RCM - Earnings call transcript Q1 2024

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Operator

Thank you for standing by, and welcome to the R1 RCM First Quarter 2024 Earnings Conference Call. [Operator Instructions] A reminder that this conference is also being recorded. I would now like to turn the conference over to Evan Smith, Senior Vice President, Investor Relations. Please go ahead.

Evan Smith

Thank you, operator, and thank you, everyone, for joining us today. this safe be Private harbor Reform of during pursuant forward-looking Securities made Act the to provisions XXXX. statements call considered may statements Litigation Certain of the our performance, our alternatives, impacts strategic strategic of are and cyber opportunities, and business liquidity Healthcare growth about our review our our statements attack initiatives, the customer our any about our Change particular, plans In bankruptcy statements. and the and position, including cost-saving future statements of performance on future forward-looking a growth financial These often as similar are project, design, identified statements of by and words anticipate, may, the such expressions would intend, use or variations. believe, estimate, plan, Investors are undue reliance not place on these to forward-looking statements. cautioned made involve today's call statements risks forward-looking on uncertainties. All and

some of the current applicable we have no so we doing law. point in extent While to statements elect may required intention future, to update except the these by at forward-looking

of including AI on recent customers our and of Cloudmed in the offering, acquisitions for ability outcome existing management in customers, potential markets, and Form results Our the our timely the strategic as have may included statements the of beyond timing from high price, heading retain our the materially report forward-looking new including alternatives but our actual the or later limited these global market most strategic acquire including, the and successfully of downturns implementation to variability and business, in factors review of outcomes synergies XX-K. achieve Risk lead our factors, customers, on that the the market and unsuccessful not cycle result those a could differ anticipated the our of various control, of our impact to prospective the conditions of within the time quality inflation, revenue our technologies, alternatives, benefits Factors economic ability of competition stock financial markets review Acclara, development and annual and discussed to, under of

that the results on referenced may rounded will call be to this be Certain number. whole nearest

referencing this non-GAAP be We metrics will call. on also

to GAAP closely comparable For reconciliation please of to non-GAAP metrics press a refer the release. our most metrics,

turn me Lee? Lee. let the over Now call to

Lee Rivas

Evan, you, everyone. and Thank good morning,

continued January, drive investments and Our quarter and technology and value underlying tools technology as in and quarter in our We multiyear AI development. automation to new includes investments innovation customers. demonstrate transformation. business onboard to continue to believe will we positive our reflect Providence ability the results trends advanced enhance our with investments our XXXX in for the date from Aclara's first revenue these and solutions drive platform The closing contributions

We first delivered approximately for in and the $XXX quarter. EBITDA revenue in adjusted million $XXX million

long-term to Before provide in progress I shareholders. growth to deliver my detail commitment our I and belief sustainable quarter, strategy reinforce vision to our in performance the and more on want RX's and

Our the vision platform choice to is provider of be automation industry. for the

groups positioned a cost the largest physician in revenue highly solve global across the ecosystem scale industry deliver technology, We distinctly reductions with our yields are to systems health of provider combination to and the and to expertise country. complex and problem

operate most customers. their space systems provider technology of we over Today, with services any of health as top with scale and the XXX the in XX our

we this growing are addressable of over growing, share large more $XXX is and to Our over market billion win our at and positioned than market well time.

of foundation the our Technology is strategy.

AI in to apply and industry. the large-scale value automation, and revenue the We to proposition our place Our customers analytics cycle.

is provider to customers. data across have large This over sets matters XXX of and We structured our platform scale the of most. where unstructured visibility

for validate all clinical payers, certain to enabling time model to models levels settings care lines. apply types, across underpaid For We us example, appeals we and apply episodes reimbursement reimbursement and payment claims. machine learning clinical care to automate all see all charges models and reduce

are examples potential the workflow. surface to strategy. embedded the service when in our scraps capabilities AI automation customers' core we Global are the These of application also for and on our

We processes and technology best-in-class scale us The are global of with plus economics our unique in unit customers. yield IP. that own allows people, our increased our our is what combination own we to revenue to operate facilities deliver and own

support execution Now performance. position XXXX and priorities let a me outlook. shift in to improve and on our strong near-term our We enter growth to long-term

started We our achieved our new modular solid relationship bookings our with acquisition Acclara have the for for our closed largest enterprise XX-year end-to-end clients, customer. executed solutions, strategic and

the our solutions commercial of and investments delivering our throughout believe in further clients, existing and strength the ongoing coming AI-driven continued XXXX We years. support growth will our technology and engine, results over to

health let the an had care turn industry. impact Healthcare to me the across which Change Now cyberattack,

