MPLN - Earnings call transcript Q1 2021

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Operator

Good day, and thank you for standing by. Welcome to the MultiPlan Corporation First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Shawna Gasik, AVP of Investor Relations. you. Thank ahead. go Please

Shawna Gasik

Good call. welcome Casey. quarter MultiPlan’s XXXX earnings morning, you, to and first Thank

today Mark and me webcast Relations White, Financial Joining section is This and President Officer; Chief Officer. website through of Dale can Executive of be Payor the is our Markets; call David accessed Chief Tabak, Redmond, being Chairman Investor and www.multiplan.com. at

the on our we supplemental press earlier slide is with available the website, earnings will of deck portion to the quarter refer call, Relations release our this During Investor XXXX morning. first along that issued

We during will morning. refer to discussion the supplemental slide our deck this

Form Before Act business we within due I annual of like assumptions the are XXXX. associated call. differ may documents of risk statements Private in statements on those on the with and to to responses that uncertainties with to remind our the begin, Actual remarks or statements results XXXX, December and filed available our forward-looking forward-looking beliefs from discussed implied would the by the of in or may other as such expectations, forecasts be and materially factors our fiscal to represent Any information meaning date forward-looking Reform XX, filed include based stated and Litigation questions risks which year-ended of report XX-K you and SEC. the included management’s for this Securities

the non-GAAP in I financial like over point a slides believe and statements discuss Executive measures earnings assume A available some is the will Certain Tabak. gain reconciliation understanding included release forward-looking financial more and Investor our Relations While unreasonable call measures available GAAP with most no the to comparable our so. and results. how such measures the We do Company’s measure, that Mark to press consistent views help in of is would future, Mark? in complete now, this turn we to financial please on non-GAAP these the management measures. these And may Chief to to elect portion our extent Officer, helpful that investors are obligation of of results at to the our without providing note we financial update our financial effort, in website. call we

Mark Tabak

Thank you, Shawna. Welcome, everyone.

I’m welcoming the like Let first their crisis, would as that a ongoing support. Amid company, our we MultiPlan join as continued healthy and me everyone staying XXXX call. continued investors to company, in a solid delivering we’ve stockholders private our operating is you for earnings thank public for results. quarter health to to has safe. pleased hope and first in I say deliver long returns a history our of few quarters public to

pressure business in quarter’s many advantages. the our related pandemic, to accelerated of results a COVID-XX this perform. attest, an continues face As to This MultiPlan’s competitive is the even to testament

value for them detailed view to As our supplemental Many their operational to reconfigure These assets create deck, allows ourselves. underpin our a configure strategic on of and and unique customers, relentless and our customers. our leading lasting that payer excellence focus with position assets slide operating we start with on us us a resources of our page our as partner. members X

revenue which services this increase establishing features of and tenure In margins the strength the them. communicated expectations finally, business scope our and our grow very in and cash long embedded strategic financial further operationally ongoing EBITDA earlier model, of customers, and turnover, high for to with strength revenues, for are and line customer have and the and relationships high financial we underpin relationships the We free first customers’ our to revenue virtuous EBITDA we level our value XXXX persistent provide recurring EBITDA and driving processes, we QX cycle. drive to the with retention made workflow our year. attractive conversion quarter investments were And with limited durable Both in supports of IT flow. to these opportunities rates, a turn,

EBITDA was Adjusted million, QX XXXX, XXXX first was a from our As deck. shown case to XX%, QX COVID-XX investments at These X.X% $XXX.X sales was quarter businesses, quarter, of incremental lower margins seasonal remainder end supplemental despite slide in X.X% decrease of representing prior acquired surged on of selected page public from QX our attributable of decrease decrease were and of to $XXX.X typical in increase deck, the page the X.X% in of first The was decline first XXXX. on of million, and newly the quarter receipts revenues our quarter our and over related a for X% XX.X%. and from the achieved were revenues of X of slide to supplemental which Discovery. of XXXX primarily was total remained softness a XXXX. and information the claim of modest the trends, an quarter technology. EBITDA due QX first Referring XXXX, QX of of through costs HST Approximately from the some XXXX. effects and the X the X% and QX to fourth which margin additional year of down company elevated

increase to flow $XXX.X and flow the of continues for from QX strong cash operations cash operations operating cash million, $XXX.X business XXXX strongest from flow ever. conversion, cash quarter with million from exhibit of XXXX of XX% flow Our MultiPlan QX

enhanced provide through customer to strong has the which led business the remains service, exceptional customer and our retention. services Our to continued confidence Even we pandemic, in strong.

this remains to forecast, year to the our business through that impact our continue and precisely of optimistic the While much expect affect is are we we worst behind to COVID-XX pandemic revenues of the on us. difficult

included to of team more our have to negotiators, level fair. proprietary press morning’s an and Dave unmatched for opportunities include release, hopeful address us provider the effect somewhat was make year care and our with high our as operating COVID help momentarily. throughput provide capacity efficient health network, visibility a in MultiPlan’s unique scale us affordable, the adverse services believe claims outlook will data for identify scope progresses. this platform the and processing sufficient the which and customized and are and solutions algorithms, which and position assets, equip We full X.X We of implement recede discuss will enterprise XXXX, which develop million year customers XXX of than our that to more we

excited XXXX for about plans continue beyond. be We and our to

a that with cost of performance the their implementing care, reductions offerings and strategically We our in growth their improve are help engaged generate and meaningful our in support customers customers health sustain our planning positioning company. as and service competitive

