Transcript
Jeremy Walker (00:00) afternoon, sir.
Derek Kamajian (00:02) Howdy ho, how are you?
Jeremy Walker (00:04) I am doing good. Are you a big golfer since you lived down in Florida? No.
Derek Kamajian (00:11) Golfing. I am sports inept. I can barely even walk without falling over. Are you?
Jeremy Walker (00:19) Serious? I?
Derek Kamajian (00:20) Just never. The only thing I got into was jujitsu and then kickboxing, but can’t throw a ball? I throw like a girl. I move my, if you, I tried to do golf with a driving range sometimes, which is fun. Yeah, even that I’m 70… yards.
Jeremy Walker (00:41) Oh, my gosh.
Derek Kamajian (00:44) It’s shameful. And I’m scared.
Jeremy Walker (00:47) Well, that’s unexpected. I feel like you look like someone who can you look like a baseball player? Is what I’ll say. So, yeah, we’ll.
Derek Kamajian (00:56) go for that.
Jeremy Walker (00:56) We can roll with that. Yeah. No, I was just asking because I thought the masters started this week and I was really bummed out when I found out that it’s not this week anyways.
Derek Kamajian (01:06) Tiger woods’, car flipped over. I know that, yes.
Jeremy Walker (01:10) Yeah, he can’t seem to keep his car in the lanes. That’s what I’m learning about him too.
Derek Kamajian (01:18) Much money, too much fame, hundreds of millions of dollars, and he’s stuck on the oxycodones and kind of just sometimes it’s not good to have all that.
Jeremy Walker (01:27) 100 percent. Yeah, I think he, like, we see glimpses of him, but I think in between the times when he’s on TV and when we see him, he’s living a rough life. Let’s say it that way. Yeah, that being.
Derek Kamajian (01:39) Said, God, if you would like to bless me with 300,000,000 dollars, I can handle it. Yes, I can also handle it. Exactly. It’s just his problem.
Jeremy Walker (01:49) That’s exactly right. That’s kind of how I’m about too. That’s funny. Well, I appreciate you. I know it’s kind of a weird ask like intentionally keeping Kalik off this call… like candidly. The math just isn’t quite making sense. And I’ll show you why in a second here, but I wanted to talk because I know we’ve got the full presentation next week and you’ve kind of been the person our go to internally to really make sure that we’re thinking about this the right way and that what we present is accurate. And so let me just start sharing my screen. I’m going to jump way ahead in the presentation so that we can kind of just get down to brass tacks here. So obviously, I have some other slides before this. I kind of summarized like the initiative, right? Is you’re tasked to create a playbook to insulate the organization to essentially grow by forex, if they so desire. Some of the problems that you listed is essentially, yeah, they’ve left the hiring freeze but you don’t feel comfortable recommending hiring until all of these systems are in place in order to again insulate the organization, talk a little bit about what is needed and then the outcomes that you’re hoping that this will drive for the organization. And so, I guess before I move on, you know, these are some quotes like want to make sure you feel comfortable with me putting those in there and just generally like, is this really the point? Like is this the initiative, are these the outcomes that your CEO is trying to drive and just confirm or make some edits on this slide here?
Derek Kamajian (03:32) Well, let’s see, create a playbook and insulate and support?
Derek Kamajian (03:41) Instead of doubling the provider account, put aggressive… expansion of provider team… you can whatever change that, that’s the aggressive support, aggressive expansion provider, duplicate the current success across all 50 states, perfect growth from say four point. Whatever. I think her goal is, we can leave 10 to 15, but I think her goal is like 8,000,000 by 20 27. But I think leaving an aggressive goal there is good. I don’t feel comfortable expanding into any additional states. Put aggressively expanding. You know, we may hire one provider, but that’s not aggressively expanding into additional states until there is an appropriate software in each department that can reduce errors and insulate the organization. Beautiful. There is no growth and expansion until there is safe. No, put, there is no aggressive growth. Beautiful needed centralized database and source of truth, true software and automation, true accelerated provider onboarding and billing. True. Yeah, true. Replicate current scale without headcount and complexity. Beautiful. And that I already communicated to the CEO and she was on board with that. Okay, freed up labor to use time more strategically. True outcome.
