "surprise" bills, creates new processes for payments to non-participating providers and facilities, and necessitates new compliance efforts by group health plans and health insurance issuers offering group or health insurance coverage, as well as non-participating providers and facilities.
Further, we have experienced rate increases in 2022 and Tabl e of Contents 2023 due to the Federal Reserve increasing its reference rate by 5.25% between March 2022 and July 2023. Although it appears the Federal Reserve is at the end of its current rate tightening cycle, any future increases or decreases are uncertain.
Further, we have experienced rate increases in 2022 and 2023 due to the Federal Reserve increasing its reference rate by 5.25% between March 2022 and July 2023. Although it appears the Federal Reserve is at the end of its current rate tightening cycle, any future increases or decreases are uncertain.
Our acquisition strategy involves a number of risks, including: • our ability to find suitable businesses to acquire at affordable valuations or on other acceptable terms; • competition for acquisition targets may lead to substantial increases in purchase prices or one of our competitors acquiring one of our acquisition targets; • our continued dependence on access to the credit and capital markets to fund acquisitions; • prohibition of any of our proposed acquisitions under United States or foreign antitrust laws; • the diversion of management's attention from existing operations to the integration of acquired companies; • our inability to realize expected cost savings and synergies; • compliance with the regulatory environment applicable to an acquisition; • expenses, delays and difficulties of integrating acquired businesses into our existing business structure, which risks are heightened for large-scale acquisitions; and • difficulty in retaining key customers and management personnel.
Our acquisition strategy involves a number of risks, including: • our ability to find suitable businesses to acquire at affordable valuations or on other acceptable terms; • competition for acquisition targets may lead to substantial increases in purchase prices or one of our competitors acquiring one of our acquisition targets; • our continued dependence on access to the credit and capital markets to fund acquisitions; • limitations on our ability to consummate acquisitions under the terms of our various debt documents; • prohibition of any of our proposed acquisitions under United States or foreign antitrust laws; • the diversion of management's attention from existing operations to the integration of acquired companies; • our inability to realize expected cost savings and synergies; • compliance with the regulatory environment applicable to an acquisition; • expenses, delays and difficulties of integrating acquired businesses into our existing business structure, which risks are heightened for large-scale acquisitions; and • difficulty in retaining key clients and management personnel.
Such risks can include, but are not limited to, the potential for errors or inaccuracies in the algorithms or models used, the potential for bias or inaccuracies in the data used to train our ML/AI capabilities, the potential for improper processing of personal information, and the potential for cybersecurity breaches that could compromise personal data or overall functionality.
Such risks can include, but are not limited to, the potential for errors or inaccuracies in the algorithms or models 34 Table of Contents used, the potential for bias or inaccuracies in the data used to train our ML/AI capabilities, the potential for improper processing of personal information, and the potential for cybersecurity breaches that could compromise personal data or overall functionality.
These principles are subject to interpretation by the SEC and other organizations that develop and interpret accounting principles. New accounting principles arise regularly, implementation of which can have a significant effect on and may increase the volatility of our reported operating results and may even retroactively affect previously reported operating results.
These principles are subject to interpretation by the SEC and other organizations that develop and interpret accounting principles. New accounting principles arise regularly, implementation of which can have a significant effect on and may increase the volatility of our reported operating results and may even retroactively affect previously reported 36 Table of Contents operating results.
Although laws such as the Affordable Care Act and the No Surprises Act have not caused us to significantly change our customer contracts or other aspects of our business, it is difficult to quantify the financial impact of such laws and there can be no assurances that we will not be adversely impacted in the future by any amendments to, interpretations of or rule-making regarding these or other healthcare laws or regulations.
Although laws such as the Affordable Care Act and the NSA have not caused us to significantly change our client contracts or other aspects of our business, it is difficult to quantify the financial impact of such laws and there can be no assurances that we will not be adversely impacted in the future by any amendments to, interpretations of or rule-making regarding these or other healthcare laws or regulations.
Recent expansions of our business, including our Data and Decision Sciences business line, involve the processing and analysis of third-party data which may include PHI or other protected personal information which has increased our potential obligations with respect to compliance with state, foreign, federal or other laws.
Recent expansions of our business, including our Data and Decision Sciences business line, involve the processing and analysis of third-party data which may include PHI or other protected personal information which has increased our potential obligations 42 Table of Contents with respect to compliance with state, foreign, federal or other laws.
Tabl e of Contents These provisions could make it more difficult for a third-party to acquire us, even if the third-party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
These provisions could make it more difficult for a third-party to acquire us, even if the third-party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
We may not be able to identify, complete and successfully integrate acquisitions, including BST, in the future and any failure to do so may limit our ability to grow our business.
We may not be able to identify, complete, and successfully integrate acquisitions in the future, and any failure to do so may limit our ability to grow our business.
Because of the breadth of these laws and the narrowness of available statutory and regulatory exceptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws from time to time, including in private litigation.
Because of 39 Table of Contents the breadth of these laws and the narrowness of available statutory and regulatory exceptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws from time to time, including in private litigation.
Tabl e of Contents We are continuing to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
We are continuing to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
Several states have implemented legislation mandating certain contract terms in provider contracts for group health plans, preferred provider organizations, HMOs and other third-party Payors. Depending on the state, these mandatory contract terms may relate to prompt payment, payment amounts and payment methods.
Several states have implemented legislation mandating certain contract terms in provider contracts for group health plans, PPOs, HMOs and other third-party payors. Depending on the state, these mandatory contract terms may relate to prompt payment, payment amounts and payment methods.
Tabl e of Contents Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and the NYSE have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and the NYSE have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
The security and privacy concerns with respect to the healthcare industry may also inhibit the growth of the healthcare information services industry in general, and our customer base and business in particular.
Security and privacy concerns with respect to the healthcare industry may also inhibit the growth of the healthcare information services industry in general, and our client base and business in particular.
A system failure, if prolonged, could result in reduced revenues, loss of customers and damage to our reputation, any of which could cause our business to materially suffer.
A system failure, if prolonged, could result in reduced revenues, loss of clients, and damage to our reputation, any of which could cause our business to materially suffer.
We have previously been, and may in the future be, subject to securities or other stockholder litigation, which is expensive and could divert management attention.
We have previously been, and may in the future be, subject to securities or other stockholder litigation, which is expensive and could divert management's attention.
Although we are one of the largest independent PPO network providers, regional and local PPO network providers may have deeper discounts or broader networks within their particular region, potentially leading our customers to select such competitors in specific geographies.
Although we are one of the largest independent PPO network providers, regional and local PPO network providers may have deeper discounts or broader networks within their region, potentially leading our clients to select such competitors in specific geographies.
We kicked off this growth strategy in 2023, by launching new products, such as Pro Pricer TM and Balance Bill Protection TM , broadening the scope of our services, such as the addition of B2B healthcare payment services and the continued expansion of our end-to-end Surprise Billing Services, and entering into new lines of business with our acquisition of BST and establishing our Data and Decision Sciences Services business line.
We kicked off this growth strategy in 2023, by launching new products, such as Pro Pricer®, broadening the scope of our services, such as the addition of B2B healthcare payment services and the continued expansion of our end-to-end Surprise Billing Services, and entering into new lines of business with our acquisition of BST and establishing our Data and Decision Sciences Services business line.
Violations of prompt payment laws, which regulate the amount of time that may elapse from when a Payor receives a claim for services rendered to when those services are paid, may result in requirements to pay interest in addition to any amounts owed to providers, and may lead to reputational harm or result in a breach of our contractual obligations to certain customers if our failure to reprice claims timely causes Payor's to become responsible for such amounts.
Violations 41 Table of Contents of prompt payment laws, which regulate the amount of time that may elapse from when a payor receives a claim for services rendered to when those services are paid, may result in requirements to pay interest in addition to any amounts owed to providers, and may lead to reputational harm or result in a breach of our contractual obligations to certain clients if our failure to reprice claims timely causes payor's to become responsible for such amounts.
In addition, the majority of our contracts contain payment terms that are based on a percentage of savings to the customer or on the number of covered employees and most contain no minimum requirements for the amount of claims that the customer must process through us.
In addition, the majority of our contracts contain payment terms that are based on a percentage of savings to the client or on the number of covered employees and most contain no minimum requirements for the number of claims that the client must process through us.
We cannot assure you that we will successfully market our services to Tabl e of Contents these insurance carriers and employers or that they will not resort to other means to achieve cost savings, including by in-sourcing or expanding their in-sourcing of such services.
We cannot assure you that we will successfully market our services to these insurance carriers and employers or that they will not resort to other means to achieve cost savings, including by in-sourcing or expanding their in-sourcing of such services.
Tabl e of Contents Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations. We are subject to laws, regulations and rules enacted by national, regional and local governments and the NYSE.
Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations. We are subject to laws, regulations and rules enacted by national, regional and local governments and the NYSE.
If any of Tabl e of Contents the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline.
If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisks from Cybersecurity Threats From time to time, including on limited occasions in the past, we have experienced cybersecurity incidents and have been notified by third party partners of cybersecurity incidents at such partners that affected MultiPlan. However, we have not experienced a cybersecurity threat or incident that has materially affected our business strategies, results of operations or financial condition.
Biggest changeRisks from Cybersecurity Threats 52 Table of Contents From time to time, including on limited occasions in the past, we have experienced cybersecurity incidents and have been notified by third party partners of cybersecurity incidents at such partners that affected Claritev.
Despite the efforts described above to identify, assess and mitigate cybersecurity vulnerabilities, we may not be able to prevent cybersecurity incidents resulting from the cyber threats we face, including incidents that may materially affect our business strategies, results of operations or financial condition.
Despite the efforts described above to identify, assess and mitigate cybersecurity vulnerabilities, we may not be able to prevent cybersecurity incidents resulting from the cyber threats we face, including incidents that may materially and adversely affect our business strategies, results of operations or financial condition.
