Transcript
Nave Brar (00:00) hey, Scott. Welcome back.
Scott Everline (00:02) Thanks. I’ll be right back. I gotta grab the dog you.
Nave Brar (00:06) Got it. Hi, Amy.
Amy Raymond (00:08) Hello. How are you?
Nave Brar (00:10) Good. How are you? Good, good. Good. Thanks for getting back to us on the questions. Yeah, I know all of them, we didn’t get to, but we did our best and we’ll try to present some pricing to you guys today.
Amy Raymond (00:22) Okay. Sounds good. I know Manny should be joining shortly, great.
Nave Brar (00:34) Once Scott gets back, let us know if there are questions that we should review before Manny gets here, and maybe we can go over those.
Scott Everline (01:05) All right, dog. Retrieved. Nice. Go out like two minutes before a meeting starts about a two minute window of being alone outside.
Nave Brar (01:16) Yeah, we just adopted a puppy. A little while ago. We went in for a German shepherd. Someone ended up adopting that one because they had like a red tag notice. So they were going to put them down and then we ended up just getting like a six month old. Great pyrenees border collie, oh, wow. Yeah, he’s going to be a big boy.
Scott Everline (01:37) But gentle.
Nave Brar (01:38) Yeah, no, he’s super gentle. He’s great. He’s a little. I think he misses his brothers and sisters, but trying to get him acclimated to everyone.
Scott Everline (01:49) Yeah, they’re adaptable like children. You know, you can kind of mess… with them more than you can.
Nave Brar (01:57) Listening great. So far. We’ll see how it goes.
Nave Brar (02:04) I was asking Amy if she had any questions. Amy, is it any questions? Anything questions about the bva? I know I sent you a version that had like a higher quoted fte, count the new one. I just put down to like six point five. I’m not sure if that matters or not. But I did that. And then if you have any questions now, it might be a good time to ask before Manny even joins.
Amy Raymond (02:25) I don’t hang on. Did you send that over this morning?
Nave Brar (02:30) The bva was sent, oh, the.
Amy Raymond (02:31) one you already sent? Yeah. Then now, I’m good.
Nave Brar (02:33) Yeah. The new one, the only adjustment that we made just was just the fte, count down to like six point two five instead of the nine that we had?
Amy Raymond (02:54) Let me ping Manny real quick. Yeah.
Amy Raymond (03:52) Well, let’s go ahead and get started. I think, are we recording? Yeah, okay, perfect. Then let’s go ahead and get started. He didn’t answer me. So he’s probably just head down. Oh, there he is. He should be jumping on so you can go ahead and get started. He’ll be hopping on.
Nave Brar (04:06) Great. Now, if there’s no questions, I’ll just go ahead and go back into presentation mode. I mean, the only things that we changed on this bva were just the things that I mentioned in brief, which was we adjusted this down, right? So the credentialing specialists and the amount of credentialing specialists you would need if you’re using five instead of seven five, we’re going to probably have closer to six point two five.
Nave Brar (04:29) So instead of 925 K or whatever I said in year five, it’s going to be closer to five 31. But that’s pretty much it. I just did it down here as well. I can send this after the call, but everything else remains consistent unless there’s any questions. I can just go straight into the pricing portion of it.
Amy Raymond (04:49) Yeah. I, actually, I was thinking that something about the revenue was, oh, the revenue that you had quoted was revenue to customers, not revenue to us, but I think that’s fine. We just made that clarification.
Nave Brar (05:01) Yeah. So what we were thinking there is like if you pass through like or if you do an additional charge, Mani had originally said that there would be like an additional charge associated with this as like an add on. So we’re assuming there’s a 40 percent adoption rate when you get into year five and you have 150 logos, and that would be 60 facilities. Each facility charge three K. And then that’s 180 K in new ARR, just depends on how you want to charge it. That’s kind of the calculation that we perform there. Okay?
Amy Raymond (05:28) So the revenue protection is more for the communities, not for us the.
Nave Brar (05:32) Revenue protection. Yeah. The way that I understood it is if billing isn’t consistent facilities aren’t credentialed or licensed properly, then there’s some leakage there.
Scott Everline (05:41) Yeah. I.
Amy Raymond (05:43) think just when we entered the call last week, it was kind of thinking that was our revenue that we were protecting.
Amy Raymond (05:48) And while we are to some extent, it’s a much smaller piece of the pie given how we bill for our services. So I think we’re fine on that, as long as that was makes sense to you guys. Yeah.
Scott Everline (06:01) That tracks. So there’s really a percentage of that overall number. And whatever that, I mean, you guys can do that math, right? Whatever that percentage is that you suffer from the enrollment delays only?
Amy Raymond (06:13) Bringing it up because I’m sure it has something to do with your pricing. So I just want to make sure we were aligned on what we were protecting for ourselves versus like whatever. But yes, otherwise, I think this all makes sense. So we can go straight to pricing.
