Transcript
Brandon Chase (00:00) hey, Brad… morning, guys.
Kevin Murphy (00:06) Morning.
Brandon Chase (00:10) Kevin, thanks for hopping on. That was a little bit last minute yesterday, but we garrison and I met with our finance team and executive leadership about the per provider cost. So we’re getting closer on that, but there were a few follow up questions that we wanted to run by you just to see if we could extract just a little bit more data from you understanding, you know, it is difficult for you.
Brandon Chase (00:37) So I will caveat it with that. We know it’s not the easiest for you to get this information. So appreciate… you hopping on. Sure… you see, I’m going to pull up the sheet garrison. Is it just these three? Yeah, just to pull?
Garrison Goodman (00:53) That up and just update our finance team’s working hard to try to come up with a model that meets what Erica wants. So they’re being amenable and they’re putting their heads together. I think Brandon might have told you but we met.
Kevin Murphy (01:03) With our.
Garrison Goodman (01:04) CFO head of finance CRO, the VP that I reported into everyone’s collectively trying to engage on this and find a way. So just know that these questions are coming kind of from them so that they can work things out, yeah.
Brandon Chase (01:23) And if you don’t have the answer, we get it. We know the uphill battle that it’s been all right. So, the first one that we were asked to kind of confirm is just how many enrollments are there by adult and peds? I think we obviously have those numbers on the spreadsheet that you gave us for the low medium and high scenarios. But if you could just kind of, I guess help us understand like obviously like the majority we’re considering two thirds of your annual new hires to be adult and one third to be peds. Is it just that there’s less peds providers. So there are less enrollments that need to be done, or is it truly, like, is it like a different set of payers that they need to be enrolled with?
Kevin Murphy (02:21) So it’s both. I’m trying to find my data here. I don’t even know if it matters. To be honest. Our adult book of business is like 100, call it 100,000,000 dollars in revenue a year. Peds is like 25 to 30. It’s just smaller. Most of our peds business is. So it’s located in less states and.
Kevin Murphy (02:57) The primary payer in most of those states is tricare. We do a lot of Aba. And tricare basically is the major payer there. Sorry heard something fall. There was no scream after it, which is. good. That’s good. So tricare… is the big that’s the big payer in those states. Medicaid is usually the second if there is one for Aba and that’s like most of our business. So some of our providers, if you’re just doing Aba, we might only enroll you with tricare. In some markets. There’s one. If you’re doing PT or OT, we might try to get you in with some of the other commercial payers. So it could be five. But our book of business in those places is much smaller than… the adult population. And that challenge we have on the adult side where we are staffing multiple facilities in a given geographic location. Peds is truly like a traditional outpatient like you’re in one clinic, you might go to one other clinic, but there isn’t this like cross coverage where we need to be able to move you into any facility that might have any variety of payer mix. So it’s just a small, it’s a smaller subset of payers just because of the business, but it’s also a different model in terms of how we’re staffing these things. So the enrollments are definitely more. I think it averages out to between two and three. Most of that is because we’re doing tricare is like just one and that’s it for most. But even the folks that we might enroll in more, it’s like five or six, right? So when you average it all out, it comes to about two or three per repeats. Got it. And the adult side, we have that crazy coverage thing where in some states like Illinois, like we want to enroll you with like 12 different payers. So you can cover as much of this as possible. Some states, it’s smaller, some states, it’s three or four, but we have 100 sites in Illinois… right? That’s you know, that drives it up quite a bit, right? Does that help? Is that helping answer your question?
Brandon Chase (05:27) I think, yeah, I feel like, you know, I personally, I didn’t know the difference between the business model. So that definitely makes sense, right? Because well… at least on the peed side, it’s a lot easier, like it’s the confidence level is probably a lot higher to be like, yeah, it’s like two or three, right? Whereas, I think the adult side because of the cross coverage model, it’s a little bit more difficult to kind of pick that one number and say, like, yeah, this is the average because it just varies so much well.
Kevin Murphy (06:01) I mean, it also depends on like, you know, if we are trying to, if all of a sudden we get, you know, 10 new sites in let’s say, New Hampshire, we’re only enrolling those people in six locations, right? As opposed to six payers as opposed to 10 or 12, right? So, it really just depends like where we hire, how many people we hire, how many people we need to backfill in a given market? That’s why it becomes like a really tricky exercise to figure out like how many enrollments are we going to need? It’s? Like, I mean, yeah, it’s a dark board that we’re just throwing, you know, could be anything.
Garrison Goodman (06:38) Yeah, that’s really that’s helpful… and it actually changes things for the positive. If we were to say, you know, because, we’re trying to make a per provider model work while also like, you know, making… sure that we’re responsible for everything that on our side and on our back end and everything. So, if we used three or four payers per peed, would that would Erica feel comfortable? That gives us enough room for?
Kevin Murphy (07:13) Peeds. Yeah. And again, I don’t think peeds is where we’re concerned, right? Yeah. Like I’m trying to find my, I have like this is the one thing I do have actual data to support. I just can’t find my file. Let me.
Garrison Goodman (07:32) See I had.
Kevin Murphy (07:33) Something somewhere.
Kevin Murphy (07:54) I don’t know, I can’t find it right now, but no.
Brandon Chase (07:58) Worries, if you find it, you can send it.
