10q10k10q10k.net

What changed in P3 Health Partners Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of P3 Health Partners Inc.'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.

+867 added−839 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-28)

Top changes in P3 Health Partners Inc.'s 2024 10-K

867 paragraphs added · 839 removed · 91 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+7 added−256 removed130 unchanged
Biggest changeBased on our analysis and experience to date, we have identified a list of target markets that we believe are ideal candidates for the P3 Care Model, whether across physicians or payors. We can facilitate this growth through new payor contracts, new network partnerships via joint ventures or expanding into a new market as part of an existing payor contract.
Biggest changeWe can facilitate this growth through new payor contracts, new network partnerships via joint ventures or expanding into a new market as part of an existing payor contract. Execute on accretive acquisitions. While our growth to date has been organic, we believe there are additional robust opportunities to acquire additional lives across both physicians and payors.
This team supports the business in identifying and recruiting top talent, supporting the onboarding of new hires through an employee orientation program, providing a structured approach to performance management that allows leaders and employees to collaborate to set organizational goals, chart plans, and assign targets such that it becomes a systematic process to achieving goals and objectives and having productive conversations about performance outcomes and career development.
This team supports the business in identifying and recruiting top talent, supporting the onboarding of new hires through an employee orientation program, providing a structured approach to performance management that allows leaders and employees to collaborate to set organizational goals, chart plans, and assign performance targets such that it becomes a systematic process to achieving goals and objectives and having productive conversations about performance outcomes and career development.
Our care managers also monitor patient care and provide physicians with insights to enable additional care across settings and locations. These factors create a positive feedback loop, whereby our technology accelerates clinical outcomes, improving strong performance, and further growing our business. The P3 Technology/Health Hub is built on multiple products, including: Provider Portal .
Our care managers also monitor patient care and provide physicians with actionable insights to enable additional care across settings and locations. These factors create a positive feedback loop, whereby our technology accelerates clinical outcomes, improving strong performance, and further growing our business. The P3 Technology/Health Hub is built on multiple products, including: Provider Portal .
This exercise gives physicians a longitudinal view of patients’ health and any potential medical conditions they may have developed since their last annual wellness visit. This represents an important opportunity for physicians to address the conditions which otherwise may have been missed during initial health reviews of the patient.
This exercise gives physicians a longitudinal view of patients’ health and any potential undiagnosed medical conditions they may have developed since their last annual wellness visit. This represents an important opportunity for physicians to address the conditions which otherwise may have been missed during initial health reviews of the patient.
By way of example, P3 recently acquired Medcore HP, a licensed health plan under the Knox Keene Act, which subjects the entity to certain capital requirements, licensing or certification, governance controls, utilization review and grievance procedures, among others.
By way of example, P3 recently acquired Medcore HP, a licensed health plan under the Knox Keene Act, which subjects the entity to certain capital requirements, licensing or certification, governance controls, utilization review, grievance procedures, and reporting requirements among others.
Within this, we believe our core addressable market to be the Medicare Advantage market, specifically within moderate-to-highly populated Medicare Advantage eligible dense counties, which we define as having greater than 10,000 Medicare eligible lives.
Within this, we believe our core addressable market to be the Medicare Advantage market, specifically within moderate-to-highly populated MA eligible dense counties, which we define as having greater than 10,000 Medicare eligible lives.
Government Regulation Regulatory Licensing and Certification Many states, including Florida, require regulatory approval, including licensure and certification, before establishing certain types of clinics offering certain professional and ancillary services, including the services P3 offers.
Government Regulation Regulatory Licensing and Certification Many states require regulatory approval, including licensure and certification, before establishing certain types of clinics offering certain professional and ancillary services, including the services P3 offers.
Under the investor relations page of the Company’s website, P3 Health Partners Inc. | 2023 Form 10-K | 16 Table of Contents ir.p3hp.org, we make available free of charge a variety of information for investors, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statements on Schedule 14A and any amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission (“SEC”).
Under the investor relations page of the Company’s website, ir.p3hp.org, we make available free of charge a variety of information for investors, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statements on Schedule 14A and any amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as P3 Health Partners Inc. | 2024 Form 10-K | 15 Table of Contents reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission (“SEC”).
By multiplying these approximately 31 million Medicare Advantage members by an average $1,000 per member per month spend, we estimate this represents a core addressable market size of over $300 billion. The P3 Care Model Patient-Centric Patient wellness, not sickness. The VBC model rewards superior clinical outcomes and value delivered to the patient.
By multiplying these approximately 33 million Medicare Advantage members by an average $1,000 per member per month spend, we estimate this represents a core addressable market size of over $300 billion. The P3 Care Model Patient-Centric Patient wellness, not sickness. The VBC model rewards superior clinical outcomes and value delivered to the patient.
Most Medicare Advantage plans also offer Part D, vision, hearing, dental and other benefits. Typically, the out-of-pocket costs are lower for Medicare Advantage plans than traditional Medicare, but patients are limited to seeing physicians within the plan’s network and some coverage of certain specialty services may require PCPs’ referrals and plan authorizations.
Most MA plans also offer Part D, vision, hearing, dental and other benefits. Typically, the out-of-pocket costs are lower for MA plans than traditional Medicare, but patients are limited to seeing physicians within the plan’s network and some coverage of certain specialty services may require PCPs’ referrals and plan authorizations.
As 10,000 seniors age into Medicare each day and prevalence of chronic conditions increases, the need for lower healthcare spend leads the push towards VBC and additional offerings such as Medicare Advantage. VBC and Medicare Advantage Medicare Advantage serves as an alternative to traditional Medicare. Medicare Advantage is an integrated plan that includes both Part A and Part B coverage.
As 10,000 seniors age into Medicare each day and prevalence of chronic conditions increases, the need for lower healthcare spend leads the push towards VBC and additional offerings such as MA. VBC and MA MA serves as an alternative to traditional Medicare. MA is an integrated plan that includes both Part A and Part B coverage.
P3 Health Partners Inc. | 2023 Form 10-K | 6 Table of Contents Robust care teams. We staff dedicated care managers and care navigators to help ensure end-to-end patient care across the full continuum. Care navigators are responsible for day-to-day patient care (e.g., scheduling appointments, assisting with check-ins, etc.).
P3 Health Partners Inc. | 2024 Form 10-K | 6 Table of Contents Robust care teams. We staff dedicated care managers and care navigators to help ensure end-to-end patient care across the full continuum. Care navigators are responsible for day-to-day patient care (e.g., scheduling appointments, assisting with check-ins, etc.).
Finally, by taking on P3 Health Partners Inc. | 2023 Form 10-K | 7 Table of Contents responsibility for processing and paying claims, we are able to ensure the appropriate payment for the appropriate care. Ownership over claims creates value and helps to accelerate the reduction of unnecessary medical costs.
Finally, by taking on P3 Health Partners Inc. | 2024 Form 10-K | 7 Table of Contents responsibility for processing and paying claims, we are able to ensure the appropriate payment for the appropriate care. Ownership over claims creates value and helps to accelerate the reduction of unnecessary medical costs.
The traditional FFS model values quantity over quality, which has been shown to lead to physician burnout and jeopardizes the long-term sustainability of the independent primary care business model. According to a 2023 Physicians Foundation report, six in 10 physicians show signs of burnout, compared to four in 10 in 2018.
The traditional FFS model values quantity over quality, which has been shown to lead to physician burnout and jeopardizes the long-term sustainability of the independent primary care business model. According to a 2024 Physicians Foundation report, six in 10 physicians show signs of burnout, compared to four in 10 in 2018.
Recent data suggests that the number of Medicare-eligible patients and Medicare Advantage penetration rates will continue to increase in the upcoming years. We believe that this trend will translate into increased coverage by our current payor partners in our existing markets.
Recent data suggests that the number of Medicare-eligible patients and MA penetration rates will continue to increase in the upcoming years. We believe that this trend will translate into increased coverage by our current payor partners in our existing markets.
This segment is growing faster than the rest of the population and is projected to reach 22% of the United States population by 2050. Healthcare expenditures are particularly concentrated in this age group in large part due to the high rate of chronic conditions. Rising healthcare costs disproportionately impact low- and middle-income seniors, who often embrace Medicare Advantage plans.
This segment is growing faster than the rest of the population and is projected to reach 22% of the United States population by 2050. Healthcare expenditures are particularly concentrated in this age group in large part due to the high rate of chronic conditions. Rising healthcare costs disproportionately impact low- and middle-income seniors, who often embrace MA plans.
The current FFS reimbursement model leads to relatively lower pay for PCPs as well as fewer quality touchpoints with patients. We believe that factors like these directly contribute to fewer physicians considering entering, or staying in, the field of primary care. • Sub-optimal quality of care and sub-optimal clinical outcomes . • PCP burnout and dissatisfaction.
The current FFS reimbursement model leads to relatively lower pay for PCPs as well as fewer quality touchpoints with patients. We believe that factors like these directly contribute to fewer physicians considering entering, or staying in, the field of primary care. • Sub-optimal quality of care and sub-optimal clinical outcomes .
Leveraging this data, we then collaborate with physicians to build individualized, longitudinal care plans, catered to the needs of individual patients. Physician-Led Collaborative and supportive partnerships. As former physicians, we have a deep understanding of the way in which physicians are trained.
Leveraging this data, we then collaborate with physicians to build individualized, longitudinal care plans, catered to the needs of individual patients. Physician-Led Collaborative and supportive partnerships. As members of our team are former physicians, we have a deep understanding of the way in which physicians are trained.
As these new patients enroll in Medicare Advantage through our payors, they become attributed to our platform with little incremental cost to us. Furthermore, we believe our physician partners will also increase their patient coverage as the number of available Medicare Advantage lives increases.
As these new patients enroll in MA through our payors, they become attributed to our platform with little incremental cost to us. Furthermore, we believe our physician partners will also increase their patient coverage as the number of available MA lives increases.
Human Capital As of December 31, 2023, we had approximately 400 full-time employees. We consider our relationship with our employees to be good. None of our employees are currently represented by a labor union or party to a collective bargaining agreement. Our human capital resources objectives include sourcing, recruiting, developing, retaining, rewarding, recognizing and integrating our existing and prospective employees.
Human Capital As of December 31, 2024, we had approximately 360 full-time employees. We consider our relationship with our employees to be good. None of our employees are currently represented by a labor union or party to a collective bargaining agreement. Our human capital resources objectives include sourcing, recruiting, developing, retaining, rewarding, recognizing and integrating our existing and prospective employees.
Our primary competitors in the population health management space include Oak Street Health, Cano Health and agilon health, in addition to numerous local provider networks, hospitals and health systems.
Our primary competitors in the population health management space include Oak Street Health, Astrana Health and agilon health, in addition to numerous local provider networks, hospitals and health systems.
Our community is strong and safe. We are “family” and we take care of each other with the same intensity as we take care of our patients. • Passion: Our heart is our patients. Our soul is our clinicians. Our strength is our people and culture. • Purpose: Our core is fixing health care. Our mindset is disciplined purposeful growth.
We are “family” and we take care of each other with the same intensity as we take care of our patients. • Passion: Our heart is our patients. Our soul is our clinicians. Our strength is our people and culture. • Purpose: Our core is fixing health care. Our mindset is disciplined purposeful growth.
Finally, as improved clinical outcomes result in reduced medical costs, we share the savings between P3 and our physician partners. These contracts were built with the physician in mind, which is reflected in our results—a 98% physician retention rate from 2018 through December 31, 2023.
Finally, as improved clinical outcomes result in reduced medical costs, we share the savings between P3 and our physician partners. These contracts were built with the physician in mind, which is reflected in our results—a 95% physician retention rate from 2018 through December 31, 2024.
P3 Technology/Health Hub integrates clinical and claims data from more than 250 disparate data points each month from payors, outpatient and inpatient facilities and other ancillary care settings.
P3 Technology/Health Hub integrates clinical and claims data from disparate data points each month from payors, outpatient and inpatient facilities and other ancillary care settings.
Our contracts with four health plans to provide capitated care services for their members collectively accounted for approximately 60% and 67% of our capitated revenue for the years ended December 31, 2023 and 2022, respectively.
Our contracts with four health plans to provide capitated care services for their members collectively accounted for approximately 59% and 60% of our capitated revenue for the years ended December 31, 2024 and 2023, respectively.
