Whit Mayo: No, that’s helpful. I appreciate it. And then maybe my follow-up question. And I know, Crissy, you’re in the middle of the planning process or beginning the process. But how do you think of the right corporate overhead costs for next year? I didn’t hear you talk about that. Presumably, you probably need to reload for some of the bonus accruals, maybe there’s some opportunities to bring that down with some of the transition costs from a former parent company or something, I don’t know. But just any thoughts there would be helpful.
Crissy Carlisle: Yes, Whit, you’re absolutely right. It’s a little too early for me to give specifics on that. I think the best guide that I would tell you right now is, again, we’re really closely monitoring all of our corporate costs, and you’ve heard about some of the actions that we’ve taken in the latter part of this year in regards to items like virtual clinical orientation, even not the home office, but looking at some of the back-office staffing of our hospice locations and such and the moves that we’ve made in order to control those costs. I do think it’s important to note that you can look at kind of the $5.8 million of stand-alone company costs that were in the third quarter. That may increase slightly in the fourth quarter and first quarter of next year, again, as we kind of continue to roll off of the final big piece, the PeopleSoft piece being the biggest piece of IT from Encompass, but it may be — what I’m looking at right now is, are we running towards the lower end of that original $26 million to $28 million estimate of stand-alone cost, and even possibly running under it on a go-forward basis.
So I think that’s what I’m very interested in at this point.
Operator: [Operator Instructions] Your next question will come from the line of Jamie Perse with Goldman Sachs.
Jamie Perse: I wanted to get a little bit more color on just what you think is going on with the Medicare fee-for-service business, that being down 11%. I know you guys have been asked about this in the past and have said the markets are down 4-ish percent. So is there a reason that you think at this point you can diagnose why you’re underperforming the market? And then relatedly, I mean, just what gives you confidence in the comments for ’24 that you’ll be more in line with market growth and fee-for-service?
Barb Jacobsmeyer: Yes. So I think probably the biggest thing to look at is where our peers have been as it relates to a percent of their home health revenues being fee-for-service Medicare. And our peers have been pretty consistently in that 60% to 65% range over the last few years. As we noted, we’re at 65% this quarter. And so we are nearing more of that normal range of our peers versus our historic 75-plus percent. So that’s what gives us confidence that we’re really more at a peer average now, so that what we should experience in the future will be more like what our peers are experiencing as folks move into MA from traditional fee-for-service Medicare.
Jamie Perse: Okay. And then I also wanted to follow up on the comments next year around Medicare Advantage pricing growth. I don’t think you gave a number there, just said you thought it’d improve with the mix shift towards the payor innovation contracts. But I guess, one, what’s included in those comments with respect to the United contract. Any color on where you are in that negotiation process and how we should think about the potential rate update for that contract next year? And then any more precision you can provide on MA pricing next year would be great.
Crissy Carlisle: Yes, Jamie. It’s too early, and I don’t know that we would provide precise pricing, especially on a specific contract because that’s kind of forbidden via the agreements themselves. We like the trends that we’re seeing, again, as we continue to shift more visits into the payor innovation contracts, but I’ll certainly keep your request in mind as we head into 2024 guidance and determine what we are willing to say and what we can say within the confines of our agreements. Again, from a per visit pricing, our agreements are kind of coming in at that 25% to 30% discount compared to the historic 35% to 40% discount. So we like what we’re seeing there and are confident in our ability, based on what we’ve seen thus far in 2023 and our ability to shift into the higher paying contracts.
Jamie Perse: Okay. And if I could squeeze one last one in, just following up on an earlier question. What’s been your contract labor expense for ’23? And would it be right to assume most of that goes away next year?
Barb Jacobsmeyer: I have — we can certainly get you the expense side. I have the utilization side of it. So when you look at — and this is quarter three information right now, but — so for example, in quarter three, 1.3% of our home health visits were performed by contract nurses that was compared to 2.2% last quarter. And then hospice visits, there was only 1% of hospice visits performed by contract nurses and that was more in that beginning part of the quarter, but we’ve eliminated all hospice contract labor by the end of the quarter. Last year, this time, 6% of our hospice visits were done by contract labor, just to give a comparison for hospice.
Crissy Carlisle: And Jamie, the only thing that I would add to that is when you look at our hospice cost per day, you see that the year-over-year increase was about 8.5%. In the prior two quarters, it was in the double-digit increase. Well, again, with the elimination of contract labor by the end of the third quarter for that segment, that was a reduction in our cost per day of about 200 — of that increase, I should say, of about 260 basis points. So you see the magnitude it can have.
Operator: And I’ll now turn the call over to Jordan for closing remarks.
Jordan Loyd: Thank you, Regina. If anyone has any additional questions, please feel free to call me at (469) 860-6061. Thank you again for joining today’s call.
