Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer series. Instructions will be given at that time. [Operator Instructions] And as a reminder, this call is being recorded.

turn over to Mr. our like now the to call host, I'd Lynch. Charles Please go ahead, sir.

Charles Lynch

assessment Good I'll meaning call. morning, forward-looking operator. forward-looking call you, Thank everyone. to deemed made of forward-looking other of Federal then are be based information future this and assessments XXXX. their be get and light Private may and in Litigation These be statements, within expected statements quickly we'll into historical the appropriate. historical statements by Act factors the – management the Reform assumptions Pediatrix' Certain statements conditions, during conference of to and risk our trends, of read Securities experience on they current believe and developments

annual XX-Q website in results, are undertakes such our and be of our the Form morning's or are earnings on this and its In be could metrics. otherwise. call to Any the result and made as Form the decisions X-K, on release, reports can press as statements quarterly no events comparable to forward-looking any entitled Risk of found these GAAP report quarterly we annual www.pediatrix.com. sections reconciliation A actual Factors. revise and on Form discussing Important most XX-K, forward-looking to our reports Form new measures XX-Q that today's at Form measures from management, current Pediatrix statements on its by on financial remarks report developments including statements, reports or will non-GAAP financial non-GAAP XX-K factors whether of described most and recent update on materially a business cause company's today, during future duty in made information, this differ

our With that, I'll the to Executive Chair, Ordan. call Mark turn

Mark Ordan

virtually Jim Charlie, move Jim Executive from Officer. to good from here December our CEO. Marc This and everyone. costs, all process reduce and announced Richards, roles enabled which and Dr. naturally we a to overhead transition Dr. leaders Swift's larger also year-long has We at Chair; since executive our transition proven smooth It sharply other CEO Chief Pediatrix. with issues. so to Financial closely morning, and leadership people-related Executive been Swift, assume and has also capped Chief on in qualified Officer; I'm fully Thanks, my a had worked COO to

the and payer both of course sector-leading overall on volumes ended and strong our position. on Over which leverage the XXXX, we of We note. financial stable saw a reduced year improved mix,

process, difficult operational cycle revenue billing caused has priority. discussion key and were quarter. AR Our transition activities largely negotiated the delays and provided quarter the direct results, but very as vendor. in RCM Within have the we our by his remains offset a fourth headwinds been reported, vendors our of financial Marc extended persisted, offsetting support these factors in Richards by detail will revenue by

on the performance expect with we necessary as believe those they just support today, XXXX, to shortfall where are discussed latter Since will our to repair as in the this in and right poor persists knew necessary all last detail the plans. plans our the of vendor to Jim situation today call ones, address was We provide QX. we are this part we

Surprises advisors our help Act. dialogue with rules hard defend Lastly, places not. government be continue bipartisan applied with with No improper overwhelmingly we work in we continue as against network a we're team to fair We, to relations to what constructive along where to payers and outside viewed in and

call Officer, the Now Chief to Swift. our I'll Jim turn over Executive

Jim Swift

leaders, clinical years closely working I of has ago. tenure serving of almost leadership Marc, as my position which privilege and, Board and our course, XX operating joined of allowed with Pediatrix, Directors. team me the the the good of during honor our roles to Thanks, team had morning, expanding and here, today our great and and I'm everyone. you I've to of CEO speak company pleased the

For to Pickert, of Lee these National and the both hope growth. Vice Lee, we several our formerly congratulate our in Officer, many longstanding Pediatrix National as I President familiar as Chief of you, leaders other morning, and and following Executive I their in formerly Vice new of Curt calls our announce Dr. Market my Chief President This having team. I'm operating for as on over past pleased events as years, well Operating touching Physician Executive Operations Wood, voice Operations. Senior want also named roles strategy our that Curt to face a and and have I'm appointment, participated

today and as power, RCM I'll we during that earnings Pediatrix outlook continued spoken transition the would of transition of about believe activities. which We above. past define has has our EBITDA burden be that XXXX, position our speak our XXXX. $XXX from this Ordan Mark the RCM reflects reaffirming view for adjusted the few for plainly years which for we shortfall million from the not we're fundamental

of heavily is latter XXXX Richards that first while to high weighted that half. we at difference a the of adjusted give Mark far of impact second year, the the additional by in XXXX outlook our level, in but EBITDA year, underpinning part $XX roughly it is million. in in bore in the The we in expected transition experienced this the improvements half or our XXXX, followed details key related contemplates the brunt outlook, the will to activities preliminary XXXX, a RCM headwind similar