Derek Kamajian (05:13) Unfazed by turnover. Yes, true scale via automation rather than headcount, true accelerated revenue through providers becoming billable. Sooner. True. I would get set up for three times more revenue. You can get rid of that. We kind of already said that better con, new better contracts delegated. You just want to put contracting support instead of new better contracts, but contracting support delegation… and more revenue. I don’t know if we’d be able to get rid of more revenue per visit. I don’t think that’ll be.
Jeremy Walker (05:49) Contracting support and delegation. I’ll just put that.
Derek Kamajian (05:53) Beautiful. Perfect. So.
Jeremy Walker (05:55) Yeah. Okay. Cool. And I tried to, again, the way that we try to build these is like I don’t want to insert my opinion or like what I think are the outcomes. And so that’s why I like to review this because you made some very meaningful edits, right? And got rid of some things that might’ve been my influence on this presentation. So, appreciate you walking through that and taking the time there apart from that, like we’ve got some other slides I’ll save for Tuesday that we can walk through together. So then we look at the business value assessment. This is where things get exciting and also a little bit. I’ve reviewed this with like three or four people internally and everyone’s kind of said the same thing. This isn’t really checking out. So we’ll get there in a second. This one is pretty straightforward. You’re seeing credentialing turnaround times of 45 days and payer enrollment turnaround times of 45 to 90 days, 68 day, average monthly revenue, 350,000, 40 credentialable providers. I’ve been hinging on that number if you really want me to change it to 70, I can do that and then change the math accordingly. But the way that we look at it is because medallion is only going to be enrolling and revalidating 40 of those 69 current providers. Those are the ones that we want to focus on. I know, you know, everyone in the organization all the way up to the CEO is generating revenue to a degree, right? But directly billing, it hasn’t been super clear if those interns are actually submitting claims to insurance payers. And so, if they are, I want to edit that right now, but would love that’s. One question I had jotted down to ask you today.
Derek Kamajian (07:36) Okay. Hold on. And that’s my bad because I know I should have answered that. Hold on. Let me send a message.
Jeremy Walker (07:40) Oh, it’s okay. Yeah.
Derek Kamajian (07:44) And.
Jeremy Walker (07:44) we can come back to it too, if needed, but.
Derek Kamajian (07:48) Let’s just send an initial.
Jeremy Walker (07:52) Excuse me?
Jeremy Walker (08:51) Did you say you were just sending a message to someone internally?
Derek Kamajian (08:53) Yes, sir. Yeah. Okay. Interns complete, you know, the interns complete their notes and are signed off by licensed providers. We don’t actually bill under mdstaff.
Derek Kamajian (09:17) Okay. Message sent?
Jeremy Walker (09:18) Okay. And they’re not because they’re not licensed, even, right?
Derek Kamajian (09:23) Yeah. Well, I don’t know how they’re organizing. I don’t know if they’re actually licensed and then they have to complete a certain amount of hours and then they have their, whoever’s managing them, their managing provider sign off on the note after they complete, and that there’s some revenue generated from these interns though.
Jeremy Walker (09:39) Okay. Awesome. Well, I think you’re.
Derek Kamajian (09:44) sticking with the, right now, sticking with the, we only know for clarity the 40 providers that are licensed in some fashion that will need to be credentialed, that’s what’s reality right now?
Jeremy Walker (09:56) Correct? And that’s kind of again, that’s what we’re focusing on. So, okay, cool. Well, let me know if that changes. So, and then comparing that to the medallion, right? Slas and outcomes will drive. So we have a three day SLA, right? Essentially, what that means is we put revenue on the table if we miss these deadlines, right? With a one day average of completing credentialing and primary source verification, which is a net of 42 days that’s saved even if we’re not hitting this one day average and we’re just hitting our SLA. So, I know that you would want a scalable business case, which was an interesting exercise for us internally, but kind of fun in a way because essentially now you can take this business case. And if some part of the organization says we’re only going to hire five providers next year. And then another part of the organization says we’re going to hire 100 providers in the next year, you can take these numbers and multiply very quickly to associate value. And so if we’re able to accelerate, which at this point is a guarantee that we’ll be able to accelerate credentialing by 42 days. And then payer enrollment, our average is 54 days that’s across all states across all payers. And that’s a net of 14 days saved, right? So you’re multiplying the number of days total by the daily revenue per provider. What that gives you is 16,200 dollars per provider in additional revenue through acceleration and that comes from streaming the time to market, getting them billable faster. So you take that 16.