as well well into are and as cost investing data aberrations are beginning positive to the HST incremental offering underway, our to our drive generate of our more to our results. integration We learning for and This solution identify cross-selling health growth. in yield in payers includes to care leverage HST acquisitions recent investments activities is artificial and analytics-based clinical The Discovery. business of savings machine intelligence already to

of Our acquisition February. at closed of end the Discovery

through our are the that transaction offerings. and payment integrity about service excited We capabilities adds revenue our complementary

payers footprint in addressing summary, relationships within expertise Discovery’s to and leverage well government in to integrity deep In our start hard an working payment we’re issues in-network are expand to our the as claims. and excellent XXXX. the in payer We clients’ off as markets

return business We of COVID conditions underlying resume business. pandemic are believe trajectory to and ongoing We the are the encouraged abates our by to as our poised we growth normal.

provide includes Finally, efforts I’d my for express whom enduring it customers and depends. and outstanding value their our Payor and whose loyal. our that tireless like like I’d turn White, colleagues That growing Company more keeps President MultiPlan with the Dale those the who continued customers call With to Markets, trust our the a business success of create appreciation Dale? than partnership, to make that, X,XXX for our update. over to to will possible

Dale White

Mark’s pressure surge Mark, on our the ahead same pre-COVID cases grew last in year, and the X.X% lower downward and compared you, by to claims, results good COVID-driven optimism non-emergency the claim revenues mix despite XXXX COVID in to starts treatments, abate. elective COVID quarter last morning, the Despite and I QX to about Thank our echo enthusiasm winter the for and year our as procedures quarter. and dollar change we everyone.

despite have our volume claims We pandemic charges conditions. to continued grow

per At As page in QX to services some by These claim. XXXX, the because billion year customers. the deck, on average COVID, for in claim charges, $X average slide to adapt The slide savings per impact. has QX, of possible of the page over identified clients our in under are QX our value a shown ensure of QX billion XX% dynamics nearly just about X to prior charge processed health identical to in had despite on we been were supplemental in drop claim we COVID driven XX.X% lower they XXXX, charge no deck. X which results $XX of supplemental about our continued XXXX, illustrated were which potential up deliver we commercial the

runs XX% year-end. our test around quarter. The in XXXX. XXXX call, $XXX. average the another $XXX. last remained runs Telehealth claims QX on treatment increase prior cited treatment claim and about and earnings The up in testing example, claims between QX. telehealth less average than up COVID $XXX, increase the mid-XXXX saw claim were claims elevated over COVID were COVID QX in over XX% For QX claims XXXX COVID testing over average claim and XX% averages I tenfold a

in consolidation, meet of transparency services. these impact pressure from utilization partner of Apart COVID, our Medicare of other Extend industry Advantage that to Surprise present -- these XXX,XXX increase strategically our year our and penetration our with elective X Recall include of date of strategy, down, some headwinds, developments in and these presents vaccine-related market as Each health though vaccination opportunities on on to opportunities that with services execute capacity rates customers. many facing requirements. in the policy influx per opportunities an normalize and about coming by that claim. as expect the over of medical of help X will mix in the run pushing We $XX also weeks. to lags Even per care COVID headwinds We claims saw QX. typically claim for vaccine rising in bill we the CMS payers opportunities growth solutions growing months, care is our average and provide approximately and only interoperability MultiPlan segments. present the system, MultiPlan. health our of three-part progresses in on to anticipate also of procedures for to the for These non-emergent these breadth each claims charges QX demand and market the volume to legislation receipt adjacent component abatement vaccine dramatically capitalize the grow claims

While significant customization. continuing regulators through and to customers by our be MultiPlan’s work in introduces will are to leveraging service rapid flexible compliance they complexity, analytics, to and with explore strength, continue achieve how specifics, legislation the deep the components dialogue we

ability types these action of enable to of our and with the to embed further MultiPlan workflows. comply depth in quickly regulatory relationship Our customer customers helps technology

believe is We continue MultiPlan’s on impact legislation this that material overall likely one a to business. to have

our strategy in is value added stepped and customers. sales Since in invested our for public have up last drive swing. that growth technologies product year, development suite, its our expanded to Our going our we full resources, roadmap

leverage at are Our both we growth Discovery and client ahead and relationships MultiPlan’s expectation, integrations of and they distribution. of of seeing are companies as HST acceleration

years intelligence happy savings I’m partnerships unlock pursuing. a growth, our company, are for XXX first made more over two than Andrew XX with Officer. with the the and we over that veteran the account many have identifying specific care and our new for And focused relationship Cone, customers health but in growth to we’ve begun Chief progress on in in business hired and opportunities including machine management public managers. We about as we’ve artificial marketing supported professionals will this learning even as more responsibility quarters year XX and sales, includes our come. material by This excited closing Revenue

on have We page of XX the of these deck. some opportunities slide highlighted supplemental

