I will now hand the conference over to Evan Smith, Senior Vice President, Investor Relations. Evan, please go ahead.
Thank you, operator. Good afternoon and welcome to the call. With me are our CEO, Tim O'Rourke, and our CFO, Jeff Schwaneke. Following our prepared remarks, we will conduct a Q&A session. Before we begin, I would like to remind you that our remarks and responses to questions may include forward-looking statements. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business. These risks and uncertainties are discussed in our SEC filings, including the factors discussed under risk factors in our annual report, Form 10-K, for fiscal year ended December 31, 2025, and subsequent filings. Please note that we assume no obligation to update any forward-looking statements. Additionally, certain financial measures we will discuss in this call are non-GAAP financial measures. Non-GAAP measures are supplemental and not a substitute for GAAP measures.
However, we believe that providing these non-GAAP measures helps investors gain a better and more complete understanding of our financial results and are consistent with how management views our financial results. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures is available in the earnings press release and Form 8-K filed with the SEC today. Before I turn the call over to Tim, I wanted to highlight that we will be hosting a virtual investor event on November 17 at 2:00 P.M. Eastern Time titled "Driving Performance at Scale: The agilon Framework," which will be a deep dive into how agilon's technology-enabled clinical and quality programs are advancing patient outcomes and supporting sustainable performance. To register, you can go to agilon's investor relations site under Events at investors.agilonhealth.com. With that, let me turn the call over to Tim.
Good afternoon, everyone, and thank you for joining us today. I am pleased to report that agilon exceeded our third quarter guidance across key financial metrics. Based on our performance through the third quarter and our outlook for the remainder of the year, we are increasing our full year 2026 guidance. Jeff will discuss both our financial results and outlook in greater detail. This quarter's performance reflects the continued progress we are making against the operational priorities we established at the beginning of the year. As I highlighted last quarter, we have remained focused on the fundamentals of our business, improving performance at the physician and market level, reducing unnecessary variability, and delivering measurable clinical and quality outcomes. Six months in, I continue to believe agilon sits at the center of where value-based care is going, improving clinical outcomes and quality for patients, and reducing unnecessary medical costs.
The passion and caring of our PCP partners reinforces our mission at agilon, and it's our absolute responsibility to support these physicians in their work across all of our communities. As we move forward, we will continue to invest in and advance initiatives to further strengthen our platform to support them in their care of patients. We remain confident that our proximity and understanding of our patient populations places agilon and our PCP partners in what we believe is the best position to have a meaningful impact on daily lives. Realizing the full value of this position depends on our ability to translate proximity into actionable insight, and that is where our investments in data and technology are making a meaningful difference. Our enhanced data capabilities are helping our teams and physician partners identify high-risk patients and gaps in care earlier.
This enables timelier diagnosis and intervention, more effective care coordination, and better management of chronic conditions. Importantly, this is not a series of short-term initiatives. We are building repeatable operating capabilities that can be deployed consistently across our network. We believe this combination of local physician relationships with proximity to the member, actionable data, and operating discipline positions our model to become more resilient and scalable over time. We continue to advance our evidence-based clinical pathways, including our programs for CHF, lung health, and dementia. We are working hand-in-hand with our physician partners, supporting them with additional tools to identify disease earlier and coordinate care more effectively. This end-to-end approach is applied to each high-risk condition we address within our population.
As we have previously stated, heart failure has emerged as a strong proof point for agilon technology-enabled clinical pathway framework, using earlier diagnosis and stronger treatment to improve patients' quality of life while reducing avoidable hospital utilization and medical expense. I want to share one particular patient story with you, which I believe demonstrates the effectiveness of this end-to-end clinical pathway. A 72-year-old patient with hypertension and diabetes had quietly accepted leg swelling and shortness of breath as normal aging and never reported them as symptoms. Through agilon technology foundation, the patient was identified as a candidate for a risk-based echocardiogram screening and was proactively scheduled. That screening identified significant structural heart disease, which had previously gone undiagnosed.
Following the results, the physician had a structured conversation with the patient to further assess the patient's daily symptoms, which, in combination with echo findings, revealed that the patient was experiencing symptomatic heart failure. The appropriate treatment began promptly with medications optimized in line with guideline-directed medical therapy, or GDMT. At the one-month follow-up, the patient said the swelling and breathlessness had resolved, and they had felt better than they had in years. This individual's experience demonstrates how agilon's technology-enabled screening, physician training, and a trusted PCP relationship can turn an overlooked condition into earlier treatment, a meaningful improvement in daily life, and reduce unnecessary medical utilization. While CHF pathways have been successful, there are still more opportunities to provide improved care and drive enhanced outcomes. We are continuing to roll out virtual pharmacy across our markets to drive greater adherence to GDMT and further improve performance.
