Whit Mayo: Okay. Other question I have is we’re going to get the physician fee schedule out, I guess, in the next month or so, and there’s probably going to be some language or discussion around the CTC, OTP business. Just curious if you have any insight perspective thoughts around like what we should expect when you put your policy regulation had on? Any comments would be helpful. Thanks.
Chris Hunter: This is Chris. You’re referring to the CTC business specifically?
Whit Mayo: Yes. Yes. Just like in reference, like are they going to look at rebasing the bundle? Just any commentary or thoughts you have from your policy people around like what we may see or expect?
Chris Hunter: Yes, I would say, overall, we’re just from the – on the CTC front, we’re just not expecting anything material. Samsung HHS have made some favorable rule changes just regarding the regulation of CTC clinics in their recent rule update. And I think there were really three main areas of positive change on that. One was just continuing take-home flexibilities. There was also one around the ability to use telehealth more broadly. And the third was just enablement of small-format medication units that can allow the full range of OTP services. But other than that, it would be just speculative.
Operator: And our next question will come from Brian Tanquilut with Jefferies. Please go ahead.
Brian Tanquilut: Hey, good morning, guys. Maybe, Chris, first question for me. Just as we think about – sorry, legislative efforts to make changes to methadone treatment access, maybe just curious to hear your thoughts again on [indiscernible] implemented these changes would affect your business? And then maybe tying that to maybe comments from the DEA recently on other drugs used to treat opioid addiction and how that’s tracking in terms of expanding access for folks who are addicted to opioids.
Chris Hunter: Yes. No, thank you for the question. And I would say that overall, we continue to be very strong proponents of increasing access to OUD care. And there obviously are a number of policy proposals out there. We have, I think, done an excellent job in our CTC business of focusing on patient quality. CARF is the regulatory body that measures the OUD players. And our quality scores have continued to be in the 98% plus range. And so we continue to believe that our focus on quality, our focus on patient outcomes, where we find that 90% of our – 80% plus of our patients are illicit opioid free within 6 months of treatment. And then we’ve operationally put in all sorts of patient very positive changes over the course of the last 6 months, including significantly reducing wait times, and our patient satisfaction is really up as well.
So with all those things together, we just continue to feel like we want to continue to expand access. We’re going to continue to make significant investments in this business. And we’ll continue to monitor the legislation and continue to work with lawmakers and expanding access and moving that along.
Brian Tanquilut: Got it. And then maybe just any update you can share with us on litigation in New Mexico.
Chris Hunter: The only thing that I would say there, if you’re referring specifically to the 6 Desert Hills case, it’s just very difficult for us to comment on pending litigation, but you should know that there’s much still to be tested in core, and we intend to vigorously defend the company on that case. We were served with an amended complaint on March 25, and we filed initial pleadings on April 24. And I would just say our legal team is very diligently working on developing the case.
Operator: And our next question will come from Andrew Mok with Barclays. Please go ahead.
Andrew Mok: Thanks, good morning. First, I just wanted to follow-up on the volume trends in the quarter. So it sounds like the quarter was bookended by seasonal factors in January and March and further impacted by the new military facility openings. Were all three of those items expected in the quarter and just had a greater-than-expected impact? Or were any of those items truly a surprise, maybe the military facility openings, you didn’t have visibility into? Can you just clarify that first?
Heather Dixon: Yes, sure. I would say those were not expected to the extent that we saw them. The first thing I would tell you is that the seasonality, the difference between spring break or the interval between spring break and Easter. Certainly, we would have anticipated normal seasonality around each of those events. But the difference was the interval between the two. And so of course, we anticipate the events, but we didn’t anticipate that significant difference in the interval between the two. In terms of the few facilities with the Military business, those beds opened earlier – at the other facilities opened earlier in the quarter, but we didn’t see any impact of that for several weeks. And so that did sort of pop up as a surprise to us in the second half of March.
And that’s just really thinking about those facilities, it was more heavily weighted to the Specialty business. And keep in mind that those have a longer length of stay. And so it takes a little bit longer for sort of a downturn in admissions or a shortfall to flow through. And so we would not have anticipated that either. Those are really the two things that came up in the back half of March that we didn’t anticipate.
Andrew Mok: Got it. Okay. And then your SWB per patient day in the quarter, I think, finished below 5% despite the headwinds from patient days. So anything in particular that helped to drive the strong results there and given the normalizing patient day trends, we should be seeing in 2Q and 3Q, is it reasonable that SWB per patient day continues to track below 5%? Thanks.
Heather Dixon: Yes, you’re right. It did track below the 5%, which is, as you recall, what we discussed last quarter and where those levels we anticipate staying and we see base wage inflation coming in line with SWB per patient day as well. We continue to focus on all those things that we have been focusing on for the last, I would say, 12 to 18 months in regards to employee engagement and retention, and we’re seeing the benefits of that come through. We will expect that, that same level would continue throughout the year, and we’ll keep a very close eye on it, as I’m sure you can appreciate, as any company that operates in multiple geographies across the country. We still have some pockets with challenges, but we feel really good about what we’ve been doing and the investments we’ve made so that we can have a great start to 2024.
So maybe to wrap that up for the full year for ‘24, we still expect that base wage inflation. And SWB per patient day will reflect that normalized rate.