The U.S. healthcare system is ripe for change and disruption, and we believe that the P3 Care Model is distinctly situated to address several pain points, including: • Unsustainable and rising healthcare costs. The United States spent $4.5 trillion, representing 17.3% of GDP, on healthcare in 2022.
The U.S. healthcare system is ripe for change and disruption, and we believe that the P3 Care Model is distinctly situated to address several pain points, including: • Unsustainable and rising healthcare costs. The United States spent $4.9 trillion, representing 17.6% of GDP, on healthcare in 2023.
Following the Business Combinations, we are organized in an “Up-C” structure, in which P3 Health Partners Inc. is the sole manager of P3 Health Group, LLC and directly owns approximately 37.2% of P3 Health Group, LLC as of December 31, 2023.
Following the Business Combinations, we are organized in an “Up-C” structure, in which P3 Health Partners Inc. is the sole manager of P3 Health Group, LLC and directly owns approximately 45% of P3 Health Group, LLC as of December 31, 2024.
Moreover, large, well-financed payors have in some cases developed their own managed services tools and may provide these services to their physicians and patients at discounted prices, or may seek to expand their relationships with additional competing physicians or physician networks, including in geographic areas we serve.
Moreover, large, well-financed payors have in some cases developed their own managed care services tools and may provide these services to their physicians and patients at discounted prices or may seek to expand their relationships with additional competing physicians or physician networks.
See the section titled “ Risk Factors—Risks Related to Our Business and Industry—We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed .” The principal competitive factors in our business include the nature and caliber of relationships with physicians; patient healthcare quality, outcomes and cost; the strength of relationships with payors; the quality of the physician experience; local geography leadership position; and the strength of the underlying economic model.
P3 Health Partners Inc. | 2024 Form 10-K | 9 Table of Contents See the section titled “ Risk Factors—Risks Related to Our Business and Industry—We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed .” The principal competitive factors in our business include the nature and caliber of relationships with physicians; patient healthcare quality, outcomes and cost; the strength of relationships with payors; the quality of the physician experience; local geography leadership position; and the strength of the underlying economic model.
State Corporate Practice of Medicine and Fee-Splitting Laws Our arrangements with our affiliated professional entities and other physician partners are subject to various state laws, commonly referred to as corporate practice of medicine and fee-splitting laws, which are intended to prevent unlicensed persons from interfering with or influencing the physician’s professional judgment, and prohibiting the sharing of professional service fees with non-professional or business interests.
P3 Health Partners Inc. | 2024 Form 10-K | 11 Table of Contents State Corporate Practice of Medicine and Fee-Splitting Laws Our arrangements with our affiliated professional entities and other physician partners are subject to various state laws, commonly referred to as corporate practice of medicine and fee-splitting laws, which are intended to prevent unlicensed persons from interfering with or influencing the physician’s professional judgment, and prohibiting the sharing of professional service fees with non-professional or business interests.
National health expenditures are projected to grow 5.4% per year from 2022 to 2031, according to CMS. While representing only 17% of the United States population, the 65 and older age group accounted for 21% of all healthcare spending in 2022, with an average spend of approximately $13,000 per person.
National health expenditures are projected to grow 5.6% per year from 2023 to 2032, according to CMS. While representing only 17% of the United States population, the 65 and older age group accounted for 21% of all healthcare spending in 2023, with an average spend of approximately $14,570 per person.
Several courts have interpreted the AKS’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the AKS has been violated. P3 Health Partners Inc. | 2023 Form 10-K | 13 Table of Contents The AKS includes statutory exceptions and regulatory safe harbors that protect certain arrangements.
Several courts have interpreted the AKS’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the AKS has been violated. The AKS includes statutory exceptions and regulatory safe harbors that protect certain arrangements.
Providers are generally recredentialed every three years or more often if necessary, which is P3 Health Partners Inc. | 2023 Form 10-K | 12 Table of Contents consistent with industry guidelines. In addition, network providers are required under their participating provider agreements with P3 to have established an ongoing quality assurance program.
Providers are generally recredentialed every three years or more often if necessary, which is consistent with industry guidelines. In addition, network providers are required under their participating provider agreements with P3 to have established an ongoing quality assurance program.
We believe our total addressable market is represented by the approximately 66 million Americans (approximately 17% of the total population) who were enrolled in either traditional Medicare or Medicare Advantage nationally in 2023, which represented $944 billion of annual spend.
We believe our total addressable market is represented by the approximately 68 million Americans (approximately 17% of the total population) who were enrolled in either traditional Medicare or MA nationally in 2024, which represented $1,030 billion of annual spend.
P3 Health Partners Inc. | 2023 Form 10-K | 15 Table of Contents Data Privacy and Security Laws We are subject to a number of federal and state laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and security laws, data breach notification laws, and consumer protection laws and regulations.
Data Privacy and Security Laws We are subject to a number of federal and state laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and security laws, data breach notification laws, and consumer protection laws and regulations.
These teams provide wraparound services to our patients and collaborate with the patients’ caregivers to ensure patients have the tools to successfully navigate their healthcare journey across the care continuum. We have made significant investments in technology to customize patient care management plans.
These teams provide wraparound services to our patients and collaborate with the patients’ caregivers to ensure patients have the tools to successfully navigate their healthcare journey across the care continuum. We have made significant investments in P3 Health Partners Inc. | 2024 Form 10-K | 5 Table of Contents technology to customize patient care management plans.
Based on our ability to provide a compelling value proposition for physicians looking to shift to value-based care while remaining independent, we believe there is significant opportunity to grow lives in our current markets in Arizona, California, Florida, Nevada, and Oregon.
Based on our ability to provide a compelling value proposition for physicians looking to shift to value-based care while remaining independent, we believe there is significant opportunity to grow lives in our current markets in Arizona, California, Nevada, and Oregon. Additionally, we have the opportunity to expand our existing membership base through our payor partners’ presence in our current markets.
Our primary competition remains the status quo, FFS environment that much of the healthcare system operates in today.
Competition The healthcare industry is highly competitive and fragmented. Our primary competition remains the status quo, FFS environment that much of the healthcare system operates in today.
P3 Health Partners Inc. | 2023 Form 10-K | 14 Table of Contents Healthcare Reform In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, many of which are intended to contain or reduce healthcare costs.
Healthcare Reform In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, many of which are intended to contain or reduce healthcare costs.
By way of example, in the United States, the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), substantially changed the way healthcare is financed by both governmental and private insurers.
By way of P3 Health Partners Inc. | 2024 Form 10-K | 13 Table of Contents example, in the United States, the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), substantially changed the way healthcare is financed by both governmental and private insurers.
Our model allows us to “do well” while also “doing good.” We contract with health plans to provide capitated care services with respect to certain of their MA members.
Our model allows us to “do well” while also “doing good.” We contract with health plans to P3 Health Partners Inc. | 2024 Form 10-K | 4 Table of Contents provide capitated care services with respect to certain of their MA members.
Taken as a whole, our P3 Care Model helps facilitate enhanced P3 Health Partners Inc. | 2023 Form 10-K | 5 Table of Contents clinical outcomes for our key stakeholders, resulting in a 98% physician retention rate from 2018 through December 31, 2023. We are led by one of the most experienced management teams in population health.
Taken as a whole, our P3 Care Model is designed to help facilitate enhanced clinical outcomes for our key stakeholders, resulting in a 95% physician retention rate from 2018 through December 31, 2024. We are led by one of the most experienced management teams in population health.
Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.
P3 Health Partners Inc. | 2024 Form 10-K | 14 Table of Contents Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.
Medicare Advantage has been well received since it was introduced, with penetration among Medicare beneficiaries increasing from 19% in 2007 to 51% in 2023 and is projected to increase to 62% by 2033. This trend reflects the understanding that Medicare Advantage plans are financially and clinically valuable to Medicare eligible patients.
MA has been well received since it was introduced, with penetration among Medicare beneficiaries increasing from 19% in 2007 to 54% in 2024 and is projected to increase to 64% by 2034. This trend reflects the understanding that MA plans are financially and clinically valuable to Medicare eligible patients. Our Market Opportunity We believe there is significant white space opportunity.
Our efforts to promote a positive employee experience and foster an inclusive culture are further supported and enhanced by local and national in-person and virtual events, including town halls, in-office celebrations and employee activity committees. We have also developed a taskforce that seeks to drive diversity and inclusion efforts, including employee focus groups to encourage participation across the organization.
Our efforts to promote a positive employee experience and foster an inclusive culture are further supported and enhanced by local and national in-person and virtual events, including town halls, in-office celebrations and employee activity committees.
We believe we offer competitive compensation packages and work to ensure fairness in internal compensation practices. People join P3 because of our mission: to ensure providers and their patients get the healthcare they deserve. Together with our employees and physician partners, we have defined our core values as: • People: Our attitude is respecting and valuing everyone.
P3 Health Partners Inc. | 2024 Form 10-K | 10 Table of Contents People join P3 because of our mission: to ensure providers and their patients get the healthcare they deserve. Together with our employees and physician partners, we have defined our core values as: • People: Our attitude is respecting and valuing everyone. Our community is strong and safe.
We then align physician incentives and provide our team tools and technology to support our physician partners in a VBC system and care for the patients we have the honor and privilege to serve together. These affiliated physicians provided care to approximately 99% of our primary care physicians as of December 31, 2023.
We then align physician incentives and provide our team tools and technology to support our physician partners in a VBC system and care for the patients we have the honor and privilege to serve together. We augment these affiliate partnerships with employed Primary Care Physicians (“PCPs”), P3 operated clinics, and wellness centers.
Our platform focuses on Medicare Advantage and manages the needs of our members through subscription-like per-member-per-month (“PMPM”) arrangements with health plans or payors.
Our platform focuses on Medicare Advantage and manages the needs of our members through subscription-like per-member-per-month (“PMPM”) arrangements with health plans or payors. From there, the economics of our care model are further impacted by our ability to drive total cost of care savings and bend the cost curve.
We invest in our employees through what we consider to be high-quality benefits, various health and wellness initiatives, and P3 Health Partners Inc. | 2023 Form 10-K | 11 Table of Contents social events that bring our employees together to support the communities in which we live and work.
We invest in our employees through what we consider to be high-quality benefits, various health and wellness initiatives, and social events that bring our employees together to support the communities in which we live and work. We believe we offer competitive compensation packages and work to ensure fairness in internal compensation practices.
We operate in the $944 billion Medicare market, which covers approximately 66 million eligible lives as of October 2023. Our core focus is the MA market, which makes up approximately 51% of the overall Medicare market, or nearly 31 million Medicare eligible lives in 2023.
Our core focus is the MA market, which makes up approximately 54% of the overall Medicare market, or nearly 33 million Medicare eligible lives in 2024.
Failure to meet the requirements of an applicable AKS safe harbor, however, does not render an arrangement illegal. Rather, the government may evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and may be subject to greater scrutiny by enforcement agencies.
Rather, the government may evaluate P3 Health Partners Inc. | 2024 Form 10-K | 12 Table of Contents such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and may be subject to greater scrutiny by enforcement agencies.
Additionally, we have the opportunity to expand our existing membership base through our payor partners’ presence in our current markets. Expansion into adjacent markets. Once we establish a presence in a geography, we are then able to leverage our regional infrastructure and our relationships with payors as we expand into adjacent geographies.
Expansion into adjacent markets. Once we establish a presence in a geography, we are then able to leverage our regional infrastructure and our relationships with payors as we expand into adjacent geographies. We are more easily able to deploy this ‘land and expand’ strategy once we have established the P3 brand in a particular market. Expansion into new markets.
We therefore expect to see higher levels of per member medical costs in the first and fourth quarters. Available Information We were incorporated under the laws of the State of Delaware on August 20, 2020 under the name Foresight Acquisition Corp. Upon the closing of the Business Combinations, we changed our name to P3 Health Partners Inc.
“ Management’s Discussion and Analysis of Results of Operations —Key Factors Affecting our Performance—Impact of Seasonality .” Available Information We were incorporated under the laws of the State of Delaware on August 20, 2020 under the name Foresight Acquisition Corp. Upon the closing of the Business Combinations, we changed our name to P3 Health Partners Inc.
Our Growth Strategy We intend to utilize our competitive strengths and capitalize on favorable industry trends to increase our footprint within our current markets and across new states and counties to ultimately increase the number of physicians and patients we serve. Additional membership through current relationships.
