Encompass Health Corporation (NYSE:EHC) Q4 2022 Earnings Call Transcript

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Operator: And we’ll go next to Ann Hynes with Mizuho Securities. Please go ahead.

Ann Hynes: Hi, good morning. So, just being on the Washington front, is there anything that’s on your radar on the regulatory or legislative outlook over the next 12 to 24 months? And then secondly, maybe on your Investor Day, I know before COVID, you had some long-term targets for EBITDA and free cash flow. Is that something we should expect to be reinstated at Investor Day? Thanks.

Mark Tarr: So, I’ll take the Washington question first, Anne. So, we have a number of new members of Congress that we have prioritized going out and making sure that they know about a rehabilitation hospital, having the opportunity for them to do a tour so that when we talk about our patients or the process, that they are much more familiar with it. So, that has been a big focus. We have plans for a CEO fly-in this year, where we’ll take a subset of our CEOs in the hospitals and have them come to Washington, and we’ll do a multi-visit members of congress from each one of our marketplaces. And that’s coordinated with our team there in Washington. Relative to the regulatory front, it’s been fairly quiet. RCD remains a topic out there that we have continued dialogue with our trade associations and CMS.

CMS has not provided any timelines or any additional details about implementation of RCD. But that is something that we’ve kept in front of mind and continue to have dialogue with CMS.

Doug Coltharp: So. Anne, just back on the longer term outlook, our last Investor Day was March 4th of 2020. And at that Investor Day, we issued longer term targets, five-year targets for discharge growth, bed additions, and for a number of de novos to be open per hour. And then we had comparable measures for home health and hospice. We didn’t issue any specific long-range targets with regard to EBITDA or cash flow or EPS at that time. Obviously, the world shut down about two weeks later, everybody lost visibility. So, we had to suspend those targets for a period of time. We introduced those for the IRF business, I think just about a year ago. I’d have to go back and check specifically, and those are the targets that you see in the – included in the supplemental materials today, albeit with the change that I’ve explained earlier with regard to the annual bed additions.

In terms of what specific metrics we will provide a longer term outlook on in September, that is something that we’re still discussing internally. I’d say everything is on the table, and it’s just going to be something that we’ll discuss and socialize with individuals such as yourself between now and September.

Ann Hynes: All right. Thanks. I was just looking at the – I thought you had some EBITDA and targets out for each segment back then. All right, thanks.

Doug Coltharp: There was a time in our history we did that, but I forget when we dropped it. I feel like it was sometime around 2018 or so.

Operator: And there are no further questions at this time. I’ll turn the call back over to Mark Miller for closing remarks.

Mark Miller: Thank you. If anyone has any additional questions, please call me at (205) 970-5860. Thank you again for joining today’s call.

Operator: Thank you, and this does conclude today’s program. Thank you for your participation. You may disconnect at any time.

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