Derek Kamajian (11:17) Two, this is where the thought process kind of goes in where if they’re 10 90 nines, their labor doesn’t cost us anything until they actually start… seeing patients, right? Correct. So I think that maybe part of the mental block too is… we’re shaving down the time and then we’re saying that they’re going to be able to bill quicker. So, we’re saving the lost time to be able to bill. Is that additional revenue or is that revenue that’s just generated faster? It’s kind of both?
Jeremy Walker (11:56) So, yeah. So it is both and I think it’s different when they’re 10 99, but it’s for both parties benefit because the provider wants to be seeing patients as soon as possible because therefore they can start receiving payment, right? As do you. And so, I guess when you look at, it is additional revenue because… those providers are going to be seeing patients that would have otherwise gone elsewhere within their plan to spend their insurance dollars, right? So if you’re able to bring in those patients and those providers sooner, it is additional revenue that potentially was missed through those clients going elsewhere, for services, right? So that’s why we say it truly is additional revenue. Unfortunately, we’re not paying them a salary, so we can’t talk about the, you know, the sunken cost of them sitting on the sidelines, which a lot of cases we can when they’re W, two employees. But again, the business case is still compelling. So yeah, whether HR says they’re going to hire 20 people and then your CEO says 100, you can take this number and very easily associate value for them.
Derek Kamajian (13:06) Cool. I love it the.
Jeremy Walker (13:08) Second component which we need to validate this number, but we’ll get there in a second. This is off of what Kalik shared with us 15 minutes per application, 25 payers per provider. That’s what Suzanne said in your more mature markets, you’re seeing and we’re assuming worst case scenario, right? Which means that six point two five labor hours are needed to submit payer applications per provider, right? With medallion, you’ve seen the interface. You’ve watched the demo. We’re going to be able to submit all of those requests in under one minute. Talked a little bit about this on our last call. This represents a 99 point eight percent reduction of labor time, then I was able to actually calculate based on that. So if it takes six point two five hours today, that means it costs 234 dollars per provider per payer application, right? Which means that medallion is going to reduce roughly 230 of that, right? What I do want to understand.
Derek Kamajian (14:08) Per state, right? Per state as well. So if we take the same provider and that provider is licensed in a different state, we need to then do the same process with that provider. Okay? But I guess it would still count as like a whole additional provider for.
Jeremy Walker (14:23) that exactly, that’s how we would calculate essentially that’s two providers. Yeah, the only thing that’s not clear here is a lot of times and I know Khaliq, I think he’s offshore, correct? So a lot of times when you’re dealing with.
Derek Kamajian (14:35) offshore, sometimes as I’m getting closer to understanding what’s going on with the team, I don’t have direct insight into all of the salaries, but I’ll probably kick that down to 50.
Jeremy Walker (14:45) Yeah, that’s exactly what I was going to suggest is potentially if we don’t have a good benchmark, 75 might be a little high given that because I wasn’t sure if they were offshore. So let’s quickly just fix this. So that would mean 50,000 divided… by there’s 2000 hours in the working year, which means they’re paid 25 dollars an hour times six point two five. So it’s actually more like 156, which… is totally fine. All right. 156. Okay, great. And then from here and this is where the math doesn’t make sense. So keep this in mind, right? 15 minutes per payer application. So what I did, what I then did is, okay, great. If we’re able to be successful in freeing up 99 percent of their time. What does that mean that coleek and time will now have time to do? These are some of the things that you mentioned, right? New contracts with new payers, contract negotiations, national contracts, delegation opportunities. And either, you know, further departmental insulation, what does that lead to or the outcomes of that drive, which in theory, this is what your CEO is going to care most about new revenue streams, right? Busier and happier providers because of additional contracting, more revenue per visit with current payers, that’s the one that you had me erase on the previous slide. And I can do that here as well providers billing within 30 days that’s once delegation comes into play and then set up for long term growth.
Derek Kamajian (16:22) I would make a couple things. I would get rid of that more revenue per visit because I think that would be more of a… yes, it’s contracting. But then it’s also the providers need additional education on new laws that are coming out on additional items that they could be billing for. So I would separate that from the payer. Okay. And then instead of set up for four times growth, I would kind of calm that down a little bit and set… up for support.
Jeremy Walker (16:53) Aggressive growth like we’ve been saying.
Derek Kamajian (16:55) Yeah. And I would do like… thank you.