Our Disciplined Growth Strategy We intend to utilize our competitive strengths to increase our footprint within our current markets and across new states and counties to ultimately increase the number of physicians and patients we serve while at the same time managing the growth of the business in a disciplined, cost-efficient manner.
It helps our administrative teams deliver a data driven approach for a better, more engaged physician experience and act as a support system to their practices. This tool combines data management with data analysis to evaluate and transform complex data sets into meaningful, actionable information used to support effective strategic, tactical and operational insights.
It helps our administrative teams deliver a data driven approach for a better, more engaged physician experience and act as a support system to their practices.
With an embedded Risk Adjustment engine, it allows the organization to determine the burden of illness for our patients while providing stratification clinical data to physicians. Our Value Proposition We believe that our P3 Care Model is effective, differentiated and represents a ‘win’ for all key stakeholders.
It also provides comprehensive information that drives performance to improve clinical outcomes and quality of care and creates physician profiles and cost analysis to improve healthcare management. With an embedded Risk Adjustment engine, it allows the organization to determine the burden of illness for our patients while providing stratification clinical data to physicians.
The industry is primed for a platform like ours, which allows physicians to remain independent while accessing financial resources and infrastructure to support a VBC model.
As of December 31, 2024, we have contracted with 3,100 primary care physicians. This represents less than 1% of the total number of PCPs in the U.S. of approximately 535,000. We believe the industry is primed for a platform like ours, which allows physicians to remain independent while accessing financial resources and infrastructure to support a VBC model.
The information found on our website is not part of this or any other report we file with, or furnish to, the SEC. Item 1A. Risk Factors. Our business involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-K.
The information found on our website is not part of this or any other report we file with, or furnish to, the SEC. P3 Health Partners Inc. | 2024 Form 10-K | 16 Table of Contents
We augment these affiliate partnerships with employed Primary Care Physicians (“PCPs,”), P3 operated clinics, and wellness centers. Furthermore, unlike our peers, we offer a broad delegated care model in which we take on the responsibility to reshape the local healthcare market to provide high quality care for patients throughout the care continuum.
Furthermore, we offer a broad delegated care model in which we take on the responsibility to reshape the local healthcare market to provide high quality care for patients throughout the care continuum. We operate in the $1,029.8 billion Medicare market, which covers approximately 68 million eligible lives as of November 2024.
Removed
From there, the economics of our care model are further impacted by our ability to drive total cost of care savings P3 Health Partners Inc. | 2023 Form 10-K | 4 Table of Contents and bend the cost curve.
Added
The FFS model unintentionally incentivizes the volume of patients and services performed rather than the quality of services and care—resulting in a deprioritization of preventative services and overall health of the patient. • PCP burnout and dissatisfaction.
Removed
Our Market Opportunity We believe there is significant white space opportunity. As of December 31, 2023, we have contracted with 2,750 primary care physicians. This represents less than 1% of the total number of PCPs in the U.S. of approximately 520,000.
Added
This platform provides comprehensive physician profiles, cost analysis, and quality metrics, allowing management to identify trends, uncover improvement opportunities, and optimize resource utilization. Additionally, its embedded Risk Adjustment engine helps quantify burden of illness, offering clinical risk stratification data that supports targeted care coordination for high-risk patient populations.
Removed
It also provides P3 Health Partners Inc. | 2023 Form 10-K | 8 Table of Contents comprehensive information that drives performance to improve clinical outcomes and quality of care and creates physician profiles and cost analysis to improve healthcare management.
Added
P3 Health Partners Inc. | 2024 Form 10-K | 8 Table of Contents This tool combines data management with data analysis to evaluate and transform complex data sets into meaningful, actionable information used to support effective strategic, tactical and operational insights.
Removed
Patients Our P3 Care Model of partnering with local physicians allows patients to maintain their relationship with their existing physicians. We believe this is key to delivering stronger clinical outcomes and support for our patients. Our model deploys care teams for each individual patient to assist in the continuity and coordination of care.
Added
As we grow our network, we conduct periodic strategic reviews of our provider and payor contracts, as a result of which we may elect to periodically exit underperforming provider and payor contracts in an effort to rationalize our network costs. Additional membership through current relationships.
Removed
This support allows for seamless interactions across multiple physicians and various care settings. Connectivity reduces the risk of unnecessary progression of disease or downstream care, which is evident in our results. Physicians We believe our model supports and empowers physicians, care teams, and practices in their transition from a traditional FFS model to a VBC model.
Added
We are constantly evaluating our pipeline of opportunities to continue growing our membership. Based on our analysis and experience to date, we have identified a list of target markets that we believe are ideal candidates for the P3 Care Model, whether across physicians or payors.
Removed
Importantly, we enable physicians to implement VBC protocols while maintaining their independence. Additionally, our P3 Care Model leverages an innovative technology suite that provides physicians with the tools to drive better clinical outcomes.
Added
Failure to meet the requirements of an applicable AKS safe harbor, however, does not render an arrangement illegal.
Removed
Enabling physicians to own much of this process also allows for improved personal satisfaction on their journey to VBC, resulting in our 98% physician retention rate from 2018 through December 31, 2023 on our network of approximately 2,750 physicians as of December 31, 2023. Payors Our model is differentiated in our ability to also partner directly with payors.
Added
We therefore expect to see higher levels of per member medical costs in the first and fourth quarters. See Part II, Item 7.
Removed
We have a proven ability to manage medical costs and improve clinical outcomes of our lives under management on behalf of our payor partners. This is evidenced by the receipt of inbound partnership requests from payors to improve growth, quality and profitability in their markets.
Removed
We believe there is a significant and growing demand from payors as they capitate risk and transition to VBC. Competitive Differentiation Broad delegated care model Under our at-risk model, we are financially responsible for the medical costs associated with our attributed patients across the care continuum.
Removed
Our broad delegated care model enables us to better manage and control critical aspects of care beyond the PCP office.
Removed
By taking on additional, delegated services from our payor partners, including networking, credentialing, utilization management and claims processing, we can better control care delivery, align incentives across the care continuum, and ensure that quality care is delivered and paid for in the appropriate care setting.
Removed
Rapidly scalable, capital efficient model We have demonstrated the rapid scalability of our model with organic average annual revenue growth of 84% from 2018 to 2023. This is in part due to the capital efficiency of our affiliate model and in part due to our ability to grow through multiple channels.
Removed
Because we primarily partner with physicians and physician groups or payors, we do not need to build brick and mortar clinics or acquire practices to enter a new market; therefore, we require less upfront capital to enter a market and can take the time to establish a market presence and build patient recognition and familiarity as well as other relationships before investing significant funds.
Removed
While many of our competitors employ the buy / build or joint-venture partnership model, our approach has a minimal “ramp-up” period and thus a faster expected near-term path to profitability. Furthermore, our ability to effectively leverage existing physician bases across the U.S. accelerates our speed to scale.

… 242 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

16 edited+497 added−197 removed0 unchanged
Biggest changeIn connection with the Business Combinations, we entered into a TRA that provides for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of P3 LLC resulting from any redemptions or exchanges of P3 LLC, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the “TRA Payments”).
Biggest changeThe Tax Receivable Agreement generally provides for the payment by us to the P3 Equityholders of 85% of the income tax benefits, if any, that we actually realize (or are deemed to realize in certain circumstances) in periods after the closing as a result of: (i) increases in our proportionate share of the tax basis of P3 LLC’s assets resulting from Business Combinations, future redemptions or exchanges by the P3 Equityholders of P3 LLC Units for our Class A common stock or cash and certain distributions (or deemed distributions) by P3 LLC; and (ii) certain other tax benefits resulting from payments we make under the Tax Receivable Agreement.
We were in compliance with all other covenants under the Term Loan Facility and VGS Promissory Note as of December 31, 2023; however, there can be no assurance that we will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility, VGS Promissory Note or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.
We were in material compliance with all other covenants under the Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note as of December 31, 2024; however, there can be no assurance that we will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note or the lenders of any future indebtedness we may incur will grant any such waiver or forbearance in the future.
As a result, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements contained elsewhere in this Form 10-K are issued.
As a result of these factors, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date the consolidated financial statements included elsewhere in this Form 10-K are issued.
In evaluating the Company’s ability to continue as a going concern, management considered the Company’s current projections of future cash flows, current financial condition, sources of liquidity, and debt obligations for at least one year from the date of issuance of this Form 10-K in considering whether it has the ability to meet its obligations.
In evaluating our ability to continue as a going concern and meet our obligations, management considered our current projections of future cash flows, current financial condition, sources of liquidity, and debt obligations for at least one year from the date of issuance of this Form 10-K.
The Term Loan Facility and VGS Promissory Note lenders have granted us a waiver of the covenant under the Term Loan Facility related to the existence of a “going concern” qualification in the audit opinion for our audited financial statements for the fiscal year ended December 31, 2023.
The Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note lenders have granted us a waiver of the covenant under the Term Loan Facility related to the existence of a “going concern” explanatory paragraph in the audit opinion for our audited financial statements for the fiscal year ended December 31, 2024.
As of December 31, 2023, we were not in compliance with its Term Loan Facility and VGS Promissory Note covenants related to issuance of the 2023 financial statements with an audit opinion free of a “going concern” qualification.
As of December 31, 2024, we were not in compliance with its Term Loan Facility, VGS Promissory Note, VGS 2 Promissory Note and VGS 3 Promissory Note covenants related to issuance of the 2024 financial statements with an audit opinion free of a “going concern” explanatory paragraph.
Additionally, to the extent that we need funds and P3 LLC is restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or P3 LLC is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
To the extent that we require funds and P3 LLC or its subsidiaries are restricted from making distributions under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition, including our ability to pay our income taxes when due.
Cash Sources To date, we have financed our operations principally through the cash we obtained as a result of the Business Combinations, private placements of our equity securities, payments from our payors, issuances of promissory notes, and borrowings under the Term Loan Facility (as defined below). We generate cash from our operations, generally from our contracts with payors.
Since our inception, we have financed our operations primarily through cash we obtained as a result of the Business Combinations, private placements of equity securities, issuances of promissory notes, payments received from various payors, borrowings under the Term Loan Facility (as defined herein) and the disposition of certain of our Florida assets.
We expect to continue to incur net losses, comprehensive losses, and negative cash flows from operating activities in accordance with our operating plan.
As of December 31, 2024, we had an accumulated deficit of $503.2 million. We expect to continue to incur net losses, comprehensive losses, and negative cash flows from operating activities in accordance with our operating plan.
As such, we have no independent means of generating revenue or cash flow, and our ability to pay taxes, make payments under the Tax Receivable Agreement (“TRA”), and to pay dividends will depend on the financial results and cash flows of P3 LLC and the distributions received from P3 LLC.
As such, we have no independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of P3 LLC and its subsidiaries, and distributions we receive from P3 LLC.
We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future due to the strong growth we have experienced over the last six years and the investments we are making in expanding our business, which require up-front expenses.
We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future.
Other . Other consists of gains and losses resulting from other transactions. Income Taxes P3 LLC is treated as a partnership for U.S. federal and most applicable state and local income tax jurisdictions. As a partnership, P3 LLC is generally not subject to taxes, other than entity level state income taxes.
P3 LLC is classified as a partnership for U.S. federal income tax purposes and, as such, is generally not be subject to entity level U.S. federal income tax. Instead, taxable income is allocated to holders of P3 LLC units, including us.
The P3 Health Partners Inc. | 2023 Form 10-K | 65 Table of Contents aggregate value of shares of Class A common stock that may be offered, issued, and sold under the Sales Agreement is included in the aggregate value of securities that may be offered, issued, and sold by us under the Shelf Registration.
P3 Health Partners Inc. | 2024 Form 10-K | 41 Table of Contents There may be sales of a substantial amount of our Class A common stock in future by our stockholders, and these sales could cause the price of our Class A common stock to fall.
If we are unable to obtain additional funding when needed, we will need to curtail planned activities in order to reduce costs, which will likely have an unfavorable effect on our ability to execute on our business plan, and have an adverse effect on our business, results of operations, and future prospects.
