Robert Ortenzio: I can tell you that as we look over the entire industry, Select Medical probably has more higher cost outliers than the average of the rest of the industry because we take higher acuity patients. You’ll recall that our strategy long held was not to take site-neutral patients and to only take the highest-acuity patients. We believe that that was the intent of the 2014 criteria. We built our clinical programs around being able to take care of those very complex patients. And so — and this has been part of our efforts with CMS, is that the high-cost outlier increase of the threshold actually hurts those providers that are actually taking care of the very patients that the policy wants the LTACs to take care of. So, ours tend to be higher and so we’re affected more.
A.J. Rice: Okay. That makes sense. And, I think in the fourth quarter, you called out that you had about $3 million of startup costs for development, and that’s similar to what you had in the fourth quarter of ’22. Have you talked about the total amount given the development projects that are underway, joint ventures, et cetera? How much ’24 startup costs will be compared to what startup cost ended being up in ’23? Is it a headwind, tailwind? How does it shake out?
Robert Ortenzio: I think for ’24, our projected startup loss is $12.3 million, and that is reflected in the business outlook.
A.J. Rice: And then how does that — do you have — off the top of your head, do you have how that compares with 23? Is it a similar amount [Multiple Speakers]
Robert Ortenzio: Yeah. It’s a similar amount in 2023.
A.J. Rice: Okay. All right. And then just last question. Marty called out that obviously some of these interest rate caps and swaps, et cetera, expire in September. What is your assumption when you think about your outlook as to what happens in the fourth quarter with respect to your borrowing cost or what mitigation strategies are you thinking about, or any comment on that?
Martin Jackson: Yeah, A.J. We anticipate that we’ll see probably about a $20 million increase in interest expense for the fourth quarter. On an EPS basis that’s about $0.12 a share.
A.J. Rice: Okay. And is there anything — any way to mitigate that in any way or not particularly that sort of — it is what rates are what rates are?
Martin Jackson: Yeah. At this point in time, the only way to mitigate it to have the indices come down, right?
A.J. Rice: Okay. I was thinking maybe pivot to paying down retiring debt or something like that. I know you said you didn’t do any buybacks this quarter. I didn’t know if anything like that was in the — was under review or not.
Martin Jackson: We will take any — we will be very opportunistic as we always are, A.J., and take advantage of any opportunity we can to get that interest expense down.
Robert Ortenzio: Yeah. We’ll — we’re looking at it at this time. It’s — we’ve got a good six months plus to think about what opportunities they are. And that is, as Marty pointed out, that’s $0.12 off the EPS that we reflected in the guidance, which, because of the cap going off. But we will find opportunities.
A.J. Rice: Okay. All right. Thanks a lot.
Operator: Thank you. At this time, I would now like to turn the conference back over to Mr. Ortenzio for closing remarks.
Robert Ortenzio: No closing remarks. Thank you, operator, and thanks, everybody, for joining us.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