Moreover, we understand that we are entrusted with sensitive data and we take our responsibility to protect that data very seriously. Detailed below is various components of our cybersecurity program, processes and practices.
Moreover, we understand that we are entrusted with sensitive data and we take our responsibility to protect that data very seriously. Detailed below are various components of our cybersecurity program, processes and practices.
Kim has served as our CIO since late 2013 and has 20 years of experience leading large IT organizations including at major insurance companies such as The Hartford Financial Services Group, Inc. and Torus Insurance Holdings Limited (prior to its acquisition by Enstar Group Limited). MultiPlan has also established a cybersecurity risk management committee, which meets quarterly.
Kim has served as our CIO since late 2013 and has 20 years of experience leading large IT organizations including at major insurance companies such as The Hartford Financial Services Group, Inc. and Torus Insurance Holdings Limited (prior to its acquisition by Enstar Group Limited). Claritev has also established a cybersecurity risk management committee, which meets quarterly.
We discuss these risks above in the section entitled " Risk Factors — Risks Related to Information Technology Systems, Intellectual Property and Cybersecurity ", but the two primary inherent cybersecurity risks we face are: (i) a large scale exfiltration or acquisition of the sensitive data and information we use; and (ii) a prolonged disruption to our information technology environment, impacting our ability to deliver value to our customers.
We discuss these risks above in the section entitled " Risk Factors — Risks Related to Information Technology Systems, Cybersecurity, and Intellectual Property, " but the two primary inherent cybersecurity risks we face are: (i) a large scale exfiltration or acquisition of the sensitive data and information we use; and (ii) a prolonged disruption to our information technology environment, impacting our ability to deliver value to our clients.
The controls include preventive, detective, and corrective controls and are employed via a combination of security personnel, security technologies and associated policies, standards, and processes. MultiPlan has implemented controls in alignment with SOC 1, SOC 2, and HITRUST frameworks, and measures cybersecurity maturity against the NIST Cybersecurity Framework (CSF). MultiPlan tracks identified risks and control deficiencies in a risk register.
The controls include preventive, detective, and corrective controls and are employed via a combination of security personnel, security technologies and associated policies, standards, and processes. Claritev has implemented controls in alignment with SOC 1, SOC 2, and HITRUST frameworks, and measures cybersecurity maturity against the NIST Cybersecurity Framework (CSF). Claritev tracks identified risks and control deficiencies in a risk register.
Prevalent sources of risk are external, malicious threat actors, whether motivated financially, politically, or otherwise; MultiPlan personnel with or without malicious intent; third-party vendors or business partners or breaches impacting them; and natural disasters or other non-malicious events, such as fire, weather, power loss, telecommunications failures, and other catastrophic events.
Prevalent sources of risk are external, malicious threat actors, whether motivated financially, politically, or otherwise; Claritev personnel with or without malicious intent; third-party vendors or business partners or breaches impacting them; and natural disasters or other non-malicious events, such as fire, weather, power loss, telecommunications failures, and other catastrophic events.
Central in this culture is the role of CISO, who is responsible for overseeing, implementing, and operating MultiPlan’s cybersecurity risk management program, as well as assessing and managing the risks from cybersecurity threats. The CISO provides regular reports to senior management. MultiPlan’s CISO, John Riding, has been with the Company since July 2021.
Central in this culture is the role of CISO, who is responsible for overseeing, implementing, and operating Claritev’s cybersecurity risk management program, as well as assessing and managing the risks from cybersecurity threats. The CISO provides regular reports to senior management. Claritev’s CISO, John Riding, has been with the Company since July 2021.
He is a two time CISO, with nearly 20 years of experience in cybersecurity. Prior to joining MultiPlan, he was CISO at a technology company in the financial services industry. He has also worked in cybersecurity consulting prior to becoming a CISO and he has experience in cybersecurity strategy, risk management, security architecture, incident response, digital forensics, and compliance.
He is a two time CISO, with nearly 20 years of experience in cybersecurity. Prior to joining Claritev, he was CISO at a technology company in the financial services industry. He has also worked in cybersecurity consulting prior to becoming a CISO and he has experience in cybersecurity strategy, risk management, security architecture, incident response, digital forensics, and compliance.
Risk Management Once risks are identified and assessed, a risk management plan is determined, based on recommendations from internal and external subject matter experts. MultiPlan strives to implement a multi-layered set of security controls based on industry standard security controls frameworks and best practices to mitigate relevant cybersecurity risks.
Risk Management Once risks are identified and assessed, a risk management plan is determined, based on recommendations from internal and external subject matter experts. Claritev strives to implement a multi-layered set of security controls based on industry standard security controls frameworks and best practices to mitigate relevant cybersecurity risks.
Risk Management and Strategy Our business faces many risks and one of the ways in which we identify, assess, manage and mitigate those risks is through our Enterprise Risk Management ("ERM") program, which is our overall risk management program. Through our ERM program, we oversee, control and drive improvement of MultiPlan's risk management capabilities in a constantly changing operating environment.
Risk Management and Strategy Our business faces many risks and one of the ways in which we identify, assess, manage and mitigate those risks is through our Enterprise Risk Management ("ERM") program, which is our overall risk management program. Through our ERM program, we oversee, control and drive improvement of Claritev's risk management capabilities in a constantly changing operating environment.
Efforts are made to ensure that the risk owners understand the implications of the risk to help facilitate informed risk decision making. Risk decisions and the status of risk mitigation activities are reported on and reviewed at least quarterly by senior management and the Risk Committee of MultiPlan’s board of directors.
Efforts are made to ensure that the risk owners understand the implications of the risk to help facilitate informed risk decision making. Risk decisions and the status of risk mitigation activities are reported on and reviewed at least quarterly by senior management and the Risk Committee of Claritev’s board of directors.
Management Senior management of MultiPlan believes it has established a culture where cybersecurity risk management is prioritized, the establishment and enforcement of information security strategies, policies, standards, and procedures is supported, and the individuals with responsibility for the same are empowered.
Management Senior management of Claritev believes it has established a culture where cybersecurity risk management is prioritized, the establishment and enforcement of information security strategies, policies, standards, and procedures is supported, and the individuals with responsibility for the same are empowered.
His accomplishments include: first-ever White Tabl e of Contents House Counter-Terrorism Czar and Cyber Czar; elected to Cyber-Security Hall of Fame; former co-chair of Virginia’s Cybersecurity Commission; former member of the New York Cybersecurity Advisory Board; former member of the Presidential Review Group on Intelligence and Technology; and numerous publications on risk management and cybersecurity, including the New York Times bestsellers Cyber War and Warnings on Terrorism and National Security.
His accomplishments include: first-ever White House Counter-Terrorism Czar and Cyber Czar; elected to Cyber-Security Hall of Fame; former co-chair of Virginia’s Cybersecurity Commission; former member of the New York Cybersecurity Advisory Board; former member of the Presidential Review Group on Intelligence and Technology; and numerous publications on risk management and cybersecurity, including the New York Times bestsellers Cyber War and Warnings on Terrorism and National Security.
These reports also include the status of threat and vulnerability management efforts, security controls engineering, user awareness training, third-party risk management, security events, detections, investigations, as well as audit and compliance activities, among others. Mr. Riding reports to our Chief Information Officer, Michael Kim. Mr.
These reports also include the status of threat and vulnerability management efforts, security controls engineering, user awareness 53 Table of Contents training, third-party risk management, security events, detections, investigations, as well as audit and compliance activities, among others. Mr. Riding reports to our Chief Information Officer, Michael Kim. Mr.
Further, much of the data that we store, process and manage is highly sensitive, such as Personal Health Information ("PHI") and individually identifiable information for patients, customers, contractors, employees and other third parties. For these reasons, our cybersecurity program is critical to our business success.
Further, much of the data that we store, process and manage is highly sensitive, such as PHI and individually identifiable information for patients, clients, contractors, employees and other third parties. For these reasons, our cybersecurity program is critical to our business success.
Item 1C. Cybersecurity MultiPlan’s business is dependent upon our ability to: (1) store, retrieve, process and manage information; (2) maintain and upgrade our data processing and information technology capabilities; and (3) deliver high-quality and uninterrupted access for our customers to our computer systems.
Item 1C. Cybersecurity Claritev’s business is dependent upon our ability to: (1) store, retrieve, process and manage information; (2) maintain and upgrade our data processing and information technology capabilities; and (3) deliver high-quality and uninterrupted access for our clients to our computer systems.
Oversight of the ERM program, including cybersecurity risk, rests with the Risk Committee of our Board (the "Risk Committee"), which receives periodic updates regarding the ERM program from management.
Oversight of the ERM program, including cybersecurity risk, rests with the Risk Committee of our Board (the "Risk Committee"), which receives periodic updates regarding the ERM program from 51 Table of Contents management.
For example, as we continue to implement artificial intelligence and machine learning in our products and services, the cybersecurity risks that are associated with these technologies will be considered when we determine how and to what extent these technologies are utilized.
For example, as we continue to implement AI and ML in our products and services, the cybersecurity risks that are associated with these technologies will be considered when we determine how and to what extent these technologies are utilized.
Likelihood is estimated based on various factors such as internet exposure, exploitability, vulnerability severity, threat intelligence, and the strength of any mitigating controls.
Risks are assessed based on their perceived likelihood and potential impact to determine prioritization and actions. Likelihood is estimated based on various factors such as internet exposure, exploitability, vulnerability severity, threat intelligence, and the strength of any mitigating controls.
We utilize our commercial relationships and third-party partners as necessary and prudent to assist in identifying vulnerabilities, such as private threat intelligence, third-party monitoring, and the facilitation of audits and assessments.
We utilize our commercial relationships and third-party partners as necessary and prudent to assist in identifying vulnerabilities, such as private threat intelligence, third-party monitoring, and the facilitation of audits and assessments. Risk Assessment As a result of the risk identification process, newly identified risks, vulnerabilities or issues are assessed to determine prioritization and to recommend corrective actions.
