And again, in supplies, we’re leveraging our size versus 21 individual hospitals. The supply savings have begun, but there’s a lot more to come and it will continue to be material. We’re working closely with our corporate team and hospital teams, and they’re very familiar with our operational planning and cost saving initiatives that we put in place. And we’re very fortunate to have some of the best leaders in the industry and our hospitals, and they’re doing a great job executing on the cost side. Thank you.
Bill Sutherland: Thanks, Josh. Thanks, Tom. If you don’t mind, I’ll sneak in one or two more questions. And because I’m curious about revenue per visit, patient revenue per visit bounced back dramatically last year. Pretty steady right now. Is that kind of a – is kind of a steady state number going forward?
Tom Vo: Yes. No. No. We’re continuing to make progress with the NSA, and as you know, and this is industry wide, is that when the NSA was implemented back in 2022, we saw roughly a 30 to 35 decrease in revenue. And that’s just not us, that’s everybody else. And so we had to make some serious adjustment very, very fast. And so over the past two years, we have learned a great deal about the process and have put together a very competent team to work these claims. And what we’re finding is that, unfortunately, we have to resubmit about two thirds of our claims back to the NSA portal in order to get a better payment. So, in other words, insurers are paying us below market on two thirds of those claims. And so, as you can imagine, that’s a lot of claims that we have to reprocess, which requires a lot more work, but however we’re doing it.
And so when we resubmit these claims, there are two ways to do it through the – what’s called the IDR or the independent dispute resolution. You could either negotiate with the insurers directly through what’s called an open negotiation, or you could go through a little bit more of a formal process called arbitration. So historically, we’ve been doing mainly open negotiation, and we’re getting good results, as you can tell from our previous financials. However, at the end of 2023, the arbitration portal was actually upgraded, thanks to the current administration, to make it a lot more streamlined as well as cost effective. And so we are basically ramping up to start to process more claims through the arbitration process of the NSA in 2024.
And so really, our goal is to get the insurance company to pay us fairly. That’s it. That’s our goal. We don’t need any more than that. However, we don’t have any data yet on the arbitration process because we’re just starting that process. However, based on public data that we see out there, we see that the providers win about 70% or 80% of the time when they go through the arbitration process. So we’re hopeful for a good outcome. So, in addition to the arbitration, you may know this already, but in 2024, the insurers, through the NSA, are mandated to increase their payment by about 5% to adjust for cost of living increase. So, in summary, we’re closely monitoring our collections, but we remain very optimistic about both the 5% cost of living increase as well as the arbitration process to help increase our collections.
So more to come as we get more results over the next few quarters.
Bill Sutherland: So, just to follow up, Tom, on that, I think that in May or this month, I should say, the payers are now using a higher, what’s called qualifying payment amount, the QPA. Is that the 5% increase you’re talking about, or is that separate?
Tom Vo: No, that’s separate. That’s separate. The QPA basically stands for qualified payment amount, and essentially tied to what’s called the median in-network. And so the median in-network is based on the median in network rates of the hospitals around our hospital. And so this is, there’s a fair amount of controversy remaining about this so called QPA, or median in network. And so, unfortunately, there has been a lack of clarity on what the insurance company used as a median in-network. And so there’s been several court cases that’s been challenging this median in-network. But so far, it looks like the court has sided with the providers on this calculation of the median in-network. And you could definitely read about it if you do a search.
But going back to the QPA that you referenced, yes. This QPA is separate to this 5% cost of living increase. And in fact, because of the NSA also mandates that if the insurance company had not done a cost of living increase since 2019, the actual cost of living increase in 2019 should be closer to 21%. So that 5% is only going from 2023 to 2024. And so we’re monitoring our collection to see that if that has been done.
Bill Sutherland: Okay.
Tom Vo: That is basically the law of the land – mandate that.
Bill Sutherland: Are the payers now forced to not forced but I thought that whole QPA thing was going to improve because they were going to start out with a higher QPA. Is that in the works? I can’t remember if that’s happened or not.