You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: In a moment, Bruce Broussard, Humana's President and Chief Executive Officer; and Susan Diamond, Chief Financial Officer, will discuss our third quarter 2021 results and our updated financial outlook for 2021.
Joe Ventura, our Chief Legal Officer will also be joining Bruce and Susan for the Q&A session.
Before we begin our discussion, I need to advise call participants of our cautionary statement.
Actual results could differ materially.
Call participants should note that today's discussion includes financial measures that are not in accordance with Generally Accepted Accounting Principles or GAAP.
Finally, any references to earnings per share or earnings per share made during this conference call refer to diluted earnings per common share.
Today, we reported adjusted earnings per share of $4.83 for the third quarter of 2021, slightly above consensus estimates.
Our year-to-date results reflect the strength of our core operations as we continue to see strong underlying fundamentals across all lines of business and have remained focused on ensuring our members receive the right care at the right time despite the continued disruption caused by the pandemic.
While our underlying fundamentals are strong, 2021 financial results have been impacted by the ongoing pandemic, which has resulted in an adjustment to our full year adjusted earnings per share guidance.
As Susan will share in more detail, this reduction of approximately $1 in adjusted earnings per share is a direct result of COVID and corresponds to our current expectation of the total Medicare Advantage utilization inclusive of COVID costs will run 1% below baseline in the fourth quarter, which is a 150 basis points less than our previous assumption of 2.5% below baseline.
This update reflects a more conservative posture going into the final months of the year and notably $21.50 remains the baseline of which to grow for 2022.
As a reminder, prior to this guidance update we had not recognized a COVID headwind in our '21 guidance as many of our peers did.
Our adjusted earnings per share guidance has been above our long-term growth target at the midpoint throughout the year at 16% growth.
This update results in an expected adjusted earnings per share growth at the lower end of our long-term range.
And importantly, it is not reflective of any concerns with our core operations.
I will now turn to our operational and strategic update.
Our Medicare Advantage individual above market growth in 2021 of 11% can be in part contributed to our industry-leading quality and consumer satisfaction scores.
We are pleased to be recognized by CMS for having 97% of our members in 4-Star or higher rated contracts for 2022.
We also increased the number of contracts that received a 5-Star rating from one contract in 2021 to four contracts in 2022, the most in our history.
Excuse me participants, this is the operator.
Your conference will begin momentarily.
Please stay on hold until the conference begin.
Sorry for the technical glitch share.
Let me just -- just maybe just go back to our guidance update here and reinsure that investors understand the guidance and in addition how it reflects in the -- as we look at the future here.
First, the guidance reflects a much more conservative posture going into the final months of the year.
And notably $21.50 remains the baseline of which to grow for 2022.
As a reminder, prior to the guidance update we had not recognized the COVID headwind in our 2021 guidance as many of our peers did.
Our adjusted earnings per share guidance has been above our long-term growth target at the midpoint throughout the year at 16% growth.
This update results an expected adjusted earnings per share growth at the lower end of our long-term range and is importantly does not reflect any concern with our core operations.
I will now turn to our operational and strategic update.
Our Medicare Advantage individual above market growth in 2021 of 11% can be in part attributed to our industry-leading quality and consumer satisfaction scores.
We are pleased to be recognized by CMS for having 97% of our members in 4-Star or higher contract for 2022.
We also increased the number of contracts that received a 5-Star rating from one contract in 2021 to four contracts in 2022, the most in our history.
And while CMS did make adjustments to the 2022 Star Ratings due to the possible impact of the COVID-19 pandemic, these adjustments had minimal impact on our ratings.
This further demonstrates our enterprisewide focus on quality, clinical outcomes and best-in-class customer service, which has been recognized from notable organizations such as Forrester, J.D. Power, and USAA.
Importantly, the Star's bonus allows us to maintain a strong value proposition for our members and provided value for supplemental benefits that address social determinants of health and other barriers not addressed by fee-for-service Medicare.