and a level, last Since we senior staffing, meaningful regional some more have internal practice RCM at instances fall, level. added corporate at level, some in a at

where avoidable RCM have is of cycle. full focus causes the identify the extended prominent particularly most delays, that ensure critical AR root and at end functions, we continuity and our to throughout the documentation, billing primary other front steps Our non-aisles

external part as sustained be of our clear, we've the not has today, identified to performance and by on our that basis. where vendor's those forces. on our a underperformance Just we've To deep to isolate in of validate been as RCM and operations, able improved gaps important, overall areas not driven yet are they order a

correct additional we identified. that properly demonstrate the to deployed deficiencies can able been staffing, end have we front However,

In backlogs, the the reduced better performance seen of step end the processes. functions areas we've first front connectivity through improvement in targeted, form we the of

steps sustained early committed improve support these track to right scale on improvement is taking operational positive we the from to is our increased at we full vendor Moving process. required But time. the are believe to the and

are we result that of highly work, RCM a we a infrastructure. As this functional enable can confident

that continue As reported translates over quarters. to we vendor progress results our coming several to push and improvement our is goal plans, this our our the

efforts revenue has cycle, back of I level. we organization, Demand to up on deserves enthusiastic opportunities urgent a core Turning strong. provide affiliated at a strengths our and I'll have am speak been on focus fundamental on from mention. the for our the clinicians services higher which the that about build our

by our volume increased X% acceleration the patient XXXX, unit by For same in quarter. approximately fourth highlighted

Same year, comparison unit XXXX. moderately a for in we difficult rose the burst across the provide hospitals despite where services

on back mentioned, Mark to today. we instances do we certain not And to in where are be be have are effects removed have network other targeted, layer ball executive level as as continue don't but ultimate the Act, major non-clinical We constructive crystal the in in we to in a in-network. of No and overwhelmingly note, Surprises overhead successfully We discussions important the areas. of well in network

and labor in at face. compared been areas But We also our possible has of we market challenges to continue cost look to muted closely other may the healthcare. volatility

capacity quarter, with the our debt have fourth us conservative borrowings credit both We structure relationships We strong and our repaid strong on the hospital balance financial opportunities leverage, for maturities We borrowing revolving facility organic low believe inorganic extended a sheet. XXXX and and offer growth. began last year's substantially and with durable are following combined in significant strength with this a of refinancings. and our all we clinician and

hospital these with We working are very clinicians. world-class on a close our focused relationship relations and directly affiliated on

And most of clinical to And clear commitment mission, care spans take important, our non-clinical. our the mission a organization, patient. entire and that one. both the It's great

making. all of our that decision and As physician, this vital is I know it a firsthand informs

Our also partners, foundation care our conservative for patients, to and gives confidence us growth. clinician, adherence real coupled hospital provides passion business principles, for in This times. for our with strong turbulent

a promising platforms. systems what number can believe opportunities of are core, we there for to are pediatric, with refine and we health continue expand on do. targeted, and discussions expand urgent our in ways care we our We and We in growth acquisitive primary

achievable noted As believe represents and outlook my our for we look priority beyond morning, our profile XXXX. as outlook that that is build we financial for in near-term coming both press our company, on it the realistic and a privilege to release year this

have clinicians can we once many on To challenges, We back efficient Working have am summarize, we done and than Curt, support our RCM team with and Lee our that by own. platform many we we opportunities. more and anything our affiliated have strengths look excited team, senior that's confident and stronger current and can what's believe ahead. a could I our on alongside

that, to over Marc the Richards. With turn I'll call

Marc Richards

morning, results. certain with our Good I'll Jim. everyone. start of Thanks, quarter components fourth

volumes was stable. and Our strong were same-unit payer mix

by impact pricing detailed funds advance QX, was the component presented we year. we release an offset but RCM our vendor. the in to received of Within what CARES by which performance the from discussed a older our of in RCM headwind program, provided prior AR similar the significant revenue, our Underlying were press against same the unit in largely

On and which was the largely as the quarter salaries also cost our side, ongoing benefits. QX specific malpractice revenue practice, and And flowed through trend. we view expense within comp incremental this an variable not to elevated,

was for EBITDA range adjusted within our expected the result, a As quarter.

of as be of we Turning or XX%. expect G&A XXXX, to under revenue and $X.X just expense XXXX billion to $X comparable percent should billion net to a revenue