For data categories MultiPlan strategy, we and we deliver example, enhancement of machine under initiatives XX partner solution learning savings have that operational a span X and concepting. initiatives the another These underway, X are with both, and component analytics across increased efficiencies. our including

the and that strengthened value in markets, of center One another now mid in last a health HST new the HST of that plan has brokers XX expanded Discovery. agreements, delivered million our XX value-driving At new stages. third-party year consultants. and in and through Integrity named small already number identified or value services plans to of category to customer Services. services our also service has we’ve administrators to extend Enhance service deploying significant component, the with and has concept Revenue acquisitions underserved of deployed models for over enhancements completed with services the through savings the $X.X Under the value market February. group or net Payment increase Discovery level strategy, and the our analytics-based payment are deliver health integrity category, mid-sized added strategy new

and these relationships well services go-to-market value services in-network as claims. Integration new new well and government Medicare for With sectors, as underway. payor’s and Medicaid, that both come Advantage significant are targeting acquisitions for services strategies deliver like a

solid Blues generate million. have integrity covered revenues pipeline in lives, stages and several for share Also annually. with to of value-driven over million are some strategy, bundle we early of that a and potential We under annual were payment services. earlier. already on capabilities fact, early Extend for over of about interesting and we on subrogation with awarded in talk plan in revenues the late our a progress as of new have deals leverage existing I expected And of we a mentioned Expand but headwinds-turn-tailwinds core number Discovery, breadth and which coordination plan component transformational and stages these, capitalize the business more groups revenue the XX we services made We’ve of a also strategy, a $X variety XX,XXX they In is well data $X.X new in over new a benefits services, adding health employer with closed concepting to the in services. new It’s to ways our little also nature. that say our analytic suffice with our of our as of assets

also potential been work partnerships working they even in payers, of the not acquisitions and with serve. build evolve that and/or the to serving MultiPlan just We a have but company, a into pipeline areas platform they consumers providers

finally, on exploring ideas core companies. And are driving we We are with business. our such several growth in laser-focused

for converted have we For XX we three-year our exciting, among initiatives example, and prepayment customers, Even a underway, deals bundled customers recently health When revenues $XX will to generate implemented, annually. deploy large regional beginning we which in-network claims this into integrity were in and revenue-generating XX plan over million a later for this plan’s year. larger $XX services. expect Medicare services to Advantage we’ve contract business we awarded additional million fully more an

summary, a for quality acquisitions services. a In of to long was service which payment past In network marketplace from our our and integrity large to taken changing our revenues network-based our access and evolving of approximately continue finalist a Today, also transform national the with We’re developed largely customers. by over a the the come we and very that the derived pleased XX% inorganic history have and MultiPlan enhancements XXXX, of meet remember I’m business to leveraging and years. small of needs our organic from we plan. both has value revenue MultiPlan a creates. analytics-based and of it services company have many the eight with over network-based revenues you steps XX%

ability our growing across who all clear, Our that, activity talk turn now, our target on of to over providing our hasn’t to focused it innovative The it customers stay for will deliver pandemic but record With new consistent our to financials. mix it markets this to customers. value Dave? altered and level about I’ll depend both and Dave, appreciate changed makes claims track has the of services. our and

David Redmond

of about add and XXXX. let this our XXXX. my discussing Thank time morning, to spend first, comments good But I’m few going the for me morning a guidance you, majority everyone. Dale, QX

X.X% As Mark were over in quarter communicated this and over down line said XXXX revenues prior expectations X.X% with earlier, up first we QX year quarter, earlier year.

believe million which sequentially, in from contribution to QX the COVID down typical were revenues communicated. were by we QX approximately as and previously entirely business, HST $X the our driven effects we seasonality Excluding and of Discovery,

first a million about the the QX date case COVID-related provided $X and was and that was during impact, to to in We of the a was workers’ COVID-related million continued dynamics, of COVID business, we are $XX estimated have throughout X $XX dynamics million communicated estimate million related $XX to December we by And approximately impact mix -- to other million which communicated Among QX as estimate capacity COVID impact revenue XXXX. $XX result, in EBITDA million we $XX $XX by XXXX We not $X volumes quarter. million up levels to revenues and million QX XXXX comp believe $XX lag services the network-based relative our combination auto at employees medical from $XX Of to on January of $XX weeks less elevated the average. to this COVID in the we million travel. QX revenues. to our to million affect our reflects lower our of full our revenues approximately impact on million. our employers from of also, auto million, impact is $XX As driven claim adjusted X and to November, that estimate

of a line changes lower surgical has our payment mix QX to $X related integrity $XX mid-sized in We clinics. primarily $X cost to by our is network related sales interactions. members of million include million and outside lines care Dale limited emergency The and in-person was especially estimate Our driven such for discussed. to due health the as volume trends impact the of total PEPM companies to departments to $X indirect in reflects our cycle by revenues, claims not of service approximately COVID primary of in does seeing service delivery, million delayed unemployment the $XX XXXX million million previously we to as receipt to fee-for-service business our volumes mix analytics revenue at estimated implementations impact and by to related revenue or We and the anesthesia COVID driven predominantly million driven is travel also $XX reduced conditions, and longer impact the trends a coverage. small network business, estimate are on on

QX million, we of $XX.X and quarter full in of million expenses expectations costs million million partial of and and growth initiatives, in The related operating million predominantly EBITDA included was quarter increase public additional $X over incremental including $X $X expenses adjusted year public HST HST HST, $X initiatives, and and for quarter were associated of line earlier a discovery an of expenses the with primarily with this growth XXXX XXXX increase $X including Discovery over The First reflects $X acquisitions. million a XXXX. over communicated QX company million costs and QX company Discovery. QX of costs of to

to from versus are was Our The acquired and $XXX.X of lower in year been fact as million XXXX, increases resulted revenues costs Discovery as prior XX.X% business. investing XXXX. in lower-margin company million. $XXX.X well company cost rate growth margins adjusted as items quarter, and in in the businesses for product EBITDA drive development again, public margin $XX annual HST the quarter they is stable combination generally million reflecting our XX.X% pre-COVID public our expense and compared QX in million QX incremental the to a XXXX, that heavily the approximately $XXX largely quarter and and have in of aforementioned in first QX run last of XX% EBITDA quarter the