Given the near-term the impacted performance large, base, in cycle diversified has our RX revenue for it operating well. central plays customer role as our

team affected. those and Our operating mobilized closely quickly with work

weeks, of matter to of the team successfully clearinghouses. alternative a In to migrate customers affected was able XXX%

longer-term and ultimately, and surrounding technology claim processing collections. to mitigate cash help implemented impacts both solutions automation We also and near-term submissions,

of Our partners which to bank uphold faced to is with RX enhance providers and data and facilitate the integrity other sources payer, cyberattack the major potential We EMR, data alternative the and unified like time. by to clearinghouse, over believe integrate demand for connections. solutions data enabled a support the challenges exchange, designed as RX every implementation have result of

focus we months, of each for several areas have made past our progress year. against the the Over

our continuing one, on revenue map them needs of executing customers above are results and measurable meet our otherwise a As drive their revenues results to they ensuring our reminder, times; challenging on do customer these and deliver our beyond would innovation excellent two, to to to growth journey; where these aligns operational customers they be their able what deliver to cycle to strategy and in with behalf on are: maximize yield last, road technology cash own. and

strategy. growth our First,

our journey. the enhancing We strength its enabling cycle systems. additional RX with health modular expanded revenue demonstrated customers model, in flexible end-to-end opportunities are to During we pipeline, in with our quickly with new saw breadth medium-sized continued our traction their quarter, for engagement bookings and they wherever align

support opportunities model, our pipeline, also to sales which activities gaining growth are new our We over in will additional traction opportunities for embedded time. our adding functional

Second, operational execution.

modular to of model, modular visibility business opportunities remains central providing advantage of business and further delivering the cross-sell our core end-to-end both a wide and for driving across Our data customers. diversification solutions provider spectrum

succeeding drive have of grown to to long We cross-selling growth. modular are a X in than and an solutions customer runway more with per additional average

demand in the Change interest During recovery physician there incident. we charge result considerable and validation, to going in advisory forward quarter, denials and Healthcare underpayments of expect the was capture AR increase a DRG solutions, for as an see and our

couple success. commercial a provide of examples me our of Let

We offerings in are XXXX for X functional earnings the our the call, partnership and modular solution managed already underpayments our both expanding retrospective signed quarter bad recent new in services, Medicare debt. we having discussed year-end

solutions, business uses Another customer of expanded example solutions. is our AR NPR which a further the who most modular recovery for long-standing multibillion-dollar

X solutions Over delivered customer years, this over alone. and in value recovery have the last fiscal in denial we AR $XX million to

also vendor seeing solutions million we for NTR named total with XXXX, Performance Solutions. success are capture DRG In were to and regional hospitals. with regional of provide choice We charge our contracted CDI hospital and a $XXX

for across deal in expand the a discussion In solutions. larger relationship and added to multiple we clinical we inpatient our first quarter, denials are

clinical forefront are advanced and our financial their the financial patient to technology and leading to and also technology data on road helping platform remains Finally, performance patient providers we engagement. map. approach our executing of at powering analytics, RX With large-scale transform access

apply improvement. to help continued cycle our have revenue cost and We the technology revenue to to customers drive

processes the revenue areas increased of for critical our key to investment leverage and solutions scale AI issues Gen cycle or global in eliminate technology to our have enhance customers. our We new develop to address further

denials action evaluation This for management management prediction heard In were discuss next and and you models me that automation, large coding. XXXX, language physician several AR launched. included

operators improve of As value and of automations, enabling a quality and for efficiency capabilities advancement customers, assurance our identified continuous have expanded technological result our additional improvement. the these our we

several our case anticipate us clinical a large on forefront at of innovating solutions our use which language customers. high model. summarization We put of throughout impact example delivered launching the this An appeal particularly behalf of quarter was new XXXX, will

from time through Instead This this XX the crafting designed designed is draft spent argument to on by drafting reduce read generate to of clinical to time hundreds hour of complete records, pages taking process average minutes. appropriate denial an appeal, a model XX% an generation and medical model is of to appeal and the on this letter.