Derek Kamajian (17:11) Out a list for replicatable state by state growth. I would do something like if that is because what I’m seeing right now is the business did a really good job of doing their initial replication and telehealth for Nevada. Now you just need to take that same system and go into Florida, California like go into every other state and take the same infrastructure they have. But without this system, we cannot. And then I would, and this is some communication… that I’ve also been seeing and this is a normal human reaction. I don’t want the team getting defensive thinking that they’re going to get fired because some of the softwares we’re looking at are going to take up most of their labor, right? So I wouldn’t put, if medallion frees up nine, nine percent of time, I would put new.
Jeremy Walker (18:00) Strategic focus.
Derek Kamajian (18:03) Yeah. With reduced labor time. So I wouldn’t because I don’t want there to be pushback on the team saying we’re all going to get fired now because it looks like you only need one credentialer to do everything… that’s a great way to say it. And then I think while we’re speaking about it, and if I take this and then can present to after we do our presentation with Susan and Kalik, to let them pick it apart, then… I will focus on hey the reduced labor time. We can be more strategic with this.
Jeremy Walker (18:34) Okay. Sounds good. Well, it’s interesting that you mention it. Okay… because one of the topics as we were looking at this is why there’s three people even needed today. And what I’ll say is based on the enrollment volume of today, there’s 40 providers and each provider is enrolled with 20 pairs. It’s actually a little bit less based on the numbers that Susan shared. But we’ll round up for the sake of making it conservative here. And then that’s 800, right? 40 times 20 divided by three years because obviously that growth wasn’t all you didn’t hire all 40 providers and bring in all 20 payers just last year, right? So we’re going to stretch that out over a period of growth. So that means 266 enrollments most likely were done in the last year over three ftes. That means about 88 enrollments were done per fte. Now here’s, what we’re not quite sure on today, right? Is if what Khaliq said on the previous slide was correct, and it’s taking 15 minutes per enrollment. That’s only associated with about what was the numbers here. I have it on my other screen here… 22 point five hours total. If it takes them 15 minutes per enrollment, over 266 enrollments, that’s one person a half a week of hours. And so again, like, I’m not sure like we want to understand right? What the right number is. But unless there’s a meaningful amount of time that’s being spent on primary source verification, or tasks outside of just payor enrollments, you… know, there’s 6,000 hours in the working week over these three employees or in the working year over these three employees. And if it takes them 15 minutes per 22 of that 6,000 hours is spent on enrollments. And so we’re just trying to figure out the right way, to uncover what this number actually is because… it can’t be 15 minutes. It’s probably more like multiple days. And that’s what again, I’m not exposing anyone or calling anyone out. It’s more of like what is the right way to think about the labor time? Because it’s not explicitly clear to us right now and we don’t want to assume anything, right? But the way that we’re looking at this, and if we did our, we do a typical like labor assessment, like how many people are needed based on your enrollment forecasted enrollment volume, right? Even if even if you grow to the extent that you think you’re going to grow, right? And we’re going to need 1,450 enrollments in the next year without medallion, that’s only two people with medallion, it’s only one. So, our part of this ask is let’s figure out the right time that it actually is taking them. And the second ask is, are you, as a, you know, advisor to this business and, you know, a potential partner of medallion? Is it off the table that, we look at the option of with medallion, we can bring the team down to just Kalik?
Derek Kamajian (22:12) Yeah. So I, and I hear you first let’s do those numbers real quick again. So if it’s 15 minutes per enrollment and they let’s just say there’s 20 payers… per provider that’s 300 minutes… 300 minutes, 300 minutes basically to get a provider tuned up, it’s 300 minutes.
Jeremy Walker (22:35) If the 15 minutes is correct. Yeah. And across if.
Derek Kamajian (22:39) the 15 minutes is correct. Yeah.
Jeremy Walker (22:42) And then across, how many providers did they hire last year? Maybe 15?