$XXX first discussed, million heavily of $XX RCM the of weighted EBITDA towards expected to adjusted half as headwind, is a $XXX the for rough which, million Jim year. outlook preliminary Our to million contemplates be

in transition totaled For resulting to headwinds from million adjusted in million EBITDA roughly that the reference, $XX we $XX our RCM activities XXXX. estimate

adjusted is but to impact adjusted our seasonality XX% also of represent In quarterly normal of our ongoing EBITDA the progression, to for XX% our outlook largely transition to which due year terms quarter financial of full anticipate we the will earnings that activities. results our of first RCM EBITDA,

in contributed $X.X million in in Finally, additional any in year. funds XXXX which last of EBITDA, CARES adjusted do quarter first the we XXXX, anticipate mostly not

paid remaining the ended substantially We our balance with under just all to of were X.Xx. revolver finally of million, year leverage and borrowings net $XXX sheet. debt Turning

call turn With that, now back I Jim. over the to will

Jim Swift

call Marc. Thank the let's for now Operator, questions. up you, open

Operator

Certainly. ahead. Thank It Please Blair. you. Ryan go Daniels with William we'll like looks Instructions] [Operator to go

Jack Senft

is guys. on Senft This Jack Ryan Hi, for Daniels.

start on expectations. off to margin wanted the and touch Just

we relates reserves. to thinking it XXXX, as of Just curious be should about kind the kind especially how of into heading AR margins

for of kind Just to subside more what wanted just the – to the given that are expectation headwinds that half, you kind to half the expectations year? margins the second you. see to this or still of your expect wanted make sure second second track in Thank the I see of your if of improve on half. in just of kind And kind you're

Marc Richards

to I in expect improve XXXX it's we to Marc year. our would Jack, the margin certainly continue Richards. into activities. ramp Hey, XXXX. in expect similar But half in our very marginally second trends XXXX, transaction as with similar XXXX, expect saw RCM expected to relative towards we Good the margins morning. I'd of saw We'd entering to those what

Jack Senft

Okay. you. Thank Awesome.

to just kind prior a this I how have $XX quarter recovery follow-up it the cumulative was curious too, and efforts as quarter. quick think this million trended Just of

that it it I monitoring an slower originally recovery that you were were than this Before was and that seems And the you area tad was expected. efforts know addressing.

how So progressed just of rates efforts if have success the kind those Thanks. have increased. and curious

Mark Ordan

activity. Recovery efforts RCM relative our to

Jack Senft

correct. Yes,

Mark Ordan

remained activity. the terms say into they from I’d core moving third the quarter our unchanged Yes. RCM fourth relatively in quarter of

Jack Senft

labor And quarter I’m this Awesome. question are just for your XXXX? and kind quick how of expectations has Okay. of curious Thank just what you. last a Thanks. then kind trended here.

Mark Ordan

quarter quarter-over-quarter. Yes. specifically in trends We’ve Jim’s the got range compensation of clinical details respect some of… labor more X% to in kind seen with terms the in

Jim Swift

programs brought new Yes. of our And we on to organic labor fair on is quarter. programs amount in contract the last related a that as

that we forward not a as don’t seen material see necessarily going So of we stated. effects the really again, and I volatility have trend as

Jack Senft

guys. Thanks, Awesome.

Operator

to go Rice Credit Please go ahead. can Suisse. we next And with AJ

AJ Rice

Hi everybody.

is activity really mentioned any try couldn’t to in you move you to are steady more of because Or state? tell and to it part remarks, couple of network then the out from Just seeing you a the prepared prepared payers still go arbitration? remarks. on the times I

Jim Swift

no in in some Jim. behavior Yes. state. network network. AJ, strongly additional We working – we considerably feel and And not have we’re it’s successful, this or is by right change where so No, we those have to changes. not again, of activity we we’re are payers of be seen now going that – really steady very stated, with out issues, material as

AJ Rice

the Any there? update Okay. you Usually, care of been didn’t the last spend any pediatric a effort really on number that. calls topic discussion has on urgent time what’s happening and

Jim Swift

Yes.

to open of with physician folks locations we inclusive on working continuing parts certain leading We’re be to primary the of team going in brought and new care of have a who’s up Board a that country in on that we initiatives geographies, those clinics. our

continues. So the activity

AJ Rice

cycle or wondered maybe is away? that anything year then a well, there? that’s or on if the in labor little well there year-end books, that quarter that I why as continue a part I think out issue, been incremental items. half up some two on to is the outlook then was on that the called last part will your And that you I in that books with And on of your of going a just true taken the else improves to see malpractice. the go revenue deal right, going up, back of my one, to revenues Okay. the as normal is is management in but step getting expense be –

