So there will be some continued extra costs associated with the utilization. We’re thinking it’s probably 50 to 100 basis points or so. We’ll, certainly get much more color on 2024 moving forward but that by no means is the only thing that’s happening within gross margin. So the 3.1 we talked about with excess reserves will not reoccur. It’s just this accelerated — realization of the legacy costs. That will stick around for a period of time, but that’s a much smaller component and frankly that will be burned through by the end of 2024. So that’s what we’re thinking now but we’ll get much more color on 2024 moving forward.
Sam Brodovsky: Great. That’s really helpful and then maybe we can talk a little bit about the accounts that are currently using, the new product there. How should we think about growth in accounts that are legacy accounts? I know a lot of the new accounts have come on with Monitor, but in accounts that are existing accounts that have started to use Monitor can you give us any color on what the growth rate for those accounts is how that’s transitioned from before and after they adopted? Thanks.
Quentin Blackford: Yeah, I will tell you it’s still very early in the days of seeing those results. We’ve been encouraged to date one of the things Brice commented on in his prepared remarks nearly 70% of our growth is coming from existing accounts. I think that the Monitor in those accounts has the potential to drive that even further as we go, because when you look in the accounts that we’re in today we probably have in the mid 30% market share of those existing accounts meaning you have a lot of cardiologists EPs even PCPs who are using our product but there’s a whole lot more within those accounts that are still not using the product and they might be using older technologies still on the halter. When you start to see this product and how easy it is to use and the patient reviews that are coming back from it, I mean our MPS scores in the early days on Zio Monitor are north of 90 that’s almost unheard of.
I do believe that’s going to start to have an impact in these existing accounts that are going to drive further adoption even beyond what we’ve seen to date. So I think we’ve got to see it play out a bit. As I mentioned the early focus right now is converting these existing accounts off of XT onto Monitor and then the focus will go back to going much deeper and broader and expanding within those accounts but I think Monitor only helps us do that over time.
Operator: Thank you. Our next question comes from Bill Plovanic of Canaccord. Your line is now open. Please go ahead.
John Young: Thanks. It’s John on for Bill tonight. Thanks for taking our question. I want to go back to your comments on the large national primary care networks that are proactively monitoring their patient population. Is this the at-risk pricing model today or eventually will this be shifted to the at-risk pricing model? And maybe could you just explain is the pricing different than if you were applying the past to say a symptomatic patient where insurance would normally cover it?
Quentin Blackford: No I will tell you at this point in time we’re not utilizing the at-risk pricing model. Now we do have our first pilot. We’ll finally get launched here shortly around the asymptomatic population with an at-risk entity where we start to think more around the traditional know-your-rhythm model that we’ve you know discussed in the past. But right now with these large national primary care networks we’re not sharing in that risk. This is — these folks understanding the value of better identifying earlier in the care pathway exactly what they’re dealing with and then being able to better care for that patient and avoid downstream unnecessary cost. And I think you know when you start to understand these large national primary care networks in many situations they’re working with payers to where they can better — they believe they can better care for the patient itself and capitate a cost to care for that patient.
And so anything that they can do to better care for them and eliminate cost of caring for the patient that becomes margin to them. And they see the value in that themselves to where they’re willing to go at-risk and apply more devices on a broader population that is well-targeted knowing they’re going to find arrhythmias and then prevent the downstream cost associated with it. So we have not had to deploy the at-risk model just yet. I still do think there’s a place for that in time, but that is not part of what we’re seeing right now.
John Young: I appreciate that. And then just on the pricing pressures that you noted especially Q4 too, but could you just talk about your progress in shifting the CMS volumes to San Francisco IBTF? Are you still targeting 50% of volumes by the end of this year? And then if we think of next year will that number grow north of 50%? Thanks again for taking our question.
Quentin Blackford: Sure. Sure. Yeah. So Jonathan nothing has changed with the plan and the move to San Francisco. I will tell you, at the end of Q3 and into Q4 it’s a little bit slower than what we had anticipated. I think a couple of different reasons. First of all, we’ve sort of evaluated what should San Francisco be. And for us I think it’s really important for us to be a center of excellence, right? So we need to make sure we’re hiring those folks that live up to that algorithm standard and truly serve as the center of excellence that will ultimately allow us to continue to navigate more volume through San Francisco. And we’ll plan to do that. It will fall a little bit short of the 50% that we outlined originally, but you can see from our guide we’ve been more than able to offset that with the volume contribution from the business.
And so but nothing has changed in the long-term plan. And do we have the opportunity of going above the 50%? Absolutely we do. And that will still be the plan as long as it makes good economic sense for us to do so.
John Young: Thank you.
Operator: Thank you. Our next question comes from David Rescott of Baird. David, your line is now open. Please go ahead.
David Rescott: Hey guys. Thanks for taking my questions. Congrats on the quarter here. Just a quick clarification question on some of the Q4 pricing pressure that I think you called out Brice. Is that a kind of year-over-year headwind on pricing? Or is that more or less related to just the higher pricing you had last year given the mix toward the higher reimbursed max?
Brice Bobzien: Yeah, that’s exactly what it is David. If you remember a large portion of our volume was going through the Chicago math last year. That was at a roughly $340 or so price point. As you know the national rate being in place this year though, it provides tremendous benefit because it removes the volatility that we’ve experienced and allows us to utilize all three IDTFs. It is much lower than that $340 that we were able to experience in Q4 of last year. So that’s really a dynamic of where the volumes were going through from a CMS perspective last year. The way I like to sort of bridge the gap on this, if you look at the midpoint of our range call it 14.5% revenue growth. If you layer on five to six points of pricing pressure year-over-year which is what we are experiencing that gets you right back into that 20% level and it helps you understand sort of the moving pieces with the guide for Q4.