Nave Brar (06:25) Okay, great. Manny. Any questions here? We’re going to go straight into the pricing portion. Cool. So I built out a three year model and then a five year model because I remember from the last call, you guys said that if you’re going to do it, it’s going to be more than one year more than likely. So we built it out here. So the total discount is 10 percent over a three year period. And then you’d start out with 84 K and that’s for 285. The reason why it says 285 facilities is because we three X the 95 number that you gave us for medicare medicaid and then commercial Scott. Do you want to explain that a little bit more? Please? Yeah, I.
Scott Everline (07:04) mean it’s essentially each enrollment, right? So each entity that the facility is enrolling with is going to count as a unit. So medicare and medicaid are both one unit each. And then… conservatively saying you’ll probably enroll with at least three entities, right? Three different payers at some course in time per facility. I would suspect it’s probably higher than that. But just trying to, knowing you guys didn’t necessarily have like a firm number to put in there. We put three in as a placeholder.
Scott Everline (07:40) Okay. Do you think three is the right number? Or do you feel like three is a little low. Three is a little high. I mean, at a minimum, it’s going to be two if you’re doing both medicare and medicaid but accounting for like medicare advantage and mcos, you’re.
Nave Brar (07:55) going to,
Scott Everline (07:55) have some more payers in the mix is my suspicion.
Amy Raymond (07:59) Yeah, I think it’s going to vary depending like, but, and what we do for billing may be different than what they might want to use the tool to track for. Okay. Yeah. And.
Scott Everline (08:08) I would also think some might not be. So of the 95 facilities, you’re not going to get necessarily 100 percent adoption either, right? So that can flex. So it’s not restrictive and tied to individual facilities, but you might have one facility that signed up and they have 15 payers, right? And so it kind of allows that to be a little more fluid and flex within the overall scope. And then.
Nave Brar (08:30) what I sent over via email, the 20 percent skew flex is this is a specific skew. This is a specific skew. So if you want to take 20 percent of the licensure from this year and move it to this year, you can, or you can pull forward 20 percent to this year as well so that’ll be put into the scope of the contract assuming these numbers are correct?
Nave Brar (08:56) Good. There are any questions, and then we can move on to the five year five year is essentially just two more years, 15 percent total discount.
Amy Raymond (09:03) Manny, should I be? I think just on the line, the 285 is communities, yes. Is that how we should be thinking about that? Perfect? Okay. Yeah. And then.
Manny Cominsky (09:12) Sorry, you may have explained this, but is that just to clarify it’s not 92 K as like a flat fee, but rather it’s broken into enrollment and revalidations on like, a rough dollar per some sort of dollar per volume base there that equates to 92 K. But we’re committing in year one to approximately 92 K of spend. Is that the way to think about it? Yeah, it’ll.
Nave Brar (09:38) be split into facilities, enrollments and facilities revalidations. And the total is 92 point four K if you needed more of one or the other. Scott, I’m pretty sure we could work that out if we needed to, because I know some of this stuff is not entirely solidified and we’re kind of, you know, like Amy said, it’s a bit of an art here because you don’t have complete information, but yeah, the total is going to be 92 point four or sorry, it’s the discounted total. If we do a three year contract is going to be 84 K. And then with that, you get 285 facilities, enrollments and 95 facility revalidations.
Amy Raymond (10:12) And so you’re saying the 20 percent flex has to stay within a SKU, so let’s say we have 115 facilities, but three of them are really complex and we use up a bunch of the enrollments. So it doesn’t work up and down just side to side.
Nave Brar (10:26) That’s something I can ask about from my understanding, it’s just within the SKU right now. But if that’s something that we want to add in, I can certainly ask.
Amy Raymond (10:36) I’m just curious. I mean.
Scott Everline (10:38) Another thing we can do, right? Is we can take a portion of this and just shave it off as an unallocated spend, right? So that won’t be tied to a specific SKU, it’s essentially a credit that you have to utilize on any SKU. So if we want to reduce both of those numbers and say, like maybe you’re not expecting a high revalidation rate because your customers already have those relationships, they’re going to maintain those ongoing renewals, maybe revalidations is where we pull that out and we put that into unallocated spend. And then you can use that for revalidations. Like we’ll put one revalidation in as a unit, right? Essentially as a placeholder, and then that can be used to flex in between. And then all that would be able to carry over from one year to the next is really where the SKU, flex hits it’s like if you use all of that in year one, then you can move that up to 20 percent into year two with no penalty. Or if you exceed year one, you can pull 20 percent from year two and put it into year one because you guys are going gangbusters, right? And then it will just cause an earlier contract renewal and, you know, you’ll end up renewing it two and a half years instead of three years. And then you just negotiate, a new unit price and processing that.