Our edit auditors then and the to validate content complete control quality needed. if

our We expect time this will case additional to capability. that we over of business areas utilize could automated continue use this drafting review as expand

automation In vision industry summary, achievable. our to of clear for platform believe be and provider we the is the choice

us growing market, our continue providers meet matches $XXX Our further today and and expect addressable will grow we help are and billion business. where strategy a in they their to to diversify needs large

industry. strong, to that, Lastly, the technology, to you. and best combining global in call financials is our scale value the the and quarterly And the discuss I'll updated Thank Jennifer turn over to proposition outlook. our with industry provider people

Jennifer Williams

Thank you, good everyone. and Lee, morning,

making quarter disruption the of our the are progress Our despite demonstrate on just in we Lee objectives some first as some results financial financial industry, discussed.

adjusted quarter delivered $XXX.X results of first business. million. EBITDA We demonstrate strength solid These $XXX.X results of continued million the the across with and in revenue

the of Change impacted respond to approximately of mentioned, with Healthcare across our the to more mitigate we customers pleased significantly behalf are disruption Lee vendor systems on volumes Overall, the with flowed impacted our than by customers' ability As XX% others. through our quickly industry some cyberattack.

company's that $X.X quarter. for in and million the both estimate results revenue impacted We disruption first the EBITDA by the adjusted

of earlier as any outstanding did the We are balances. reserved completed a in challenges. experiencing were the week. for late our protection Lee we for in As this quarter services revenue is reserved financial customer customer mentioned, all This had same we fully for not filed large unpaid we bankruptcy work record XXXX AR also they that modular and for

offset the health that the quarter. filed and our customers XX. growth divestitures our well this one on a these I since XX% just bankruptcy was to Acclara in financial closed and discussed results we modular impacts But January growth partially Total update base the as provide an on details business quarter, want give included week. the was well as the some by of grew will acquisition attrition I of year-over-year, earlier we changed for you in contribution first, last as which the revenue client facility on moment. outage by from as This care

grew Net from and million the X% Low Acclara. the attrition contribution operating fees facility of in across $XX.X and known collections was physician business cash in divestitures. our growth mostly customer by driven was base million single-digit year-over-year. by $XX.X offset or expected approximately million $XXX.X This end-to-end

net impact Incentive to due The in operating incident in of negatively cash each of related million, collections lag the Healthcare had Change to and primarily expectations, end our fees to the fees Healthcare the measured due which revenue no outage. Change that were on our $XX.X quarter, cyberattack sheet was quarter. metrics below calculations. used AR impacted fee gets our the balance This at base

We also elevated to our expect outage year few next of the as revenue these some for metrics the will quarters. remain full impact

of year-over-year, XX% million other of $XXX.X Acclara both by as and Healthcare offset grew customer the by of Our revenue to was impact Change bankruptcy. the the and as new by This and addition expansion $XX driven of approximately the customers modular customer well contracts. partially million or services existing revenues

million, to Non-GAAP million cost This of for was QX roughly related year-over-year. services approximately expenses $XX to Acclara. $XX million $XXX the approximately quarter. in includes Turning up

realization the due customers margin Excluding tech investments technology, synergies business we in maturity and of to on our benefits make Acclara, our to continue end-to-end underlying platform. by from decreased offset expenses

Non-GAAP well related driven increase expenses is a to year. from million, and prior $X.X by of as $XX.X corporate as up the million $X were SG&A timing expenses of expenses This Acclara approximately million functions.

the EBITDA $XXX.X expectations was this for even faced quarter. our the from the incidents million, impact with adjusted was quarter in line which after we Our internal

incentive Continued and which related in the of few timing quarter. to quarters, related the the over some to investments, are the cost fees reduce Providence lower next expected occur impact now discipline the

other expenses. in included million roughly of the $XX million related acquisition. $XX costs incurred we transaction to This Acclara Lastly,

and of couple a the cash provide comments me on let Now balance flow sheet.

the a previously cash of December. focus I end for company. the of were March generation cash As million remains at at the compared $XXX and equivalents million to discussed, end Cash $XXX.X

For the we million cash operations. in generated $XX.X from quarter,

Acclara. reflects at for increase debt $XXX was and revolver debt quarter end for up December. end loans the of approximately This billion, and Net the $X.X of additional term million the the borrowings

This remained and also the million liquidity at both March. Our our strong $XXX balance is approximately from borrowing of on with our cash on capacity revolver. sheet, end

XXXX let Now outlook. move me to our

impact we're billion of reflect year-over-year, $XXX revenue for cyberattack, GAAP of XX% EBITDA on the our the the million. now Healthcare updating to $X.XX expect expected of operating $XXX year. As to billion $XXX Change revenue to a adjusted growing million XX% outlook result $X.X full to and of $XX million to adjusted and EBITDA We income million

These the new of the expectations reflect year XXXX cyberattack contract as Providence. as full and Change well contribution of the the impact Healthcare Acclara with

is RX's Healthcare was As revenue by a the which tied collections, to reminder, Change cyberattack. impacted cash

our successfully revenue of the as disruption timing As clients through to clearinghouses operating Lee will indicated, we've impact fee the transitioned we the year. while net move alternative