Similarly, we are executing a consistent framework for our other end-to-end pathways, including dementia. We are also investing in technology and AI-enabled capabilities that can surface relevant information at the point of care, reduce administrative work, engage other patients, and help physicians focus their time on those with the greatest needs. We view these tools as force multipliers for primary care. Their value comes from combining technology with the judgment and experience of a trusted physician who understands the patient, the family, and the local community. It is integrating diverse structured and unstructured patient data to drive actionable insights embedded in both agilon and the PCP workflows to support improved patient care and outcomes, and reduce unnecessary medical costs. Through increased performance visibility across markets and payers, we believe we can uncover patterns earlier, reduce performance variability, and more effectively leverage best practices nationwide.
Quality remains central to our model and to the value we create for patients, physicians, and health plan partners. Our physician partners show up every day to deliver better, more coordinated care for their patients. This is supported by timely data and insights, accurate attribution, and proactive collaboration, so care gaps are addressed before they become health issues. That commitment shows up in outcomes. Outcomes result in better management of chronic diseases such as hypertension, cardiovascular disease, and diabetes, more cancer screenings, stronger medication adherence, and more consistent preventative care. To us, these are not metrics, but instead are real people getting healthier. agilon's Stars performance is a result of a highly integrated quality operating model that combines data infrastructure, physician engagement, and payer alignment each and every day.
Following the publication of the measurement year 2025 quality cut points on a consolidated basis, agilon increased gap closure by 3% versus prior year, and consistent with prior year, achieved a 4.2-star performance for quality measures used by our contracted health plans. Based on healthcare plans' overall performance, in measurement year 2025, nationally, we expect 75% of our members to be in 4+ Star plans for payment year 2028, compared with 71% nationally and 77% in payment year 2027. We achieved 5 Star performance in measures for cardiovascular disease, hypertension, and cancer screenings, as well as 4 Star performance in measures for diabetes management, all of which reflect the impact of our work in preventative care, chronic disease management, and medication adherence. Looking beyond the quarter, we are encouraged by the continued development of our ACO business and the opportunities we see for 2027 beyond.
We are seeing positive traction and strong interest from both existing and prospective physician partners. Based on the opportunities we've recently announced, we expect ACO membership to grow approximately 40%-50% in 2027, with the majority of that growth expected to come through the Medicare Shared Savings Program, or MSSP, and we'll enter 2027 with a balance between the two models. During the quarter, we announced three relationship expansions for nearly 50,000 MSSP members. In each case, the physician partner already held full-risk Medicare Advantage contracts with agilon, so they know our processes well and have seen firsthand how our model, supported by our clinical and quality programs, can help improve care delivery and positively impact medical outcomes for patients. Through these expansions, we are extending our value-based care approach to traditional Medicare beneficiaries in addition to their previously contracted Medicare Advantage patients.
We believe these expansions are significant to our business for a couple of reasons. First, it demonstrates the embedded growth opportunity and trust we build with our partners over time. As partners experience the benefits of the model, we can further deepen our relationships by extending a consistent care approach across a broader portion of their Medicare populations, improving support and outcomes for patients with the greatest needs. Second, it demonstrates the scalability and flexibility of the agilon platform. We can bring our clinical programs, quality capabilities, technology-enabled workflows, and care management resources to more physicians and patients across multiple value-based care models within the same organization. Our confidence in the opportunity ahead is grounded in demonstrated performance through the ACO business.
As a reminder, in performance year 2024, our eight ACOs generated $229 million in gross savings and achieved an average quality score of 96%, with four earning perfect quality scores and five recognized as high performers. These results, combined with our strong platform capabilities and continued interest, reinforce our belief that the ACO business will remain a strong contributor to agilon's performance in 2027 and beyond. As we enter 2027, we expect both ACO care models may create additional opportunities for agilon and our physician partners. We are taking a measured approach to that growth, prioritizing partnerships where we see strong alignment, a clear path to improved patient outcomes, and the ability to generate sustainable performance over time. We will provide additional detail regarding expected total ACO membership and Adjusted EBITDA contribution when we issue our full-year 2027 guidance in February.