Removed
Tabl e of Contents Risk Assessment As a result of the risk identification process, newly identified risks, vulnerabilities or issues are assessed to determine prioritization and to recommend corrective actions. Risks are assessed based on their perceived likelihood and potential impact to determine prioritization and actions.
Added
We also engage auditors to perform specific external audits and consultants to perform independent risk assessments. Risk assessments and audits include interviews, documentation reviews, and observations of technical controls. We also engage third-party experts to perform technical exercises, such as penetration testing, and to facilitate and evaluate our cyber incident readiness.
Added
However, we have not experienced a cybersecurity threat or incident that has materially affected our business strategies, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We lease all of our properties, which are located in 11 states. Our corporate headquarters are located in New York, New York. Our primary data center is hosted by a leading provider of co-location hosting services in Texas.
Biggest changeItem 2. Properties We lease all of our properties, which are located in 10 states. Our corporate headquarters are located in McLean, Virginia. Our primary data center is hosted by a leading provider of co-location hosting services in Texas. Our redundant data center is hosted by a leading provider of co-location hosting services within a facility located in Illinois.
Removed
Our redundant data center is hosted by a leading provider of co-location hosting services within a facility located in Illinois.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the ultimate outcome with respect to such proceedings cannot be predicted with certainty, we believe they will not have a material adverse effect on our financial condition or results of operations.
Biggest changeWhile the ultimate outcome with respect to such proceedings cannot be predicted with certainty, we believe they will not have a material adverse effect on our financial condition or results of operations. Item 4. Mine Safety Disclosures N/A Part II
Removed
On March 25, 2021 and April 9, 2021, we were named as a defendant in two putative class action lawsuits relating to the Transactions that have since been consolidated under the caption In Re MultiPlan Corp. Stockholders Litigation, Consolidated C.A. No. 2021-0300-LWW (Del.Ch) ("Delaware Stockholder Litigation").
Removed
The Delaware Stockholder Litigation asserts breach of fiduciary duty claims and aiding and abetting breach of fiduciary duty claims against the former directors of the Churchill board, the Sponsor, KG and M. Klein (collectively, the "Churchill Defendants") and the Company.
Removed
The Delaware Stockholder Tabl e of Contents Litigation complaint alleges that the Transactions were a product of an unfair process by Churchill, which was allegedly impacted by conflicts of interest, resulting in mispricing of the Transactions. The complaint seeks, among other things, damages, certain equitable relief including the reopening of redemptions, and attorneys’ fees and costs.
Removed
The Company and the Churchill Defendants filed motions to dismiss the complaint. On January 3, 2022, the Chancery Court issued a ruling granting in part the Company’s motion to dismiss and denying the motion to dismiss filed by the Churchill Defendants. While the Company was dismissed from the Delaware Stockholder Litigation, the consolidated lawsuit proceeded against the Churchill Defendants.
Removed
We had previously agreed to indemnify certain of the Churchill Defendants with respect to the Delaware Stockholder Litigation. On November 17, 2022, the Company and the parties to the Delaware Stockholder Litigation entered into a settlement agreement to fully and finally resolve the Delaware Stockholder Litigation.
Removed
In connection with the settlement, the Company and its insurers paid $33.75 million in exchange for a broad release of all claims related to the business combination and ownership of Churchill stock and warrants from February 19, 2020 through October 8, 2020. The settlement was paid pursuant to the Company’s indemnification obligations and from available director and officer insurance policies.
Removed
On February 28, 2023, the Delaware Court of Chancery held a settlement hearing relating to the Delaware Action and approved the settlement, with the court ruling becoming final 30 days thereafter. As a result, the Delaware Stockholder Litigation has been resolved. During the year ended December 31, 2023, the Company paid the settlement of the Delaware Stockholder Litigation.
Removed
The Company has also incurred legal expenses in connection with the Delaware Stockholder Litigation, which have been expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of (loss) income and comprehensive (loss) income. On May 31, 2023, a putative class action complaint captioned Sarkar v. White, C.A. No. 2023-0576-NAC (Del.
Removed
Ch.) was filed against our Board in the Court of Chancery of the State of Delaware. The complaint alleges violations of 8 Del. C. §213(a) in fixing record dates more than 60 days before the Company’s annual meetings on April 26, 2022 (“2022 Annual Meeting”) and April 26, 2023 (“2023 Annual Meeting”).
Removed
The complaint alleged that, because these record dates violated 8 Del. C. §213(a), the actions taken at the 2022 and 2023 Annual Meetings were invalid. The complaint also asserted claims for breach of fiduciary duty.
Removed
On August 4, 2023, the Company held a meeting at which stockholders voted to ratify the election of the four Class II and the four Class III directors, as well as ratify the 2023 Employee Stock Purchase Plan. These actions mooted Plaintiff’s claims.
Removed
On August 14, 2023, the Court granted the plaintiff’s request to voluntarily dismiss this action without prejudice as to the named plaintiff only, and retained jurisdiction solely for the purpose of adjudicating an anticipated application for attorney’s fees and expenses incurred by plaintiff’s counsel.
Removed
Without admitting any fault or wrongdoing, the Company agreed to pay $300,000 in attorneys’ fees and expenses to plaintiff’s counsel in connection with the mooted claims. On December 26, 2023, the Court entered an order closing the case, subject to the Company filing an affidavit with the Court confirming compliance with the Court’s order.
Removed
In entering the order, the Court did not review, and did not pass judgment on, the payment of the attorneys’ fees and expenses or their reasonableness. Item 4. Mine Safety Disclosures N/A Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 57 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 57 Item 6. [Reserved] 59 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 60 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 78 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 54 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54 Item 6. [Reserved] 56 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 57 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 76 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities On February 27, 2023, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $100 million of its Class A common stock from time to time in open market transactions. The repurchase program was effective immediately and was set to expire on December 31, 2023.
Biggest changeRecent Sales of Unregistered Securities None. 54 Table of Contents Issuer Purchases of Equity Securities On February 27, 2023, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $100 million of its Class A common stock from time to time in open market transactions.
Performance Graph The following Performance Graph and related information shall not be deemed "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Securities Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.
Performance Graph The following Performance Graph and related information shall not be deemed "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.
The graph assumes that the value of the investment in our Class A common stock and each index was $100 at October 9, 2020, which was the first day the Class A common stock was traded on the New York Stock Exchange, and that all dividends paid by those companies included in the indices were reinvested.
The graph assumes that the value of the investment in our Class A common stock and each index was $100 at October 9, 2020, which was the first day the Class A common stock was traded on the NYSE, and that all dividends paid by those companies included in the indices were reinvested.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price and Ticker Symbols Our Class A common stock are currently listed on NYSE under the symbol "MPLN". Our Public Warrants trade over the counter under the symbol "MPLNW".
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price and Ticker Symbols Our Class A common stock is currently listed on NYSE under the symbol "MPLN." Our Public Warrants (as defined below) trade over the counter under the symbol "MPLNW".
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, Security Ownership of Certain Beneficial Owner and Management and related Stockholder Matters, for information related to securities authorized for issuance under the Company's equity compensation plans. Recent Sales of Unregistered Securities None.
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, Security Ownership of Certain Beneficial Owner and Management and related Stockholder Matters, for information related to securities authorized for issuance under the Company's equity compensation plans.
On November 8, 2023, the Company announced that its Board of Directors extended the Company’s $100 million program to repurchase shares of the Company’s common stock through December 31, 2024.
The repurchase program was effective immediately and was set to expire on December 31, 2023. On November 8, 2023, the Company announced that its Board of Directors extended the Company’s $100 million program to repurchase shares of the Company’s common stock through December 31, 2024.
Holders As of February 22, 2024, there were 99 holders of record of our Class A common stock. Such numbers do not include beneficial owners holding our securities through nominee names. Tabl e of Contents Dividend Policy We have not paid any cash dividends on our Class A common stock to date.
Holders As of February 21, 2025, there were 81 holders of record of our Class A common stock. Such numbers do not include beneficial owners holding our securities through nominee names. Dividend Policy We have not paid any cash dividends on our Class A common stock to date.
The graph is based on historical data and is not necessarily indicative of future performance. Tabl e of Contents October 9, 2020 ($) December 31, 2021 ($) December 31, 2022 ($) December 31, 2023 ($) MultiPlan Corporation 100.00 45.76 11.88 14.88 S&P 500 Index 100.00 139.52 114.25 144.29 S&P Composite 1500 Health Care Technology Index 100.00 137.40 117.13 85.22
The graph is based on historical data and is not necessarily indicative of future performance. 55 Table of Contents October 9, 2020 ($) December 31, 2023 ($) December 31, 2024 ($) Claritev Corporation 100.00 14.88 3.82 S&P 500 Index 100.00 144.29 180.39 S&P Composite 1500 Health Care Technology Index 100.00 85.22 93.53
Removed
As of December 31, 2023, the Company has repurchased $15.2 million in shares of its common stock under the Share Repurchase Program, leaving up to $84.8 million in authorized repurchases of its common stock through the remainder of the Share Repurchase Program, as extended.
Added
As of December 31, 2024, the Company has repurchased its Class A common stock as part of this program using cash on hand for an aggregate amount of $25.6 million, including commissions, of which $10.4 million was spent during the year ended December 31, 2024.
Removed
The Company expects to fund the remainder of the Share Repurchase Program using the Company’s cash on hand and cash from operations.