Looking ahead to 2022, we are pleased to be able to provide stable or enhanced benefits for the majority of our Medicare Advantage members.
Operating plans that support members whole health needs while continuing to deliver the human care our members have come to expect from us.
Our strong clinical and quality programs drive improved clinical outcomes and cost savings that allow our Medicare Advantage plans to continue to expand member benefits on those covered by fee-for-service Medicare.
Our plans include highly valuable extra benefits including dental, vision, hearing and over-the-counter medication allowance, transportation support, business program memberships and home delivered meals following an inpatient hospital set.
Over the last few years, we've made great progress in addressing social determinants of health and health equity by expanding our Medicare Advantage benefits.
Examples of those impactful areas include respite care distributing 1.5 million meals during COVID, sending fans to seniors with COPD during a heat wave and providing support for financial need impacting a senior's health and well-being.
Given the increased demand for health equity across America, we have aggressively expanded our efforts to address it.
We continue to advance our consumer segmentation efforts developing plans that are tailored to the unique needs of specific member populations.
This has allowed us to provide benefits that enhance and complement an individual's existing coverage through programs like Medicaid or entities such as Veterans Affairs.
This approach leads to disproportionate growth.
As you've seen in our D-SNP plans designed for dual eligible members where we have grown our membership approximately 40% in both 2022 and 2021.
We've expanded our D-SNP offerings for 2022 to cover nearly 65% of the dual eligible population nationally.
To reduce food and security, 97% of our members enrolled in our D-SNP plans, and we'll have a healthy foods cart, which provides a monthly allowance to purchase approved food and beverages at various national chains.
New for 2022, many of our D-SNP members will have reduced Part D drug co-pays as a result of the D-SNP prescription drug savings benefit, which will help address the financial barriers some members face when assessing needed prescriptions leading to better medication adherence, an important driver of member's health -- overall health outcomes.
As previously shared, we took a more conservative approach to our 2022 bids recognizing the continued uncertainty associated with COVID-19 and potential impacts to premium and claims assumption allowing us to prioritize long-term benefit stability for our members.
While it is early in the selling season we believe we struck the right balance and are competitively positioned for our continued growth in Medicare Advantage.
Our brand promise to deliver human care resonates with seniors given our comprehensive set of offerings and focus on providing a patient-centric experience based on their specific needs.
Susan will provide more detail and 2022 commentary in our remarks, including high level earnings per share and membership guidance.
I now would like to highlight the continued progress of our strategy through the build out of our healthcare service platform starting with Primary Care business and then moving to our Growing Home Solutions offerings.
We have the largest senior-focused, value based primary care organization in the country, which by year end will include approximately 200 clinics serving 300,000 patients across 24 markets in nine states.
We are accelerating organic and inorganic growth nationally and plan to open a total of 30 de novo senior focused centers in 2022, up from 24 in 2021.
This will include launching in two new major metropolitan areas, Dallas and Phoenix next year.
This faster pace expansion comes as we continue to gain conviction in our de novo center model with panel growth in centers launched in 2021 exceeding plan and clinical performance in our more mature markets continuing to improve.
At our more mature centers hospitalizations and ER visits are down 12% year-to-date versus 2019 pre-COVID Stars performance tracking to 4.5 Stars and NPS score of 90.
We will also continue to expand through inorganic growth completing seven acquisitions through the third quarter of this year bringing 21 newly, wholly owned centers to our portfolio.
We plan to continue this pace of acquisitions, focused on the markets where we have established presence to provide more access and high quality care to our patients.
Turning to the home, we completed the acquisition of Kindred at Home in the third quarter and now the largest home health and hospice organization in the nation.
As previously shared we will be migrating Kindred at Home to Humana's payor-agnostic healthcare service brand CenterWell.
Our efforts to transform home health to a value-based model come at a pivotal time for the industry.
As seniors increasingly choose Medicare Advantage, there is a meaningful opportunity for home health organizations to engage differently with patients and Medicare Advantage payers to more holistically address patient needs and improved health outcomes reduce the total cost of care for health plans and share appropriately in this value creation.