Mark Ordan

be by of the Hey, Mark. we be borne that some that, AJ, With incremental and some it and cost have RCM additional by the our vendor staffing made, will to that it’s both vendor. is borne of will respect us efforts

AJ Rice

And does or up fade permanent on Okay. labor? is a step at out point some that that

Mark Ordan

I’d this point. at that say unknown remains

AJ Rice

on anything then And Okay. there? your malpractice comment,

Mark Ordan

fourth normal in settlements that related With respect and related to is activity year-end to to the spike the quarter, this activity. really

AJ Rice

Okay. Thanks. All right.

Operator

And Bank. with Chickering next we’ll ahead. Please go go to Deutsche Pito

Pito Chickering

guys. morning, my Thanks Good question. taking Yes. for

to follow-up AJ’s Just a there. questions

commercial for proper What loss to Act. revenue going your What percent talked your this rules And case win you following arbitration? in Is XX%? commercial sure a this revenues quantify case about cases the is? No that the of making guess You was payers Surprise I are contraction our here. is? questions couple still ratio the are can in

Mark Ordan

the have one say It’s been number on IDR claims from we I of in submitted standpoint, Yes, our that into We’ve for we well, robust very we think a submit. the that thing of process, a feel process small that largely that’s process. And entered IDR. won that our that. we’ve I that claims would in with the packet XX% time successful we’ve the doing very over

payers and see confident the that message the think fairly that they to we’re come we that So sends move back a network. going us to with have that to rate in they’re – way by success

successful we’ve So been I again, largely think, there.

Pito Chickering

Okay.

they level That’s Second question here, jump in big quarter. $XX on fourth spiked costs transformational haven’t to the versus almost at pretty a the XXXX. we million seen the since

We’re doing the fees. consulting all

us what XXXX? for for assume that cost details what give in can you So of you number transformational and was

Marc Richards

that a costs exit amount transition represented do XXXX, number That end in and significant again. the expenses. were associated that were executives Richards year. with of at pool, the into in we expect going Marc not There any It’s terminated restructuring Sure. of those executives

Pito Chickering

– leverage does great. just Thanks. guidance look or at? last ratio ratios Okay, right year? the or sort then What’s XXXX last looking net And this ESB you couple you the how on X.X. at acquisitions With running is does of question the the for the at leverage And flattish that EBITDA down next here, years. leverage change EBITDA

Marc Richards

say, a in range. like move we But think draws will we we’re quarter-to-quarter I as said past I of rule our Certainly, the would We’ve our make very don’t that times thumb, as general credit from three the three facility. times. on No, comfortable so. in leverage

Mark Ordan

there’s quarters plenty cash have be we’ve that We will No about also flow we continue prudent do that we I we’ll targeted through. Surprises will that and to such And in wise but and of previous in kind do regard. to how were regard at talked with order and transactions Act think principle being say, acquisitions. conservative as look of in acquisitions opportunity,

Pito Chickering

so much. Thanks Great.

Operator

Mayo SVB Please ahead. to go And next with Securities. can go we Whit

Whit Mayo

Thanks guys.

feel You inflation communicated have or you material in I XXXX that took around G&A progress was made it the $XXX reducing that there’s guys came in like I offset previously for inside for G&A, know number million some $X.XX. XXXX. ‘XX target and some you by whatever natural out.

that and I’m savings number So this to you’re of targeting also another number savings the kind circle trying what found in there like XXXX a G&A you year? that Thanks. permanent is

Marc Richards

progress as progress and our XXXX, a Hey, Whit, we Yes, sub-XX looking all in in similar of We at as that that a the right. guidance has a indicated throughout it’s of load XXXX, – G&A reducing lot to Marc in been of that overhead in XX% revenue. We Richards. think result, think we significant made are made XX.X% you XXXX. that – range and we’re to XXXX probably for total in

Whit Mayo

Okay.

there was further that feel that had $XX G&A my had number previously this a that a no So like reduce in like additional there number I you maybe year? communicated. initiatives – to I million head,

Marc Richards

– we – the we course that level is fees offset Well, side. But executive to savings are had on hit the the over at concentrated savings. item. achieved line things last our we that overhead XXXX, last they’re permanent permanent million. savings over over and over An of the RCM year that the $XX pay other to are people and vendor and savings we of course the obviously the of which the And

Whit Mayo

it. Got Okay,

number is So out that the forward. recurring be organization the that of should you million took of kind $XX going