Item 7. Management's Discussion & Analysis

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

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Biggest changeTable of Contents Results of Operations for the Years Ended December 31, 2023 and 2022 The following table provides the results of operations for the periods indicated: Year Ended December 31, Change ($ in thousands) 2023 2022 $ % Revenues Network-Based Services $ 223,394 $ 245,280 $ (21,886) (8.9) % Analytics-Based Services 625,754 713,715 (87,961) (12.3) % Payment and Revenue Integrity Services 112,376 120,721 (8,345) (6.9) % Total Revenues $ 961,524 $ 1,079,716 $ (118,192) (10.9) % Costs of services (exclusive of depreciation and amortization of intangible assets shown below) 235,468 204,098 31,370 15.4 % General and administrative expenses 144,057 166,837 (22,780) (13.7) % Depreciation expense 77,323 68,756 8,567 12.5 % Amortization of intangible assets 342,694 340,536 2,158 0.6 % Loss on impairment of goodwill and intangible assets — 662,221 (662,221) (100.0) % Operating income (loss) 161,982 (362,732) 524,714 144.7 % Interest expense 333,208 303,401 29,807 9.8 % Interest income (8,233) (3,500) (4,733) 135.2 % Gain on extinguishment of debt (53,968) (34,551) (19,417) 56.2 % Gain on investments — (289) 289 100.0 % Gain on change in fair value of Private Placement Warrants and Unvested Founder Shares (1,965) (67,050) 65,085 97.1 % Net loss before taxes (107,060) (560,743) 453,683 80.9 % (Benefit) provision for income taxes (15,363) 12,169 (27,532) (226.2) % Net loss $ (91,697) $ (572,912) $ 481,215 84.0 % Revenues Revenues decreased $118.2 million, or 10.9%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Biggest changeAs part of the Refinancing Transactions, we have incurred transaction expenses of approximately $68.8 million, of which $63.9 million have been expensed as incurred for the year ended December 31, 2024, and are included in Transaction Costs - Refinancing Transaction in the accompanying consolidated statements of loss and comprehensive loss, and $4.9 million associated with the revolving credit facility are included in other assets in the accompanying consolidated balance sheets as of December 31, 2024. 65 Table of Contents Results of Operations for the Years Ended December 31, 2024 and 2023 The following table provides the results of operations for the periods indicated: Year Ended December 31, Change ($ in thousands) 2024 2023 $ % Revenues Network-Based Services $ 185,281 $ 223,394 $ (38,113) (17.1) % Analytics-Based Services 634,767 625,754 9,013 1.4 % Payment and Revenue Integrity Services 110,576 112,376 (1,800) (1.6) % Total Revenues $ 930,624 $ 961,524 $ (30,900) (3.2) % Costs of services (exclusive of depreciation and amortization of intangible assets shown below) 239,404 235,468 3,936 1.7 % General and administrative expenses 160,216 144,057 16,159 11.2 % Depreciation expense 88,190 77,323 10,867 14.1 % Amortization of intangible assets 343,883 342,694 1,189 0.3 % Loss on impairment of goodwill and intangible assets 1,488,863 — 1,488,863 NM Operating (loss) income (1,389,932) 161,982 (1,551,914) NM Interest expense 326,371 333,208 (6,837) (2.1) % Interest income (3,130) (8,233) 5,103 62.0 % Transaction Costs - Refinancing Transaction 63,930 — 63,930 NM Gain on extinguishment of debt (5,913) (53,968) 48,055 89.0 % Gain on change in fair value of Private Placement Warrants and Unvested Founder Shares (477) (1,965) 1,488 75.7 % Net loss before taxes (1,770,713) (107,060) (1,663,653) NM (Benefit) provision for income taxes (124,881) (15,363) (109,518) NM Net loss $ (1,645,832) $ (91,697) $ (1,554,135) NM Revenues Revenues decreased $30.9 million, or 3.2%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Our Network-Based Services Payors are priced based on either a percentage of savings achieved or at a per employee/member per month fee. This service category also includes customized network development and management services for Payors seeking to expand their network footprint using outsourced services.
Our Network-Based Services are priced based on either a percentage of savings achieved or at a per employee/member per month fee. This service category also includes customized network development and management services for payors seeking to expand their network footprint using outsourced services.
Gain on extinguishment of debt In the year ended December 31, 2023, the Company repurchased and cancelled $184.0 million of the 5.750% Notes and $25.0 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $46.9 million and $7.1 million, respectively.
In the year ended December 31, 2023, the Company repurchased and cancelled $184.0 million of the 5.750% Notes and $25.0 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $46.9 million and $7.1 million, respectively.
The interest rate on the Senior Convertible PIK Notes is fixed at 6% in cash and 7% in kind and is payable semi-annually on April 15 and October 15 of each year. On October 29, 2020, the Company issued $1,300.0 million in aggregate principal amount of the 5.750% Notes.
The interest rate on the Senior Convertible PIK Notes is fixed at 6% in cash and 7% in kind and is payable semi-annually on April 15 and October 15 of each year. 5.750% Notes On October 29, 2020, the Company issued $1,300.0 million in aggregate principal amount of the 5.750% Notes.
Services included in this category are as follows: ◦ Payment and Revenue Integrity Services ▪ Pre-Payment Clinical Reviews ▪ Coordination of Benefits and Subrogation Services ▪ Data Mining ▪ Revenue Integrity Services ◦ Network-Based Services ▪ Property & Casualty Network Services (pre-payment) ▪ Other network services Our reporting methodology consists of the following: • Medical charges processed and potential medical cost savings are reported based on closed claims date, such that the reported claims are claims that have closed during the period presented, which more closely aligns with our receipt of Table of Contents revenue during that period.
Services included in this category are as follows: ◦ Payment and Revenue Integrity Services ▪ Pre-Payment Clinical Reviews ▪ Coordination of Benefits and Subrogation Services ▪ Data Mining ▪ Revenue Integrity Services ◦ Network-Based Services ▪ Property & Casualty Network Services (pre-payment) ▪ Other network services Our reporting methodology consists of the following: • Medical charges processed and potential medical cost savings are reported based on closed claims date, such that the reported claims are claims that have closed during the period presented, which more closely aligns with our receipt of 59 Table of Contents revenue during that period.
Loss on Impairment of Goodwill and Intangible Assets A loss on impairment is recorded in connection with the quantitative impairment testing of our goodwill and indefinite-lived intangibles and is performed annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable, and their fair value is less than their carrying value.
Loss on Impairment of Goodwill and Intangible Assets A loss on impairment can be recorded in connection with the quantitative impairment testing of our goodwill and indefinite-lived intangibles and is performed annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable, and their fair value is less than their carrying value.
Debt Repayments In the year ended December 31, 2023, the Company repurchased and cancelled $184.0 million of the 5.750% Notes and $25.0 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $46.9 million and $7.1 million, respectively.
In the year ended December 31, 2023, the Company repurchased and cancelled $184.0 million of the 5.750% Notes and $25.0 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $46.9 million and $7.1 million, respectively.
The changes in fair value are primarily due to the change in the stock price of the Company's Class A common stock and the passage of time over that period. Income Tax Expense (Benefit) Income tax expense (benefit) consists of federal, state, and local income taxes.
The changes in fair value are primarily due to the change in the stock price of the Company's Class A common stock and the passage of time over that period. Income Tax Benefit Income tax benefit consists of federal, state, and local income taxes.
These services are generally priced on a per provider contract or other project-based price; • Payment and Revenue Integrity Services reduce medical cost through data, technology, and clinical expertise deployed to identify and remove improper and unnecessary charges before or after claims are paid, or to identify and help restore premium dollars underpaid by CMS for government health plans caused by discrepancies with enrollment-related data.
These services are generally priced on a per provider contract or other project-based price; • Payment and Revenue Integrity Service s reduce medical cost through data, technology, and clinical expertise deployed to identify and remove improper and unnecessary charges before or after claims are paid, or to identify and help restore premium dollars underpaid by CMS for government health plans caused by discrepancies with enrollment-related data.
Payment and Revenue Integrity Services are generally priced based on a percentage of savings achieved; • Data and Decision Science Services reduce medical costs through a next generation suite of solutions that apply modern methods of data science to produce descriptive, predictive and prescriptive analytics that enable customers to optimize decision-making about plan design and network configurations and to support decision-making to improve clinical outcomes, plan performance, and competitive positioning.
Payment and Revenue Integrity Services are generally priced based on a percentage of savings achieved; and • Data and Decision Science Services reduce medical costs through a next generation suite of solutions that apply modern methods of data science to produce descriptive, predictive, and prescriptive analytics that enable clients to optimize decision-making about plan design and network configurations and to support decision-making to improve clinical outcomes, plan performance, and competitive positioning.
These covenants limit our and/or certain of our subsidiaries' ability to, among other things: • incur additional indebtedness or issue disqualified or preferred stock; • pay certain dividends or make certain distributions on capital stock or repurchase or redeem capital stock; • make certain loans, investments or other restricted payments; • transfer or sell certain assets; • incur certain liens; • place restrictions on the ability of its subsidiaries to pay dividends or make other payments to us; • guarantee indebtedness or incur other contingent obligations; • prepay junior debt and make certain investments; • consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or dispose of all or substantially all of its business units, assets or other properties; and • engage in transactions with our affiliates.
These covenants limit our and/or certain of our subsidiaries' ability to, among other things: • incur additional indebtedness or issue disqualified or preferred stock; • pay certain dividends or make certain distributions on capital stock or repurchase or redeem capital stock; • make certain loans, investments or other restricted payments; • transfer or sell certain assets; • incur certain liens; • place restrictions on the ability of its subsidiaries to pay dividends or make other payments to us; • guarantee indebtedness or incur other contingent obligations; • prepay junior debt and make certain investments; • consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or dispose of all or substantially all of its business units, assets or other properties; and 72 Table of Contents • engage in transactions with our affiliates.
Previous reporting included claims based on receipt date so that at the conclusion of any time period there were medical charges processed that would not include the ultimate potential medical cost savings achieved for that claim. • Future development of previously reported medical charges processed and potential medical cost savings due to customer claim resubmissions or cancellation of claims will be included in the future reporting period in which that future development occurs.