We've made substantial progress toward our goal of scaling and maturing a risk-bearing value-based model that manages the provision of home health, durable medical equipment and home infusion services.
With the acquisition of onehome earlier in 2021, a delegated post-acute management services organization for the home, we have the capabilities to be a value-based convener providing risk-based contracting and referral management and continue to develop technology enabling us to coordinate with other adjacent services.
These services include gap in care, closure, primary or emergent care in the home as well as coordination of meals, transportation and other services to positively support social determinants of health.
We currently care for approximately 270,000 Humana members under value-based home care models in South Florida and Southeast Texas where we have seen improved outcomes including emergency room usage being 100 basis points better than Humana's national average.
We now are focused on expanding to select markets in North Carolina and Virginia, which we've chose based on multiple criteria including market density, opportunity to significantly reduce home care expense and a robust Kindred at Home footprint.
We expect to begin the rollout in the second quarter of 2022 with the goal of covering nearly 50% of Humana Medicare Advantage members under this value-based home health model within the next five years.
We are excited about the continued progress of our strategy in the home, but consistent with our home health peers we recognize that the national nursing labor shortage poses a significant risk to the industry and we are taking proactive steps to address it as part of our well-developed integration process with Kindred at Home.
In some markets the nursing shortages resulting in inadequate capacity to meet demand, negatively impacting our ability to grow the top line.
We believe that Humana's CenterWell brand supported by our patient-centric culture will bolster recruiting and retention efforts for nurses.
We've seen increased nurse satisfaction and engagement in pilot markets where we have deployed value-based concepts, with voluntary nursing turnover improving nearly 10% among home health nurses in 2021.
In addition to unlock sufficient capacity to meet our growth goals, we are implementing broader operational improvements and benefit enhancements, while also making targeted investments in capacity constrained areas to enhance nurse recruiting and retention.
With respect to hospice, our intent remains to ultimately divest the majority interest in this portion of the asset.
As our experience has demonstrated, we can deliver desired experiences and outcomes for patients transitioning from restorative care to hospice through partnership models.
Since we closed the transaction in August we have continued to explore alternatives for the long-term ownership structure for the business and have initiated steps to reorganize the hospice business for stand-alone operations, while also ensuring business continuity and monitoring underlying trends.
We do not have a further update on the specific transaction structure or expected transaction timing, but we will provide additional updates as appropriate moving forward.
Given the continued expansion of an interest in our healthcare service platform we are committed to providing additional disclosure to give further transparency into the performance of these businesses beginning with our first quarter 2022 reporting.
Before closing, I want to touch on the current regulatory and legislative landscape.
As you know, last week, the White House and congressional leaders released their plan known as, Build Back Better, which includes several proposed changes to the Medicare program including establishing a hearing benefit starting in calendar year 2024, which will be included in the Medicare Advantage benchmark.
Given that today more than 40% of Medicare beneficiaries, over 27 million seniors and those with disabilities are enrolled in Medicare Advantage, we were encouraged to see that the package did not include any payment reductions to the program.
As this legislation continues to advance and likely be modified and as we look ahead to the annual CMS call letter and rate notice period, we will continue to work with policymakers and the Biden Administration to further improve Medicare Advantage building on the program's innovation and significant progress in areas like value-based care, social determinants of health, affordability and financial protection for beneficiaries, as well as reducing the total cost of care.
These attributes, along with a deep consumer popularity of Medicare Advantage are what have enabled it to have a strong bipartisan support with hundreds of members of Congress on record supporting the program.
With Medicare Advantage serving as a leading example of a successful private-public partnership, I am optimistic we can continue to lead on important healthcare issues facing both individuals and society, including addressing health and equities, improving health outcomes and expanding value-based care.
Today we reported adjusted earnings per share of $4.83 for the third quarter and updated full year 2021 adjusted earnings per share guidance to approximately $20.50 to reflect a net unmitigated COVID headwind resulting from our current view of utilization levels for the balance of the year.