XX-K, versus $X another there malpractice year, was million costs comments. year-over-year. the were I’ve It last and lower $XX end a Okay. was prior million $XX That’s helpful. million at on been favorable your malpractice year development. actually like I’m period confused the little looking

So in but just don’t fourth flush necessarily a year. elevated Marc, quarter, just bit the maybe was little know, full the more, can not I there out you that something maybe in

Marc Richards

Yes, that’s correct.

it past know pattern that and seen quarter. we event going the So no one was haven’t don’t so in that. that and see and terms just we one was malpractice, But forward. There’s the event don’t fourth in of that in never anticipate we you

Whit Mayo

one absorbed confused last And I a And in the I’m and write a Okay. of in assuming They this. down made then one whole. fourth sorry, RX what you are there just AR you here, quarter, the in you. little It’s was XXXX? terms still one on that headwind for presume perhaps

Marc Richards

terms the the in related of to erosion. be in approximately Well, to continued adjusted and said headwind, headwind we expect rate we’ve that EBITDA $XX-plus XXXX million

the our service all revenue ins billings fourth of outs the patient in Looking to quarter at write and net course associated XXXX, and quarter. related reflects of the the downs

So the in that’s and revenue in saw quarter. total discussion all for we both rate contemplated in the what

real direct our no I’m to So write-off sure, just that. related policies. aging to our not revenue there’s relative recognition It’s

Mark Ordan

In back back the realized been very quarter, a the one-time that was deficient a they that receivables, fourth had event, vendor supported and portion which they fourth quarter. RX of because numbers our stopped stopped, directly our our coming into

Whit Mayo

Okay.

last Sorry, I’ll one off. follow-up get and

of that the off, of With AR are the all any are to bills the collect out any you focused you’ve making initiatives written of going on today? that the Sorry. door progress any previously or already

Marc Richards

of on on out initiatives a Certainly A there’s today. going of lot bills couple the that. things

difference the mentioned debt XXXX, reflected we to I expenses our is recognized recognized that revenue P&L. in any As appropriately we and believe bad therefore respect with in earlier, in

Whit Mayo

Okay. Thanks, guys.

Operator

ahead. And with America. Bank next Kevin go of can Fischbeck Please to go we

Kevin Fischbeck

– your RX’s guess, not show I through Is is is how it’s to guess this up, Great. me still Thanks. in Yes, number XXX% I where does P&L? working. revenue or the it it payment flowing it clear

Marc Richards

revenue. in It’s

Kevin Fischbeck

Okay.

the your So impact. includes pricing RX

think normal you So trying what about looked do collections? do like I’m performance a ex-CARES, would’ve on the in with to What ex-RX, think think quarter? pricing – just what like but you

Marc Richards

points. Down about XXX basis

Kevin Fischbeck

Down points, about XXX basis

Marc Richards

Ex those factors.

Kevin Fischbeck

quarter. was even though in commercial factors, up those the Ex

a on was else, guess, causing So basis mixed XXX like, down I what what basis? So a points? else

Charles Lynch

Yes. Charlie. Kevin, it’s

function of which those the underlying through fourth XXXX. as still CARES the the the of range our quarter, within fourth think rev like, the – predominantly pretty governmental revenue as And and variable of X% it trend they through pieces, pricing account managed and you And it of price the flowed impact in care CARES our it – that’s to the as is fee of was contract across whether usually increase of X% significant dollars dollars was in modest. call between that to all it admin looking and an and quarter in trends at For cycle I some we’re X%. well has normal fee Digging the admin fourth comparison as, a for pricing. process, fairly payers know, the quarter that’s we revenue

Kevin Fischbeck

Okay.

X%, X% kind is think of stabilized? way you is So all forward about to a thinking once of underlying pricing is this it go

Jim Swift

Yes, any from we see reason it different that. for don’t be to

Kevin Fischbeck

just two implications because types collect And the question that understand, you back to get forward. think this, these I guess right through and that you second asked before is you to then disruptions, one rate, then the I other could is didn’t run was One there’s companies to going – potential collect. to things that on back that go go are just about of when that the we

be of period think it? of the what a about of it? the some right get it’s, start is as backstop old looks – I about that fact catch on we guess, taken collecting you way kind the when to that actually should there’s other from. Or of there is thinking things So away that like I how RXs opportunity? mean, outperformance, Is this to up receivables we side