If we are unable to raise additional funds when needed to fund our operations, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
During the year ended December 31, 2022, we recorded a $1,315.0 million goodwill impairment charge due to the presence of certain macroeconomic and financial market conditions, industry-specific considerations, our performance, and the sustained decrease in the price of our Class A common stock. We do not have any goodwill as of December 31, 2022. Other Income (Expense) Interest expense, net.
For example, due to the decrease in the share price over the second and fourth quarters of 2022, the Company recorded a significant goodwill impairment charge of $1,315.0 million during the year ended December 31, 2022. Goodwill or intangible asset impairments have had, and any future impairments may have, a material adverse effect on our results of operations.
We are subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss generated by P3 LLC.
As a result, we generally will incur taxes on our allocable share of any net taxable income generated by P3 LLC.
Removed
Item 1A. Risk Factors ” and elsewhere in this Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any periods in the future. Overview P3 is a patient-centered and physician-led population health management company. We strive to offer superior care to all those in need.
Added
Item 1A. Risk Factors. Our business involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-K. The occurrence of any of the events described below could harm our business, operating results, financial condition, liquidity, or prospects.
Removed
We believe that the misaligned incentives in the FFS healthcare payment model and the fragmentation between physicians and care teams has led to sub-optimal clinical outcomes, limited access, high spending and unnecessary variability in the quality of care.
Added
In any such event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. This Form 10-K also contains forward-looking statements that involve risks and uncertainties.
Removed
We believe that a platform such as ours, which helps to realign incentives and focuses on treating the full patient, is uniquely positioned to address these healthcare challenges.
Added
See “ Cautionary Statement Regarding Forward-Looking Statements .” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain important factors, including those set forth below.
Removed
We have leveraged the expertise of our management team’s more than 20 years of experience in population health management, to build our “P3 Care Model.” The key attributes that differentiate P3 include: 1) patient-focused model, 2) physician-led model, and 3) our broad delegated model.
Added
Risks Related to Our Business and Financial Results Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern.
Removed
Our model operates by entering into arrangements with payors providing for monthly payments to manage the total healthcare needs of members attributed to our primary care physicians. In tandem, we enter into arrangements directly with existing physician groups or independent physicians in the community to join our VBC network.
Added
As of December 31, 2024, we had $38.8 million of unrestricted cash and cash equivalents available to fund future operations, $154.8 million of outstanding indebtedness, of which $65.0 million is classified as current on our balance sheet, $31.5 million of paid in-kind interest, and $255.1 million of unpaid claims.
Removed
In our model, physicians are able to retain their independence and entrepreneurial spirit, while gaining access to the tools, teams and technologies that are key to success in a VBC model, all while sharing in the savings from successfully improving the quality of patient care and reducing costs.
Added
Based on our currently available cash resources, including the aggregate proceeds of $30.0 million we received from a related party financing transaction in February and March 2025, and assuming no other financing transactions, we believe we will require additional funding in 2025.
Removed
We operate in the $944 billion Medicare market, which covers approximately 66 million eligible lives as of October 2023. Our core focus is the MA market, which makes up approximately 51% of the overall Medicare market, or nearly 31 million Medicare eligible lives in 2023.
Added
We continue to explore raising additional capital through a combination of debt financing and equity issuances and sales of assets.
Removed
Medicare beneficiaries may enroll in an MA plan, under which payors contract with the CMS to provide a defined range of healthcare services that are comparable to Medicare FFS (which is also referred to as “traditional Medicare”). We predominantly enter into capitated contracts with the nation’s largest health plans to provide holistic, comprehensive healthcare to MA members.
Added
As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through the sale and issuance of debt or equity securities or through bank or other financing could be impaired and there is no assurance that sources of financing will be available on a timely basis, or on satisfactory terms, or at all.
Removed
Under the typical capitation arrangement, we are entitled to PMPM fees from payors to provide a defined range of healthcare services for MA health plan members attributed to our PCPs. These PMPM fees comprise our capitated revenue and are determined as a percent of the premium (“POP”) payors receive from CMS for these members.
Added
If we are unable to raise additional capital or generate cash flows necessary to fund our operations or refinance our indebtedness, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
Removed
Our contracted recurring revenue model offers us highly predictable revenue, and rewards us for providing high-quality care rather than driving a high volume of services. In this capitated arrangement, our goals are well-aligned with payors and patients alike—the more we improve health outcomes, the more profitable we will be over time.
Added
Risks Related to Our Operating History We have a history of net losses. We expect to continue to incur losses for the foreseeable future and we may never achieve or maintain profitability. We have experienced losses since our inception. For the year ended December 31, 2024, we incurred net losses of $310.4 million.
Removed
Under this capitated contract structure, we are generally responsible for all members’ medical costs across the care continuum, including, but not limited to emergency room and hospital visits, post-acute care admissions, prescription drugs, specialist physician spend, and primary care spend. Keeping members healthy is our primary objective.
Added
We expect that our operating expenses will continue to increase as we grow our business, build relationships with physician partners and payors, develop new services and comply with the requirements associated with being a public company.
Removed
When they need medical care, delivery of the right care in the right setting can greatly impact outcomes. When our members need care outside of our network of PCPs, we utilize a number of tools including network management, utilization management and claims processing to ensure that the appropriate quality care is provided.
Added
We may not succeed in sufficiently increasing our revenue to offset these expenses. Consequently, we may not be able to achieve and maintain profitability for the current or any future fiscal year.
Removed
Our company was formed in 2017 and our first at-risk contract became effective on January 1, 2018.
Added
We may never be able to generate sufficient revenue to achieve or sustain profitability and our recent and historical growth should not be considered indicative of our future performance. We may need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations.
Removed
We have demonstrated an ability to rapidly scale, primarily entering markets with our affiliate physician model, and expanding to a PCP network of approximately 2,750 physicians, in 18 markets (counties) across five states in six full years of operations as of December 31, 2023.
Added
We may need to spend significant amounts to fund our existing operations, including expansion into new geographies, to improve our platform and to develop new services.
Removed
Our platform has enabled us to grow our revenue by an average of 84% annually from December 31, 2018 to December 31, 2023. As of December 31, 2023, our PCP network served approximately 108,900 at-risk members.
Added
Based upon management’s assessment of the P3 Health Partners Inc. | 2024 Form 10-K | 17 Table of Contents Company’s ability to continue as a going concern as described above in the risk factor entitled “ Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern ,” absent additional funding, we believe that our existing cash, cash equivalents and restricted cash are not sufficient to fund our operating and capital needs for at least the next 12 months.
Removed
We believe we have significant growth opportunities available to us across existing and new markets, with less than 1% of the 520,000 PCPs in the U.S. currently included in our physician network.
Added
We maintain the majority of our cash, cash equivalents and restricted cash in accounts with major U.S. financial institutions, and our deposits at these institutions, at times, may exceed insured limits. Market conditions can impact the viability of these institutions.
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 55 Table of Contents Key Factors Affecting our Performance Growing Medicare Advantage Membership on Our Platform Membership and revenue are tied to the number of members attributed to our physician network by our payors.
Added
In the event of failure of any of the financial institutions where we maintain our cash, cash equivalents and restricted cash, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
Removed
We believe we have multiple avenues to serve additional members, including through: • Growth in membership under our existing contracts and existing markets: ◦ Patients who are attributed to our physician network who (a) age into Medicare and elect to enroll in MA or (b) elect to convert from Medicare FFS to MA. • Adding new contracts (either payor contracts or physician contracts) in existing markets. • Adding new contracts (either payor contracts or physician contracts) in adjacent and new markets.
Added
Our expectation regarding the sufficiency of funds is based on assumptions that may change as a result of many factors currently unknown to us. Until such time, if ever, as we can generate sufficient revenue, we may finance our cash needs through a combination of equity offerings and debt financings or other sources.
Removed
Growing Existing Contract Membership As new patients age-in to Medicare and enroll in MA through our payors, they become attributed to our network of physicians with little incremental cost to us. In addition to age-ins, Medicare eligible patients can change their enrollment selections during select periods throughout the year.
Added
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.
Removed
Our sales and marketing teams actively work with local community partners to connect with Medicare eligible patients and make them aware of their healthcare choices and the services that we offer with our VBC model, including greater access to their physicians and customized care plans catered to their needs.
Added
Our present and future funding requirements will depend on many factors, including: • our ability to achieve revenue growth; • our ability to effectively manage medical expense amounts; • the cost of expanding our operations, including our geographic scope, and our offerings, including our marketing efforts; • our rate of progress in launching, commercializing and establishing adoption of our services; and • the effect of competing technological and market developments.
Removed
The ultimate effect of our marketing efforts is increased awareness of P3 and additional patients choosing us as their primary care provider.
Added
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder.
Removed
We believe that our marketing efforts also help to grow our payor partners’ membership base as we grow our own patient base and help educate patients about their choices on Medicare, further aligning our model with that of healthcare payors.
Added
In addition, debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and these forms of financing may have rights, preferences, and privileges senior to those of holders of our common stock and may involve restrictive covenants which could place significant restrictions on our operations.
Removed
Growing Membership in Adjacent and New Markets Our affiliate model allows us to quickly and efficiently enter into new and adjacent markets in two ways: (1) partnering with payors and (2) partnering with providers. Because our model honors the existing patient-provider relationship, we are able to deploy our care model around existing physicians in a given a market.
Added
For example, since December 2022, in various private placement transactions and in connection with the issuance of unsecured promissory notes (see Note 10 “Debt” to the consolidated financial statements included elsewhere in this Form 10-K), we have issued an aggregate of 110.8 million shares of Class A common stock and warrants and pre-funded warrants to purchase an aggregate of 307.1 million shares of Class A common stock.
Removed
By utilizing the local healthcare infrastructure, we can quickly build a network of PCPs to serve the healthcare needs of contracted members. Our business development and managed care teams maintain an active pipeline of new partnership opportunities for both providers and payors.
Added
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources .” If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, intellectual property, or future revenue streams or grant licenses on terms that may not be favorable to us.
Removed
These potential opportunities are developed through significant inbound interest and the deep relationships our team has developed with their more than 20 years of experience in the VBC space and our proactive assessment of expansion markets. When choosing a market to enter, we make our decision on a county-by-county basis across the United States.
Added
Furthermore, any capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to advance development activities.
Removed
We look at various factors including: (i) population size, (ii) payor participants and concentration, (iii) health system participants and concentration, and (iv) competitive landscape. When entering a new market, we supplement the existing physician network with local market leadership teams and support infrastructure to drive the improvement in medical cost and quality.
Added
Our business and the markets in which we operate are rapidly evolving, which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
Removed
When entering an adjacent market, we are able to leverage the investments we previously made to have a faster impact on our expanded footprint. As of December 31, 2023, we operate in 18 markets, markets being counties, across five states.
Added
Our business and the markets in which we operate are rapidly evolving which make it difficult to evaluate and assess the success of our business to date, our future prospects and the risks and challenges that we may encounter.
Removed
Growing Membership in Existing Markets Once established in a market, we have an opportunity to efficiently expand both our provider and payor contracts. Given the benefits PCPs experience from joining our P3 Care Model, which offers providers the teams, tools and technologies to better support their patient base, we often experience growth in our affiliate network after entering a market.
Added
These risks and challenges include our ability to: • attract new members and partner physicians to our platform and position our platform as a convenient and accepted way to access and deliver healthcare; P3 Health Partners Inc. | 2024 Form 10-K | 18 Table of Contents • retain our current members, affiliated professional entities and other physician partners and encourage them to continue to utilize our platform and services; • gain market acceptance of our services and products with members and physicians and maintain and expand such relationships; • comply with existing and new laws and regulations applicable to our business and in our industry; • anticipate and respond to changes in Medicare reimbursement rates and the markets in which we operate; • react to challenges from existing and new competitors; • maintain and enhance our reputation and brand; • effectively manage our growth and business operations, including new geographies; • forecast our revenue, which includes reimbursements, and budget for, and manage, our expenses, including our medical expense amounts, and capital expenditures; • hire and retain talented individuals at all levels of our organization; • maintain and improve the infrastructure underlying our platform, including our data protection, intellectual property and cybersecurity; and • successfully update our platform and services, including expanding our services into different healthcare products and services, develop and update our software, offerings and services to benefit our members.
Removed
Because of the benefits, we have also historically experienced high retention with our affiliate providers. From 2018 through December 31, 2023, we experienced a 98% physician retention rate in our affiliate provider network.