Specifically, we a of cash large and on May. and QX based the expect QX between revenues backlog timing April claims shift operating our in fee during and and net March,

fees. net is cash is from last utilization most August, has expect net will collections between a this shift the will point, not impact timing settled our the operating we our given quarters. changed, that outlook QX fee by which to month just the the operating revenues of claims believe We of these in At be drive

of first balance for experienced sheet in million of from to in metrics I recovery do approximately and our a to complete. million in cash incentive In efforts total, required the clients. and for back earn driven approximately as we be we year, AR just the year revenue outage in of $X backlog related we and $XX the support $XX that the the able quarter in from As is costs approximately and impact additional fees manual the expect EBITDA. expect the is per will revenue claims be primarily until the missed impact This we mentioned quarter, will by not full revenues be rest will for lost full XXXX, to million adjusted reduction the

attrition Our our the customers. consistent outlook. outlook Low from also are divestitures with year-over-year original and net growth operating Customer facility assumes following. fees for our existing single-digit

Providence confident with our line onboarding remain the previous that to contract in also We expect guidance. of in materially and be

this revising are to reflect we we customer that anticipate business Acclara, to support adjusted of plan our as will certain move XXXX. and respect With harmonize to our outlook we We outlook lines EBITDA into contracts.

$XX consistent result, million XXXX. now of original to revenue a $XXX in approximately we million Acclara million guidance. is to our adjusted expect contribute $XXX with of As EBITDA

We other revenue, Acclara expect to low impact modular excluding grow of the and digits. double

million of outlook service designated early given not have vendors in for million. full providers revenue removed We our Based client from $XXX $XX in this Regarding critical above week. the the the factors, revenue EBITDA customer bankruptcy, we adjusted year filing outlook. to modular our this were the be in to million on range RCM as the we now estimate expect $XXX in

to $XXX in related of expense $XXX $XXX to expenses also $XXX expense million, including and approximately debt assumes and of million. other the Acclara amortization X% outlook including depreciation expenses; interest million revenue; capital increased costs to fund of of of to This expenditures million $XXX and integrated million the Acclara; transaction $XXX range approximately million,

quarter, In colleagues. came back the our and proud pleased of as it are the quarter, a deliver We health with for customers. from the closing, care work XX,XXX to turn incredibly we the team grateful in to some I'll our we and this that, experts global had operator. With great a to over industry work best and together I'm good

Operator

TD first Your comes [Operator Charles Instructions] of Rhyee line from from Cowen. the question

Charles Rhyee

dive outage. the this into just Change to I wanted impact on

fall think Change impact With is just the that is that chance it completely fair into 'XX? some of of year? the is captured really that a guidance there to into change, full next Or could impact

can't end that the on sheet of sort items could some that sheet some capture, then, I incentive did balance of be period. obviously, at that which of are hear correctly date the the think the of I Jennifer, at a And But you recaptured balance you fees said, items? later

terms should lastly, any you if give could sorry, how a shift QX, adjusted sense -- sense then look And have QX, QX of what in for and EBITDA. of you kind revs us of the

Lee Rivas

I question addressed specific this the how and Charles, just Jennifer it don't with timing. to this then answer on Lee. over big picture, I'll start Why we've to is hand challenge,

impact just strong. solid through If be the and lessons impact. address don't we our me near-term a let But the what need long team and clearly, Long-term of automation just done term, maybe this learned. that's hit did we'll know to and this near-term address impact, systems we'll this there's our what then very common emphasized question, and a no upfront, few specifics. about So for a and host situation feel talk about we've strategically, talk I our for the if core anything, technology with would customers the long-term I The our all the is impact. about for challenge. business But business. business

our know, got mobilized that behalf assessed of within second alternatives, vendors is X clearinghouses. and alternative on technology those up weeks, The a main and them the very quickly on thing team would of running matter customers, you clearinghouses

some denials of KPIs of do have to systems. because many expect vendors, we regard residual automations on we impact with with many our host Now built-in our

up back expect of did do feel of the to year. about we we weeks. and some good So couple them on of half the impact customers get last this But work running our KPI behalf over very we

could what's on one learned, of the the our lessons by This happening information #X in is far of an terms relative company is industry. in clearly company In to any importance industry. to happen security but attack our

customer dependencies. vendor base clearly dependency. pretty our a any be to change. own systems around is other This across internal unique happens looked with We've learned situation our lesson second across identify The to

the scale. third, importance of technology And

issues, resolve answer the the some it questions? fix So do us you ahead on of and being on timing the specifics issues. Jennifer, behalf invest to of the get able our want customers, to of