Derek Kamajian (22:46) Yeah. Let’s just do 300 minutes divided by 60. Yeah, my math is correct. So basically, it takes a total of five hours for one credentialing specialist to get a provider totally tuned up like you have a dirty product which is the uncredentialed provider. Yes. And now if I sit down for five basically in one day, yeah me, as a credentialing specialist, I can get a new provider ready to bill and ready to see patients in one day. That’s what I’m saying. And now you have 40 providers and three people on the team. So basically, if we influxed 40 new providers or say, if this company started fresh in one week, you should be able to get 40 new providers totally credentialed and up to date right now. And if that’s what Kalik is saying, I wouldn’t push on that. If it takes them 15 minutes to go type into the payers portal, go put in their information. Now, I think to your point, right? I’m not going to be doing or recommending any cutting at this point because my mind is, this is where the team’s at you’re making 4,000,000 dollars a year. What systems do we need in place for cross training and software? For me to be able to bring this to every state? And right now, especially when you’re building a team or building growing, you don’t there’s no cuts until… all human… or ever. I’m not going to do it just for there. But the second is all human knowledge needs to be placed within the receptacle of the organization. And right now there’s a lot of human specific knowledge because we don’t have a software. I already had that communication with Francesco. Okay. Like there’s no, there’s too much human specific knowledge where if somebody wins the lottery or quits or gets fired, that’s when you start having departmental breaks. And we need this is the main reason we need the tool. So guess what? Even if the… team of three people starts to use this tool and… after one month, they get all the credentialing they need for the year. And then when you have five new providers or 10 new providers come a month, literally, they can do it in one day. They can get all the new providers. The first of every month, we hire 10 new providers and that’s the way we do it literally, that first day, the credentialing team can get every new provider credential right now. What are they going to do? But… this is why we need the system and I can come up with other alternatives for them to do pay or negotiate pay your relationships, other things like that. But I hear you. But I want to keep that 15 minutes for now because that’s what I probably think it is. And if a teammate self reports that without having a system like this, you have to believe it because we don’t have an actual software system that can be tracking things, which is another detriment to not having a software, yeah.
Jeremy Walker (25:50) There’s no way to pull reports and essentially fact check, right? So fully aligned there. And that’s so I appreciate your perspective on the reallocation of time and like, hey, let’s that’s a good problem to solve. Like you said, if all of the credentialing work for a given month is done in the first day of the month, that’s a good problem. And you’ll reassign tasks based on once this is that successful. And so what I will say is we forecast it based on the current efficiency of the team, right? If it, you know, currently they’re each performing Ada enrollments handled annually and, this is a full enrollment. This isn’t just payor applications. So it’s still very well could be that it’s taking 15 minutes to submit payor applications that’s not encapsulating of the entire credentialing process, right? So, what I’m saying is that each.
Derek Kamajian (26:47) of.
Jeremy Walker (26:48) the three ftes today is able to complete 88 complete enrollments per year, right? If there’s 25 payors per… new provider, that means that for every three point five providers hired, the team is going to need to scale by one fte.
Derek Kamajian (27:12) And then put for so that’s true. But I would say for, I would say current staffing, I would put like current staffing for because I don’t know if, they probably, they obviously have capacity, but I would say currently, Francesca, we are staffed with three point five providers or I’m sorry, we’re staffed with our credentialing team of three point five individuals and they’re credentialing 88 enrollments per year. If we were to Francesca, if you were to double your business right now and double the providers. Now, you’d have to have another three point five with this current staffing model. Francesca, with this software, there’s no additional staff needed yep.
Jeremy Walker (27:56) So I need to change this number. I’m gonna, I’m actually… so because they’re paid 50,000, this was off of 20,000.
Jeremy Walker (28:04) So 50,000 divided by three point five. Okay. So it’s actually 14,000, and I.
Derek Kamajian (28:12) don’t even know if I would do per provider, I would just stick to the staffing. I would just stick to the staffing model right here. So at 75,000 dollars per year or at 50,000, I would get rid of that and just say the enrollment volume you. So, so I would put where it says for every three point five providers hired in seven, I would put current state there. So right before it says for it says right before it says for every output current state and then, you know, current state and then put a colon and then below that, I would say future state… no additional new hires needed until… whatever your recommendation is 500,000, we need to clearly say that?
Jeremy Walker (29:06) Let me say, so I do, I want to jump over here because I think I answered some of that over here. So let’s I’m going to leave that there for now because I think it’s good. So here’s how I did that right here’s. How I told that story. So it’s basically like everything in white is the current state. Everything in blue is with medallion. So forecast enrollment volume, right? 50 new providers, 25 new payers, plus 40 current providers with around five new payers, right? That’s the math that Susan gave us in her or Suzanne gave us in her email, right? So that means that your total enrollment forecasted volume for the next year is 1,450 enrollments needed. Right? So now we take that 1,450, we divide it by 88 enrollments that the current team is doing. That means that you’re going to need 16 full time employees in order for these numbers to be obtained. Well?