Marc Richards

should hard back proper Jim be. forecasting, that and over think the may bump are get back to the process quarters. but collections, in be are to detailed, is the get our a and forecast I coming additional from our level get working some to we we forecast as we’re there where going And to the back that we functioning to that right numbers levels

Kevin Fischbeck

dynamic, you mentioned Okay. you’re out that some And those to into guys improved round and permanent. collection, may that not some are taking, taking, of undertaking. million of payment this the $XX costs just costs putting you’re extra they’re and may then which or that RX which be And you includes try

Jim Swift

impact about, quarters, our the additional G&A this the incremental through few of No, for kind we’re to might is for that that of as year, of believe expectation outlook AR is incur any last the flow solely embedded process, our costs sub XX% staffing that of talked related incurring we’ve or we on revenue within G&A that Marc referenced.

Marc Richards

But about are additional that we’re need additional them And vendor, talked labor there and by helped in they we properly get have a still in bolstering because we from that our back discussions QX. track. on need how needed with those if stepped are lot share them we the labor on costs, costs cover of continue that to for to that that costs we to costs incurred the up

Kevin Fischbeck

that in think that Okay. you’re earlier, asked I change clarification here. you from on just are any seeing question of And ask said I’ll not network payers a then was a behavior

we’re Just be percentage missing want not saying to you’re X% to You during rate you – then trying of you’re couple X%, in make network make to And that the sure have out to at from still consistent, a could in overwhelmingly payers anything go changed so sure squeeze has but just want in there. say years? network, last to you’re overwhelmingly, what all understand more stay that not of two you is network. One are two, from they’re is, not updates things.

Jim Swift

coming as look is to a stable. a to the IDR process, been Jim. No where not It’s this hasn’t few us been very said, have network. payers payers Again, very and and we’ve trend of had the Yes, I network move it out of we us in successful out seen changed. we’ve of to we’ve

Marc Richards

and that. I’d would say the renewing seen in a that fear in that, there network with over cases proper And last, the rates the what this XX the use past. payers many in we’ve being in What months weapon. payers normal that had is was we about with as seen discussions say a line in in we’ve market haven’t

Jim we big that So, if had, the don’t a remarks, as have have you’re continue to materialize have future, asking his concern seen not but about a relative we we relationships. constructive ball everybody say to in we that said crystal

in not in more few, of What’s want We at fact, even us in a constructive change dialogue. have having we’ve had payers a some clear are very areas out is we’re situations. network, though in network where that been network. And there

are the from clinicians We want providing babies. think I provider of that and premier Pediatrix mothers you to services know these people to want physicians [ph] subscribers, necessary you have And if have and care.

Kevin Fischbeck

you. Thank Great. Okay.

Operator

Rishi we Please next And to go JPMorgan. Parekh with go ahead.

Rishi Parekh

I doing? the you you’re I How NSA, or cases of think Thanks going is XX% the believe, a QPA. back that my winning on I above for your One, questions. said taking you at you’re assume that winning rate

are the through these that what multiple One, the as winning the to us rate and claims? above things. just claims of running you couple you arbitration and can are how And then like? two, you many – looks give that above QPA DSOs confirm a rate on what an idea So can you’re

Jim Swift

as – one our great that We, bit people a the we’re good we Listen, has that has see terms vendor QPA. contract team that been back our And winning in barometer above we’ve a ability those as and rates. Jim. everybody feel network that same in disjointed. actually to a process process those well the it’s heard, And Yes, of on at of has team. the relatively had however, been

very into submitting IDR us. of the gone for the the has process So claims smoothly

Rishi Parekh

those the any that, in On has collect way situation claims? RX affected on your to ability

Jim Swift

bright been Actually in spot relationship. the all. that’s No, not a at

Rishi Parekh

as curious the And just to with TMA it affect think then you? guys the QPA, summary regards judgment how to you will

Jim Swift

there’ll resolution issue what we that Well, after the more February considered process that claims to and going at IDR of they’re down, QPA. and the can be think, all in a that the not view shutting We for X. just hopeful be I look the judicious look effect should in

can do us be and HHS positive what So they’re vigilant to that know there. going remain outcome very we there’ll remain that. of none an with we and CMS, But

So that following we’re to case. court hear waiting

Marc Richards

IDR can Right out. the come but go now they process, claims can’t into

So which unfortunate. it’s going to is increase the backlog, very

because IDR it it us doesn’t many the way so overwhelmingly affect government us, certainly the hope for rules Fortunately clarifies process the restart. other that in we’re does But network, we can the people.