Jennifer Williams

Sure.

clarity bit give way change X we're the a you of in in little it's Let me really in total. And thinking about areas. just

this related then on and a we metrics, the X be are first AR, Lee the related impacts QX quarters, there AR cash, balance we're the couple have will monitoring, some some And cash, of and impact of will of mentioned, Cash then QX, is and on will bit. just the be QX impact will recoup revenue KPIs. there AR, will that for the areas the KPIs, which about think will will little next cash that there The come QX, metrics as and in to It's to QX, we you help mentioned. obviously on there be back denials. think remain in in some elevated because so opportunity of large the on. and just sheet and believe, a to impacted KPIs that metrics denials that impact was we Lee And asked Charles, KPIs by we X

kind So metrics of really, quarter quarter fourth impact noise on in net-net, the will some first with QX. QX KPIs in be and big and between

about and is just modular, in that's there QX a we expect The and different and second little one impact really timing think X timing. bit was in QX in On an it of impact buckets.

the our lag. we cash fees. year. in And comes The that So when the come and remember, have through, base a on backlog half X-month the back of we is expect impact will second larger the that,

customers, to is base QX. and is is in an March, August May, So cash the cash about June, revenue. way which our will think July QX be April impact frame that fee then the our and of time biggest to And for collections that

we're a fees. the for we So our really no quarters, But between our year. net QX impact but between fluctuation, big large QX fluctuation and that expect timing considering base

cost. prepared driven with impact the And -- then as and really associated year the expected bucket either million incremental of change in $X and in form quarter. overtime people that's incremental you of efforts. balance cost the remarks, contractors third the incremental labor about by per costs the in And of is heard of manual And and

years. building that rules to other automations. we built we've rules those just change automation transition got lot been Lee to as into and years a as health we some And So over rebuild in vendors, front-end of mentioned, of care And and software. we've have those

got will to we've And the got that the work it claims up time through. to some efficiency So get expect. to back of that we we've take short term, in a level backlog

Operator

your Craig [Operator question next Morgan the And Instructions] line Hettenbach from from Stanley. of comes

Craig Hettenbach

making how into Providence, on really just around into then Lee, far? feel that And this first into ramp investments again, contract XXXX? question it's year, the half in visibility going second ramp and of visibility the of the half you so you're and the

Lee Rivas

on any win incentives. partner, selected playbook has to this team very very Craig. is their a for acute Jennifer, onboarding, on the Craig. and and flagship customer, start -- our -- the on please Acclara and proud important worked very both of as an color, goals and customers. following obviously aligned We're Providence back, have side. execution you I'll that executive side, regarding a is very positive, set of All business. a large we're Thanks, add. free been And There's feel their supportive, on physician Stepping other if of strong being for having other

to onboarding and We teams, RX of is on moving Jennifer, There's onboarding add? about that people onto to good very on of our experienced many integration. feel anything parts, timing their lots have very track. getting a bringing transitioning We all but technologies, team.

Jennifer Williams

remarks Just the to gave contract, as achieve with ability in the prepared results. guidance in for our perspective, our confident guidance a that from line those mentioned we're we in and we're Providence we materially

Operator

Your next Anderson question Evercore. comes from Elizabeth from line of the

Elizabeth Anderson

what I May that the comment more there's more And as does harmonization I interested this. in is, set if of mentioned? you then can update if not, X you of a on was could better publicly bit you wondering about that if I XXXX, sort that up appreciate waiver. And was like around sensitivity how comment increased sort little for guys that? wondering the the you with on is I Acclara. was the anything understanding in

Lee Rivas

our in, focused behalf than letting distract team. of this other on look, medical very I'm months on a and buyers. our sized what's on first and question, centers, operating sophisticated Acclara, a publicly Look, reasonably of customers, Thanks, seen With including few very customers to we're no what academic set positive Yes. solid very update several we've available are not Elizabeth. on your regard these

gotten with the and has done very meetings had of pleased work a the they their those several on deep we've good over years. last are behalf Acclara So customers, with set that

The second I've have amount of team out customers. is cycle focus healthy thing that leaders between there's the of expertise. I'd Acclara the to team, point relationships very technology, has that deep respect they RX and know customer and the got revenue with expertise, and a ability just deploy on level our teams on to

people taking We all commercially, that approach are structured kind a operationally CloudMed to very very with to took similar of processes. back-end a the with integration regard approach we and

All that is on of track.

the we with on integration we've in with to very positive terms no the So of followed about very so concerns what customers. we business deployed good complementary process feel far already they and just how are

