APOLLO MEDICAL HOLDINGS, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the unaudited
consolidated financial statements and the notes thereto included in Part I, Item
1, "Financial Statements" of this Quarterly Report on Form 10-Q. In addition,
reference is made to our audited consolidated financial statements and notes
thereto and related Management's Discussion and Analysis of Financial Condition
and Results of Operations included in our Annual Report on Form 10-K for the
year ended December 31, 2020, filed with the SEC on March 15, 2021.
Overview
We, together with our affiliated physician-owned medical groups and consolidated
entities, are a leading physician-centric, technology-enabled healthcare
management company. Leveraging our proprietary population health management and
healthcare delivery platform, we operate an integrated, value-based healthcare
model. We aim to empower the healthcare providers in our network to deliver the
highest quality of care to our patients in a cost-effective manner.

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Headquartered in Alhambra, California, our subsidiaries and VIEs include
management services organizations ("MSOs"), affiliated independent practice
associations ("IPAs"), and a Next Generation Accountable Care Organization
("NGACO"). Network Medical Management, Inc. ("NMM") and Apollo Medical
Management, Inc. ("AMM") are the administrative and managerial services
companies for the affiliated physician-owned professional corporations that
contract with independent physicians to deliver medical services in-office and
virtually under brands including (i) Allied Physicians of California, a
Professional Medical Corporation d.b.a. Allied Pacific of California IPA
("APC"), (ii) Alpha Care Medical Group, Inc., and (iii) Accountable Health Care
IPA. These affiliates are supported by ApolloMed Hospitalists, a Medical
Corporation ("AMH"), and Southern California Heart Centers, a Medical
Corporation ("SCHC"). Our NGACO operates under the APA ACO, Inc. ("APAACO")
brand and participates in the Centers for Medicare & Medicaid Services program,
which allows provider groups to assume higher levels of financial risk and
potentially achieve a higher reward under an attribution-based risk-sharing
model.

We, together with our affiliated physician-owned medical groups and consolidated
entities, provide coordinated outcomes-based medical care primarily serving
patients in California. The majority of our patients are covered by private or
public insurance provided through Medicare, Medicaid, and health maintenance
organizations ("HMOs"). However, a small portion of our revenue comes from
non-insured patients. We provide care coordination services to each major
constituent of the healthcare delivery system, including patients, families,
primary care physicians, specialists, acute care hospitals, alternative sites of
inpatient care, physician groups, and health plans. Our physician network
consists of primary care physicians, specialist physicians, and hospitalists. We
operate primarily through Apollo Medical Holdings, Inc. ("ApolloMed") and the
following subsidiaries: NMM, AMM, and APAACO and their consolidated entities,
including consolidated VIEs.

Led by a management team with several decades of experience, we are focused on
physicians providing high-quality medical care, population health management,
and care coordination for patients. As a result, we are well positioned to take
advantage of the shift in the U.S. healthcare industry toward providing
value-based and results-oriented healthcare with a focus on patient
satisfaction, high-quality care, and cost efficiency.
Through our NGACO model and a network of IPAs with more than 2,000 primary care
physicians, 7,000 specialist physicians, 10 dual physicians, and 350 physician
and specialist extenders, we are currently responsible for coordinating care for
approximately 1.1 million patients in California.

Recent and Other Developments
DMG
In October 2021, the Company entered into an agreement to purchase within three
years all of the remaining equity interests in DMG. The Company currently owns
40% of DMG and has committed to purchasing the remaining 60% within three years.
In accordance with relevant accounting guidance, the Company has determined that
DMG is a variable interest entity of the Company; therefore, DMG's financial
statements will be consolidated with those of the Company.

Appointment and Departure of Certain Officers

In November 2021, the Company appointed Brandon Sim as its Co-Chief Executive
Officer. With this appointment, Kenneth Sim, M.D. will no longer serve as Co-CEO
of ApolloMed but will continue in his role as Executive Chairman. Over the past
several months, Mr. Sim has taken leadership of the Company's corporate
strategy, operations and engineering teams, and he will continue to lead all
these aspects of ApolloMed's business as Co-CEO.

Key Financial Measures and Indicators
Operating Revenues
Our revenue primarily consists of capitation revenue, risk pool settlements and
incentives, NGACO AIPBP revenue, management fee income, and FFS revenue. The
form of billing and related risk of collection for such services may vary by
type of revenue and the customer.
Operating Expenses
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Our largest expenses are the patient care cost paid to contracted physicians and
the cost of providing management and administrative support services to our
affiliated physician groups. These management services include utilization and
case management, physician practice billing, revenue cycle services, physician
practice management, administrative oversight, coding services, and other
consulting services.

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