I will now walk you through this detail starting with a reminder of our previous commentary.
As of our second quarter call, full year guidance assumed non-COVID Medicare Advantage utilization was around 2.5% below baseline in the second half of the year, with a further assumption of minimal COVID testing and treatment costs for the same period.
In September 2021 as a result of the surge in COVID cases due to the Delta variant, we updated our commentary on full year guidance to indicate we expected non-COVID Medicare Advantage utilization to be 5.5% below baseline in the back half of the year, while being partially offset by 3% of COVID costs, therefore, again assuming total utilization would be 2.5% below baseline in the back half of 2021.
What we've seen develop for the third quarter is that total utilization is running 1% below baseline versus the previously anticipated 2.5%.
COVID costs have been higher than initially anticipated as the Delta Variant resulted in hospitalization levels on par with what we experienced in January of 2021 and were overwhelmingly driven by the 20% of our Medicare Advantage members believed to be unvaccinated.
These higher-than-expected COVID costs were fully offset by non-COVID utilization in the quarter.
As COVID hospitalizations increased or decreased we continue to see an approximate 1-to-1 offset in non-COVID hospitalization levels.
We also continue to see significantly reduced non-inpatient utilization when surges occur, offsetting the higher average cost of COVID admission.
However, for the third quarter, in total we saw 1% incremental reduction in utilization beyond the level needed to offset COVID costs versus the 2.5% contemplated in our previous guide.
As a result, we have adjusted our full year guide to now reflect the fourth quarter running similarly with total Medicare Advantage utilization running 1% below baseline inclusive of estimated COVID costs, consistent with what we experienced in the third quarter.
We realized higher than expected positive current period claims development in Medicare Advantage in the third quarter as well as other operating outperformance largely mitigating the lower than anticipated depressed Medicare Advantage utilization allowing us to report results that were slightly favorable to The Street estimates.
Our revised guidance does not assume that the higher levels of favorable current period development seen in the third quarter will continue.
Taken together, our updated full year 2021 adjusted earnings per share guidance takes a more conservative posture going into the final months of 2021, and it's important to note as we've consistently shared throughout the year the midpoint of our original guidance range of $21.50 remains the correct baseline for 2022 given our approach to pricing.
I will now briefly touch on operating results across our segments before sharing early thoughts on 2022 performance.
Our Medicare Advantage growth remains on track and consistent with previous expectations.
We have refined our full year individual Medicare Advantage membership guidance to up approximately 450,000 members consistent with the midpoint of our previous guidance of up 425,000 to 475,000 members.
This outlook represents above market growth with an increase of 11.4% year-over-year.
Our Medicaid results continue to exceed initial expectations due to higher than anticipated membership increases, largely attributable to the extension of the public health emergency.
We now expect to add 125,000 to 150,000 Medicaid members in 2021, up from our previous expectation of up 100,000 to 125,000 members.
Utilization trends continue to be favorable to initial expectations and the Medicaid team is working diligently toward a successful implementation in Ohio with Go Live anticipated in July.
In our Group and Specialty segment, fully insured medical results were impacted by higher than expected COVID costs in the quarter, while our Specialty business results continued to exceed expectations as utilization, particularly for dental services remained lower than previously anticipated.
Recall that our guidance as of second quarter did not contemplate significant COVID costs in the back half of the year and the Commercial business is not seeing the same level of utilization offset experienced in Medicare Advantage.
From a membership perspective, we have increased our expected Group medical membership losses from 100,00 to 125,000 reflecting the expectation of additional losses in the fourth quarter as a result of rating actions taken to account for the expected impact of COVID in 2022.
Finally, within our healthcare service of operations, the Pharmacy and Provider businesses continue to perform slightly better than expected with Pharmacy benefiting from increased mail order penetration as a result of customer experience improvements and marketing campaigns and the Provider business seeing continued operating improvement at our more mature centers, which are now aligned under the same leadership in our de novo centers.
