CareMax, Inc. (NASDAQ:CMAX) Q4 2022 Earnings Call Transcript

Kevin Wirges: Hi, Jessica its Kevin. So, the cadence on those, we’ll have a little bit of a tranche come January. As you know, we’ve been working with all of our payer partners, specifically on the national MSO side, from a contract conversion, flipping those Medicare Advantage fee-for-service contracts and Medicare Advantage value-based care contracts. So once that conversion happens, those patients, we begin to attribute them to us and we add them to our Medicare Advantage line item. When I would tell you is that, we have big ambitions on the MSO side. I would say it’s consistent growth within our legacy core business, so the core 45 and South Florida. There’s a few thousand or our de novo clinics that are open in ’22 and opening in ’23. But the bulk, a significant amount of that membership growth is going to be coming from those contract conversions and also working with our payer partners and providers and converting those fee-for-service.

Jessica Tassan: Got it. And then just kind of given the different platform contribution of the center base versus MSO. MA patients are you going to clarify going forward what that mix looks like?

Kevin Wirges: Yes, it’s a great question. I’m not sure we have an answer for that just yet. Obviously, it’s something that we’re looking into. From a platform contribution standpoint, the way we’ve looked at it historically specifically, MSO is typically around the 15% and the synergy typically around the 20%. Obviously, we have some high performing the legacy synergy are high performing, getting closer to 25% from a platform contribution standpoint. But MER, I think is where there’s a big variation in that 85 to 70. But I think from a platform contribution standpoint, they’re similar. But something that we’re definitely evaluating, and we’ll let you know.

Carlos de Solo: Yeah, but I assume not to give too much away but you’ll see some of that in the Investor Day presentation as you think about mature medical margins on the different lines of business. And as we think about guidance for ’23 and ’26. So, you have some information kind of back into that as well.

Jessica Tassan: And my last one is just can you kind of explain how you went about identifying or deciding which of the fee for service and my patients from Steward will be moved into full risk. And just like whether these decisions are being made on a provider by provider basis, or just how we should think about that? And then of the 17 centers built or opened year-to-date, how many of those are kind of built in collaboration with Stewart and how many are standalone CareMax? Thank you, guys.

Carlos de Solo: Sorry, can you repeat that last, the beginning of the question, Jessica?

Jessica Tassan: Yeah, how many of those spends year-to-date? And then maybe for the full year going to be standalone kind of CareMax vendors? And how many will be built in Stewart geographies in collaboration with the that’s up?

Carlos de Solo: Yeah, I think when we think about as I answered the question before, I think, because we’re going to be opportunistic on the new centers, we’re not going to guide to a specific number. So, the intent is really to identify opportunity by opportunity, as we think about which clinics to open and all. What I can tell you is the majority of our de novo clinics that we open will be seated de novo with membership, either from our existing MSO in the Florida business, or the additional membership that we added on the MSO and all the various different markets.

Operator: And we’ll take our next question from Gary Taylor with Cowen. Your line is open.

Gary Taylor: Hi, good morning. I was wondering if you give it some color on the cash from ups in the 4Q which the loss seems to be larger there and just kind of what you’re thinking about 2023 cash from ops and free cash flow?