So that overwhelmingly bipartisan have But inappropriate fortunately we the Pediatrix, unfortunate. is the courts don’t there’s been in that second have and Again, are rulings which time and the network for now the is we this stall, said mirror this win. legislation.

arbitration. We gone have won overwhelmingly in the cases to that have

is – I again a group that a at all it the in think if favors a you bipartisan it like ours. signal it’s look So factors were legislation, the that

Rishi Parekh

just there’s NSA, of XXXX? that network, as move there’s that the the of agreement, maybe had And you some earlier percentage percentage over as could probability that quantify in that was And you that amount of relates you to do of that last or you what think and network is amount think just an I on me network high a that a I is is? out to can then in move probability of the of what out the course question remind Where think you high that into could hoping network. it that could actually the that stated is you

Jim Swift

Yes.

be where good the concern years. have good to we number worse. very, we be had very of along about those where network, what may NSA Marc’s able are in position out out And do that feel we we’re again, to get behavior point, we roughly could anybody of traditionally with a lines the the back think network. kind in that’s I And that. we’re over that with To about that held and X% of Obviously, payer last network. of

Rishi Parekh

capital the just XXXX, you. you question us walk And allocation just your for last through Thank can though policies?

Jim Swift

Sorry for again, think our be is capital regard. that that. as very Listen, Jim. that deployment in going are acquisitions on This to is I we call what, of careful about I the and referenced strategic

it sheet I a where think we with is. are balance

some at in an of order original XXXX. the We the be sheet heels I have one do buyback. groups we’re we plenty of this seen areas to to have instead is for At us of and now, behaviors do that people change allocation of We groups out in right acquisitions in interest time, off been core coming with being that may flow in And the of to took about have thought reaching think that balance cash we've look having have us transactions. having again prospecting our attractive. stock will we part us we I who was say called the that to a pediatrics.

Operator

can ahead. with go me, excuse Please go we And, Tao to Stifel. next Qiu

Tao Qiu

that's potential about Good either payer impact mix your the you. from with how second volume of to into you Medicaid on patient baked in the Thank guidance? is of or And expected Could much terms morning. that shift expectation determination talk quarter? in start

Charles Lynch

It's Charlie. Hey, Tao.

changes expecting a for whether provide think a a We in services eligibility. tend the haven't some across given outlook. We for back a all it priority threshold our Act. that long Medicaid a I Care additional that the affiliated nature the has physicians Affordable huge anything to ago have are the within support poverty of during original The in percent occurred rules higher time was newborns, as pandemic, of mothers eligibility virtually and country completely it the going of

our indeed, any mix course tended did mix movement a of our the any based in has to see in on not of that part that through those changes. as pandemic. the material fashion create So we payer Medicaid And not

Tao Qiu

kind on from you. fourth Ordan the you us expectations $XX the you cadence in RX, the quarters the Could Got revenue of And called million? through the out the level million was what four $XX [ph] expected give having quarter? next of

Mark Ordan

referenced The last impact to was in quarter the see what the comparable fourth to in experienced quarter. the our difficult although third I it's within fourth we results, in of year. quarter embedded think that Marc

Marc Richards

third And if we XXXX will second just and you're and first asking we half quarter. of the think about XXXX, be that ramp-up the as in fourth largely Mark said, ramp-up quarter, – the the as the and year of in into the approach end drag $XX million we –

Tao Qiu

Mostly the Okay, got you. half. in first

So stabilize the RX or do Thank the that when in think transitions once DSO, complete? then might we – think when you. you about XXXX where

Mark Ordan

We quarter. is recovery normal. positive slow the it don't fourth to – third the is DSO in But movement know. from a We and it saw

DSO again probably our towards line. expect waited XXXX when come back that we see So we would half the latter in once of

Marc Richards

to continue we'll And in report on coming the quarters. that

Tao Qiu

Yes.

talking of about be DSO a are kind talk to bit level normal, expect do you we about elevated? pre-pandemic when or it right, you So little

Mark Ordan

level. Pre-pandemic Correct.

Tao Qiu

Okay. Thank you.

Operator

up we have from follow go Please ahead. a Bank. next And Pito with Chickering Deutsche

Pito Chickering

Hey guy's thanks for taking this follow up.

a Just quick one here.

dollars quarter? increase labor, practice contract what's in your fourth benefits Excluding and

Mark Ordan

related quarters we've elsewhere, a the volatility the the trend partners that we in and second behalf and staffing, expected. not get and elevated given right to seen those expansions, our practices little comments standup Certainly recruiting of locums on the bit mid-single-digit, somewhat we the referenced what of as for new from the similar level in the new Was you've underlying was others in the to difficulties but third – primarily elevated, of need and and in some like Jim Pito. hospital right. of and

Jim Swift

we the Yes. off. – time that in of have holidays people unusual taking opportunities It's period or additional not staffing of time that have because challenges to

in well. that's So, probably baked there as

Pito Chickering

Okay.