Previous reporting included claims based on receipt date so that at the conclusion of any time period there were medical charges processed that would not include the ultimate potential medical cost savings achieved for that claim. • Future development of previously reported medical charges processed and potential medical cost savings due to client claim resubmissions or cancellation of claims will be included in the future reporting period in which that future development occurs.
BST Acquisition On May 8, 2023, the Company acquired BST, a company offering a next generation suite of solutions that apply modern methods of data science to produce descriptive, predictive and prescriptive analytics that enable customers to optimize decision-making about plan design and network configurations and to support decision-making to improve clinical outcomes, plan performance, and competitive positioning.
BST Acquisition On May 8, 2023, the Company acquired BST, a company offering a next generation suite of solutions that apply modern methods of data science to produce descriptive, predictive and prescriptive analytics that enable clients to optimize decision-making about plan design and network configurations and to support decision-making to improve clinical outcomes, plan performance, and competitive positioning.
We offer these Payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan customers, by lowering the per-unit cost of medical services incurred, managing the utilization of medical services, and increasing the likelihood that the services are reimbursed without error and accepted by the provider.
We offer these payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan clients, by lowering the per-unit cost of medical services incurred, managing the utilization of medical services, and increasing the likelihood that the services are reimbursed without error and accepted by the provider.
Significant judgment is used in constraining estimates of variable consideration, and these estimates are based upon both customer-specific and aggregated factors that include historical billing and adjustment data, customer contractual terms, and performance guarantees. We update our estimates at the end of each reporting period as additional information becomes available.
Significant judgment is used in constraining estimates of variable consideration, and these estimates are based upon both client-specific and aggregated factors that include historical billing and adjustment data, client contractual terms, and performance guarantees. We update our estimates at the end of each reporting period as additional information becomes available.
On May 8, 2023, we paid cash consideration in an aggregate amount of $140.9 million as of December 31, 2023, for the acquisition of BST. We funded this cash consideration with cash on hand. Our primary sources of liquidity are internally generated funds combined with our borrowing capacity under our revolving credit facility.
On May 8, 2023, we paid cash consideration in an aggregate amount of $140.9 million as of December 31, 2024, for the acquisition of BST. We funded this cash consideration with cash on hand. Our primary sources of liquidity are internally generated funds combined with our borrowing capacity under our 2025 revolving credit facility.
Depreciation Expense The increase in depreciation expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was due to purchases of property and equipment, including internally generated capitalized software in the years ended December 31, 2023 and 2022, partially offset by assets that were written-off or became fully depreciated in the period.
Depreciation Expense The increase in depreciation expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to purchases of property and equipment, including internally generated capitalized software in the years ended December 31, 2024 and 2023, partially offset by assets that were written-off or became fully depreciated in the period.
Since certain of our fees are based on the amount of savings achieved by our customers, and our customers are the final adjudicator of the claims and may choose not to reduce claims or reduce claims by only a portion of the potential savings identified, potential medical cost savings may not directly correlate with the amount of fees earned in connection with the processing of such claims.
Since certain of our fees are based on the amount of savings achieved by our clients, and our clients are the final adjudicator of the claims and may choose not to reduce claims or reduce claims by only a portion of the potential savings identified, potential medical cost savings may not directly correlate with the amount of fees earned in connection with the processing of such claims.
Table of Contents Adjusted EPS is used in reporting to our Board and executive management and as a component of the measurement of our performance. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year basis.
Adjusted EPS is used in reporting to our Board and executive management and as a component of the measurement of our performance. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year basis.
The following is a discussion of our critical accounting policies and the related management estimates and assumptions necessary in determining the value of related assets, liabilities, revenues and expenses. Revenue Recognition We derive revenues from contracts with customers by selling various cost management services and solutions.
The following is a discussion of our critical accounting policies and the related management estimates and assumptions necessary in determining the value of related assets, liabilities, revenues and expenses. Revenue Recognition We derive revenues from contracts with clients by selling various cost management services and solutions.
See Note 2 Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for additional information. Table of Contents Goodwill Goodwill is calculated as the excess of the purchase price in an acquisition over the fair value of identifiable net assets acquired.
See Note 2 Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for additional information. Goodwill Goodwill is calculated as the excess of the purchase price in an acquisition over the fair value of identifiable net assets acquired.
These credits are the result of Payors not utilizing the discounts that were initially calculated, or differences between our estimates of savings achieved for a customer and the amounts self-reported in the following month by that same customer.
These credits are the result of payors not utilizing the discounts that were initially calculated, or differences between our estimates of savings achieved for a client and the amounts self-reported in the following month by that same client.
Costs of Services (exclusive of depreciation and amortization of intangible assets) Costs of services (exclusive of depreciation and amortization of intangible assets) consist of all costs specifically associated with claims processing activities for customers, sales and marketing, and the development and maintenance of our networks, analytics-based services, and payment and revenue integrity services.
Costs of Services (exclusive of depreciation and amortization of intangible assets) Costs of services (exclusive of depreciation and amortization of intangible assets) consist of all costs specifically associated with claims processing activities for clients, sales and marketing, and the development and maintenance of our networks, analytics-based services, and payment and revenue integrity services.
We evaluate a variety of factors on a regular basis to determine the amount of deferred income tax assets to recognize in our financial statements, including our recent earnings history, current and projected future taxable income, the number of years our net operating loss and tax credits can be carried forward, the existence of taxable temporary differences, any changes in current tax law, the TCJA and available tax planning strategies.
We evaluate a variety of factors on a regular basis to determine the amount of deferred income tax assets to recognize in our financial statements, including our recent earnings history, current and projected future taxable income, the number of years our net operating loss and tax credits can be carried forward, the existence of taxable temporary differences, any changes in current tax law, the Tax Cuts and Jobs Act of 2017 ("TCJA") and available tax planning strategies.
The Company's interest rate swaps are highly effective at offsetting the changes in cash outflows and therefore designated as cash flow hedging instruments. The blended rate for Term Loan B factoring in the effect of the interest rate swap agreements was 9.53% as of December 31, 2023.
The Company's interest rate swaps are highly effective at offsetting the changes in cash outflows and therefore designated as cash flow hedging instruments. The blended rate for Term Loan B factoring in the effect of the interest rate swap agreements was 9.07% and 9.53% as of December 31, 2024 and 2023, respectively.
These services are generally priced at a bundled PEPM rate; • Network-Based Services reduce medical cost by providing access to contracted discounts with healthcare providers with whom Payors do not have a contractual relationship, through our expansive network of over 1.4 million healthcare providers, which forms one of the largest independent preferred provider organizations in the United States.
These services are generally priced at a bundled PEPM rate; • Network-Based Services reduce medical cost by providing access to contracted discounts with healthcare providers with whom payors do not have a contractual relationship, through our expansive network of over 1.4 million healthcare providers, which forms one of the largest independent PPOs in the United States.
See our consolidated financial statements included in this Annual Report for more information regarding these adjustments. Adjusted EBITDA is used in our agreements governing our outstanding indebtedness for debt covenant compliance purposes. Our Adjusted EBITDA calculation is consistent with the definition of Adjusted EBITDA used in our debt instruments.
See our consolidated financial statements included in this Annual Report for more information regarding these adjustments. Adjusted EBITDA is used in our agreements governing our outstanding indebtedness for debt covenant 62 Table of Contents compliance purposes. Our Adjusted EBITDA calculation is consistent with the definition of Adjusted EBITDA used in our debt instruments.
See the footnotes to the EBITDA and Adjusted EBITDA reconciliation table provided above under " Non-GAAP Financial Measures " for material differences between the financial information of MultiPlan and MPH.
See the footnotes to the EBITDA and Adjusted EBITDA reconciliation table provided above under " Non-GAAP Financial Measures " for material differences between the financial information of Claritev and MPH.
The Company, through its operating subsidiary, MultiPlan, Inc., offers its solutions nationally through a range of service lines, which include: • Analytics-Based Services reduce medical cost through data-driven algorithms and insights that detect claims over-charges and either negotiate or recommend fair reimbursement for out-of-network medical costs using a variety of data sources and pricing algorithms.
The Company offers its solutions nationally through a range of service lines, which include: • Analytics-Based Services reduce medical cost through data-driven algorithms and insights that detect claims over-charges and either negotiate or recommend fair reimbursement for out-of-network medical costs using a variety of data sources and pricing algorithms.
The results of operations and financial condition of BST have been included in the Company's consolidated results from the date of acquisition. In connection with the BST acquisition, the Company incurred transaction-related expenses of $6.9 million for the year ended December 31, 2023.
The results of operations and financial condition of BST have been included in the Company's consolidated results from the date of acquisition. In connection with the BST acquisition, the Company incurred transaction-related expenses of 64 Table of Contents $6.9 million for the year ended December 31, 2023.
Healthcare Industry Exposure Our business avoids reimbursement and malpractice risk and exposure. We do not provide or manage healthcare services or provide medical care. This reduces our exposure to state and federal regulations that are imposed on insurers and medical services providers. According to CMS, healthcare expenditures will grow from $4.7 trillion, or 17.6% of U.S.
Healthcare Industry Exposure Our business avoids reimbursement and malpractice risk and exposure. We do not provide or manage healthcare services or provide medical care. This reduces our exposure to state and federal regulations that are imposed on insurers and medical services providers. According to CMS, healthcare expenditures will grow from $5.0 trillion, or 17.7% of U.S.
As of December 31, 2023, our long-term debt was $4,532.7 million and included (i) $1,281.9 million Term Loan B, excluding the current portion of Term Loan B of $13.3 million , discount on Term Loan B of $9.3 million , (ii) $1,050.0 million of 5.50% Senior Secured Notes, (iii) $979.8 million of 5.750% Notes, and (iv) $1,275.0 million of Senior Convertible PIK Notes, discount on Senior Convertible PIK Notes of $18.8 million, net of (v) debt issue costs of $25.9 million.
