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

Gary Taylor: Okay. I just want to go back to the risk or model change for a minute, because I think it’s could be really important for ’24, particularly how it seems to maybe impact some of the Florida physician groups, maybe not yours, but some. But I mean, I understand that you don’t have full risk or settlement on patients that you have, that you’ve gained this year. But certainly, you’ve been able to take your population, you can run it through the new risk score model and sort of see what the impact is. So even before that final, those final sweeps and settlements. Is there any indication that, you look better or worse than sort of that national average negative 3% that CMS is promulgated?

Carlos de Solo: I was going to say, Yes, we’re still in the process of evaluating that. I think the other important process priority for you. I think the other important piece of this is, there’s going to be, there’s going to be some impact or risk, or I’m going to understand what that is that 3% also includes the CMS normalization. So, we need to understand, when we segment those two things out what’s really that fee-for-service adjuster. But ultimately, that’s the national average, we need to understand exactly what that means for our patients. So that’s kind of the first step. I think the other step is as you think about health plans and how they bid, the build their bids. Those bids have to be normalized to a 1.0 using the acuity of the population which has to be recast under this new methodology.

And so, there’s going to be some flexibility in the health plans on how they build their bids. And how they’re going to attribute, what did into rebates, what goes to the AB at 1.0. And ultimately from there, there’s some wiggle room with the health plans are going to have. So, whatever the impact, and again, we’re still evaluating. Whatever that impact is from a top line standpoint, we think there’s some impact also offsetting impact on the medical expense side. We’re still evaluating.

Gary Taylor: Yes. That’s right. I just wanted to make that point clear that that rescoring is also part of the calculation when setting the bids. So, I think there is going to be some potential relief to the extent of what that is, we don’t we don’t know yet.

Carlos de Solo: Okay, thank you.

Operator: And we will take our next question from Brian Tanquilut with Jefferies. Your line is open.

Brian Tanquilut: Hi, good morning, guys. Carlos, I know you’re going to lay out a lot of things and then yesterday on Monday, but as we think about Stewart, and the integration, and the strategizing around that. Just maybe if you can share with us kind of like the milestone for success that at least for the next 12 to 24 months that you’re thinking about to say, okay, we’re on the right path. And we’re hitting the right, we’re hitting our Stewart.

Carlos de Solo: Yeah, I think when we think about that, it’s all going to boil down to boots on the ground, the integration, and I am going to talk specifically on some of the things that we’ve already done. And we’re going to talk about the membership on Monday. So, a lot more detail to come there. But it’s really going to be integrating our technology or workflows, all that process has already begun. Negotiating the value-based care agreements and making sure that we took advantage of potential arbitrage. Most of those have actually already been done as well. So, we’re really tracking very, very positively and probably ahead of schedule in some of these areas. And then additionally, it’s going to be how quickly we’re able to transition the membership from the Medicare Advantage fee for service to Medicare Advantage value-based care.