Taken together, the progress this quarter reinforces our confidence in agilon's direction. We believe our operational discipline is strengthening, our clinical programs are becoming more systematic, our physician partnerships are deepening, and our ACO capabilities are enabling us to extend the reach of our model to additional Medicare patients. We still have work ahead of us and remain focused on a few key areas. First, strengthening operational execution across the organization by reducing performance variability, ensuring that our strongest operating practices are consistently adopted across the network, and enhancing our care delivery through the continuation of our clinical and quality programs. Second, disciplined payer contracting. We are in the midst of our 2027 contracting, which will address approximately 50% of our book of business, and we remain focused on reducing risks outside our control while securing economics supportive of the value we provide our physician and payer partners.
Third, we are looking towards measured growth, ways to further enhance our data capabilities to drive actionable insights at the point of patient care, and gaining efficiencies while maintaining the market expertise, as well as our proximity to the PCP and patient, which differentiates our model. With regards to growth, I want to remind you that we will take a measured approach. In the near term, we are focused on embedded opportunities. Looking to 2028 and beyond, we are evaluating new markets and physician groups that align with our model. As a reminder, onboarding typically involves a 12- to 18-month implementation timeframe, which allows us to establish the infrastructure, data integration, and clinical workflows necessary to position these partnerships for long-term success. This disciplined approach, combined with our continued focus on operational execution, provides a solid foundation as we move forward.
We believe we are well-positioned with the right strategy, the right physician partnerships, and an increasingly strong set of capabilities to work towards better outcomes for patients and more predictable performance over time. I want to thank our physician partners, employees, and health plan partners for their continued commitment and collaboration. Their work is the foundation of our progress and the reason we remain confident in agilon's long-term opportunity. With that, I'll turn the call over to Jeff to discuss our financial results and updated outlook in greater detail.
Thank you, Tim, and good afternoon. As Tim mentioned, we're pleased with the continued strength in our performance and execution by the agilon team and our PCP partners. Third quarter results were strong and exceeded the high end of our guidance across our key financial metrics. The positive results and increase to our full year guidance were driven by better-than-expected performance in the burden of illness and clinical pathways initiatives, and favorable medical expense development in the first half of 2026. I'll cover three things today. First, our strong third quarter financial performance. Second, an update on cost trends and the macro environment. Finally, our increased full year 2026 outlook and what we believe will drive continued performance improvement in 2027. First, let me highlight our third quarter performance.
Medicare Advantage membership at the end of the third quarter was 454,000 members, compared to 437,000 members at the end of the second quarter 2026, and 503,000 members in the third quarter of 2025. Membership in the current period and year to date includes approximately 39,000 members in care coordination fee arrangements. As a reminder, the year-over-year decline of approximately 10% reflects previously disclosed market exits related to our disciplined, profitability-focused approach to contracting in 2026 and measured approach to growth. ACO membership for the third quarter was 112,000, compared to 112,000 in the second quarter of 2026 and 115,000 in the third quarter of 2025. Revenue for the third quarter was approximately $1.5 billion, compared to $1.4 billion in the third quarter of 2025.
The 6% increase reflects the membership decline I just mentioned, which was more than offset by more constructive rates for 2026 from the CMS benchmark, favorable payer contracting, and higher revenue associated with improved diagnosis, assessment, and treatment of our members' health conditions. Our burden of illness program serves as the foundation for our clinical and quality programs through earlier identification, diagnosis, and treatment of patients' comprehensive health conditions. This program drove higher-than-expected revenue in the third quarter, driven by favorable final year risk adjustment and completion of mid-year risk adjustment data. Moving on to medical expense. Medical costs in the third quarter reflect favorable development for the first half of 2026, which is now estimated in the low 6% range.
While we have seen some moderation in cost trends in the first half of the year, we recorded a third quarter cost trend in the low 7% range, which reflects our prudent reserving approach. As indicated in our press release, we will now be providing a medical services expense ratio, or MSER, as a core metric. The MSER uses the components of medical margin and represents costs incurred for medical services provided directly to our members, divided by total medical services revenue. For the third quarter, the MSER was 88.5%, compared to 104% in the third quarter of 2025. The medical services expense ratio for the third quarter was better than our expectations, driven by higher medical services revenue associated with our burden of illness programs, including both final year risk adjustment true-ups and mid-year risk adjustment true-ups.