Moving guidance. to XXXX our on

release this billion of XXXX our expect As deck, This and supplemental morning of noted acquisitions $XX billion. to revenues from the slide for XXXX, $X.XX approximately of XX in press revenues to $X.XX full on of year and Discovery page million includes we our HST. approximately $XX million recent in

smaller we than but in significant impact still Our COVID XXXX revenue guidance from had a XXXX. in assumes

was XXXX between impact million. you $XXX If re-estimated remember, million in $XXX the to

range But of We impact MultiPlan’s in a assumptions the guidance obviously, built I given those mentioned of nature few into worked a the through moments the business, have is COVID ago. methodically best of and at variety estimation. forecasting

that QX given We are anticipating XXXX $XX QX revenues. be of similar of our lag $XX effect million, will COVID trends substantially QX the million the COVID we it’s you COVID our to look on impact When of of to out QX the impact to quite still effects subside. hopeful of XXXX, are some But, that results QX meaningful. be and will on will likely of the in

of COVID-related million QX quarter per in million between reflects adjusted annual quarterly which estimated and guidance $XX EBITDA million to annually, $XX consistent annually to previously or with estimated million million $XX of our XXXX $XX COVID impact revenue estimated an to impact Our quarter million per $XX $XX $XX or that COVID-related I impact million mentioned. to is million $XX

adjusted EBITDA. expect XX supplemental to million. EBITDA approximately $XXX adjusted noted we the we page million press Moving to and the of this deck release On $XXX of in morning, XXXX for

EBITDA previously million as business approximately expectations our as learning expansion incorporate intelligence, XXXX, of minor and artificial including of for $XX adjusted sales initiatives. to around machine IT spend, other force Our in additional primarily well investment million communicated, as $XX the

increased guidance expect few will imply of company MultiPlan in the we over a acquired HST. businesses Discovery XXXX. not margin yield incremental EBITDA necessarily and adjusted We portfolio to a meaningful business for will returns lower the revenue and time revenues XXXX historically, low-XX investments our combination adjusted cost, to incremental percentage has from during customers, savings the and and in deliver but public The lower what believe generate and investments the points reflecting range, been aforementioned EBITDA and margins it of the solutions they than our evolve functionality material these

as grow, adjusted year trajectory investing recede of we and and integrate of higher effects COVID and moderates a the over anticipate expecting exiting on are margin revenues HST quarters. fully EBITDA we pace we of than the couple the the As and Discovery, next

derived discussed. a estimates This, from assumptions of and cash operating approximately million to flow is expect we result all $XXX just XXXX, course, million. of For other $XXX

to and our tend interest timing, As tax flow due cash be payment QX QX and higher to quarters. a reminder,

million million for depreciation As previously communicated, $XX $XX XXXX. we approximately expect of to

amortization expect XXXX. million We million $XXX for of $XXX intangibles to approximately

We expense of ‘XX $XX cash expect was to $XXX expect in we costs And in it less million interest interest than $XXX XXXX. be to million approximately approximately our in XXXX. million,

of million to million $XX We for $XX XXXX. compensation expect stock-based

tax communicated, $XX we And an expect previously to of million. effective rate XXXX $XX we XX% for for As of XX%. CapEx million to roughly XXXX expect

the As a $XXX adjusted we outlined the $XXX deck on as for $XX -- of $XX XX his similar $XXX press impact XXXX, a revenue page of million, approximately and This morning, for anticipate closing Mark? slide of in includes I we this to million QX supplemental in release and to to of of XXXX. million. COVID-related had $XXX million million revenue QX With to million, for adjusted back will it and turn previously what Mark comments. impact discussed, that, COVID-related EBITDA approximately EBITDA

Mark Tabak

Thanks, Dale. Dave. Thanks,

future. the to like I’d very reinforce Before we’re excited about that we to go Q&A,

has about yet, we how the quite to and move pace growth pandemic behind while poised Company well the I positioned through We on against year. far, are drive the bear so success our are strategy, prouder and by we excellence. to fruit, of our continue couldn’t through as be solid acquisitions we us focusing execute operational on progress integrations managed isn’t making COVID to recent and are growth and the

let’s forum operator, the open for up Okay, questions.

Operator

of Nephron Raskin go Please line Josh [Operator from first comes from Research. And Instructions] your here the ahead. question

Your now is line open.

Josh Raskin

everyone. morning, Good Thanks. Hi.

the revenues the the are in the factors growth remaining for on quarters, the question, guidance First sort year. of XQ, leading it the to annualized ramp rest just for three implies some the of in that

there? Part B So, throughout sort kind ramp then, similar the that seeing not EBITDA. same to is in COVID the sounds the the a headwind And first what’s of be would like question be It it. would ramp of

of So, is dynamic assume sort or new in investments that’s well. ramp-up in should new the coming margin? low help us a the as against that revenue we at with just revenue, Just

David Redmond

Sure.