As Bruce mentioned in his remarks, we are actively integrating the Kindred at Home operations and results post integration have largely been in line with expectations.
Similar to Home Health and Hospice peers, the business is being impacted by COVID and labor shortages.
For the third quarter, home health admissions grew low single digits year-over-year, while hospice experienced a low single-digit decline year-over-year.
We will continue to closely monitor trends as we made targeted investments to sustainably improve the recruitment and retention of nurses.
Now, let me take a few moments to share an early outlook for 2022 starting with membership.
As you're aware, the overall PDP market continues to decline as more and more beneficiaries including dual eligibles choose Medicare Advantage.
In addition, as we've discussed previously, PDP plans have become a commodity with the low price leader capturing disproportionate growth.
Consistent with 2021 the Walmart Value Plan will offer competitive benefits but will not be the low premium leader in 2022.
As a result, we expect a net decline in PDP membership of a few hundred thousand members in 2022.
We continue to focus on creating enterprise value for our PDP plans by driving increased mail order penetration and conversions to Medicare Advantage.
With respect to Group Medicare Advantage, we expect membership to be generally flat for 2022 as we do not anticipate any large accounts will be gained or lost as we continue to maintain pricing discipline in a highly competitive market.
Moving to individual Medicare Advantage; as previously shared, we took a more conservative approach to our 2020 bids, reflecting the continued uncertainty associated with the pandemic.
We expect to grow our individual Medicare Advantage membership in a range of 325,000 to 375,000 members in 2022 or approximately 8% year-over-year reflective of our prudent approach we took to pricing for 2022 and the competitive nature of the market.
It is early in our AEP selling season and the outlook we are providing today could change depending on how sales and voluntary disenrollment ultimately commence.
And consistent with prior years we have very little member disenrollment data at this point in the AEP cycle.
I will now turn to our expected 2022 financial performance.
As previously mentioned, I want to reiterate that the $21.50 midpoint of our original 2021 guide continues to be the appropriate jumping-off point for 2022 adjusted earnings per share growth given our approach to pricing.
In addition, we feel comfortable that the risk adjusted assumptions and our 2022 pricing are appropriate as providers have been actively engaging with our members to ensure their conditions are fully documented and that care plans are established to address gaps in care.
Provider interactions and documentation of clinical diagnoses that we anticipate will impact 2022 revenue are approximately 92% complete to-date, in line with both our expectations for 2021 as well as the estimated completion rate for the same time period in 2019.
We also assumed medical costs will return to baseline levels reflecting a pre-COVID historical trending.
From an earnings perspective, we believe the conservative approach we took to 2020 pricing struck the appropriate balance between membership and earnings growth.
Given the ongoing uncertainty surrounding the COVID-19 pandemic we expect to enter the year with an appropriately conservative view of our initial 2022 financial outlook.
Accordingly, we anticipate that our initial earnings per share guidance will target the low end of our long-term growth range of 11% to 15%.
We expect that COVID will be net neutral to the Medicare business in 2022 as we do not anticipate a risk adjustment headwind and expect COVID utilization to be offset by a reduction in non-COVID utilization.
However, our initial guide will allow for an explicit COVID-related headwinds that we can tolerate, should it emerge similar to the approach some of our peers took in 2021.
We believe entering the year with this more conservative approach is prudent in the current environment and sets the company up for success in 2022.
We look forward to providing more specific guidance on our fourth quarter earnings call in early February.
In fairness to those waiting in the queue we ask that you limit yourself to one question.
Operator, please introduce the first caller.

user
sees fy adjusted earnings per share about $20.50.
q3 adjusted earnings per share $4.83.
confirming $21.50 as baseline for 2022 adjusted earnings per share growth.
updates fy 2021 expected individual medicare advantage membership growth to 450,000 members.
during 3q21 covid costs were higher than previously expected.
updating its fy 2021 earnings per share guidance to take a more conservative posture going into final months of 2021.
anticipating total medicare advantage utilization, net of covid costs, will run approximately 1 percent below baseline in q4.

assistant