Jennifer Williams

transaction Acclara, on add in I One, harmonization, the the you Elizabeth, below time the are are may with announced X the margins business. things. the what obviously our margins thing at only as is we would The recall,

contracts or cases, move margins. into we well but where to any EBITDA so at in no we that us businesses as we're a really that as have some But and to it didn't will negative we're hard have as really were and a those profitability, starting certain solutions XXXX. think areas harmonization looking aren't about and taking impact, and And at about impact revenue will the opportunity look set think there taking integration on profitable businesses,

So one that's area.

on with top line, be and base the around is revenue we're will second of they're in Providence but out some the impact The opportunities Providence. There where some the the that end as end-to-end for up. Acclara sorting particularly on for contract will contemplated had revenue Acclara already the fee

with impact it's spending the there's that already either And contemplated had vendors other business. taking baseline they're player some no a spend so part with Providence that of of on margin because or

no margin. So revenue business, across really but how just the sorting the aligns to different impact out

Operator

comes question from the Securities. next Singh of Jailendra Your line Truist from

Jailendra Singh

First, on quick a question. clarification Charles'

what So dollars the Basically, like you're core assumed all you no understand, intra-year. of to back. X.X kind like it items in change like within calling that or your shift saying to you're EBITDA, there trying is XXXX of nature onetime we're of months looks out are kind

that. disruption, So flow basically, to has from conversations 'XX, to that in is impacting about developments options, RFP also change converse? -- all My inline main no respect think Change how seen ongoing your And that I'm we months growth any have you general? to there's like compared back. going rollout with around client Healthcare the X.X 'XX question from to like impacted any these or strategic contract your come

Jennifer Williams

I'll Jailendra, to So want on take start then, impact you Lee, piece change the if on that. And impact. pipeline the the and

of end if to really the a to built driven we will, providers will elevated the KPIs, process. as period for continue of we expect as rule new as denials in a we the that's expect of build on some far rebuilt, has clearinghouse And impact we the As be you do have that time over that XXXX of 'XX. to where by front and period first we've KPI that automation into denials half time will of the be bleed into

of net-net, in expect the and outside if there the on issue that both do at net said, we XXXX. to business is will an be So the look really it net the half core the impact. impact business fundamental impact, change KPI no to you the the KPIs There's change in then With that guidance, first of impact. that cost

Lee Rivas

me full track, in both year a increase quarter opportunity delay, in modular with If X-week Jailendra. the impact get on of X- part the bookings, the here there's Just that. let the but team or long-term we on is to bookings. to No an did year. very the will see second the customer We half pipeline. of And and outage much specifically have as on any denials, I'm back who deals think, anything, speaking for an

we the in denials. and pipeline increase around AR So seeing are

Operator

of from comes your from the And line question RBC Sean Dodge Markets. next Capital

Sean Dodge

change this the outage trying of to for on incentive Just of I'm for Jennifer, a the the the understand fees impact just year. cadence staying just moment.

year, the $XX $X of cost impact quarter and QX said for of million rest you So then the to in the each million total of $XX extra million year.

incentive So I down there flattish in And sounds to $X relative that I be that of think incentive step-up in it right? cadence-wise, there fees, that means a a of is bit might kind all and like step Am then to of then QX. right? impact million another QX, be QX a about QX in little aggregating should fees kind

Jennifer Williams

There the expected other step-up another in bit in will denials. on little but right. of incentive QX by of and be just but a that's fees in in impact bit that's QX, a then fees, really incentive but there's large Yes, driven a noise noise that little still and impact negative QX

that's yes, correct. So

Operator

from Bank. Your next the from line question Hill of comes George Deutsche

George Hill

of I guys in to the which plate, guys potential questioning, model. or of like, attracting interest worried is interested seeing clients funnel sales is be kind a capacity in of pipeline the is of to sales market relates with people down the line is of about this sales place thinking is decreased whether you how go the increased as or lot your looking more or have the like a the follow-up are that macro safe this of at you kind or on kind business on just have are and forward? onboarding Providence guys it on backdrop. And the Jailendra's And has acquisition this you Acclara, as

Lee Rivas

the what's like there. pipeline, about feeling in impact. we're is small- many on there. Short short medium plenty or opportunity very in good We're very pipeline, some arenas. Sean, across We're same still active increases several happening systems. the term medium-sized areas end-to-end seeing modular seeing pipeline. in of and board And answer nature no the on discussions

changes teams, no focused anything, onboarding and just So on add, very awareness also needing partners Look, to no deploy separate And are I'd or Providence question. your can that Acclara. good technology services. province if that these teams, across the Rich, of integrating heightens impact

Operator

Guggenheim comes next from of Wallace Securities. Your from the question Jack line

Jack Wallace

an opportunity looked to how quarter just then I've EBITDA Jennifer, tell And much to want there just sure the impact us correct. [indiscernible]. I make net the me first got under give that outperformance

expected $XX million I the we recall million Change. We're also first or only down about is million related to $X million, down $XX be to that $XX discussed. quarter of included some correctly, quarter-over-quarter of what, EBITDA if So about transactions

to under or about are EBITDA million the right there's the of beat million $XX $XX in So we quarter?