-- As ahead, you Mark, first. see the ramp go

Mark Tabak

business of to the customers addition and growth. in the speak the Why to more existing fuel can don’t company investments the customers? new terms in talk also additional you Dave And initiatives to then, of about selling

Dale White

acquisition think we our Thanks, customers continued MultiPlan work that enough through on sources. the call have more it’s operational primary monetization so three additional don’t that savings throughout for derive it’s that you’ve our on year, I of additional customers internally -- Mark. you to I’ll suite the say current in we business, existing it’s better that Look, inwardly of that thirdly, of in and well I’ll -- today, And rates. new company. of we working initiatives of initiatives customers underway it’s or efforts Absolutely, help Sure. the One services. revenue drive logos and customers my revenue customers making for our and value throughout as a comments, initiatives number suite and and service looking know become drive And a helped of initiatives -- our improve of that new underway either Josh. the savings through number we I company. with -- have our our claims learning new that enhancing heard ultimately the the it’s machine have and is, think Two, year through through and and

help to growth. them of fuel All our Dave?

David Redmond

for questions. Sure. Hey the Josh. Thank you

drive of to I included The think single-digit revenues the high-XXs. growth something XXXX time of next be two at about we combined the to HST think in which biggest first has And historically EBITDA the really two rate have $XX all, EBITDA We each of have in to on that impact X%, of into quarters, is higher years. and COVID. of have million the rate year, which will we acquisitions. had, numbers independent have DHP, three those of that was that things growth impact roughly estimate high basically the The revenue, X% of which a the two DHP, we’ll only I for one have believe annualizes talked driven teens run X.X% other growth acquisitions in a the -- to months Dale in subsequent in the to million XX%. quarter-over-quarter primarily the and of in on we initiatives them $XX we an rate the by X% something on is and Mark which EBITDA an basis month hopefully margin obviously acquired in QX, factor, independent

artificial provide and talked I where incremental a margin including year. revenues million think lot that our granularity bit probably revenue bit. data. sales additional million which about, About drive a other this we has believe so as a is in quarters, About to out as and as investments we little IT, little when the at a that learning, are and $XX in that of of customers million in force, suffers to does through little said, reduction see that will that in Josh, today, talk to we are services we you Dale a bit And which million $X margins, And that later the $X of EBITDA in we you. $XX we’ll $X to few walk $X expenses. So, more to look not in million investing we million our that machine intelligence we develop continue may with

Josh Raskin

just And perfect. -- Mark. That’s go ahead,

Mark Tabak

to revenues additional million $XX to year, the know. million you latter in $XX will and $XX the in COVID as and $XX impact well, of that EBITDA as quarter-over-quarter drive EBITDA million of of COVID million, factored as We half additional subsides

Josh Raskin

a just question. then, second Yes. And

If services of go to out-of-network of same out the I about to seeing but results, better same book of into relative you usage store sort XXXX? the of about with accounts? tough those thinking do, analytic or of are sort you business pre-COVID penetration in you seeing percentage of think customer, maybe are sort that that’s And changes know and claims network same of

Mark Tabak

to Dale, the Yes. comment do you utilization I’ll and services customer of punctuate want on our and that. trends,

Dale White

Yes.

think it’s the of about percentage I Josh, I you utilization. in-network -- think, asked

an as earlier, the that continue think, I our to I -- through amount customers. to we dollars of increase see in alluded

pre-COVID almost in quarter. QX over up we XXXX, claim You’re billion right, it’s processed hard to which predict. in which charges, $XX were XXXX, was the But, XX% about QX last

customers. deepen our continue to So, our with we relationships

a the integrity. expand additional and to analytics our through in the with portfolio those potentially and ways new at Discovery, to same we’re customers, payment have out new $X I Discovery revenue and for example, gave this -- were through customers, tools And of you HST of networks, the and regional and another some customers relationship delighted reach through able look of now, with service to to and subrogation of services, that’s services our through were sales, examples through our we signed existing to benefits million. continue coordination to addition to able We Discovery, we with deploy where we’re later prepayment plan health year integrity. And we signed to to payment -- service for a million contract we able over we is $X -- large

customer So, seeing we’re I what base. across with we’re pleased our think

Mark Tabak

business also footprint analytical only benefits. -- significantly, Our integrity coordination and and payment its isn’t large, now because revenue is integrity, subrogation it not it’s

capabilities, those the and So, data we the claims reliance can bring increase of we’ve acquired decades. these charging database analytical foundation many our payor to customers is more services on that a over of of which suite comprehensive

Dale White

Discovery, we’ve historically, company. our And addition footprint. was integrity widened prepayment-focused Mark’s Josh, right, payment a with MultiPlan and the of --

the premium enrich and and integrity payment services, our the With addition revenue broaden world Medicare coordination Discovery our which and things now post-payment benefits, we extend like into reach of premium subrogation, restoration, offering. integrity suite our restoration of include to services, other ESRD

Operator

Your from next from of Daniel question Grosslight ahead. the comes Citi. Please line go

is now line Your open.

Daniel Grosslight

million to to impact the at COVID $XX go midpoint. this wanted around I back the of year

be You finer cadence little in the little lag, of you on of impact you the to the point a put that Can the back expect similar surprised half will but impact mentioned same in the year. XQ making the sense helpful. a if what given back this of the which makes segment a provide around you telehealth half, acuity in visits assumptions year back be testing, get you’re we half and by beyond? And higher very breakdown into and Thanks. that June would the as XQ, and could

Mark Tabak

you can Dave, the through walk analytics?