Derek Kamajian (30:02) But we don’t know or I don’t know what the team’s current capacity is, and I’m not going to be able to get that accurately because I don’t have a software. If I were to say guys, can we double our provider load right now without needing to hire anybody? I may get a yes, or I may get a no, everything may self destruct. I don’t know. So I think just saying this with the current staffing model is the 16 full time employees. Yep? Okay. Sounds.
Jeremy Walker (30:31) Good. So you want me to bring it over here, then future state, no additional new hires or should I leave it like it is?
Derek Kamajian (30:37) I think you leave it like it is, which is the easy to read as the future state, no additional new hires until, but until whatever your recommendation is for number of providers, yeah.
Jeremy Walker (30:49) It’s a 1,000 providers is when, well, so you’re at three full time employees at the industry average of 12 to 17 payers per provider. We usually say one FT for a 1,000 providers, and that’s the eclipsing point where you need to hire a second full time employee.
Derek Kamajian (31:07) Holy shit. Yeah. So, and this is a cultural thing that… this scared of having software take our jobs. Is, I think a thing?
Jeremy Walker (31:20) Is that, has Kalik and Suzanne, have they expressed those concerns to you?
Derek Kamajian (31:27) They have not, but some other department heads have communicated that they’re not worried but that some of their team is worried because my first communication to the team is each department head is going to pick a new software instead of excel sheets. You’re going to interview these different softwares. You’re going to write down, you’re going to figure out the cost you’re going to get some demos. And I think that this is a especially for, I think billings same thing. Okay? But we’re lucky because right now the credentialing… department does not have, I would be worried if there was 10 or 15 people in this department, we can figure out other additional things for them to expand the company, correct? Yeah.
Jeremy Walker (32:08) Exactly.
Derek Kamajian (32:10) They’re not going to listen to what I say because it doesn’t matter what I say, people’s fear takes over.
Jeremy Walker (32:17) Correct. Yeah. Okay. Well, as long as you feel comfortable being able to sell and encourage this idea of, hey, we’re not getting rid of anyone. We’re going to repurpose here’s. The deal. If the core of the value, the core of the value here is we’re going to allow folks for X growth without any operational expenditure lift, right? That’s a good story because it doesn’t threaten anyone that’s already there, right?
Derek Kamajian (32:43) Yes, yes, yes. So.
Jeremy Walker (32:45) Versus a lot of times, I think I told you this in the first call like there was an organization that I partnered with, they had 12 people and the only way they could justify the cost of medallion was to bring that team down to two. And so in that case, the business case wasn’t hinged on growth. It was hinged on current operational expense reduction, right? So, I think we’re fine. I don’t think the team should be worried. And I think the story again that we’re telling is we’re going to make the current team way more efficient. We’re going to, you know, strategically use the time that’s freed up for other things. And we’re going to allow the installation to, you know, not have to hire people for every three point five providers. One additional specialist, right? Credentialing specialist.
Derek Kamajian (33:28) That’s beautiful. And when you’re presenting and talking to the team on Tuesday.
Derek Kamajian (33:36) That framing of expansion and other items to be able to support Susan is the way to go, right? So this is basically saying you have less work. And then the third piece I would put as a note is, I understand Derek spoke about that. There was that Francesca’s also focused on acquisitions. So she’s looking at buying. I think she did just purchase, is going to purchase another actual physical location. So guys, I understand you guys are doing physical acquisitions as well, which will also help support that, right? Yeah. Okay. But totally stay away from, I think the staffing and scaling to be able to hit your targets and goals that’s it with no additional staff is the appropriate way to say it.
Jeremy Walker (34:23) Well, it sounds like I will go ahead and I’ll leave these slides as is then, right? It’s like, hey, this one’s about the pay or application labor time here’s, the results that are going to be associated with that. Here’s, the fte to enrollment ratio and the current forecasted enrollment volume for the next year, right? To avoid growing the team to and keeping it at three. You partner with medallion. And then I have this like kind of put a neat bow around everything which I do need to change this a little bit because we lowered the salaries of the employees. But essentially for every new provider that insight onboards with medallion, you capture an additional 16 two in revenue that one’s correct? So if it’s 50 new providers, it’s 815,000 dollars in revenue for every provider application submitted through medallion. Insight saves 230 dollars of labor costs and frees up 99 percent of time. And then insight saves, I think it’s 14,000. I have it right here. 14,000, 285 in operating costs for every new provider they bring on with medallion. So if you hire 50 new providers, I’m going to.