Added
If we fail to understand fully or adequately address the challenges that we are currently encountering or that we may encounter in the future, including those challenges described here and elsewhere in this “ Risk Factors ” section, our business, financial condition and results of operations could be adversely affected.
Removed
By expanding our affiliate provider network and adding new physicians to the P3 network, we can quickly increase the number of contracted at-risk members under our existing health plan arrangements.
Added
If the risks and uncertainties that we plan for when operating our business are incorrect or change, or if we fail to manage these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 56 Table of Contents Additionally, by expanding the number of contracted payors, we can leverage our existing infrastructure to quickly increase our share of patients within our physician network.
Added
Our relatively limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter. We were established in 2017 and we are continuing to grow our marketing and management capabilities.
Removed
Growing Capitated Revenue Per Member Medicare pays capitation using a risk adjusted model, which compensates payors based on the health status, or acuity, of each individual member. Payors with higher acuity members receive a higher payment and those with lower acuity members receive a lower payment.
Added
Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.

… 630 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+3 added−2 removed4 unchanged
Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors that have access to our critical systems and information.
Biggest changeKey elements of our cybersecurity risk management program include but are not limited to: P3 Health Partners Inc. | 2024 Form 10-K | 49 Table of Contents • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
See the section titled “ Risk Factors—Risks Related to Our Business and Industry—Our business and operations would suffer in the event of information technology system failures, security breaches, cyberattacks or other deficiencies in cybersecurity. ” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity and other information technology risks.
See the section titled “ Risk Factors—Risks Related to Our Business and Industry—Our business and operations would suffer in the event of information technology system failures, security breaches, cyberattacks or other deficiencies in cybersecurity. ” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan. We design and assess our program based on the HITRUST Common Security Framework.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on the HITRUST Common Security Framework.
Our management team, including, but not limited to, our Senior Vice President of Technology, Director of Information Systems Security, and Director of Information Systems Governance Risk and Compliance, is responsible for assessing and managing our material risks from cybersecurity threats.
Our management team, including our Senior Vice President of Technology, Director of Information Systems Security, and Director of Information Systems Governance Risk and Compliance, is responsible for assessing and managing our material risks from cybersecurity threats.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security P3 Health Partners Inc. | 2024 Form 10-K | 50 Table of Contents personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
P3 Health Partners Inc. | 2023 Form 10-K | 49 Table of Contents Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our management team’s experience spans over 20 years in all aspects of information technology including cybersecurity, IT operations (infrastructure engineering and architecture design), and IT governance audit compliance across industries such as energy, healthcare, pharmaceuticals, and finance.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team’s experience spans all aspects of information technology including cybersecurity, IT operations (infrastructure engineering and architecture design), and IT governance audit compliance across industries such as energy, healthcare, pharmaceuticals, and finance.
The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Committee, where it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Removed
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Added
Our Senior Vice President of Technology’s experience includes over 30 years in technology leadership and management, with 25 years within the healthcare sector, specializing in cybersecurity programs, and establishing technology compliance programs with industry standards such as Sarbanes-Oxley, HIPAA, HITRUST, and NIST.
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 50 Table of Contents
Added
Our Director of Information Systems Security’s experience includes over 20 years in IT, with 12 years within the healthcare sector, managing risk assessments and leading security programs using the HITRUST framework to ensure compliance with HIPAA, NIST, ISO27001, and GDPR.
Added
Our Director of Information Systems Governance Risk and Compliance’s experiences includes over 25 years in IT audit and security governance, establishing and leading IT GRC programs, directing IT security initiatives, and maintaining relevant certifications including CDPSE, CRISC, and CISA.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−25 removed0 unchanged
Biggest changePetersburg/Tampa areas, FL. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations. Item 3. Legal Proceedings.
Biggest changePetersburg/Tampa areas, FL. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.
Item 2. Properties. As of December 31, 2023, our principal executive office is located in Henderson, NV, where we occupy facilities totaling approximately 35,000 square feet, primarily under a lease that expires in July 2030. We use this facility principally for corporate activities. We also lease offices in Tucson, AZ; Las Vegas, NV; Salem, OR; Stockton, CA; and the St.
Item 2. Properties. As of December 31, 2024, our principal executive office is located in Henderson, NV, where we occupy facilities totaling approximately 35,000 square feet, primarily under a lease that expires in July 2030. We use this facility principally for corporate activities. We also lease offices in Tucson, AZ; Las Vegas, NV; Salem, OR; Stockton, CA; and the St.
Removed
The Company is a party to various claims, legal and regulatory proceedings, lawsuits and administrative actions arising in the ordinary course of business and associated with the Business Combinations. The Company carries general and professional liability insurance coverage to mitigate the Company’s risk of potential loss in such cases.
Removed
An accrual is established when a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. The Company believes that disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, net loss or cash flows.
Removed
It is the Company’s policy to expense costs associated with loss contingencies, including any related legal fees, as they are incurred. Books and Records Action On April 19, 2021, two members of the P3 Board of Managers, Joseph Straus and Jonathan Bradburn, filed a lawsuit in the Delaware Court of Chancery captioned Straus et al v.
Removed
P3 Health Group Holdings, LLC, C.A. No. 2021-0335-JTL (the “Books and Records Action”). In the Books and Records Action, Straus and Bradburn sought an order requiring P3 to produce certain books and records relating to the process leading up to, and the approval of, the Business Combinations.
Removed
On May 21, 2021, P3 filed its answer to the complaint in the Books and Records Action. On May 9, 2023, the Books and Records Action was dismissed with prejudice.
Removed
Hudson Class D Dispute On June 11, 2021, Hudson Vegas Investment SPV, LLC (“Hudson”), a holder of P3’s Class D Units, filed an action in the Delaware Court of Chancery captioned Hudson Vegas Investments SPV, LLC v. Chicago Pacific Founders Fund, L.P., et al., C.A. No. 2021-0518-JTL (the “Hudson Action”), in which it challenged the Business Combinations.
Removed
Specifically, Hudson purports to assert claims against P3, certain managers that were on the P3 Board of Managers, certain of its officers, and Chicago Pacific Founders Fund, L.P.
Removed
(“CPF”) for breach of P3’s then-existing LLC agreement (the “LLC Agreement”) (against P3 and CPF), breach of fiduciary duty (against certain of P3’s officers) and breach of contract claims related to the then-existing LLC Agreement (against the P3 Board of Managers) in connection with the process leading up to, and approval of, the Business Combinations.
Removed
In the Hudson Action, Hudson sought to enjoin the consummation of the Business Combinations and seeks a declaration that the Business Combinations violate its rights under the P3 then-existing LLC Agreement, a declaration that certain managers on the P3 Board of Managers and certain of P3’s officers breached their fiduciary duties, and money damages including attorneys’ fees.
Removed
On June 13, 2021, P3 filed an action in the Delaware Court of Chancery captioned P3 Health Group Holdings, L.L.C. v. Hudson Vegas Investment SPV, LLC, C.A. No. 2021-0519-JTL (the “P3 Action”).
Removed
In the P3 Action, P3 seeks: (i) a declaration that the Business Combinations do not violate Section 3.10 of P3’s Existing LLC Agreement; and (ii) reformation of a provision of P3’s Existing LLC Agreement. The P3 Action was consolidated with the Hudson Action. The combined cases are captioned In re P3 Health Group Holdings, L.L.C, C.A. No. 2021-0518-JTL.
Removed
On June 22, 2021, Hudson filed a motion for expedited proceedings in the Hudson Action in which it sought expedited discovery and a hearing on its motion for preliminary injunction to enjoin the consummation of the Business Combinations.
Removed
The defendants in the Hudson Action determined not to oppose Hudson’s motion for expedited proceedings and engaged in expedited discovery in advance of a preliminary injunction hearing that took place September 9, 2021.
Removed
On September 14, 2021, the Court of Chancery issued an oral ruling denying Hudson’s motion for preliminary injunction due to the lack of probability of success on the merits or, with respect to the Section 5.10 of the then-existing P3 LLC Agreement (the “Purchase Option”) only, lack of a showing of irreparable harm based on the condition that the escrow described below be created.
Removed
This ruling was made subject to the condition that Defendants memorialize their commitment to escrow, pending final resolution of this action, the consideration Hudson would be entitled to receive if it is P3 Health Partners Inc. | 2023 Form 10-K | 51 Table of Contents determined that the Purchase Option can be validly exercised, in a stipulation filed with the Court.
Removed
On September 17, 2021, Defendants filed a stipulation and proposed order and the Court entered the Order regarding escrow which confirmed their commitment to do so and to cause the Payment Spreadsheet (as that term is defined in Section 2.01(f) of the Merger Agreement) to provide that such consideration will be directed to such escrow.
Removed
The former members of P3 (other than Hudson) have agreed to indemnify the Company and P3 LLC following the Closing, for any damages, including reasonable attorney’s fees, arising out of matters relating to the dispute with Hudson. On December 27, 2021, Hudson filed a Motion for Leave to Amend the Verified Complaint.
Removed
The proposed Amended Complaint contains certain of Hudson’s original claims and also adds additional claims, including bad faith breach of contract claims against certain of the former P3 Managers, an additional contractual claim against P3, and a tortious interference with contract claim against Foresight Acquisition Corp., Foresight Acquisition Corp. II, P3 Partners Inc., Sameer Mathur, and Greg Wasson.
Removed
Defendants informed Hudson that they did not oppose the Motion for Leave to Amend the Verified Complaint, and on February 4, 2022, Hudson filed its Verified Amended Complaint. From September 12, 2022 through November 7, 2022, the Court issued a series of Orders ruling on the Defendants’ Motions to Dismiss the Verified Amended Complaint.
Removed
Such Orders provided for the dismissal with prejudice of, among other claims, (i) Hudson’s claim to a Purchase Option and (ii) part of Hudson’s claim to a priority right to cash distributed as a result of the transactions. The Court granted in part and denied in part a motion to dismiss filed by Mr. Leisure, Mr. Kazarian, Mr. Abdou, Mr.
Removed
Bacchus, Mr. Garrett, Mr. Price, Ms. Glisson, and Mr. Leavitt (the “Manager Defendants”) with respect to Hudson’s claim for bad faith breach of contract under a variety of theories.
Removed
The Court also granted in part and denied in part the Manager Defendants’ motion, permitting Hudson’s bad faith breach of contract claim to proceed against the Manager Defendants on certain theories, but dismissing other theories, including that the Manager Defendants committed a bad faith breach of contract by failing to act in good faith to facilitate the Purchase Option.
Removed
On November 7, 2022, the Court issued an order denying in part and granting in part the motion to dismiss the breach of fiduciary claims against the officer Defendants, including Mr. Kazarian, Mr. Abdou, Mr. Bacchus, Ms. Glisson, and Ms. Puathasnanon. On November 9, 2022, the Court issued an order denying the motion to dismiss the claim against Mr.
Removed
Mathur for tortious interference with Hudson’s contract rights. On June 21, 2023, the Court entered a scheduling order for the case, pursuant to which, a five day trial will commence on July 22, 2024. The parties are now currently engaged in discovery on Hudson’s surviving claims. Item 4. Mine Safety Disclosures. Not applicable.
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 52 Table of Contents PART II

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+13 added−268 removed0 unchanged
Biggest changeRisks Related to Our Legal and Regulatory Environment We conduct business in a heavily regulated industry and if we fail to adhere to all of the complex government laws and regulations that apply to our business, we could incur fines or penalties or be required to make changes to our operations or experience adverse publicity, any or all of which could have a material adverse effect on our business, results of operations, financial condition, cash flows, and reputation.
Biggest changeSee “— We conduct business in a heavily regulated industry and if we fail to adhere to all of the complex government laws and regulations that apply to our business, we could incur fines or penalties or be required to make changes to our operations or experience adverse publicity, any or all of which could have a material adverse effect on our business, results of operations, financial condition, cash flows, and reputation.” P3 Health Partners Inc. | 2024 Form 10-K | 51 Table of Contents Item 4.
Removed
Item 3. Legal Proceedings ” for a description of the Hudson Class D Dispute proceedings.
Added
Item 3. Legal Proceedings. The Company is a party to various claims, legal and regulatory proceedings, lawsuits and administrative actions arising in the ordinary course of business. The Company carries general and professional liability insurance coverage to mitigate the Company’s risk of potential loss in such cases. An accrual is established when a specific contingency is probable and estimable.