Amy Raymond (11:50) Makes sense. I think it makes sense. I think my concern Annie was that of the 90 something we already have on board, we’ve kind of handled the enrollments. And so it’s less about everything on the books starting on the day we start this contract plus growth and it’s more about revalidations probably for there might be some that we could utilize, but revalidations for the existing ones, if necessary, getting everything loaded. And then growth would actually be what we use this for kind of going forward other than getting things in the system and uploaded. And so that volume on year one just concerns me, but I may be missing context that you have where you’re good with that Manny.
Manny Cominsky (12:32) No, I see how you just laid it out as well.
Nave Brar (12:37) Yeah, because.
Amy Raymond (12:37) That 285 almost assumes 285 new facilities that we’re using this tool for. We’ve already gone and we actually just spent the last few weeks trying to get as caught up as possible. So, there might be some in there. But like the 96 or 97, I don’t remember the number 90 something that are currently on our books that we’re doing work with where it would skip… the enrollment piece and go more to the revalidation, yeah, revalidation piece.
Scott Everline (13:04) Yeah. So thinking that way, what’s the count for growth in year one? How many new facilities are you all thinking? You’re going to have in the first year?
Manny Cominsky (13:16) We’re trying to get to 300 in total at.
Amy Raymond (13:19) your end. So it’s like 200 more. Yeah. Okay.
Scott Everline (13:26) So, 200 more by year end. I mean, that actually increases the year one number, right? If you’re doing an assumption of three enrollments per facility and you have 200 new facilities?
Nave Brar (13:44) Yeah. So the way we counted for the 285 was the 95 times three?
Amy Raymond (13:48) Ah, the existing, okay. Yeah.
Nave Brar (13:51) So, if we did 200 new facilities and you three X, that number, it’s going to be 600.
Amy Raymond (13:57) Instead of, okay. So, 285 is three times 90, whatever we said.
Nave Brar (14:01) 95 that’s correct? Yeah. Okay.
Amy Raymond (14:04) But what we actually should be pricing for is the growth in year one, which would be 200 times three, and.
Scott Everline (14:12) That’s assuming 100 percent of those organizations sign up for this service, right? Yeah.
Amy Raymond (14:18) I don’t think we’re going to, yeah.
Manny Cominsky (14:21) We’re not going to get to 600 facilities this year. I mean, don’t get me wrong, if we do that would.
Amy Raymond (14:26) Be amazing.
Scott Everline (14:26) Right. So, if that’s 202 100 facilities, I say.
Nave Brar (14:30) We stay conservative. We can always change these numbers up as you begin to work with us. Again, you have skew, flex, so you can always bring the 370 forward as well if you needed to.
Amy Raymond (14:42) Okay. So basically, what we’re saying is we’re in for 84 K, regardless of how much we use and we can flex 20 percent of that revalidation through enrollments past year one or bring year two into year one if we need year one. Okay. Yeah. Okay.
Nave Brar (15:03) Yeah. We’re on the side of conservatism here.
Nave Brar (15:05) Like if you’re going to three X this year, you’ll probably need more than 285. If you want us to build in a slight buffer, we can or you can like you said, bring in the numbers from year two.
Nave Brar (15:22) Good here. And then if we go to the five year estimation, it’s the same type of thing just extended two more years and a 15 percent discount on top of retail… same type of conditions apply. We would be able to do skew flex here as well.
Amy Raymond (15:49) So, I think for us internally Manny, it’s just talking through the, if we think for all those facilities will be also selling and doing the credentialing or the enrollment piece so that we can bet that we feel good about that number. And then what?
Manny Cominsky (16:05) And if.
Amy Raymond (16:05) we would price as pass through so that we know what we’re all in for from a contract perspective. Agreed? Okay. This is helpful. Thank you. Yeah.
Manny Cominsky (16:16) Thank you guys. Great. I.
Nave Brar (16:17) Can pack this up and send it over. I guess on like a timeline perspective. Is this look in line with what we’re thinking? Are we able to review this like this week and then get some sort of determination by the end of the week?
Manny Cominsky (16:32) Amy is traveling most of this week and then I’m also basically out of office tomorrow and Thursday. So we would probably, it’s probably better to target like end of next week for next steps slash feedback there. Because we also want to, we’ll get on feedback too in the sales team just to validate, you know, some of these assumptions there that Amy and I have made our feedback to you. So I’ll.
Nave Brar (16:57) send this over and we’ll do the validation. From our perspective. We are ending the quarter at the end of this month. So I do have some leverage to maybe get some more discounting, Scott and I can work on that if we can execute by the end of the quarter, if not perfectly fine. Just want to give you guys that option.
Manny Cominsky (17:15) That’s fair helpful. We will keep that in mind. Yeah, you got it.
Nave Brar (17:19) Any other questions before we hop off here? I think it’s pretty straightforward. It’s just a matter of internal validation at this point.
Amy Raymond (17:26) Yep. Sounds good to me. Works great. Thank you.
Nave Brar (17:29) Guys. Sounds good. We’ll connect offline then. Thanks.
Amy Raymond (17:32) Thank y’all, cool.
Manny Cominsky (17:33) Thanks, Steve. Bye.