The higher revenue, in addition to lower medical services expense, including the cost trends previously mentioned, drove the medical services expense ratio lower for the third quarter. Adjusted EBITDA for the third quarter was $64 million, compared to - $91 million in the third quarter of 2025. This exceeded the midpoint of our third quarter guidance by approximately $64 million. This was driven by favorable prior year development of $14 million, the year-to-date impact from the increase in our revised estimate for risk adjustment of $23 million, performance in ACO of $11 million, and favorable development of the first half of 2026 cost trends of $12 million. Additionally, the third quarter benefited from approximately $4 million related to timing of geo entry costs and operating expenses, which we expect to incur in the fourth quarter.
ACO REACH continues to perform well, and the results exceeded our third quarter guidance range. Adjusted EBITDA was $11 million in the quarter compared to our previous guidance of approximately break-even. This includes approximately $7 million related to prior year performance. On the balance sheet, we ended the quarter with $312 million in cash and marketable securities and $74 million of off-balance sheet cash held by our ACO entities. We continue to execute initiatives intended to improve cash flow, and those initiatives, in combination with positive prior year development, have improved our cash flow outlook for the year-end of this year. We are increasing our year-end cash outlook and now expect year-end 2026 cash of at least $175 million. Now let me turn to our outlook.
We are revising our full year 2026 guidance to reflect the strength of the third quarter results, including higher-than-expected revenue associated with higher estimated risk scores for the year and favorable cost trend for the first half of 2026. Using the midpoint of our guidance ranges for the full year 2026, we now expect revenue of approximately $5.88 billion, medical services expense ratio of 90.4%, and Adjusted EBITDA of approximately $150 million. The increased full year 2026 guidance reflects the year-to-date performance, a prudent assumption for cost trends in the 7% range for the remainder of the year, and the expected impact for the fourth quarter from the increase in our revenue associated with the higher-than-expected risk adjustment in Q3.
It also includes an increase in ACO REACH Adjusted EBITDA expectations to between $40 million- $45 million, which includes the additional year-to-date contribution of approximately $18 million from strong 2025 performance. We remain confident in our increased 2026 outlook, as well as our ability to deliver continued improvement in 2027. While it is still early and subject to a number of factors, we wanted to provide some preliminary color on how we are thinking about 2027. Based on our initial review of payer bids and ongoing contracting discussions, we currently anticipate we will see a favorable benefit in 2027, albeit more modest than we saw in 2026, when we re-contracted approximately 80% of our membership. Beyond contracting, we expect to have additional opportunities to drive revenue and make potential impacts to medical costs as we further strengthen our CHF program and advance additional clinical pathways and quality initiatives.
Within our ACO business, we anticipate growing from approximately 110,000 members today to approximately 160,000 in 2027 due to the expanded partnerships Tim previously outlined. We anticipate ratable improvement in baseline ACO Adjusted EBITDA performance based on this growth. As we look ahead, we intend to remain focused on operational efficiency and continue to take a measured approach towards our cost trend outlook. I'll close by saying we are proud of the progress across the business, and we believe there is further opportunity ahead. The work our physician partners and employees are doing every day is reflected in our results, and we believe the foundation we're building supports durable performance into 2027 and beyond. With that, operator, let's move to the Q&A portion of the call.
We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jailendra Singh with Truist Securities. Your line is open. Please go ahead.
Hey, guys. This is Eduardo, Ron, Alan, for Jailendra. Thanks for taking the question. Just on the comment about focusing on external growth in 2028 and beyond, does that mean that you guys are signing contracts in 2027, and given the 12 to 18 months onboarding lag, that these numbers end up showing up in 2029, or do they show up in 2028?
Eduardo, hey. Tim, I appreciate the question. I think if you think about external or new market, new partner growth, I would think of it as, first of all, demand continues to be really high. We get inbounds every day. We were talking to physicians and physician groups before we put it down. The pipeline is strong. I would think about it as signing in 2027 for 2028 impact.
Great. That's helpful. Just one more from me. This year, on the cost trend, I think you guys were accruing for second quarter cost trends in the low 7s, and it sounds today like that's continuing, for at least 3Q. Did you guys provide an update for the Q2 trend?
No, no. What we said was that the first half has restated favorably into the low 6% range. You're correct on the Q3. Again, we've recorded roughly 7% cost trend in Q3. Again, just recall that we have limited paid claims visibility setting here at the end of the quarter for the third quarter.
Your next question comes from the line of Ryan Langston with TD Cowen. Your line is open. Please go ahead.
Great. Thanks. In terms of the 2028 growth commentary, for these new markets, are you looking to kind of jump right into the full risk-sharing arrangements for these potential deals, or would you sort of use the care coordination fee structure at least maybe upfront for the first year?