Removed
Defending or settling this lawsuit could draw the attention of our management team away from the operation of our business and while we are indemnified by the P3 Equityholders for costs in connection with this lawsuit, it is possible that we could nonetheless incur financial losses if disputes arise with respect to the extent of the indemnification obligations.
Added
The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. The Company believes that disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, net loss or cash flows.
Removed
Any future litigation against us could be costly and time-consuming to defend.
Added
It is the Company’s policy to expense costs associated with loss contingencies, including any related legal fees, as they are incurred. Hudson Class D Dispute On June 11, 2021, Hudson Vegas Investment SPV, LLC (“Hudson”), a holder of P3’s Class D Units, filed an action in the Delaware Court of Chancery captioned Hudson Vegas Investments SPV, LLC v.
Removed
We may become subject, from time to time, to legal proceedings, federal and state audits, government investigations, and payor audits, investigations, overpayments, and claims that arise in the ordinary course of business such as claims brought by our clients in connection with commercial disputes or employment claims made by our current or former associates.
Added
Chicago Pacific Founders Fund, L.P., et al., C.A. No. 2021-0518-JTL (the “Hudson Action”), in which it challenged the Business Combinations.
Removed
Litigation and audits may result in substantial costs and may divert management’s attention and resources, which may substantially harm our business, financial condition and results of operations.
Added
Specifically, Hudson purported to assert claims against P3, certain managers that were on the P3 Board of Managers, certain of its officers, and Chicago Pacific Founders Fund, L.P. for breach of P3’s then-existing LLC agreement (the “LLC Agreement”) (against P3 and Chicago Pacific Founders Fund, L.P.), breach of fiduciary duty (against certain of P3’s officers) and breach of contract claims related to the then-existing LLC Agreement (against the P3 Board of Managers) in connection with the process leading up to, and approval of, the Business Combinations.
Removed
Insurance may not cover such claims, may not provide sufficient payments to cover all of the costs to resolve one or more such claims and may not continue to be available on terms acceptable to us.
Added
In the Hudson Action, Hudson sought to enjoin the consummation of the Business Combinations and seeks a declaration that the Business Combinations violate its rights under the P3 then-existing LLC Agreement, a declaration that certain managers on the P3 Board of Managers and certain of P3’s officers breached their fiduciary duties, and money damages including attorneys’ fees.
Removed
A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our earnings and leading analysts or potential investors to reduce their expectations of our performance, which could reduce the market price of our Class A common stock or publicly traded warrants.
Added
On June 13, 2021, P3 filed an action in the Delaware Court of Chancery captioned P3 Health Group Holdings, L.L.C. v. Hudson Vegas Investment SPV, LLC, C.A. No. 2021-0519-JTL (the “P3 Action”).
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 31 Table of Contents Changes in U.S. tax laws, and the adoption of tax reform policies or changes in tax legislation or policies in jurisdictions outside of the United States, could adversely affect our operating results and financial condition.
Added
In the P3 Action, P3 sought: (i) a declaration that the Business Combinations do not violate Section 3.10 of P3’s Existing LLC Agreement; and (ii) reformation of a provision of P3’s Existing LLC Agreement. The P3 Action was consolidated with the Hudson Action. The combined cases are captioned In re P3 Health Group Holdings, L.L.C, C.A. No. 2021-0518-JTL (the “Action”).
Removed
We are subject to federal and state income and non-income taxes in the United States. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating these taxes.
Added
On August 22, 2024, the parties to the Action executed a Confidential Settlement and Mutual Release Agreement, pursuant to which the parties to the Action agreed to jointly file a Stipulation of Dismissal with Prejudice relating to the Action. On October 9, 2024, the Action was dismissed with prejudice.
Removed
Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations.
Added
Civil Investigative Demand In June 2024, we received a civil investigative demand (“CID”) from the DOJ pursuant to the False Claims Act in the course of the government’s investigation concerning our arrangements with insurance agents and brokers.
Removed
We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and tax authorities may challenge the positions that we take. Our quarterly results may fluctuate significantly, which could adversely impact the value of our Class A common stock and publicly traded warrants.
Added
The CID requests documentation and information relating to the marketing of our broker programs and our arrangements with, and remuneration paid to, MA brokers, agents and agencies, as well as our arrangements with third parties relating to these programs. We are cooperating with the investigation and providing the requested information.
Removed
Our quarterly results of operations, including our revenue, net loss and cash flows, has varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, our quarterly results should not be relied upon as an indication of future performance.
Added
No assurance can be given as to the timing or outcome of the government’s investigation.
Removed
Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, including, without limitation, the following: • our ability to maintain and grow the number of members on our platform; • the demand for and types of services that are offered on our platform by providers; • the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • our ability to effectively manage the size and composition of our network of healthcare providers relative to the level of demand for services from our members and our clients’ members and patients; • our ability to respond to competitive developments, including pricing changes and the introduction of new products and services by our competitors; • client and member renewal rates and the timing and terms of client and member renewals; • changes to our pricing model; • our ability to introduce new features and services and enhance our existing platform and our ability to generate significant revenue from new features and services; • the impact of outages of our platform and associated reputational harm; • security or data privacy breaches and associated remediation costs; • the timing of expenses related to the development or acquisition of technologies or businesses; and • the COVID-19 pandemic or other pandemics.
Added
Mine Safety Disclosures. Not applicable. P3 Health Partners Inc. | 2024 Form 10-K | 52 Table of Contents PART II
Removed
Any fluctuation in our quarterly results may not accurately reflect the underlying performance of our business and could cause a decline in the trading price of our Class A common stock and publicly traded warrants.
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 32 Table of Contents Our only significant asset is the ownership of a minority of the economic interest in P3 LLC, and such ownership may not be sufficient to generate the funds necessary to meet our financial obligations or to pay any dividends on our Class A common stock.
Removed
We have no direct operations and no significant assets other than the ownership of a minority of the economic interests in P3 LLC. As of December 31, 2023, we owned approximately 37.2% of the economic interests in P3 LLC.
Removed
We depend on P3 LLC and its subsidiaries for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including to satisfy our obligations under the Tax Receivable Agreement, or to pay any dividends with respect to our Class A Common Stock.
Removed
Legal and contractual restrictions in agreements governing the indebtedness of P3 LLC and its subsidiaries may limit our ability to obtain cash from P3 LLC.
Removed
The earnings from, or other available assets of, P3 LLC and its subsidiaries may not be sufficient to enable us to satisfy our financial obligations, including our obligations under the Tax Receivable Agreement, or pay any dividends on our Class A common stock should we decide to do so.
Removed
P3 LLC will be classified as a partnership for U.S. federal income tax purposes and, as such, will generally not be subject to entity level U.S. federal income tax. Instead, taxable income will be allocated to holders of P3 LLC units, including us.
Removed
As a result, we generally will incur taxes on our allocable share of any net taxable income generated by P3 LLC.
Removed
Under the terms of the P3 LLC Amended and Restated Limited Liability Agreement (the “P3 LLC A&R LLC Agreement”), and the Tax Receivable Agreement, P3 LLC will be obligated to make tax distributions or payments to holders of its P3 LLC units, including us, except to the extent such distributions or payments would render P3 LLC insolvent or are otherwise prohibited by law or the terms of any credit facility.
Removed
In addition to our tax payment obligations, we will also incur expenses related to our operations and our interests in P3 LLC, including costs and expenses of being a publicly traded company, all of which could be significant.
Removed
To the extent that we require funds and P3 LLC or its subsidiaries are restricted from making distributions under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition, including our ability to pay our income taxes when due.
Removed
Our business could be adversely impacted by climate change, extreme weather conditions and natural disasters. The intensifying effects of climate change present physical, liability, and transition risks with both macro and micro implications for companies and financial markets.
Removed
There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere are causing significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters.
Removed
Changes in weather patterns and an increased frequency, intensity and duration of extreme weather events (such as floods, droughts, wildfires and severe storms), whether as a result of climate change or otherwise, could, among other things, disrupt our operations or damage or destroy our headquarters or owned or managed clinics, which may cause us to suffer losses and additional costs to maintain or resume operations, which could have an adverse impact on our business and results of operations.
Removed
In addition, implementing changes to mitigate risks associated with such events may result in substantial short- and long-term additional operational expenses, which may materially affect our profitability.
Removed
The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payors, our contractual relationships and arrangements with healthcare providers and vendors, our marketing activities and other aspects of our operations.
Removed
Of particular importance are: • the federal Anti-Kickback Statute (the “AKS”), which prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid.
Removed
Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly.
Removed
By way of example, the AKS safe harbor for value-based arrangements requires, P3 Health Partners Inc. | 2023 Form 10-K | 33 Table of Contents among other things, that the arrangement does not induce a person or entity to reduce or limit medically necessary items or services furnished to any patient.
Removed
Failure to meet the requirements of a safe harbor, however, does not render an arrangement illegal, although such arrangements may be subject to greater scrutiny by government authorities.
Removed
Further, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the federal physician self-referral law (the “Stark Law”), which, subject to limited exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain designated health services (“DHS”), if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare or Medicaid for such DHS.
Removed
Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral; • the federal False Claims Act (the “FCA”), which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits.
Removed
There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud; including alleged upcoding or improper coding of diagnosis codes under the risk-adjustment methodology, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality.
Removed
In addition, we could be held liable under the FCA if we are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing, coding or risk adjustment information to our affiliated professional entities and other physician partners through Provider Portal and Analytic Management Tools, respectively.
Removed
The government may also assert that a claim including items or services resulting from a violation of the AKS or Stark Law constitutes a false or fraudulent claim for purposes of the FCA; • the Civil Monetary Penalties Statute, which prohibits, among other things, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider; • the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Removed
Similar to the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs; • similar state law provisions pertaining to anti-kickback, self-referral and false claims issues, some of which may apply to items or services reimbursed by any payor, including patients and commercial insurers; • laws that regulate debt collection practices; • a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose, or refund known overpayments; • federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; and • federal and state laws pertaining to the provision of services by nurse practitioners and physician assistants in certain settings, physician supervision of those services, and reimbursement requirements that depend on the types of services provided and documented and relationships between physician supervisors and nurse practitioners and physician assistants.
Removed
P3 Health Partners Inc. | 2023 Form 10-K | 34 Table of Contents The laws and regulations in these areas are complex, changing and often subject to varying interpretations.
Removed
As a result, there is no guarantee that a government authority will find that we or our affiliated professional entities or other physician partners are in compliance with all such laws and regulations that apply to our business.
Removed
Further, because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of the business activities undertaken by us or our affiliated professional entities or other physician partners could be subject to challenge under one or more of these laws, including, without limitation, our patient assistance programs that waive or reduce the patient’s obligation to pay copayments, coinsurance or deductible amounts owed for the services we provide to them if they meet certain financial need criteria.
Removed
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to significant penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment.
Removed
In addition, any action against us or our affiliated professional entities or other physician partners for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and result in adverse publicity, or otherwise experience a material adverse impact on our business, results of operations, financial condition, cash flows, reputation as a result.
Removed
If any of our affiliated professional entities, other physician partners or owned or managed clinics lose their regulatory licenses, permits, accreditations and/or registrations, as applicable, or become ineligible to receive reimbursement under Medicare, Medicaid or other third-party payors, there may be a material adverse effect on our business, financial condition, cash flows, or results of operations.
Removed
The operations of our owned and managed clinics through our affiliated professional entities and other physician partners are subject to extensive federal, state and local regulation relating to, among other things, the adequacy of medical care, equipment, personnel, operating policies and procedures, fire prevention, rate-setting, compliance with building codes and environmental protection and proof of financial ability to operate.
Removed
Our owned and managed clinics and affiliated professional entities and other physician partners are also subject to extensive laws and regulation relating to facility and professional licensure, conduct of operations, including financial relationships among healthcare providers, Medicare, Medicaid and state fraud and abuse and physician self-referrals, and maintaining updates to our affiliated professional entities’ and other physician partners’ enrollment in the Medicare and Medicaid programs, including the addition of new clinic locations, providers and other enrollment information.
Removed
Our owned and managed clinics and affiliates professional entities are subject to periodic inspection by licensing authorities and accreditation organizations to assure their continued compliance with these various standards. There can be no assurance that these regulatory authorities will determine that all applicable requirements are fully met at any given time.