As of December 31, 2023, our long-term debt was $4,532.7 million and included (i) $1,281.9 million Term Loan B, excluding the current portion of Term Loan B of $13.3 million, discount on Term Loan B of $9.3 million, (ii) $1,050.0 million of 5.50% Notes, (iii) $979.8 million of 5.750% Notes, (iv) $1,275.0 million of Senior Convertible PIK Notes, discount on Senior Convertible PIK Notes of $18.8 million, and (v) $0.1 million of long-term finance lease obligations, net of (vi) debt issue costs of $25.9 million.
Third-party network expenses are fees paid to non-owned provider networks used to supplement our owned network assets to provide more network claim savings to our customers.
Third-party network expenses are fees paid to non-owned provider networks used to supplement our owned network assets to provide more network claim savings to our clients.
If the future financial performance falls below our expectations or there are unfavorable revisions to significant assumptions, or if our market capitalization significantly declines, we may need to record an additional non-cash loss on impairment of goodwill and intangible assets charge in a future period.
If the future financial performance falls below our expectations or there are unfavorable revisions to significant assumptions, or if our market capitalization significantly declines, we may need to record an additional non-cash loss on impairment of goodwill in a future period.
These claims are pre-payment in nature, generate savings through repricing, and are characterized by a higher percentage of potential medical cost savings as a percentage of medical charges processed. For the year ended December 31, 2023, this category represented approximately 89% of our revenues.
These claims are pre-payment in nature, generate savings through repricing, and are characterized by a higher percentage of potential medical cost savings as a percentage of medical charges processed. For the year ended December 31, 2024, this category represented approximately 87% of our revenues.
It does include any medical charges or potential medical cost savings for BST as BST is a fee-based subscription service and there are no potential medical cost savings to report relative to their revenues. For the year ended December 31, 2023, BST represented approximately 1% of revenues.
It does include any medical charges or potential medical cost savings for BST as BST is a fee-based subscription service and there are no potential medical cost savings to report relative to their revenues. For the year ended December 31, 2024, BST represented approximately 2% of revenues.
The debt agreements governing the senior secured credit facilities, the 5.750% Notes and the 5.50% Senior Secured Notes contain customary events of default, subject to grace periods and exceptions, which include, among others, payment defaults, cross-defaults to certain material indebtedness, certain events of bankruptcy, material judgments, in the case of the debt agreements governing the senior secured credit facilities and the 5.50% Senior Secured Notes, failure of a guarantee on the liens on material collateral to remain in effect, in the case of the debt agreements governing the senior secured credit facilities, any change of control.
The debt agreements governing our senior secured indebtedness contain customary events of default, subject to grace periods and exceptions, which include, among others, payment defaults, cross-defaults to certain material indebtedness, certain events of bankruptcy, material judgments, failure of a guarantee on the liens on material collateral to remain in effect, in the case of the debt agreements governing the senior secured credit facilities, any change of control.
The Company also has an irrevocable letter of credit to satisfy the obligations of a captive insurance subsidiary in the amount of $6.1 million as of December 31, 2023 and zero as of December 31, 2022.
The Company also has an irrevocable letter of credit to satisfy the obligations of a captive insurance subsidiary in the amount of $6.1 million as of December 31, 2024 and 2023.
Amortization of Intangible Assets The increase in the amortization of intangible assets for the year ended December 31, 2023, as compared to the year ended December 31, 2022 was primarily due to the acquisitions of BST. This expense represents the amortization of intangible assets, as explained above and in the Notes to Consolidated Financial Statements.
Amortization of Intangible Assets The increase in the amortization of intangible assets for the year ended December 31, 2024, as compared to the year ended December 31, 2023 was primarily due to the acquisitions of BST. This expense represents the amortization of intangible assets, as explained below and in the Notes to Consolidated Financial Statements.
Amortization of Intangible Assets Amortization of intangible assets includes amortization of the value of our customer relationships, provider network, technology, and trademarks which were identified in valuing the intangible assets in connection with the June 6, 2016 acquisition by H&F and its affiliates, as well as recent acquisitions of BST, HST and DHP by the Company.
Amortization of Intangible Assets Amortization of intangible assets includes amortization of the value of our client relationships, provider network, technology, and trademarks which were identified in valuing the intangible assets in connection with the acquisition by H&F and its affiliates, as well as recent acquisitions of BST, HST, and DHP by the Company.
Non-GAAP Financial Measures We use EBITDA, Adjusted EBITDA and Adjusted EPS to evaluate our financial performance. EBITDA, Adjusted EBITDA and adjusted EPS are financial measures that are not presented in accordance with GAAP.
Non-GAAP Financial Measures We use EBITDA, Adjusted EBITDA and Adjusted Earnings Per Share ("EPS") to evaluate our financial performance. EBITDA, Adjusted EBITDA and adjusted EPS are financial measures that are not presented in accordance with GAAP.
The transaction-related expenses have been expensed as incurred and are Table of Contents included in general and administrative expenses in the accompanying consolidated statements of (loss) income and comprehensive (loss) income.
The transaction-related expenses have been expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of loss and comprehensive loss.
The Company's interest rate swaps are effective at offsetting the changes in cash outflows and therefore designated as cash flow hedging instruments. The interest rate in effect for Term Loan B was 9.90% and 8.98% as of December 31, 2023 and December 31, 2022, respectively.
The Company's interest rate swaps are effective at offsetting the changes in cash outflows and therefore designated as cash flow hedging instruments. The interest rate in effect for Term Loan B was 9.02% and 9.90% as of December 31, 2024 and December 31, 2023, respectively.
Change in fair value of Private Placement Warrants and Unvested Founder Shares The Company measures at each reporting period the fair values of the Private Placement Warrants and Unvested Founder Shares. For the year ended December 31, 2023, the fair values of the Private Placement Warrants and the Unvested Founder Shares decreased by $1.2 million and $0.8 million, respectively.
Change in fair value of Private Placement Warrants and Unvested Founder Shares The Company measures at each reporting period the fair values of the Private Placement Warrants and Unvested Founder Shares. For the year ended December 31, 2024, the fair values of the Private Placement Warrants and the Unvested Founder Shares decreased by $0.3 million and $0.2 million, respectively.
For the years ended December 31, 2023 and December 31, 2022, MPH had higher EBITDA expenses than MultiPlan Corporation of $3.2 million and $2.9 million, respectively, due to Adjusted EBITDA associated with our captive insurance company which revenues and expenses are eliminated in the consolidated financial reporting of MultiPlan Corporation.
For the years ended December 31, 2024 and December 31, 2023, MPH had higher EBITDA expenses than Claritev Corporation of $2.6 million and $3.2 million, respectively, due to Adjusted EBITDA associated with our captive insurance company which revenues and expenses are eliminated in the consolidated financial reporting of Claritev Corporation.
GDP in 2023, to represent 19.6% of GDP by 2031, representing a compound annual growth rate of 5.5%. There are a multitude of factors driving this expected growth, including recent regulations and ongoing secular trends, such as the aging population and other demographic factors, which are driving expanded healthcare coverage and increased utilization in the long-term.
GDP in 2024, to represent 19.7% of GDP by 2032, representing a compound annual growth rate of 5.4%. There are a multitude of factors driving this expected growth, including recent regulations and ongoing secular trends, such as the aging population and other demographic factors, which are driving expanded healthcare coverage and increased utilization in the long-term.
The goodwill arose from the acquisition of the Company in 2016 by Holdings, the HST acquisition in 2020, the DHP acquisition in 2021 and the BST acquisition in 2023. The carrying value of goodwill was $3,829.0 million and $3,705.2 million as of December 31, 2023 and 2022, respectively.
The goodwill arose from the acquisition of the Company in 2016 by Holdings, the HST acquisition in 2020, the DHP acquisition in 2021 and the BST acquisition in 2023. The carrying value of goodwill was $2,403.1 million and $3,829.0 million as of December 31, 2024 and 2023, respectively.
Interest on Term Loan B and Revolver B is calculated, at MPH's option, as (a) Term SOFR (or, with respect to the term loan facility only, 0.50%, if higher), plus the applicable SOFR adjustment, plus the applicable margin, or (b) the highest rate of (1) the prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the Term SOFR for an interest period of one month, plus the applicable SOFR adjustment, plus 1.00% and (4) 0.50% for Term Loan B and 1.00% for Revolver B, in each case, plus an applicable margin of 4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on MPH's first lien debt to consolidated EBITDA ratio.
Debt Repricing Interest on Term Loan B and the revolving credit facility in conjunction with Term Loan B and maturing on August 24, 2026 (the "Revolver B") is calculated, at MPH's option, as (a) Term Secured Overnight Financing Rate ("SOFR") (or, with respect to the term loan facility only, 0.50%, if higher), plus the applicable SOFR adjustment, plus the applicable margin, or (b) the highest rate of (1) the prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the Term SOFR for an interest period of one month, plus the applicable SOFR adjustment, plus 1.00% and (4) 0.50% for Term Loan B and 1.00% for Revolver B, in each case, plus an applicable margin of 4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on MPH's first lien debt to consolidated EBITDA ratio.
Term Loans and Revolvers On August 24, 2021, MPH issued new senior secured credit facilities composed of $1,325.0 million of Term Loan B and $450.0 million of Revolver B, and $1,050.0 million in aggregate principal amount of 5.50% Senior Secured Notes.
Term Loans and Revolvers Term Loan B and Revolver B On August 24, 2021, MPH issued senior secured credit facilities composed of $1,325.0 million of Term Loan B and $450.0 million of Revolver B, and $1,050.0 million in aggregate principal amount of 5.50% Notes. Term Loan B was issued with a discount of 1.00%.
The blended rate for Term Loan B factoring in the effect of the interest rate swap agreements was 9.53% as of December 31, 2023.