Ryan, appreciate the question. As we kind of think about the timeline, if you remember, we've got about a 12 to 18-month implementation timeline. We would not be looking at care coordination. Part of that implementation timeline we have is setting up the right operations, the connectivity, the risk-bearing entity. There's a lot of work that gets done before you move to risk, but I would not look at us moving into care coordination fees, but looking at risk.
Yeah. Ryan, as you think about obviously the improvement we've had in profitability, I think our underwriting model, we have confidence in our underwriting model as we head into 2028 and think about growth.
Okay. Appreciate the commentary on improving clinical pathways. I think you mentioned obviously the story about CHF. Maybe touch on some of the areas of additional opportunity you see from a clinical perspective that you could look to kind of implement here over the next maybe one to two years. Thanks.
I think if you start, we still have plenty of room to go with our CHF clinical pathway. Talked a little bit about the performance that we're having, but again, still room to go deeper there as we look at 2027 and 2028. Think about the variability between partners, the variability within a partner and different physicians. We've got work to do to reduce that variability. We still have patients to screen, preventative screening to see where they sit in disease progression, so work to do there. If you think about the end-to-end process, Ryan, on the clinical pathway, we talked a little bit about GDMT, so work to do to continue to roll out that virtual pharmacy, where we've got about 25% of our partners in that virtual pharmacy today.
If you think about some of the other areas, we talked a little bit about dementia and lung health. I would say those are the two primary ones as we sit here today, and think about the fact that we've got that rolled out to about a third of our markets and our partners today, with more room to go over the next couple years.
Your next question comes from the line of Andrew Mok with Barclays. Your line is open. Please go ahead.
Hi, this is Tiffany Yuan on for Andrew. You've previously talked about structuring contracts to protect overall economics when a payer partner experiences a decline in STARS bonus revenue. As some of your payer partners now recover STARS, how should we think about the reverse dynamic? Do you participate in the upside as bonus revenue recovers?
Yes, is what I would say. I would say in the past, what we have said is we want to get compensated for the value that we deliver to our payer partners. If there was a Stars issue that wasn't associated with any of the metrics or measures that we perform very well on, then we've sought relief. In the past, I would say we've been successful at getting that relief from payers. On a going-forward basis, yes, as you know, we contract based on a percent of premium. Without those relief dollars, yes, we would participate in that as well on a going-forward basis.
Okay, got it. Just a quick numbers question. I think the updated full-year guidance implies a somewhat deeper sequential decrease in Q4 medical margin than we've historically seen, even after adjusting for some of the out-of-period items, particularly considering you have lower Part D exposure this year. Can you walk through the Q4 seasonality assumptions and any other factors we should be considering?
Yeah, I think the first and foremost, you have to remember that for us, when we think about Part D, it's recorded net in revenue for us, and the risk we have there is substantially reduced year over year, right? We were 30% with full risk in Part D on 2025, down to roughly 15% this year, and obviously, we will make reductions in that next year as well. We're pretty confident that we're through the contracting process, that we'll substantially reduce that risk as we go into next year. I would say, as you think about fourth quarter, we have a normal seasonality, and fourth quarter is generally our lowest earning quarter. I would say the only thing I would point to is just, we have a 7% cost trend embedded in our guide in that quarter.
Your next question comes from the line of Jack Slevin with Jefferies. Your line is open. Please go ahead.
Hey, good evening. Thanks for taking the question, and congrats on the really strong results. I wanted to talk a little bit about what you've seen in the first half results that are driving some of the performance. Maybe just looking a little more granularly at the revenue strength and perhaps if that's coming from better pull-through on some of the clinical programs that you guys have been talking about, or generally what the pockets of strength have been as you've revised that higher. Similarly with cost trend now landing towards the lower 6% range and a little bit better claims development in the first half, are there any things you're picking up across different categories of cost spend that are worth noting?
Yeah, I think, Jack, you've called out the two points is what I would say the largest drivers of the performance this year. Absolutely, the clinical pathways and our success there of really caring for the members earlier and getting them on the appropriate medication is extremely important, and we're proud of the success there. You're right, that has delivered, I would say, higher revenue performance this year. If you go back to our original guide, I think we had roughly 40 basis points of improvement in there, and obviously we're in a much different position this year. So, the success of those programs has been great. The other piece you mentioned is medical cost. A couple of things. Number one, we've had favorable development from 2025 dates of service.
