Simeon Schindelman, CEO of Bright HealthCare, will resign from his position on March 11 and will be replaced by the company's chief financial officer, Jay Matushak.
Matushak will lead on an interim basis as the insurer seeks out another individual to fill the role, Bright Health Group announced Feb 11.
NeueHealth and Bright HealthCare, Bright Health Group's market-facing businesses, provide care delivery and value-based services to more than 400,000 patients, as well as commercial and Medicare health plans to more than 1 million consumers across 17 states.
Founded in 2017, the company has largely grown through acquisition, merging its health plan, provider and provider-enablement platforms in an attempt to control its prices and increase its value.
Part of its strategy will include investing in value-based primary care clinics in 2022 to generate $2 billion in revenue for its health services arm.
While Bright Health raised $924 million on a valuation of around $12 billion during its initial public offering in 2021—the largest offering among health insurance startups that went public last year—its shares fell short of their estimated $18 price tag, reaching $16.64.
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Near the end of 2021, the Minneapolis-based insurtech's stock hit a record low of $3.26. During the year's third quarter, Bright Health met a medical loss ratio of 103% and its net loss widened 400.7% year-over-year to $296.7 million, which the company attributed to an increase in COVID-19-related claims and the improperly measured risk of new enrollees gained during the special enrollment period.
The company's disappointing performance in 2021 has also spurred a class action lawsuit on behalf of Bright Health Group shareholders, claiming the company violated federal securities laws in failing to state information relevant to its business and financial condition.
Filed in January, the complaint alleges that Bright Health Group overstated its post-initial public offering business and financial prospects, was not equipped to handle the impact of COVID-19-related costs and experienced a decline in premium revenue because of its failure to capture risk adjustment on newly added lives.
Bright Health did not provide a response by publication.
Several law firms have been advertising for investor plaintiffs—who purchased, or otherwise acquired, Bright Health between June 24, 2021 and Nov. 10, 2021—to join the class action by March 7, 2022.