The blended rate for Term Loan B factoring in the effect of the interest rate swap agreements was 9.07% and 9.53% as of December 31, 2024 and December 31, 2023, respectively.
As of December 31, 2023, we have four letters of credit totaling $7.9 million of utilization against the revolving credit facility. Three letters of credit are used to satisfy real estate lease agreements for three of our offices in lieu of security deposits in the amount of $1.8 million as of December 31, 2023 and 2022.
As of December 31, 2024, we have five letters of credit totaling $9.3 million of utilization against the 2021 revolving credit facility. Four letters of credit are used to satisfy real estate lease agreements for our offices in lieu of security deposits in the amount of $3.2 million and $1.8 million as of December 31, 2024 and 2023, respectively.
Year Ended December 31, (in billions) 2023 2022 Commercial Health Plans Medical charges processed $ 75.1 $ 74.2 Potential medical cost savings $ 21.7 $ 21.2 Potential savings as % of charges 28.9 % 28.6 % Payment & Revenue Integrity, Property & Casualty, and Other Medical charges processed $ 93.6 $ 81.0 Potential medical cost savings $ 1.3 $ 1.1 Potential savings as % of charges 1.3 % 1.3 % Total Medical charges processed $ 168.6 $ 155.2 Potential medical cost savings $ 22.9 $ 22.3 Potential savings as % of charges 13.6 % 14.3 % Medical charges processed represent the aggregate dollar amount of claims processed by our cost management and payment and revenue integrity solutions in the period presented.
Year Ended December 31, (in billions) 2024 2023 Commercial Health Plans Medical charges processed $ 80.2 $ 75.1 Potential medical cost savings $ 23.2 $ 21.7 Potential savings as % of charges 29.0 % 28.9 % Payment & Revenue Integrity, Property & Casualty, and Other Medical charges processed $ 97.4 $ 93.6 Potential medical cost savings $ 1.4 $ 1.3 Potential savings as % of charges 1.4 % 1.3 % Total Medical charges processed $ 177.6 $ 168.6 Potential medical cost savings $ 24.7 $ 22.9 Potential savings as % of charges 13.9 % 13.6 % Medical charges processed represent the aggregate dollar amount of claims processed by our cost management and payment and revenue integrity solutions in the period presented.
Payors typically compensate us through either a PSAV achieved or a PEPM rate. Approximately 90% of revenues for the year ended December 31, 2023 were based on a PSAV achieved rate.
Payors typically compensate us through either a percentage of savings ("PSAV") achieved or a PEPM rate. Approximately 88% of revenues for the year ended December 31, 2024 were based on a PSAV achieved rate.
As of December 31, 2023 , our total debt had an annualized weighted average cash interest rate of 6.83%.
As of December 31, 2024 , our total debt had an annualized weighted average cash interest rate of 6.68%.
On September 12, 2023, the Company entered into three interest rate swap agreements with a total notional value of $800 million to effectively convert a portion of its floating rate debt to a fixed-rate basis of 4.59% as a weighted-average across the three swaps. The interest rate swap agreements are effective August 31, 2023 and mature on August 31, 2026.
The Company is exposed to interest rate risk on its floating rate debt. On September 12, 2023, the Company entered into three interest rate swap agreements with a total notional value of $800 million to effectively convert a portion of its floating rate debt to a fixed-rate basis of 4.59% as a weighted-average across the three swaps.
Our annualized weighted average cash interest rate increased by 0.16% across our total debt in the year ended December 31, 2023 , as compared to the year ended December 31, 2022 .
Our annualized weighted average cash interest rate decreased by 0.15% across our total debt in the year ended December 31, 2024 , as compared to the year ended December 31, 2023 .
Table of Contents Components of Results of Operations Revenues We generate revenues from several sources including: (i) Network-Based Services that process claims at a discount compared to billed fee-for-service rates and by using an extensive network, (ii) Analytics-Based Services that use our leading and proprietary information technology platform to offer customers solutions to reduce medical costs, and (iii) Payment and Revenue Integrity Services that use data, technology, and clinical expertise to identify improper, unnecessary and excessive charges.
As expenditures continue to rise, stakeholders, and especially payors, are becoming increasingly focused on solutions that reduce medical costs and improve payment accuracy. 60 Table of Contents Components of Results of Operations Revenues We generate revenues from several sources including: (i) Network-Based Services that process claims at a discount compared to billed fee-for-service rates and by using an extensive network, (ii) Analytics-Based Services that use our leading and proprietary information technology platform to offer clients solutions to reduce medical costs, and (iii) Payment and Revenue Integrity Services that use data, technology, and clinical expertise to identify improper, unnecessary and excessive charges.
We determine the fair value of Employee NQSOs with an exercise price equal to the price of the Company's Class A common stock on the grant date ("at-the-money") using a Black-Scholes option pricing model while taking into consideration the price of the Company's Class A common stock, vesting conditions, and the expected term obtained using Table of Contents the simplified method of averaging the vesting term and the original contractual term of the options.
We determine the fair value of grants of non-qualified stock options awarded to certain employees under the 2020 Omnibus Incentive Plan ("Employee NQSOs") with an exercise price equal to the price of the Company's Class A common stock on the grant date ("at-the-money") using a Black-Scholes option pricing model while taking into consideration the price of the Company's Class A common stock, vesting conditions, and the expected term obtained using the simplified method of averaging the vesting term and the original contractual term of the options.
Although the end beneficiary of our services are employers and other plan sponsors and their health plan members, our direct customers are typically Payors, including ASOs and third-party administrators ("TPAs"), who go to market with our services to those end customers.
Although the end beneficiaries of our services are employers and other plan sponsors and their health plan members, our direct clients are typically payors, including payors providing ASOs, TPAs, who go to market with our services to those end clients.
For the year ended December 31, 2023, this category represented approximately 10% of our revenues.
For the year ended December 31, 2024, this category represented approximately 11% of our revenues.
During the year ended December 31, 2023, the Company repurchased and cancelled $184.0 million of the 5.750% Notes, resulting in the recognition of a gain on debt extinguishment of $46.9 million, and $25.0 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $7.1 million.
The repurchases resulted in the recognition of gain on debt extinguishment of $5.9 million. During the year ended December 31, 2023, the Company repurchased and cancelled $184.0 million and $25.0 million, of the 5.750% Notes and the Senior Convertible PIK Notes, respectively. The repurchases resulted in the recognition of gain on debt extinguishment of $54.0 million.
This estimated enterprise fair value is then reconciled to our market enterprise value based on our market capitalization at year end with an appropriate implied market participant acquisition premium. Qualitative impairment assessments were performed for the year ended December 31, 2021. Fair value measurements require considerable judgment and are sensitive to changes in underlying assumptions.
This estimated enterprise fair value is then reconciled to our market enterprise value based on our market capitalization at year end with an appropriate implied market participant acquisition premium. Fair value measurements require considerable judgment and are sensitive to changes in underlying assumptions.
The loss of the business of one or more of our larger customers could have a material adverse effect on our results of operations. Recent Accounting Pronouncements See Note 3 New Accounting Pronouncements of the Notes to Consolidated Financial Statements for additional information. Quantitative and Qualitative Disclosure About Market Risk See Item 7A.
The loss of the business of one or more of our larger clients could have a material adverse effect on our results of operations. Recent Accounting Pronouncements See Note 3 New Accounting Pronouncements of the Notes to Consolidated Financial Statements for additional information.
The principal objective of these contracts is to reduce the volatility of the cash flows in interest payments associated with the Company's floating rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows.
The interest rate swap agreements are effective August 31, 2023 and mature on August 31, 2026. The principal objective of these contracts is to reduce the volatility of the cash flows in interest payments associated with the Company's floating rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows.
The Revolver Ratio is such that, if, as of the last day of any fiscal quarter of MPH, the aggregate amount of loans under the revolving credit facility, letters of credit issued under the revolving credit facility (to the extent not cash collateralized or backstopped or, in the aggregate, in excess of $10.0 million) and swingline loans are outstanding and/or issued in an aggregate amount greater than 35% of the total commitments in respect of the revolving credit facility at such time, the revolving credit Table of Contents facility will require MPH to maintain a maximum first lien secured leverage ratio of 6.75 to 1.00.
The financial covenant under the 2021 revolving credit facility is such that, if, as of the last day of any fiscal quarter of MPH (commencing with the fiscal quarter ending March 31, 2022), the aggregate amount of loans under the 2021 revolving credit facility, letters of credit issued under the 2021 revolving credit facility (to the extent not cash collateralized or backstopped or, in the aggregate, in excess of $15.0 million) and swingline loans are outstanding and/or issued in an aggregate amount greater than 35% of the total commitments in respect of the 2021 revolving credit facility at such time, the 2021 revolving credit facility will require MPH to maintain a consolidated first lien debt to consolidated EBITDA ratio not to exceed 6.75 to 1.00.
For the years ended December 31, 2023 and December 31, 2022 interest expense for MultiPlan Corporation was higher than interest expense for MPH by $82.5 million and $81.9 million, respectively, due to interest expense incurred by MultiPlan Corporation on the Senior Convertible Notes (issued on October 8, 2020), net of debt issue costs.
For the years ended December 31, 2024 and December 31, 2023 interest expense for Claritev Corporation was higher than interest expense for MPH by $79.5 million and $82.5 million, respectively, due to interest expense incurred by Claritev Corporation on the Senior Convertible PIK Notes, net of debt issue costs.
This decrease in revenues was due to decreases in Network-Based Services revenues of $21.9 million, Analytics-Based Services revenues of $88.0 million, and Payment and Revenue Integrity Services of $8.3 million. Network-Based Services revenues decreased $21.9 million, or 8.9%, in the year ended December 31, 2023, as compared to the year ended December 31, 2022.
