https://wccftech.com/clover-health-clov-shares-slide-as-a-wall-street-behemoth-pukes-on-the-companys-prospects/

Clover Health (NASDAQ:CLOV), a medical insurance provider affiliated with the US Medicare program, shocked investors earlier this week as its shares registered a gain of over 20 percent without any discernable cause, fueling a Reddit-driven frenzy among retail investors. Well, the stock’s fortunes are reversing today as a Wall Street behemoth has now puked on the company’s prospects.

As a refresher, Clover Health is an affiliated insurance provider under the US Medicare program. The company currently receives a fixed sum of money every year for each of its registered patients. Its profit is computed by deducting all patient-related insurance claims from this lump-sum amount. Given this compensation structure, Clover Health has an incentive to minimize the costs related to the patients’ claims. In order to achieve this, the company incentivizes accurate diagnosis of its registered pool of patients by onboarding doctors to its proprietary Clover Assistant digital platform – a web application that aggregates all Clover patient outcomes and uses models to identify issues such as patients not following their prescriptions – and paying those doctors nearly double the prevailing Medicare physician fees. In fact, it was this lucrative physician fee structure that was the subject of a high-profile short report a few months back.