Jennifer Williams

We did with quarter our have a good business. core

We also some it favorability the Providence of of on remarks, the first -- to our the was driven onboarding. timing investments and quarter I alluded by prepared in

that onetime some will related licenses on to come that QX. we technology we some things expect and like QX other there's So costs incur in onboarding costs and technology

did So some have that is timing we of great a but quarter.

Operator

Your line next question comes Partners. from Michael of Leerink from the Cherny

Michael Cherny

any on apologize thinking I did about either how give Sutter in II? the ongoing if in but And process? Or you there, means this, the are it changes you update missed what onboarding current for I management Phase

Lee Rivas

many as like that. Broadly part for their any ago. we this important Phase Michael. manage have a end-to-end West performing customer I there's I'd important with customer, that called our well, opportunity of customer, customers years opportunities improvement is take we of think won of would business. as an I'll several very like Thanks, say II going we always another Coast forward. what an

Operator

question from of next from line X Your James Cantor is Fitzgerald. Sarah the

Sarah James

Yes.

the related you through insurance? that. of permanent? to of Is business vendors some costs those give to to about And could other impact to And us change seasonality interruption an change any there operating revenue. changes Sorry vendors are cover the color with opportunity of switching then of net if on --

Lee Rivas

to I companies part many are So first pursuing any regarding give question, Sarah, we, clearly, options like different want don't specifics, other but of insurance. your

case, an area. never X question us large will or of a on be forward, we, technology regarding it's our would I this part any one, single-threaded house is second going options through your use important as of whether of base otherwise. think The diversifying this clearing

not Some just will have this for customers others. use most be will permanent one than any of more case. part, and deploy for the those multiple of But options your

Jennifer Williams

it between And to and then probably somewhere will on base fee in $XX fees, really in range $XX related to million. think question of and timing impact the we QX fluctuation large and million revenue, the be a of last shift timing your QX base between

Operator

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

Daniel Grosslight

do how some some Medicare you incentive term, and drive and your and going environment, headwinds may wondering my that think really if to care end And end? XXXX demand in of beyond, an modular longer may some that's end increase Medicare management question tools? macro guess on your in And then about on Advantage. managed how if of in for more More those difficulties I'm your Advantage utilization a that of that the collections given faces I impact solutions? particularly possibly fees on cause,

Lee Rivas

Yes.

a it's macro I'd on say great balanced board pretty the across question. So the outlook.

that And customers anything, of the of demand love our time have technology driving and on does with importance on question. the I technologies a last with sizes the costs. drive the the proactive reducing as our on part of of to reasonably customers do payment MA look, It and some revenue side. of population can lines nature they'll reasonable reimbursement of MA. deal if deploy emphasize some of partner So their some yield having be as your

balanced No changes going seen add, Jennifer? across we're the plus, Jennifer, watching pretty So I've major to Anything that last board. definitely trend forward. the year over

Operator

of from comes from the Garro question Your Stephens. next line Jeff

Jeffrey Garro

and of to examples I your of progression growth And booking wanted NPR through way all success. the success your discrete on if or But confidence otherwise model end-to-end in yourself revenue business recognize evolving, more quantify want is don't that you to opportunities support the the you environment. booking or any demand ask guys outlook? certainly medium-term the and to pipeline also the could there's just appreciate ask targets to tie want the

Lee Rivas

demand high a at touch level just I'll on Jeff, the environment.

is down bit analyze us managed is and what middle our seeing lack cycle are of go to been fully we're we situations meeting and or cycle. that journey. solutions, based or where deal or path underpaid. the IP better plenty the a using to the for deeper find services the otherwise is while our still on are for coding calling our on the would managed of help claims want go we've you of have accomplish they be what in spectrum, errors, having you And better technology comprehensive I'll revenue people revenue in partnerships, that or drive where on capabilities most denials have said, offshore whether not able the task we you it us potential So the other to revenue providers of set resources functional the deal may have of a customer customer with a believe availability manage -- We of manage

see good across board. we demand So the

seeing on solutions area. underpayments end-to-end to side, the denials side, we're that medium-size would see We the On -- where other seeing I'm strong managed do on on spectrum, modular see on And plenty seeing the physician advisory side. and coding we're deal. the as strong for systems look accuracy a demand still demand continued of a it very and demand. most Where optimization on the I the fully still is AR side. said, the pipeline

providers the industry demand most. in we see we it across So need where the strong believe time a