David Redmond

Sure.

pretty numbers think on we seen we’re QX have visibility to QX. will what move our QX. we’ve Daniel, we’re way prepared our said, QX, We enough we on don’t yet now and guidance -- obviously QX similar so and based As be that to far through

hopeful us QX But, opinions QX that everybody give wanted wanted what and overpromise guidance as to have different relatively last will under-deliver, in in is quarters. that But and you optimistic and I disclose guidance into impact we thing we so understand COVID do do quarters. that decline our different built A probably out of the those haven’t pretty so hopeful we’ve We’re to we totally using appreciably. workers’ and area. our million Illinois less seen has in is be we $X business, move a or our in Obviously, In million million country. very network a bit we’re department is more little are, the regional the PEPM particularly which they to fragmented bit, But it That of $X seem that to that our fee-for-service, California network. move. lot call analytics will million moving and driven lot it’s or business. comp, expect we Florida, that to understood decision by people not a claims, travel point what much a is drove adjust and relatively a want to we and direction that’s be. million numbers be, New the we of coming number or basically, $XX as company, in About ASC. can most cautious That York. The fully But, you, people what COVID said, basically should that little those accordingly. a their anesthesia make that is and what we sure of want be $X emergency across this out-of-network our should and across impact to that of in say, that to where our travel in we what is of don’t than COVID primarily on right and $XX at in is will in -- continued, That time continues flat new little that the to move to -- from. as primary to bit that

those of business, surgery and And ED the to those of where unique ambulatory extent, a specialties So, in we payment driven we’ve in like, centers. that’s kind maintained and anesthesia claims also are. our great out-of-network by integrity level

you, had of based last impact to the kind that the we’d and debate of talk explain internally, have and numbers, rather lot COVID prepared analysts. half. a and our we’ve weren’t that, so that move in on with guidance But, yet discussion especially it we’ve that individually to all fully So, we can when we flat decided bind we talk

Mark Tabak

that the and $XXX guidance, meaningful COVID a COVID abates can increase overly cautious last impact. million if you EBITDA, see be being half overly revenue in corresponding factors being to million, look of you the in If quickly, at we’re there $XXX in cautious and we’re If more a the year. could

Daniel Grosslight

All right. surprise implemented And just there’s of you’ve I lot I billing legislation in I XXXX. that previously get thoughts that. being wanted here. understood. to appreciate pieces know Yes, on your moving mentioned a

for beginning have So, in do implemented actually can you you be the and think new this started any preparation regulations? see changes provider to of at the XXXX? And behavior

Mark Tabak

on as summary step making don’t of we back then and don’t where process a it’s -- you an why rule it as the and update is of passed do Dale, today. why been billing just legislation surprise quick

Dale White

six -- have comment process. plan don’t -- week, question, stakeholders we’re hopeful but at -- level give it’s on -- and And to give to you the And impact debate final legislative they’ll come is the soon, think from parts is the I rules, on still even July to we hopeful Daniel, is don’t least that great Xst. have it I that opportunity it is still we’re the headlines and taking before as implemented, interim still because to we those. place of it -- a saw there months hard as from at to believe think the being at a this

debate. capped providers, affords by is an at payor inflection when CMS And say, would both Although -- member it’s is receiving has has to at last ancillary calculation payors the routine when a out know its out make pay, There’s provider had and an -- if amount. but that related member’s is in process what otherwise the -- qualified liability and limiting is bills provider the critical in I provider XX-day contracted payment, if way that had let’s part I the for that been ancillary by to provider. of, offer or that to the an summary, for payments a I that the the If to and they today, most then has, transported I’ll protects nonemergency It’s HS or care, folks negotiate. it’s the everyone have along to in-network dispute their consumers that care. the emergency bill quick for to way. HS along that unhappy pretty identification reached other with from been that care is services surprise an a the think emergency law independent statute and fail, company’s bill, resolution. points insurance under plan The amount, seek which co-share surprise [ph] law the there’s time, But negotiations piece rate. piece Look, to median of knows for and think opportunity the providers is window a ambulance they and think discretion reaching I call to payment same the balance receive

originally, Now, arbiter was things provider, Congress added other that debated arbitration including which whether as to equal passed, going everyone that must whether law of either in provider the the debating passed, the process, case, the being knows, is the the the of payor. should the on for first the the consideration now the several is I it’s extent be intended like each or sought arbitration, acuity the I those think, -- rates, arbitration, initially sought for was And that. by everyone now, of factors arbitration, baseball-style the complexity now of by amount is there the consideration think, prior of the which And training were choose weight. case, to calls the like QTA, means be debate factors things contracted primary when

an at a just introduces home mentioned, regardless how our issue to -- And opportunity a the in our the our with it solutions. billing bringing for inflection process of by the compliance of and to lot arbitration issue in resolved resolved how our and is I the for every heck it gives with how of of us, customers. leveraging explore ultimately complexity this process. -- ultimately deep to as including point is dialogue process, partner regardless strengths strategically they’ll it think, the and at we customers legislation achieve us I And of are bill surprise payment

Mark Tabak

reliance be early if done in on at the footnotes. consummated, the state in identified our program. you the in a a negotiation. federal and we’ll of has a an be complexity administer a arbitration, historically is much MultiPlan, outsourced in of to there fact capability as complexity One That’s result level, continue payor And what is do arbitration, to that indications of that that MultiPlan has how to well. is Number and rulemaking three, of complexity will will negotiation increased as independent that. two our again, resolution that That cannot customers the number result I’d by of process three dispute terms lot add one. is component prior

been that fully our has process So, no enhancement will impact could once defined. on material have time, business and we it rulemaking be believe an over the