This decrease in revenues was due to decreases in Network-Based Services revenues of $38.1 million, and Payment and Revenue Integrity Services of $1.8 million, partially offset by increases in Analytics-Based Services revenues of $9.0 million. Network-Based Services revenues decreased $38.1 million, or 17.1%, in the year ended December 31, 2024, as compared to the year ended December 31, 2023.
The decrease was primarily due to the passage of time over that period. Provision (Benefit) for Income Taxes Net loss before income taxes for the year ended December 31, 2023 of $107.1 million generated a benefit for income taxes of $15.4 million with an effective tax rate of 14.3%.
Net loss before income taxes for the year ended December 31, 2023 of $107.1 million generated a benefit for income taxes of $15.4 million with an effective tax rate of 14.3%.
All such obligations, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by a first priority lien shared between the senior secured credit facilities and the 5.50% Senior Secured Notes on substantially all of MPH’s and the subsidiary guarantors’ tangible and intangible property, and a pledge of all of the capital stock of each of their respective subsidiaries.
All such obligations, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by a first priority lien shared between the senior secured credit facilities and the New Notes on substantially all of 73 Table of Contents the tangible and intangible property of the Company, MPH Acquisition, Polaris Intermediate, Polaris Parent, MPH and the subsidiary guarantors, and a pledge of all of the capital stock of each of their respective subsidiaries (subject to certain exceptions).
Cash Flow Summary The following table is derived from our consolidated statements of cash flows: For the Year Ended December 31, (in thousands) 2023 2022 Net cash flows provided by (used in): Operating activities $ 171,720 $ 372,364 Investing activities $ (249,792) $ (104,446) Financing activities $ (180,993) $ (115,738) Table of Contents For the year ended December 31, 2023 as compared to the year ended December 31, 2022 Cash Flows from Operating Activities Cash flows from operating activities decreased by $200.6 million, or 53.9%, primarily due to lower earnings once adjusted for non-cash items, and unfavorable changes in working capital.
Cash Flow Summary The following table is derived from our consolidated statements of cash flows: For the Year Ended December 31, (in thousands) 2024 2023 Net cash flows provided by (used in): Operating activities $ 107,616 $ 171,720 Investing activities $ (118,123) $ (249,792) Financing activities $ (41,315) $ (180,993) For the year ended December 31, 2024 as compared to the year ended December 31, 2023 Cash Flows from Operating Activities Cash flows from operating activities decreased by $64.1 million, or 37.3%, primarily due to lower earnings once adjusted for non-cash items, and unfavorable changes in working capital.
We group our claims charges into two categories that correspond to differing characteristics of identified savings performance: • Commercial Health Plans . This category primarily represents our Network-Based Services and Analytics-Based Services claims.
The volume of medical charges associated with those claims is a primary driver of our ability to generate claim savings. We group our claims charges into two categories that correspond to differing characteristics of identified savings performance: • Commercial Health Plans . This category primarily represents our Network-Based Services and Analytics-Based Services claims.
Table of Contents Interest Expense The increase in interest expense of $29.8 million , or 9.8% for the year ended December 31, 2023 , as compared to the year ended December 31, 2022 was primarily due to the increase in the interest rate on our Term Loan B, offset by reductions in interest expense due to the swap rate agreements reducing interest by $2.2 million for the year ended December 31, 2023, and to the repurchase and cancellation of some of our 5.75% Notes and Senior Convertible PIK Notes.
Interest Expense The decrease in interest expense of $6.8 million , or 2.1% for the year ended December 31, 2024 , as compared to the year ended December 31, 2023 was primarily due t o reductions in interest expense due to the swap rate agreements reducing interest by $5.0 million for the year ended December 31, 2024, and to the repurchase and cancellation of some of our 5.75% Notes and Senior Convertible PIK Notes.
Term Loan B matures on September 1, 2028 and Revolver B matures on August 24, 2026. We are obligated to pay a commitment fee on the average daily unused amount of our revolving credit facility. The annual commitment fee rate was 0.50% at December 31, 2023 and December 31, 2022.
We are obligated to pay a commitment fee on the average daily unused amount of our 2021 revolving credit facility. The annual commitment fee rate was 0.50% at December 31, 2024 and December 31, 2023.
Our effective tax rate for the year ended December 31, 2022 differed from the statutory rate primarily due to non-deductible stock-based compensation expense, non-deductible mark-to-market liability, non-deductible intangible impairment charge, limitations on executive compensation, changes in the Company's deferred state tax rate due to previous acquisitions, tax credits, operations, and state tax expense.
Our effective tax rate for the year ended December 31, 2024 differed from the statutory rate primarily due to stock compensation expense, limitations on executive compensation, non-deductible goodwill impairment, tax credits, operations and state tax expense.
Stock-Based Compensation The fair value of the awards under the 2020 Omnibus Incentive Plan is measured on the grant date. We determine the fair value of the Employee RS, Employee RSUs and Director RSUs with time-based vesting using the value on our common stock on the date of the grant.
We determine the fair value of grants of restricted stock awarded to certain employees under the 2020 Omnibus Incentive Plan ("Employee RS"), grants of restricted stock units awarded to certain employees under the 2020 Omnibus Incentive Plan ("Employee RSUs"), and restricted stock units issued to non-employee directors under the 2020 Omnibus Incentive Plan ("Director RSUs") with time-based vesting using the value on our common stock on the date of the grant.
Net loss before income taxes for the year ended December 31, 2022 of $560.7 million generated a provision for income taxes of $12.2 million with an effective tax rate of (2.2)%.
Benefit for Income Taxes Net loss before income taxes for the year ended December 31, 2024 of $1,770.7 million generated a benefit for income taxes of $124.9 million with an effective tax rate of 7.1%.
The results described below are not necessarily indicative of the results to be expected in any future periods. Company Overview MultiPlan is a market leading provider of data analytics and technology-enabled solutions designed to bring affordability, efficiency and fairness to the U.S. healthcare industry.
The results described below are not necessarily indicative of the results to be expected in any future periods. Company Overview Claritev is a leading provider of data-driven cost management solutions that deliver transparency and promote fairness, quality and affordability to the U.S. healthcare industry.
Analytics-Based Services revenues decreased $88.0 million, or 12.3%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Analytics-Based Services revenues increased $9.0 million, or 1.4%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
In the year ended December 31, 2022, the Company repurchased in the open market and cancelled $136.2 million of the 5.750% Notes, resulting in the recognition of a gain on extinguishment of debt of $34.6 million, representing the difference between the purchase price including associated fees and the net carrying amount of the extinguished debt.
Debt Repayments In the year ended December 31, 2024, the Company repurchased and cancelled $21.1 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $5.9 million. This gain on debt extinguishment represents the difference between the purchase price including associated fees and the net carrying amount of the extinguished debt.
For the years ended December 31, 2023 and December 31, 2022, the change in fair value of Private Placement Warrants and Unvested Founder Shares, and stock-based compensation (excluding the employee stock purchase plan) are recorded in the Table of Contents parent company MultiPlan Corporation and not in the MPH operating company and therefore represent differences between MultiPlan Corporation and MPH.
In addition, in the years ended December 31, 2024 and December 31, 2023, there were gains on retirement of Senior Convertible PIK Notes of $5.9 million and $7.1 million, respectively, in Claritev Corporation related to the purchase and extinguishment of the Senior Convertible PIK Notes. 63 Table of Contents For the years ended December 31, 2024 and December 31, 2023, the change in fair value of Private Placement Warrants and Unvested Founder Shares, and stock-based compensation (excluding the employee stock purchase plan) are recorded in the parent company Claritev Corporation and not in the MPH operating company and therefore represent differences between Claritev Corporation and MPH.

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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 changeIn the event that the counterparty failed to meet the terms of a contract or agreement then our exposure would Table of Contents have been limited to the current value, at that time, of the interest rate differential, not the full notional or contract amount. Management believes that such contracts and agreements were executed with creditworthy financial institutions.
Biggest changeWe controlled the credit risks associated with these instruments through the evaluation of the creditworthiness of the counterparties. In the event that the counterparty failed to meet the terms of a contract or agreement then our exposure would have been limited to the current value, at that time, of the interest rate differential, not the full notional or contract amount.
Based upon historical experience and any specific customer collection issues that have been identified, we record a provision for estimated credit losses, as deemed appropriate. While such credit losses have historically been within our expectations, we cannot guarantee that we will continue to experience the same credit loss rates in the future. Interest Rate Risks.
Based upon historical experience and any specific client collection issues that have been identified, we record a provision for estimated credit losses, as deemed appropriate. While such credit losses have historically been within our expectations, we cannot guarantee that we will continue to experience the same credit loss rates in the future. Interest Rate Risks.
Trade accounts receivable include amounts billed and currently due from customers, amounts currently due but unbilled, certain estimated contract changes, claims in negotiation that are probable of recovery, and amounts retained by the customer pending contract completion. We continuously monitor collections and payments from customers.
Trade accounts receivable include amounts billed and currently due from clients, amounts currently due but unbilled, certain estimated contract changes, claims in negotiation that are probable of recovery, and amounts retained by the client pending contract completion. We continuously monitor collections and payments from clients.
A 100-basis point increase (decrease) in the variable interest rates under Term Loan B (excluding $800 million subject to interest rate swap agreements) would result in a $5.0 million increase (decrease) in interest expense, per annum on our borrowings.
As of December 31, 2024, a 100-basis point increase (decrease) in the variable interest rates under Term Loan B (excluding $800 million subject to interest rate swap agreements) would result in a $4.8 million increase (decrease) in interest expense, per annum on our borrowings.
As such, we considered the risk of nonperformance to be remote. Table of Contents
Management believes that such contracts and agreements were executed with creditworthy financial institutions. As such, we considered the risk of nonperformance to be remote. 76 Table of Contents
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We controlled the credit risks associated with these instruments through the evaluation of the creditworthiness of the counterparties.

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