Derek Kamajian (35:32) Play the devil’s advocate. So we’re not devil’s advocate, but just a pain in the ass person that’s on the call. Okay? So how are you saving me 16,000 dollars per provider?
Jeremy Walker (35:44) So very, simply, so… saving is maybe an incorrect way to look at it. It’s additional revenue.
Derek Kamajian (35:55) Capturing additional 16,000 dollars of revenue.
Jeremy Walker (35:58) By getting your I’m just laughing at your tone. It’s funny by capturing revenue sooner and getting patients that would have otherwise gone elsewhere if those providers were not ready, right? Your providers are the number one way that you generate revenue as a business. And if you’re not adding providers who can take on additional patients, you’re not going to expand revenue. And so this is an opportunity to get providers ready to see patients sooner and capture patients that would have otherwise sent their business elsewhere.
Derek Kamajian (36:28) Okay. Jeremy, that makes sense. Thank you so much. What do you mean? We’re going to save 99 point eight percent of time. Nobody’s going to have a job.
Jeremy Walker (36:36) Well, really the benefit here, right? Is the team is doing such a great job today that they’ve been able to be really efficient. The proposal with medallion is we want to take on a lot of the manual workflows that candidly, Khaliq, I don’t want to speak on your behalf that you don’t want to be doing anyways so that their time can be used more strategically. As you guys expand into new states. There’s going to be inherently a lot of additional work that’s done and needed to be done. And so rather than going and hiring teams to build out those plans, you can use the time that’s freed up here to expand your networks, focus on national contracts. And then when the timing is right, get delegation set up that’s all.
Derek Kamajian (37:18) Beautiful. You nailed it. Okay. Perfect. Amazing. Okay.
Jeremy Walker (37:21) That’s all. Yeah. And I’m trying to like take your advice and be like really affirming of like, hey, the team’s done a great job, all that stuff. And it’s true like it is true, right? So anyways, all that to be said here’s the volumes. I can explain why we structured it this way in a little like that down the line. But essentially, we have what’s called SKU flex which allows you to pull in enrollments from year two into year one. Essentially, you need 1,400 in the first year and you only need about 600 in the second year. We’re putting it this way so that it’s an even or a more even spread of ARR across the two years. And that will allow you if we have a significant drop off of ARR in the second year. In a case like this, right? Where we have 1,400 in year one and 16 600 in the second year, my eligibility for discounts and additional levers that I can pull goes way down. So this is just to protect you so that we can get you a better, essentially a better cost per enrollment. So that’s why I built it out this way. And then.
Derek Kamajian (38:27) Okay. Go ahead. So this, I am not a credentialing specialist or billing specialist or operation specialist, or any of that? What’s the simplest way you can communicate to me the cost per, is it in general, the cost per provider that’s uploaded into the system? Or is it cost per payer or what’s the easiest without any of this is a lot of information.
Jeremy Walker (38:48) I’ll go down one at a time. So medallion core is our software that we use, that is per provider, you’re going to be at 90 providers at the end of the first year. And then assuming you add another 25 in the second year, you’re at 115, right? Ncqa monitoring, same thing per provider, right?
Jeremy Walker (39:04) We’re monitoring ncqa certifications for 90 providers in the first year, 115 in the second year. Credentialing is primary source verification. So in the first year, we’re going to credential because the 40 that you already have are already credentialed. So we’re going to focus credentialing on the new providers, which is 50, right? And then in the second year, again assuming you only add 25, pay your enrollments. Now, this is where you have the volume of 1,400. So this is the number a total number of payer enrollments. So you’re hiring 50 new providers. If each of those providers were being enrolled with one payer, it would be 50 enrollments. However each of those providers are being enrolled with 25 payers. So that’s what I think it’s 200 or more than that, it’s 2000, whatever it is. A 1,000. Is it, whatever it is? 50 times?
Derek Kamajian (39:55) 25, 1,250 there?
Jeremy Walker (39:58) You go 1,250. And then we’re also taking the current providers that you have today because we know you want to expand into new payers, new states, things like that. We’re going to assume based on Suzanne’s numbers that she gave me, the goal is you want to have five new payers per current provider. So we’re also going to take 40 times five, which what’s that I got my calculator here. So that’s 200, right? So that gives us a total of 1,450, right? Yeah, I shared what I shared about the volumes here. So in the first year, it would be 1,450. In the second year, it would actually go down to 601 because you’re probably not going to hire quite as many and two, you don’t have to worry about the enrollment in the new plans for the providers that are already in seat. We already did that in year one. Does that make sense? Yes. Okay. Payor revalidations, this is just very simply every three years, on average, a provider needs to be re enrolled if they’ve already been enrolled. So, the reason why we do have some of these in year one is because we’re going to take the ownership of those revalidations for the 40 providers that you already have today with the current payers that you have today.
