1.

It appears from your response to the first bullet point of our prior comment that your "inaccurate adjudication of provider claims" in 2016 is the result of programmed claims payment configuration in your claims processing systems that was inconsistent with the specific terminology in certain provider contracts. This situation ultimately caused a backlog in claims processing and the understatement of your medical care costs in 2016 and the related medical claims and benefits payable at December 31, 2016. Please address the following:

•	Tell us why you did not properly reflect the claims payment parameters in your claims processing system.

•	Tell us why restatement of your financial statements in accordance with ASC 250-10-45 is not necessary.

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•	To the extent that you believe such restatement is not necessary, tell us how your medical claims and benefits payable at December 31, 2016 would not have been substantially different if you had originally configured your claims payment parameters in your claims processing systems properly.

▪	A mathematical error, or

▪	A misapplication of Generally Accepted Accounting Principles (GAAP), or

▪	An oversight or misuse of facts that existed at the time the financial statements were prepared.

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▪	The review of disputes that we commenced in 2016, which resulted in a backlog in claims processing as the result of a deliberate slowing of claims payment to allow for quality review and potential adjustment prior to payment

▪	Our actuaries made changes to their IBNP models at December 31, 2016 that attempted to capture the impact of the claim adjudication matters and resulting claims backlog, based on professional judgment including:

◦	Adjustments to completion factors in the four states in question to account for the longer expected duration to reach an ultimate, estimated loss for the 2016 service year;

◦	Additional weight placed on per-member, per-month (PMPM) trends, and trends adjusted to account for claim backlogs; and

◦	Explicit adjustments for certain known provider disputes and other unique claim matters.

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▪

Given the declining financial performance of the Company during 2016 and 2017, in which the Company fell substantially short of analysts’ expectations, there is not a substantial likelihood that recording the $51 million of unfavorable prior year claims development in 2016 instead of 2017 would have been viewed by a reasonable investor as having significantly altered the total mix of information available;

▪

Given the near break-even results in 2016 and the significant net loss in 2017, pretax income and net income are less relevant metrics to users of the financial statements. We believe that other operating metrics such as medical margin, the medical cost ratio (MCR) and medical cost on a PMPM basis are more relevant metrics considered by investors when assessing the Company’s operations and performance.

▪	Recording the $51 million in 2016 would not have materially impacted, or changed any trends in earnings or key metrics in either 2016 or 2017;

◦	Medical costs would be impacted by only .35% in 2016 and .30% in 2017;

◦	Medical margin would be impacted by only 3.1% in 2016 and 2.9% in 2017;

◦	The MCR would only be impacted by 31 basis points in 2016 and 27 basis points in 2017;

◦	Medical cost PMPM of $292.75 in 2016 and $309.14 in 2017, would have increased by only $0.81, and decreased by only $0.77, respectively;

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◦	The year-over-year declines in pretax income and net income would not have changed;

◦	Total medical benefits payable would have increased by only 2.6% at December 31, 2016;

◦	Total liabilities would have increased by only .9% at December 31, 2016; and

◦	Total stockholders’ equity would have decreased by only 2.0% at December 31, 2016

▪	All other SAB 99 criteria were assessed and supported the conclusion that the prior period development is not material, including a determination that no incentive compensation or loan covenant thresholds would have been impacted, and the qualitative consideration for the degree of imprecision inherent in the estimate of IBNP, which is incapable of precise measurement.

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•	The Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•	Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and

•	The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.