As you recall, our 2025 setting around 5.8% cost trend for the year, but it developed favorably, so there is a benefit from prior year development that's in our numbers this year, as well as, we started the year with roughly a 7% cost trend, and that's come in a little bit lower for the first half. So those are the two pieces I would point to that's really driving the outperformance this year compared to when we started.
Okay, that's helpful. As a follow-up, I just want to touch on some of the comments on the ACO business. Is there any way to think about penetration within existing partners on the ACO front? As you look to 2027, I guess, changeover in models, MSSPs, which you guys are talking about, has that created more opportunities to maybe drive that penetration higher? Would love to just get another level of color on how you think about the ACO business.
Yeah, thanks. I would tell you right now that the ACO work and avenue continues to be an attractive opportunity for us for growth in those embedded markets, as we've discussed. If you take a look at our historical performance, again, we continue to, 2024 performance, $229 million in gross savings. If you pull forward and look at 2025 in our financials, we can continue that success in our ACO program. We really like that. Talked about the three groups we added. By the way, those are multi-year deals and continue to drive stability as we kind of look in our long-term partnership mentality with our different partners. If you think about the opportunity ahead, we have the ACO business with about half of our partners today, so there's a continued opportunity in 2027 and beyond to get deeper in that space.
We continue to be focused on the right timing for the partner, the right partner, and making sure that we can drive profitable growth. Again, a reminder, it really highlights the flexibility of our model, thinking about the optionality of our platform, from Medicare Advantage to the ACO business, including MSSP and the ACO models as we move ahead. So pretty excited about the embedded growth opportunity ahead.
Just a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Amir Farahani with Evercore. Your line is open. Please go ahead.
Hey, guys. Thanks for taking my question. Just want to better understand the raise. So it looks like it largely reflects the Q3 upside. Is that the right way to think about it, or have your underlying expectations for Q4 improved as well? Then I have a follow-up after this, please.
Yeah, you said rate, right?
Rate.
Rate.
Oh, the raise. Yeah.
Oh, yeah. The raise, yeah.
Yeah. If you think about, yeah, where we were before, I'll just bridge you from the mid on Adjusted EBITDA, right? So we were at roughly $85 million at the previous midpoint Adjusted EBITDA. The Q3 beat was roughly $64 million. $4 million of that was timing related, so geo entry costs shifting from Q3 to Q4. So you have to kind of back that out. And then you're right, the remainder is the risk adjustment improvement. There's a fourth quarter component, roughly $7 million. So that should bridge you back to the midpoint of roughly 150.
Okay, got it. That makes sense. Thank you. On the contracting opportunity, you mentioned a more moderate contracting benefit next year. Is that mainly because less of the book is being repriced, or is it just the improvement available in each contract also smaller? Thank you.
Yeah. No, I think the comment is we touched 80% of our contracts last year that drove $127 million of value in 2026. It is just recognizing that from an economics perspective, we touched the majority of those, and that drove a lot of value for us this year. Again, we have made substantial progress. We are deep into our contracting cycle right now. We are very confident it is going to be a positive contributor for us last year, and it is really that 20% we are focused on getting in the economics.
Your next question comes from Ryan Daniels with William Blair. Your line is open. Please go ahead.
Hello, this is Matthew Mardula on for Ryan Daniels. Thank you so much for taking all the questions. With the enhanced data pipeline, I believe it was around 80%-85% last quarter. What is it now? How are you thinking about the path toward maybe potentially 100% coverage? Is this achievable in 2027? What still needs to occur to kind of bring the remaining payers onto the program?
Yeah. Certainly, you are right. We are roughly in the close to the mid-80% range. Obviously, I think we want to continue down that path. As I have reminded people, though, we really started with the largest payers first, and so the number of incremental payers to get those last few percentages, it is more work, right? These are separate implementations per each of our payer partners. I think long term, we would love to be in the low to mid-90s, but it is just going to be slower progress. We are still working on it, and I think ultimately we are going to end up in the low to mid-90s. The real question is, what about that remaining 5%? I think at that point in time, we get other information, like settlement information, and it is going to be a cost-benefit analysis for us.
Great. Thank you so much.
There are no further questions at this time. I will now turn the call back to Tim O'Rourke for closing remarks.
Thank you, operator, and thank you all for joining us today. The third quarter performance showed agilon's continued progress against our strategic priorities and improved operational execution. I want to thank our employees, along with our physician and payer partners, for their dedication, and our shareholders for their continued support. We look forward to updating you next quarter, and thanks.
This concludes today's call. Thank you for attending. You may now disconnect.