Dale White

at start you out around Clearly, of there to comment -- delay. an about changes, to Clearly, be a period. asked the all rule-making a come the this be significance there’s January debate a those Depending point. has there’ll appropriate I do delay? Daniel, for don’t will think X, speculation taking It’s place. we comment process it’s supposed with starting it on us think XXXX,

-- XXXX, implementation. relief providers seriously throughout to given speculation, forward there’s a or some moves doubt I the would as the given -- and/or relief think but process in payers be I delay there’ll again,

Operator

go from Andrew Sachs. Kugler Your next Goldman ahead. line from Please question comes the of

is open. Your now line

Andrew Kugler

taking quarter solid guidance. guys, Hey Thanks and questions for here. my

in two Just mind.

guidance, Discovery of in your at some and high the midpoint end hit impact XQ, there’s similar kind even guidance of sequentially quarter assuming versus as that upside your XQ sequential sort COVID of the impact then XQ second Looking still of and range.

have in, XQ So, be there starting run a may that there initiatives rate new I’m should the the also that XQ to year? actually of any are in seeing supposed you’re been whether are reflected that just rest wondering and if not in kick for

Mark Tabak

do speak want to guidance? to you Dave,

David Redmond

Sure.

what’s happening, slow they in. I with visibility bit be Andrew, a appear a extent, little to think is more some of were our customers, to some that some bit have little that initiatives we kicking

that a We the But QX some trend did we’re will to that see As you hope that QX. continue, up little and our is starting Discovery, be comfortable growth. guidance. And in on as far we’re proof midpoint faster about look in at MultiPlan, move QX, what I’ll the felt HST of bit. we excluding But kind QX than of that they enough call to really customers base we’re and X%, of will number in as moving the over little pudding. a

X% If growth. and that’s what have organic that’s believed you our to non-COVID X% annually, historically X.X% we revenue core about X% take is or quarter-over-quarter,

Andrew Kugler

that the whether you. going some there impactful there the but is this right. way those or but would All haven’t taken yet, from sort impact fiscal to assumed year? initiatives initiatives you’re And you to revenue also quite think guess, XXXX of start Is impact more -- those think Thanks. any you then, what way are And Thank seeing in in kicked outlined the any year XH about in of haven’t revenue I about if Great. total the revenues to initiatives? works yet. be haven’t at those from and effect that to yet, are of initiatives the end some for that

Mark Tabak

Dale a I’ll let little talk Well, about bit initiatives.

in a there’ll material earnings I call, said not XXXX, lot QX. QX of a as have initiatives think those although we will impact, think some on in we that our be and

of we’re now. given want generate a those will initiatives obviously, As don’t dealing hope quantify about talk double-digit we about very impact, but feel really to been XXXX, this XXXX. we into good meaningful haven’t they point, with right in able out really But, and we those And are look exactly. we at still to have we ‘XX optimistic should COVID lot growth initiatives. And

Dale White

to we’re just opportunity of customer an to being would have initiatives the year the add, if in in And implement I implement year, able more our early a with Yes. base. throughout have initiative position obviously, impact. unique the you obviously, you

get current further in in that year. As impact the more things less equal, you all subsequent being year the year, out will be and the in

have the year, prepayment as we’re it launching in lion’s will the large payment year, the we impact -- revenue the XXXX. I be I later but forward where mentioned going this integrity of will think this impact So, share -- plan impact some

Mark Tabak

in in that here The addition additional to IT as initiatives study XXXX we run we is The that get developments have the where XXXX then had in objective until a be add is contract, in implemented to goal would and beyond, in with place. now XX-month them that being under we do be already supplement to we’re -- full we footnote or to-date get enhancements and process can add revenue integrity a footprint on as with and of through we The well to integrity those implemented. would capabilities. in that can of a other in-flight And Discovery, is the that, best too the the payment of the number either subrogation once payment revenue case integrity. services

Dale White

analytical to almost our implement is those good to operationally, the as to -- claims And come periodically able initiatives of that’s away, able to fruition, the the drive year, are think more initiatives analytics and additional savings year whether all and take right program payment clients news or in we I the something our help whether new or and to integrity our factors throughout value our enhancement payment savings to throughout And we’re us they network integrity, of mentioned, our happen value. continue methodology, the advantage customers. modifying adding once monetize Yes. implemented, we analytics throughout I those are and to as solutions, that’s year. drive And or across our

Mark Tabak

application analytics additional drive to and savings. to learning, of development the those intelligence Heavily accelerate machine invested in artificial

Operator

Please [Technical from ahead. Difficulty] go Barclays.

now Your line is open.

Unidentified Analyst

taking question. the for Thanks

the with of they’re HST, mentioned to Discovery, revenue you we’ve that any your a that far. so about include Thanks. of guidance some cross-selling few that pipeline and timeline the And and pipe about moving pipeline other could Just talk going talked in what’s Does sizing opportunities opportunities? well deals signed you you’ve generation?