So actually the what differently, labor ask your quarter? inflating of fourth cost kind higher excluding general core in sort the in I want to of was labor

Mark Ordan

historical range. the had that mid right? in Kind at kind directional versus of still XXXX but within great fashion. outlook single in somewhat of same not And we’re for Peter, digit there, the our elevated norm, looking comment We a

Pito Chickering

Okay.

I if of… were like So, sort

Marc Richards

Yes. like mid X% single-digit, By X%. to

Pito Chickering

Okay.

X% mid X% pricing or question, Kevin’s to labor digits. either you place, digits of sort single to single low sort normalized in inflating So

gene X% that can X% of start the it is negate like this what down beyond? the XXXX increasing Is the labor yield help leverage comes the to Just, that makes pricing it to Is to to X%? better business margin you gets of, spread? in off of get in it the X% order than or amount sort and negative

Marc Richards

a in positive. leverage is component when well, which carries volume it’s operating There as there

I further? So to in that’s don’t mind you equation. in if thing one Jim, know add to that keep want just

Jim Swift

No.

Pito Chickering

great. much. Thanks right, All so

Operator

with Brian can Please ahead. go to Jefferies. we Tanquilut go next And

Brian Tanquilut

morning good Hey, on guys. Hey that Jim, on. put your just BizDev and yes, former try

as on thinking and normalized be of past where thinking do what there’s cycle focus about, you growth but near perspective about, be you about get know, to are once a how that, we kind I obviously you to a once is think lot focus your rate good rev here think term, maybe growth like of from a will got You XXXX?

Jim Swift

Yes, opportunities this build dividends terms really I think, our also services. sourcing what our on all of, in organic we the paid around we’ve around and that growth number is often partners and which years the relationships What build mentioned instead on that we’ve really it hospitals seen, to reach looking and they’re a, where with had, of out children. and have us women we suite call, going in really hospital out of internal focused with of that us and these the around programs of forward sourcing last now ambulatory for, on being team, one to program to opportunities that, want hospitals out reported I the there’s we’re us they is a

children’s. in and talk always programs we’re that those not company, about we a So, and we’re a company women staffing we’re fact building program the

issues think hospitals the in the pike, you the seen confluence of think population. look areas, there’s about physician a, the people, where of right at that and are in significant we’ve So, a concerned they do down activity. the uptick I I have some practices there’s these issues, ages core coming of some on, the as succession in When hospitals the population

do of organic and after in say measured. something to going to MFM going a we’re ready but I and because side, powder we’re of, the growth think core what material you to talk side, both that NICU, when in our inquisitive remember, to stand I the the terms We’ll side, is multiple is big we’re go dry you would a to keep an that on we focused specialties there going that we have about think doing, us but core there’s be you on but pretty the part talk if acquisition, in to key opportunity I be it’s to on what So, think we is when really obviously big there’s this need also on out for I about it.

Brian Tanquilut

I and just always it. about how but you is quantify think of And Got maybe about I if I then us seasonality QX Mark, thinking can sequential just payroll for tax purposes. issues modeling know as should be the guess one we for here,

Marc Richards

are I second of End the typically, of of met first We’d the the first mean, towards quarter. expect I which, last quarter. which tail limits the as year. quarter at a will look XXXX, end off quarter similar first would the in load of those

Brian Tanquilut

All it. Got thank Okay. right, you.

Marc Richards

Okay,

Operator

currently have And in questions queue. further we no

Marc Richards

joining much, all operator. very for Thank you call. you Thank the

Operator

Ladies through at gentlemen, will running midnight. Eastern today for and very March conference be you available and XX.XX much. Thank this Xrd after replay

International X-XXX-XXX-XXXX, Thanks with dialing access for can AT&T may dial Those to system for access XXX-XXX-XXXX. Service. any the at the using replay today. call You time your code X-XXX-XXX-XXXX are AT&T for conclude participation That and by a XXX-XXX-XXXX access does numbers Conferencing XXX-XXXX. entering XXX-XXXX. international participants parties, again code

now may You disconnect.

Pediatrix Medical (MD) 17 Feb 232022 Q4 Earnings call transcript