Removed
Should any of our owned or managed clinics or affiliated professional entities be found to be noncompliant with these requirements, we could be assessed fines and penalties, could be required to refund reimbursement amounts or could lose our licensure or Medicare and/or Medicaid certification so that we or our affiliated professional entities and other physician partners are unable to receive reimbursement from such programs and possibly from other third-party payors, any of which could materially adversely affect our business, financial condition, cash flows or results of operations.
Removed
If our arrangements with our affiliated professional entities and other physician partners are found to constitute the improper rendering of medical services or fee splitting under applicable state laws, our business, financial condition and our ability to operate in those states could be adversely impacted.
Removed
Our contractual relationships with our affiliated professional entities and other physician partners may implicate certain state laws that generally prohibit non-professional entities from providing licensed medical services or exercising control over licensed physicians or other healthcare professionals (such activities generally referred to as the “corporate practice of medicine”) or engaging in certain practices such as fee-splitting with such licensed professionals.
Removed
The interpretation and enforcement of these laws vary significantly from state to state.
Removed
There can be no assurance that these laws will be interpreted in a manner consistent with our practices or that other laws or regulations will not be enacted in the future that could have a material and adverse effect on our business, financial condition and results of operations.
Removed
Regulatory authorities, state boards of medicine, state attorneys general and other parties may assert that, despite the agreements through which we operate, we are engaged in the provision of medical services and/or that our arrangements with our affiliated professional entities and other physician partners constitute unlawful fee-splitting.
Removed
If a jurisdiction’s prohibition on the corporate practice of medicine or fee-splitting is interpreted in a manner that is inconsistent with our practices, we would be required to restructure or terminate our arrangements with our affiliated professional entities and other physician partners to bring our activities into compliance with such laws.
Removed
A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties, P3 Health Partners Inc. | 2023 Form 10-K | 35 Table of Contents damages, fines, and/or a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations.
Removed
State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could discourage physicians and other healthcare professionals from providing clinical services to members of the health plans with whom we contract. We face inspections, reviews, audits and investigations under federal and state government programs and contracts.
Removed
These audits could have adverse findings that may negatively affect our business, including our results of operations, liquidity, financial condition and reputation. As a result of our participation in the Medicare and Medicaid programs, we are subject to various governmental inspections, reviews, audits and investigations to verify our compliance with these programs and applicable laws and regulations.
Removed
Other third-party payors may also reserve the right to conduct audits. We also periodically conduct internal audits and reviews of our regulatory compliance.
Removed
An adverse inspection, review, audit or investigation could result in: • refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from payors; • state or federal agencies imposing fines, penalties and other sanctions on us; • temporary suspension of payment for new patients to the facility or agency; • decertification or exclusion from participation in the Medicare or Medicaid programs or one or more payor networks; • self-disclosure of violations to applicable regulatory authorities; • damage to our reputation; • the revocation of a facility’s or agency’s license; • criminal penalties; • a corporate integrity agreement with HHS’s Office of Inspector General; and • loss of certain rights under, or termination of, our contracts with payors.
Removed
We have in the past and will likely in the future be required to refund amounts we have been paid and/or pay fines and penalties as a result of these inspections, reviews, audits and investigations.
Removed
If adverse inspections, reviews, audits or investigations occur and any of the results noted above occur, it could have a material adverse effect on our business and operating results. Furthermore, the legal, document production and other costs associated with complying with these inspections, reviews, audits or investigations could be significant.
Removed
Our records and submissions to a health plan may contain inaccurate or unsupportable information regarding risk adjustment scores of members, which could cause us to overstate or understate our revenue and subject us to various penalties.
Removed
The claims and encounter records that we submit to health plans may impact data that support the Medicare Risk Adjustment Factor (“RAF”) scores attributable to members.
Removed
These RAF scores determine, in part, the revenue to which the health plans and, in turn, we or our affiliated professional entities or other physician partners are entitled for the provision of medical care to such members.
Removed
The data submitted to CMS by each health plan is based, in part, on medical charts and diagnosis codes that we prepare and submit to the health plans. Each health plan generally relies on us and our affiliated professional entities or other physician partners to appropriately document and support such RAF data in our medical records.

… 202 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 52 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. [Reserved] 54 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55
Biggest changeItem 4. Mine Safety Disclosures 52 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. [Reserved] 54 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 74 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed7 unchanged
Biggest changeHolders As of March 15, 2024, there were 27 holders of record of our Class A common stock and 40 holders of Class V common stock.
Biggest changeHolders of our Common Stock As of March 13, 2025, there were 27 holders of record of our Class A common stock and 36 holders of Class V common stock.
Stock Performance Graph The following graph and related information provide a comparison of the cumulative total return for our Class A common stock, the S&P 500 Index and the S&P 500 Healthcare Index between April 6, 2021 (the date our common stock commenced trading on Nasdaq) through December 31, 2023.
Stock Performance Graph The following graph and related information provide a comparison of the cumulative total return for our Class A common stock, the S&P 500 Index and the S&P 500 Healthcare Index between April 6, 2021 (the date our common stock commenced trading on Nasdaq) through December 31, 2024.
P3 Health Partners Inc. | 2023 Form 10-K | 53 Table of Contents Recent Sales of Unregistered Securities There was no unregistered sale of our equity securities during the fiscal year ended December 31, 2023, that were not otherwise disclosed in a Current Report on Form 8-K. Purchases of Equity Securities by the Issuer and Affiliated Purchaser None.
P3 Health Partners Inc. | 2024 Form 10-K | 53 Table of Contents Recent Sales of Unregistered Securities There were no unregistered sales of our equity securities during the fiscal year ended December 31, 2024, that were not otherwise disclosed in a Current Report on Form 8-K. Purchases of Equity Securities by the Issuer and Affiliated Purchaser None.

Item 7. Management's Discussion & Analysis

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

1 edited+256 added−0 removed2 unchanged
Biggest changeThis discussion contains forward-looking statements and involves numerous risks and uncertainties. Our actual results may differ materially from those anticipated in any forward-looking statements as a result of many factors, including those set forth under “ Cautionary Statement Regarding Forward-Looking Statements ,” “
Biggest changeThis discussion contains forward-looking statements and involves numerous risks and uncertainties. Our actual results may differ materially from those anticipated in any forward-looking statements as a result of many factors, including those set forth under “ Cautionary Statement Regarding Forward-Looking Statements ,” “ Item 1A. Risk Factors ” and elsewhere in this Form 10-K.
Added
Our historical results are not necessarily indicative of the results that may be expected for any periods in the future. Overview P3 is a patient-centered and physician-led population health management company. We strive to offer superior care to all those in need.
Added
We believe that the misaligned incentives in the FFS healthcare payment model and the fragmentation between physicians and care teams has led to sub-optimal clinical outcomes, limited access, high spending and unnecessary variability in the quality of care.
Added
We believe that a platform such as ours, which helps to realign incentives and focuses on treating the full patient, is uniquely positioned to address these healthcare challenges.
Added
We have leveraged the expertise of our management team’s more than 20 years of experience in population health management, to build our “P3 Care Model.” The key attributes that differentiate P3 include: 1) patient-focused model, 2) physician-led model, and 3) our broad delegated model.
Added
Our model operates by entering into arrangements with payors providing for monthly payments to manage the total healthcare needs of members attributed to our primary care physicians. In tandem, we enter into arrangements directly with existing physician groups or independent physicians in the community to join our VBC network.
Added
In our model, physicians are able to retain their independence and entrepreneurial spirit, while gaining access to the tools, teams and technologies that are key to success in a VBC model, all while sharing in the savings from successfully improving the quality of patient care and reducing costs.
Added
We operate in the $1,030 billion Medicare market, which covers approximately 68 million eligible lives as of November 2024. Our core focus is the MA market, which makes up approximately 54% of the overall Medicare market, or nearly 33 million Medicare eligible lives in 2024.
Added
Medicare beneficiaries may enroll in an MA plan, under which payors contract with the CMS to provide a defined range of healthcare services that are comparable to Medicare FFS (which is also referred to as “traditional Medicare”). We predominantly enter into capitated contracts with the nation’s largest health plans to provide holistic, comprehensive healthcare to MA members.
Added
Under the typical capitation arrangement, we are entitled to PMPM fees from payors to provide a defined range of healthcare services for MA health plan members attributed to our PCPs. These PMPM fees comprise our capitated revenue and are determined as a percent of the premium (“POP”) payors receive from CMS for these members.
Added
Our contracted recurring revenue model offers us highly predictable revenue, and rewards us for providing high-quality care rather than driving a high volume of services. In this capitated arrangement, our goals are well-aligned with payors and patients alike—the more we improve health outcomes, the more profitable we will be over time.
Added
Under this capitated contract structure, we are generally responsible for all members’ medical costs across the care continuum, including, but not limited to emergency room and hospital visits, post-acute care admissions, prescription drugs, specialist physician spend, and primary care spend. Keeping members healthy is our primary objective.
Added
When they need medical care, delivery of the right care in the right setting can greatly impact outcomes. When our members need care outside of our network of PCPs, we utilize a number of tools including network management, utilization management and claims processing to ensure that the appropriate quality care is provided.
Added
Our company was formed in 2017 and our first at-risk contract became effective on January 1, 2018.
Added
We have demonstrated an ability to rapidly scale, primarily entering markets with our affiliate physician model, and expanding to a PCP network of approximately 3,100 physicians, in 27 markets (counties) across five states in over six full years of operations as of December 31, 2024.
Added
Our platform has enabled us to grow our revenue by an average of 74% annually from December 31, 2020 to December 31, 2024. As of December 31, 2024, our PCP network served approximately 123,800 at-risk members.
Added
We believe we have significant growth opportunities available to us across existing and new markets, with less than 1% of the 535,000 PCPs in the U.S. currently included in our physician network.
Added
P3 Health Partners Inc. | 2024 Form 10-K | 55 Table of Contents Key Factors Affecting our Performance Growing Medicare Advantage Membership on Our Platform Membership and revenue are tied to the number of members attributed to our physician network by our payors.
Added
We believe we have multiple avenues to serve additional members, including through: • Growth in membership under our existing contracts and existing markets: ◦ Patients who are attributed to our physician network who (a) age into Medicare and elect to enroll in MA or (b) elect to convert from Medicare FFS to MA. • Adding new contracts (either payor contracts or physician contracts) in existing markets. • Adding new contracts (either payor contracts or physician contracts) in adjacent and new markets.
Added
Growing Existing Contract Membership As new patients age-in to Medicare and enroll in MA through our payors, they become attributed to our network of physicians with little incremental cost to us. In addition to age-ins, Medicare eligible patients can change their enrollment selections during select periods throughout the year.
Added
Our sales and marketing teams actively work with local community partners to connect with Medicare eligible patients and make them aware of their healthcare choices and the services that we offer with our VBC model, including greater access to their physicians and customized care plans catered to their needs.
Added
The ultimate effect of our marketing efforts is increased awareness of P3 and additional patients choosing us as their primary care provider.
Added
We believe that our marketing efforts also help to grow our payor partners’ membership base as we grow our own patient base and help educate patients about their choices on Medicare, further aligning our model with that of healthcare payors.
Added
Growing Membership in Adjacent and New Markets Our affiliate model allows us to quickly and efficiently enter into new and adjacent markets in two ways: (1) partnering with payors and (2) partnering with providers. Because our model honors the existing patient-provider relationship, we are able to deploy our care model around existing physicians in a given a market.
Added
By utilizing the local healthcare infrastructure, we can quickly build a network of PCPs to serve the healthcare needs of contracted members. We maintain an active pipeline of new partnership opportunities for both providers and payors.
Added
These potential opportunities are developed through significant inbound interest and the deep relationships our team has developed with their more than 20 years of experience in the VBC space and our proactive assessment of expansion markets. When choosing a market to enter, we make our decision on a county-by-county basis across the United States.
Added
We look at various factors including: (i) population size, (ii) payor participants and concentration, (iii) health system participants and concentration, and (iv) competitive landscape. When entering a new market, we supplement the existing physician network with local market leadership teams and support infrastructure to drive the improvement in medical cost and quality.
Added
When entering an adjacent market, we are able to leverage the investments we previously made to have a faster impact on our expanded footprint. Growing Membership in Existing Markets Once established in a market, we have an opportunity to efficiently expand both our provider and payor contracts.
