Pediatrix Medical Group, Inc. (NYSE:MD) Q4 2022 Earnings Call Transcript

Marc Richards: I think our forecast is that we are going to get back to the right level over the coming quarters. And there may be some bump from additional collections, but in our forecast and the numbers that we’re forecasting, we are working hard as Jim detailed, to get back to a proper functioning process and get back to the levels that where we should be.

Kevin Fischbeck: Okay. And then just to try and round out this R1 payment dynamic, you guys mentioned that you’re putting extra costs into improved collection, some of which you’re taking, some of which they’re taking, and the $15 million includes those costs that you are undertaking. And that may or may not be permanent.

Jim Swift: No, that is solely related to our expectation of the flow through of revenue impact of the AR process, as we’ve talked about, the last few quarters, any kind of incremental costs that we’re incurring or believe we might incur on additional staffing is embedded within our outlook for G&A for this year, that sub 12% G&A that Marc referenced.

Marc Richards: But we’re still in discussions with our vendor, if there are additional labor costs that are needed on how we share those costs, because they stepped up properly and helped cover a lot of the costs that we incurred from additional labor in Q4. And we have talked to them about the need to continue that that bolstering by them for costs that we need to get back on track.

Kevin Fischbeck: Okay. And then just I’ll ask a clarification on a question that was asked earlier, I think you said you’re not seeing any change of behavior from payers that are in network here. Just want to make sure understand two things. One is, rate updates from payers in network are consistent, is what you’re saying that you’re not €“ they’re not trying to squeeze more out of you to stay in network. And then two, you say you’re overwhelmingly in network, has that percentage changed at all during the last couple of years? You could still be overwhelmingly, but have a go from 4% to 6%, so just want to make sure we’re not missing anything there.

Jim Swift: Yes, this is Jim. No it hasn’t changed. Again, we’ve had a few of the payers where we’ve been out of network and as I said, we’ve been very successful in the IDR process, and we have not seen a trend of payers coming to us to look to move us out network. It’s very stable.

Marc Richards: I’d say that there was a fear in the market over the last, say 18 months that, that payers would use this as a weapon. And we haven’t seen that. What we’ve seen is the normal proper discussions with payers about being in network and in many cases renewing in rates in line with what we’ve had in the past. So, if you’re asking relative to a big concern that everybody had, we say we have not seen that materialize as Jim said in his remarks, we don’t have a crystal ball about the future, but we continue to have constructive relationships. We have not had change in more out of network situations. And in fact, in some areas where we’ve been at a network, even though there are a few, we’re having very constructive dialogue.

What’s clear is that payers want us in network. We are the premier provider of these necessary services from mothers and babies. And I think people know that if you want to have subscribers, you want to have Pediatrix physicians and clinicians providing care.

Kevin Fischbeck: Okay. Great. Thank you.

Operator: And next we go to Rishi Parekh with JPMorgan. Please go ahead.