Derek Kamajian (41:08) Yep. And then.
Jeremy Walker (41:09) caqh management is also per provider.
Derek Kamajian (41:13) So this is based on the projections of the, excuse me, the growth for the first year, right? Yes. So this is the 40 providers plus additional. Yes. And then I’m going to assume that there’s these are like the minimal thresholds of being able to pay something. So instead of like actively having to monitor the number of providers and all these other metrics, you just say, hey guys, this is your locked in rate. Assuming these are, this is the pay rate. Is that correct?
Jeremy Walker (41:43) So let me make sure I understand the question. So are you saying like… this is what you are agreeing to at a minimum? And then, yes.
Derek Kamajian (41:55) Yeah. And that’s what the, that’s what the payment is based off of. Can you make a… so these are all different scenarios. Can you do a scenario for low growth? So what the low growth would be, would, whatever that number is right now, if we have 40 credentialed providers, what is low growth? 20 additional providers. Can you make one of these and just modify it by 20 percent or 30 percent or whatever? Just, I would like to have two scenarios, year one, year two for guys, this is your aggressive growth and we are able to get you this reduced pricing because we are saying by year two, you are going to have 115. Now, it’s going to be more expensive if we don’t have that projected lock in growth, but this is a more conservative growth. Obviously, you see it’s more money per month because you’re agreeing to a smaller pool of smaller volume pool. Is that fair? That’s.
Jeremy Walker (42:56) fair. I would say. And… yeah, I’m happy to build it out. I’ll build it based off of maybe 25 and then 50. So the numbers are clean. Yes, it’s not going to be the case where the 25 is exactly half of the 50 because obviously, the more medallion you buy, the less each of these individual ones costs, right? But yeah, I’ll build that out for you 25 providers is low growth. And then 50 is like optimistic or hopeful growth.
Derek Kamajian (43:27) That’s our goal yep.
Jeremy Walker (43:28) Yeah. As the goal… okay, cool. Yeah, I can do that for sure.
Derek Kamajian (43:34) That’s a big one that’ll be awesome.
Jeremy Walker (43:36) Well, then before I show pricing, right? Is there any idea?
Derek Kamajian (43:45) Well, is.
Jeremy Walker (43:47) there any idea of like what the total budget for this initiative is? And like I already have the pricing here. I’m not going to change it if you say enough, like I just want to make sure we’re at least in the same universe, right before I.
Derek Kamajian (44:02) Yeah. The answer is I don’t know small company, single owned 350,000 a month in revenue and this is not just a budgeting thing. This is a cultural change. So, historically the owner, Francesca has been very against spending almost any money on software. Yeah, that’s just what it’s been. And she said, you know, every CEO has their own journey of wherever they think they’re at. I had a meeting with her on Wednesday and I said this is a must have. We need to have this. And I told her a little bit about medallion and some of the other softwares we’re looking into, but this is up to her and I’m not in her brain. And that’s usually one of the weaknesses in small organizations. There’s no, each department doesn’t have a budget.
Jeremy Walker (44:44) It’s just hence.
Derek Kamajian (44:46) There’s no staffing model. There’s no understanding of volume to the work of that staffing model, right? But this is what medallion is going to be able to give us for the future of this business. It’s been around for 10 years. We need something that can grow with us for the next 10 years, right?
Jeremy Walker (45:02) Yeah, exactly. Yeah.
Derek Kamajian (45:04) Okay. But I don’t know if it’s a 1,000 or can I make a guess first? Can I guess? Yes. Okay.
Jeremy Walker (45:13) I’m waiting.
Derek Kamajian (45:15) My guess is… my guess is 60… 500 a month.
Jeremy Walker (45:24) 6,500 a month. All right. Let me do the math.
Derek Kamajian (45:26) 100 a month that’s my guess 12.
Jeremy Walker (45:31) We’re definitely not in the same universe, but I’ll show you, I’ll tell you full transparency. Let me actually, just let me do something real quick here.