Added
Given the benefits PCPs experience from joining our P3 Care Model, which offers providers the teams, tools and technologies to better support their patient base, we often experience growth in our affiliate network after entering a market. Because of the benefits, we have also historically experienced high retention with our affiliate providers.
Added
From 2018 through December 31, 2024, we experienced a 95% physician retention rate in our affiliate provider network. By expanding our affiliate provider network and adding new physicians to the P3 network, we can quickly increase the number of contracted at-risk members under our existing health plan arrangements.
Added
P3 Health Partners Inc. | 2024 Form 10-K | 56 Table of Contents Additionally, by expanding the number of contracted payors, we can leverage our existing infrastructure to quickly increase our share of patients within our physician network.
Added
However, we have and intend to continue to conduct periodic strategic reviews of our provider and payor contracts, as a result of which we may elect to periodically exit underperforming provider and payor contracts from our network.
Added
Growing Capitated Revenue Per Member Medicare pays capitation using a risk adjusted model, which compensates payors based on the health status, or acuity, of each individual member. Payors with higher acuity members receive a higher payment and those with lower acuity members receive a lower payment.
Added
Moreover, some of our capitated revenue also includes adjustments for performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. Given the prevalence of FFS arrangements, our patients often have historically not participated in a VBC model, and therefore their health conditions are poorly documented.
Added
Through the P3 Care Model, we determine and assess the health needs of our patients and create an individualized care plan consistent with those needs. We capture and document health conditions as a part of this process.
Added
We expect that our PMPM revenue will continue to improve the longer members participate in our care model as we better understand and assess their health status (acuity) and coordinate their medical care. Effectively Managing Member Medical Expense Our medical expense is our largest expense category, representing 86% of our total operating expense for the year ended December 31, 2024.
Added
We manage our medical costs by improving our members access to healthcare. Our care model focuses on maintaining health and leveraging the primary care setting as a means of avoiding costly downstream healthcare costs, such as emergency department visits and acute hospital inpatient admissions.
Added
Achieving Operating Efficiencies As a result of our affiliate model and ability to leverage our existing local and national infrastructure, we aim to generate operating efficiencies at both the market and enterprise level.
Added
Our local corporate, general and administrative expense, which includes our local leadership, care management teams and other operating costs to support our markets, are expected to decrease over time as a percentage of revenue as we add members to our existing contracts, grow membership with new payor and physician contracts, and our revenue subsequently increases.
Added
Our corporate general and administrative expenses at the enterprise level include resources and technology to support payor contracting, quality, data management, delegated services, finance and legal functions.
Added
While we expect our absolute investment in our enterprise resources to increase over time, we expect our investment will decrease as a percentage of revenue when we are able to leverage our infrastructure across a broader group of at-risk members.
Added
We expect our corporate, general and administrative expenses to increase in absolute dollars in the future as we continue to invest to support growth of our business, as well as due to the costs required to operate as a public company, including insurance coverage, investments in internal audit, investor relations and financial reporting functions, fees paid to the Nasdaq Stock Market, and increased legal and audit fees.
Added
Impact of Seasonality Our operational and financial results reflect some variability depending upon the time of year in which they are measured. This variability is most notable in the following areas: At-Risk Member Growth . While new members are attributed to our platform throughout the year, we experience the largest portion of our at-risk member growth during the first quarter.
Added
Contracts with new payors typically begin on January 1, at which time new members become attributed to our network of physicians. Additionally, new members are attributed to our network on January 1, when plan enrollment selections made during the prior Annual Enrollment Period from October 15 through December 7 of the prior year take effect. Revenue Per Member .
Added
Our revenue is based on percentage of premium we have negotiated with our payors as well as our ability to accurately and appropriately document the acuity of a member’s health status. We experience some seasonality with respect to our per member revenue as it will generally decline over the course of the year.
Added
In January of each year, CMS revises the risk adjustment factor for each patient based upon health conditions documented in the prior year, leading to an overall increase in per-patient revenue.
Added
As the year progresses, our per-patient revenue declines as new patients join us typically with less complete or accurate documentation (and therefore lower risk-adjustment scores) and patients with more severe acuity profiles (and, therefore, higher per member revenue rates) expire. P3 Health Partners Inc. | 2024 Form 10-K | 57 Table of Contents Medical Costs .
Added
Medical expense is driven by utilization of healthcare services by our attributed membership. Medical expense will vary seasonally depending on a number of factors, including the weather and the number of business days.
Added
Certain illnesses, such as the influenza virus, are far more prevalent during colder months of the year, which will result in an increase in medical expenses during these time periods. We would therefore expect to see higher levels of per-member medical expense in the first and fourth quarters.
Added
Business days can also create year-over-year comparability issues if one year has a different number of business days compared to another. Non-GAAP Financial Measures and Key Performance Metrics We use certain financial measures, which are not calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”), as well as key performance metrics, to supplement our consolidated financial statements.
Added
The measures set forth below should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures and key performance metrics as used by us may not be comparable to similarly titled measures used by other companies.
Added
Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Added
The presentation of non-GAAP financial measures and key performance metrics provides additional information to investors regarding our results of operations that our management believes is useful for identifying trends, analyzing and benchmarking the performance of our business. Non-GAAP Financial Measures Adjusted EBITDA The key non-GAAP metric we utilize to measure our profitability and performance is Adjusted EBITDA.
Added
We present Adjusted EBITDA because we believe it helps investors understand underlying trends in our business and facilitates an understanding of our operating performance from period to period because it facilitates a comparison of our recurring core business operating results. By definition, EBITDA consists of net income (loss) before interest, income taxes, depreciation, and amortization.
Added
We define Adjusted EBITDA as EBITDA, further adjusted to exclude the effect of certain supplemental adjustments, such as mark-to-market warrant gain/loss, premium deficiency reserves, equity-based compensation expense, and certain other items that we believe are not indicative of our core operating performance.
Added
Our definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP. It is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance.
Added
Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, debt principal repayments, and other expenses defined above, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity.
Added
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis.
Added
You should review the reconciliation of net loss to Adjusted EBITDA set forth below and not rely on any single financial measure to evaluate our business.
Added
P3 Health Partners Inc. | 2024 Form 10-K | 58 Table of Contents The following table sets forth a reconciliation of our net loss, the most directly comparable GAAP metric, to Adjusted EBITDA loss: Year Ended December 31, 2024 2023 (in thousands) Net loss $ (310,378) $ (186,426) Interest expense, net 22,173 15,985 Depreciation and amortization 86,058 86,675 Income tax provision 4,387 2,695 Mark-to-market of stock warrants (22,114) (433) Premium deficiency reserve 53,698 (12,705) Equity-based compensation 5,752 5,979 Other (1) (6,775) 2,656 Transaction and other related costs (2) — 70 Adjusted EBITDA loss $ (167,199) $ (85,504) _____________________________________________ (1) Other during the year ended December 31, 2024 consisted of (i) interest income, (ii) gain recognized upon the settlement and write-off of contingent consideration related to an acquisition completed in a prior year and (iii) gain recognized on asset sale partially offset by (iv) severance and related expense in connection with our chief executive officer transition (v) loss on impairment on assets held for sale, and (vi) valuation allowance on our notes receivable.
Added
Other during the year ended December 31, 2023 consisted of (i) interest income offset by (ii) cybersecurity incident loss, (iii) restructuring and other charges, including severance and benefits paid to employees pursuant to workforce reduction plans, (iv) the disposition of our Pahrump operations, (v) expenses for third-party consultants to assist us with the development, implementation, and documentation of new and enhanced internal controls and processes for compliance with Sarbanes-Oxley Section 404(b), (vi) a legal settlement outside of the ordinary course of business, and (vii) valuation allowance on our notes receivable.
Added
(2) Transaction and other related costs during the year ended December 31, 2023 consisted of legal fees incurred related to acquisition-related litigation. Medical Margin Medical margin is a non-GAAP financial metric.
Added
We present medical margin because we believe it helps investors understand underlying trends in our business and facilitates an understanding of our operating performance from period to period by facilitating a comparison of our recurring core business operating results. Medical margin represents the amount earned from capitated revenue after medical claims expenses are deducted.
Added
Medical claims expenses represent costs incurred for medical services provided to our members. As our platform grows and matures over time, we expect medical margin to increase in absolute dollars; however, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM.
Added
Medical margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using medical margin on a supplemental basis.
Added
You should review the reconciliation of gross profit to medical margin set forth below and not rely on any single financial measure to evaluate our business.
Added
The following table presents our medical margin: Year Ended December 31, 2024 2023 (in thousands) Capitated revenue $ 1,483,602 $ 1,252,309 Less: medical claims expense (1,398,143) (1,117,258) Medical margin $ 85,459 $ 135,051 P3 Health Partners Inc. | 2024 Form 10-K | 59 Table of Contents The following table sets forth a reconciliation of our gross profit, the most directly comparable GAAP metric, to medical margin: Year Ended December 31, 2024 2023 (in thousands) Gross profit (loss) $ (58,917) $ 31,635 Other patient service revenue (16,853) (14,066) Other medical expense 161,229 117,482 Medical margin $ 85,459 $ 135,051 Key Performance Metrics We monitor the following operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
Added
Gross Profit Gross profit represents the amount earned from total operating revenue less the sum of: (i) medical claims expenses and (ii) other medical expenses including physician compensation expense related to surplus sharing and bonuses and other direct medical expenses incurred to improve care for our members.
Added
We believe this metric provides insight into the economics of the P3 Care Model, as it includes all medical claims expense associated with our members’ care as well as partner compensation and additional medical costs we incur as part of our aligned partnership model.
Added
Other medical expenses are largely variable and proportionate to the level of surplus in each respective market, among other cost factors.
Added
The following table presents our gross profit (loss): Year Ended December 31, 2024 2023 (in thousands) Total operating revenue $ 1,500,455 $ 1,266,375 Less: medical claims expense (1,398,143) (1,117,258) Less: other medical expense (161,229) (117,482) Gross profit (loss) $ (58,917) $ 31,635 At-Risk Membership At-risk membership represents the approximate number of Medicare members for whom we receive a fixed percentage of premium under capitation arrangements as of the end of the reporting period.
Added
We had 123,800 and 108,900 at-risk members as of December 31, 2024 and 2023, respectively. Affiliate Primary Care Physicians Affiliate primary care physicians represent the approximate number of primary care physicians included in our affiliate network, with whom members may be attributed under our capitation arrangements, as of the end of the reporting period.
Added
We had 3,100 and 2,750 primary care physicians as of December 31, 2024 and 2023, respectively. Platform Support Costs Our platform support costs, which include regionally-based support personnel and other operating costs to support our markets, are expected to decrease over time as a percentage of revenue as our physician partners add members and our revenue grows.
Added
Our operating expenses at the enterprise level include resources and technology to support payor contracting, clinical program development, quality, data management, finance, and legal functions. We exclude costs related to the operations of our owned medical clinics and wellness centers.
Added
P3 Health Partners Inc. | 2024 Form 10-K | 60 Table of Contents The table below represents costs to support our markets and enterprise functions, which are included in corporate, general and administrative expenses: Year Ended December 31, 2024 2023 (dollars in thousands) Platform support costs $ 92,202 $ 96,937 % of total operating revenue 6.1 % 7.7 % Key Components of Results of Operations Revenue Capitated revenue.
Added
We contract with health plans using an at-risk model. Under the at-risk model, we are responsible for the cost of all covered health care services provided to members assigned by the health plans to the Company in exchange for a fixed payment, which generally is a POP based on health plans’ premiums received from CMS.
Added
Through this capitation arrangement, we stand ready to provide assigned MA members all their medical care via our directly employed and affiliated physician/specialist network. The premiums health plans receive are determined via a competitive bidding process with CMS and are based on the costs of care in local markets and the average utilization of services by patients enrolled.
Added
Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual patient. MA plans with higher acuity patients receive higher premiums. Conversely, MA plans with lower acuity patients receive lesser premiums.
Added
Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after final data is compiled.
Added
As premiums are adjusted via this risk adjustment model (using a Risk Adjustment Factor, “RAF”), our PMPM payments change commensurately with how our contracted Medicare Advantage plans’ premiums change with CMS.

… 177 more changes not shown on this page.

Other PIII 10-K year-over-year comparisons