Operator

from Your Canaccord the Close Richard from line of Genuity. next comes question

Richard Close

mentioned I quarter. But provide wondering in Jennifer, how your the you're the details the business million time thinking revenue And and your was about the full a little term? the there. the on for you year modular going bankruptcy that good here. hard impact a appreciate forward out longer clients curious you in more bit $XX the your And I'm could comments on in you referenced. all bankruptcy job if helping

Lee Rivas

Richard, very This teams and both an on over if give has combination scale highly customer sides. have sold They context the long-standing important that customer of a familiar customer Jennifer. little valued both mind, for going just to bankruptcy. don't global I'm is on This the a you Acclara and and it solutions personally to have. is both we solutions hand Multiple start, kind Cloudmed, technology, Acclara with. with are for filed familiar of sides. and I'm

to we helping we know, you are in situations. this as As have helped others similar committed through them

about Jennifer? we work very good for So we forward. will feel going them do the

Jennifer Williams

Sure.

Solutions what business, in revenue the So not remarks Solutions Acclara the quarter, for about first $XX not the mentioned collected. of the is is I did Cloudmed across With that pieces this in and both any revenue said, million wasn't that we recognize customer. annual

filed of week. bankruptcy on point for received books we've And that for this at the payments is recognized outstanding any that we the all had the revenue in AR So they first fully quarter. cash the we reserved the that

in earnings took is the This we financial knew had. exposure of part XXXX, So calls, receivables. reserve from outstanding based we on may sheet there's customer recall customer, the prior the balance from you same where as on latter no a challenges a based this perspective

to And a so we taken had for reserve that. account

the is customer. this same So

I As vendors week. from to guidance operations far as forward, initial looking revenue the removed revenue mentioned, for year. the cycle designated But earlier being the they we business. as not they critical have the have filed filings, this of the They just as our -- in

for revenue So removed doing forecast through not process, forward. we the we're work them for the have but we're working going still we bankruptcy as believe do

Operator

of comes from from question Bank America. next of Lutz Allen line Your the

Allen Lutz

some Modular talked you of Solutions a you're seeing the benefits in Lee, little change. about bit from

solutions material modular to any how as you recovery. denial highlighted or and I those have of customers to Is AR those your percent think adopted date? quantify are way there what

Lee Rivas

way is of The said customer cross-sell about level least we've XX more I top previously the of solution A this, at have at former we XXX that Cloudmed, than into strategy think the modular has have one just the now part to been highest base. that big sold.

historically just that remarks, top of new be previous that the And markets. The as XX% that our attacking is solutions base. sold more of of but And a customers, we're next So big continues current and go number not XXX. is growth top number you increasing my is the past XXX, is part is or about I strategy one the to think mentioned of in growth when sold. into part of Really strategy. solutions the from coming our our also metric

seeing solutions, We haven't kind there. that going for And market after down gone also of before. we're with us, is, success bundled

know would RX what physician cross-selling we of base. is historic CBO we solutions is coding -- part think the kind advisory a third we the like modular some call about our The solutions of into that

very XXX expect we bookings and our you, that with internally at success We be much teams very we every much revenue rates of we time a the on growth giving have seeing top to we're revenue these commercial the the of on of conveyed we're double-digit track quarter those solutions to good already in cycle articulated penetration and and in new numbers, the So target. base, we by over have delivers have translates that with to year. track and there the rate you into really head without relationships track

Jennifer Williams

business. larger The there's our penetration only across the is of lines solution for with opportunity further customer our I denials Lee of within would But is modular one base. a our thing mentioned, add that, still as lot

Operator

time. [Operator Instructions] at over this to no questions final would for turn the back I to are there remarks. call closing And like Lee

Lee Rivas

out. A things Thank of just to couple this Paul. close say you, I'd

our our for we priority. customers. by on and far foremost, delivering focused and remain First top operationally innovating That's

very And to point the board. opportunity technology everyone. are through transform demand about strong and emphasized a the is and across is that for last, believe people that Second for today, excited I've the times we in the best market industry your few the Thank we're what industry. very third a solutions time our is you

Operator

the rest Enjoy call. conference today's concludes your of This day.

disconnect. now may You

R1 RCM (RCM) 8 May 242024 Q1 Earnings call transcript