Mark Tabak

you And do more the to bit then, can granularity in a little we that. quantify about want pipeline? Dale, talk

Dale White

It’s -- pipeline market. things, The of right? combination cross-selling it’s a Yes. and is at Discovery’s couple a into looking of HST’s services the

-- as able annually, years, million our our early stages, drive we’re And revenues and distribution all the out now we’ll short base. HST, so, taking over customers for to through brokers existing thirdly, third-party and consultants, now, but bundling a in those And products our a that sales, strategic and we in implemented, I the market over in very that seen in of over across mentioned customer relationships way. groups -- are our them reach groups it’s have with more right advantage with we the generate, together us and I new looking We have time using the the about of XX new and $X time, expect the -- XX,XXX right? to effect That into sell bundling and and have administrator so. employer a already we’re new our will, lives. opportunities of -- think, see opportunities our products, around payor at much that and we’re we’re to and through bundling opportunities products identify to to

Mark Tabak

the for and wholesaler being employer is thing community end services instead to our exciting the simply distribute well. The now as can through a that us retail in and also of direct services, we of part user broker

again conversion So, high accelerate has distribution again of lead multiple expand in the channels, and margins company. to there’s robust Company, flow, a which been historically will growth our cash the which this revenue for nature to and

Unidentified Analyst

frothy. market, bit And then, market the a a just the recent despite on we’ve in remained heard bit generally volatility more M&A,

to portion survey about fairly will acquisitions you do the you Discovery, your be would largely targets strategy? for in you? Thanks. or still of and space, the think be large cards the And similar the Extend or how bolt-on, Expand As HST

Mark Tabak

infrastructure terms M&A. our to all and disciplined and them M&A opportunities at and market be would supplemental we MultiPlan’s which very growth through determine accretive fuel into activity, how ones in of as capital deploy take We’re we’ll we look could and them our to integrate

Operator

[Technical Difficulty]

Unidentified Analyst

to believe Just just any on give quick ones year-over-year. if changes I concentration? transition, at a a first we customers from last trend least And I was if portion continued really services analytics-based I’m half of wondering update And an me. the there Can customer talked, curious noted into there’s you network-based services. that material was time your from you of the just XXXX?

Mark Tabak

no from of been material to QX There’s XXXX of change XXXX. QX

Unidentified Analyst

In either to regard, as analytics-based it services services to customer and network-based relates concentration?

Dale White

the analytics network that has from think slowed. transition I

of of I was lot of peak hit ED think to with over types that of one of claims. a that A of claims. had kind couple last do those certain the types years.

said, complementary business. of has some, percentage at over leveled our And off as our period not Mark extended network basically, has top group that customer think, I an changed time. really we look as

Unidentified Analyst

or towards utilization seen the markdown, offerings more your Have of their, versus pricing charge-based the with staying And within change analytics-based using reference-based cost-based? moving payors say, Okay. services. you markup or

Mark Tabak

I any behavior. seen you? material haven’t Have changes in

Dale White

on that broke me. again. You up Say

Unidentified Analyst

services, reference-based markdown example, markup charge-based Within and towards have for services? change of the yours, solutions moving or you payers they cost-based, pricing leverage seen from, say, Yes. analytics-based say,

Dale White

Mark. I think, with I agree the focus --

a over -- We this last change depending right? base change. methodologies, they on and using to they’ll charge-based material of which costs significant methodologies, really a haven’t some past, do, in the managing year typically haven’t in really cost a But using payors’ the cost-based seen their They’re year the focus use plan. on the I seen cases, from either preference

or other Now, at they when the part charge. billing same is customary paid by the and process the to you can’t Medicaid any arbiter bill or of surprise can’t to consider program. time, the usual rates the it’s get be arbitration, Medicare, government arbitration provider’s And going and -- consider charge

So, to it to narrows arbiter trying that out. that window of during can the arbitration They’re use rule what balance process. it

Unidentified Analyst

acquisition? question been last due the the acquisition, And and to reception And your to relates it Discovery there that as you. you just the payment how just to of curious Thank majority revenue to it services. me client the useful. Discovery offerings division? growth revenue for as relates Was brings integrity to saw then, the has Okay, the that

Dale White

entirely based a was that. prepayment programs. Discovery’s of it’s the payment algorithms on is call in on. It’s through remarks has I MultiPlan’s MultiPlan Yes. of my was that payment combination historical program fact, the -- it The what we the integrity not in focused I answer integrity -- opportunities. mentioned one growth can And opportunities

And the so, MultiPlan. has Discovery, that terrific. great, was entirely reception been and Relative it’s to been

opportunity. We’re Most and in receive is premium expense. services, incorrect. restoration instances restoration Advantage Medicare where Medicare and for identify them change premium correct to particularly the Discovery’s revenue clients Advantage manage of and to help opportunity them very to to excited we they their this their it is what CMS is of payment ESRD. about payment the for that addition do from and That plans is was an the claims to an this In incorrect, where case, instances

that’s owned it that very terms in we’re Discovery customers, the as of reception we’re a our building. the And for And clients been suite, and opportunity excited, But, of and so, expansion And by revenue wins of the we favorable. the pipeline excited the has plan. getting the of late the we’re obviously, introduction our has February. very about already started we’re just very

David Redmond

increase last in X is in $XX.X in Discovery. That and slides, million is QX on year. of page the QX $XX.X To question QX, answer basically revenue million your where principally million our $XX.X based

Mark Tabak

strategy. very three-part our growth Yes. that Look, you we see can operationalize clearly

our services service previously. Enhance, patient consistent we’ve identify existing offerings; see serve, opportunities provide such we Medicare study; Extend virtue our strategy working Advantage enhanced the into You a extended community, able those aggressively to adjacent Expand very by we’ve the markets, to case to offerings of the to and community and other we’re product product as and classic with constituents articulated be we is provider

Operator

today’s for participating. Thank Difficulty] call. conference you [Technical

MultiPlan (MPLN) 13 May 212021 Q1 Earnings call transcript