Kevin Wirges: Hey, Gary, it’s Kevin. Yeah. So, as you think about our cash flow, one of the leading components that we always look at obviously is, from an MSSP standpoint, there’s a delay in receiving that payment. So, we talked about this on the call a little bit, but essentially the, what we earn on the MSSP side for 2023, obviously will be accruing. Those will be hitting accounts receivable, but the government doesn’t pay that until really Q4 of ’24. And so that receivable is going to continue to get larger and larger. As we think about cash flow and cash flow projections, our core business continues to perform, we do have those de novo centers that are ever opened kind of late this year, or during this year, but most of them late this year.
Those operating losses are going to continue. If you remember that J-curve that we’ve always talked about, those operating losses will continue into 2023. And so, there’s going to be a drag on cash which we anticipated. And so, I think as we think about the cash flow components of this, it’s really, when that MSSP payment comes and kind of Q4 of 2024 is really what we think is kind of like the breakeven point, at that point, we will be in a position where we’re cash flow positive. Going forward, the other way to think about it is if you know it’s MSSP paid similar to how Medicare Advantage pays, meaning we know, there’s only a three- or four-month lag from our Medicare Advantage plans. Then that payment will be pushed forward meeting, we would probably break even a little sooner.
And so, there’s just a little bit of a delay, and it’s such a material amount of our business now. It’s causing a little bit of a cash drag. It’s really why we need to be very prudent and how we deploy capital this year specifically. And that’s why we’re reinvesting really all those fees that we’re getting on the MA side, from the MSO really just reinvesting those and making sure that we’re prepared to take risk next year, but we also didn’t want to over invest, because we know that, the cash flow is going to be a little bit of a burden.
Gary Taylor: So, the AR growth in the 4Q, I think a lot of that, or maybe most of that attributed to Steward, is that all that receivable, largely would be collected in 4Q ’23 then?
Carlos de Solo: The bulk of that, probably close to $50 million or so that specifically around the Steward receivables, not all of that is MSSP. But yes, that would be collectible, and collected in Q4 of ’23. But remember, there is an AR facility that we entered into where we, add those funds are technically owed to the store. But we also have an AR facility where we prepaid those. And so essentially, those funds are going to go to pay back that AR facility that we took out. Does that make sense?
Kevin Wirges: Yes. The best way to think about it, Gary is in 2023, in the last two months of 2022, the data service that we actually owned the MSSP platform will actually receive the payment in Q4 of 2024. So, you’re really looking at almost two years, just under two years of a lag and payments and that’s really just the cash flow and why Kevin went into the kind of cash flow positive Q4 of 2024 rather than potentially even a year sooner.