Garrison Goodman (08:00) I think you.
Brandon Chase (08:02) know obviously to Kevin to answer your question, yes, that’s helpful. I know when you and I spoke kind of one of the last exercises that you and I did. I just kind of was like which of these do we use low medium or high for? Like if we’re going to try to model this and we agreed to go off the medium?
Kevin Murphy (08:23) And I think there.
Brandon Chase (08:25) May have been a follow up conversation with Erica where she was even saying like, well, she’s not like even 100 percent confident with the low numbers.
Garrison Goodman (08:34) So like,
Brandon Chase (08:35) I think garrison and I are sort of like skewing towards like the lower end, you know, just to kind of show like a range.
Kevin Murphy (08:45) I think what she’s really like the worst thing in her mind is paying for something… you know, paying for an amount and us not hitting it like she doesn’t want to lock in on a high end, right? It would be like, you… know, here’s what… you pay for. Let’s call it 100 enrollments, right? Or 100 new providers. You know, if you gate into 200, you know, then the price comes down. If you hit 300, the price comes down. And it seems like I think she’s reacting to a model of like, well, you’re pricing me at 400 and I’m not getting any wiggle room if I hit 100, right? I’m already locked in at that, right? So it’s that like upfront cost where we’re committing to X and locking ourselves in. And if we are below that, right? I… the low end seems like we would hit it. But to her point, like there could be some structural things that happen in the company. Like, I don’t know like we sell half the business for whatever reason. All of a sudden, we’re nowhere near that number, right? I think that’s what she’s trying to protect against is the downside risk of like we stop hiring for some reason. I don’t know what that reason is, an economy could tank, right? Like that could happen. And all of a sudden, we need to shut down a ton of sites and we’re not hiring. And all of a sudden we’re locked into, you know, I think there’s that flexibility that she’s you know, she does not want to lock us into a 1,000,000 dollar a deal thing. Your thing if we can’t guarantee that we’re going to, we have to hire 900 people a year to do that. In this business like that’s what I think she’s trying to protect against.
Garrison Goodman (10:29) Yep, that tracks. And I think what our team’s trying to build is basically like, hey, you pay us, you know, something like a lump sum for all of your existing providers. And then here’s your price after that. And then once you hit another tier, here’s, your price after that. And so we’re trying to build that, which does kind of bring into the next point. We just want to reconfirm what is the steady state provider count that we, should be using… you know, and we had it as 2000. I think that was like consistent across I.
Kevin Murphy (11:12) Think that’s the number you should use. And I’m laughing a little bit because like this is a number that we’re trying to. We are trying to actively understand ourselves. And I’ll tell you why it seems like it’s like it seems like it should be an easy thing for us to know. The problem is prns make up a significant portion of our business and our operations team likes to keep that they don’t term them. They never term these people because they want to make sure they have coverage if they need it. So, a lot of times a therapist will leave healthpro, but we won’t terminate them in the system. They stay on our roles as a PRN. We keep credentialing them because, they may end up working for us a month later to do some coverage or two months later. So we just did this exercise where I looked at everybody to try to like help keep our advantage costs down. I looked at everybody who we, who start who we originally had credentialed in March, any March because, they roll in a 12 year, a 12 month cycle. So we looked at 150 providers that either didn’t bill or had low billing or had no billing the past six months or something.
Kevin Murphy (12:24) And we sent it to our operations team said, do these people still work here? And we only ended up saying like only 20 of them don’t work here. And we like sometimes the art, like the operations team doesn’t know who these people are. So like our data is this is the problem, our data is, so our data and our process around this, they’re not clean and it’s… almost like they, they’re hoarding these people in case they need them.
Kevin Murphy (12:52) So we don’t you know, until we apply like rigorous accountability which is something we’re trying to do. It’s just not really been enforced yet. Like active billing, headcount is something that this company is trying to wrap their arms around. And, you know, if you ask anybody what that is. They’ll say it’s you know, 1,600 to 1900. But that includes, our… that includes our long term care business which we don’t need credentialing for. So, I’m sitting here thinking like that number seems super low. But the problem is like Brandon might bill. He might be on the active head count in March, garrison, you’re on it in April. I’m on it in may, but none of us are on it all three. So it’s, really difficult to get a point in time of like how many people do we actually have here that are doing billing that we need to have enrolled in some manner? I think we have 2,100 people or so on the advantum roster right now. I think that we should, we can probably cut, you know, 100, maybe 200, maybe up to 10 percent of that because they’re prns that we don’t bill. So that’s why I think 2000 is a problem is pretty good understanding of where we are… because again, we are trying to hire more people and we are like, I think that’s a little bit bloated. So if we cut, you know, 10 to 20 percent, but then we hire a bunch more, I think we fall right around 2000. So that’s my best guess and it’s I wish I had, I wish that wasn’t the case. I wish I had like a legit number that I could tell you. And in most businesses I’d be able to. But the way we run this shop is very, it’s very hard to pin down how many people do we actually. Do we actually employ and pay just.
Garrison Goodman (14:55) Running that back, it’s like, hey, we have 2,100 on staff. 10 to 20 percent are prns. And so that number could flow.
Kevin Murphy (15:01) Well, it’s way higher than that. It’s way higher than that. Your PRN number is probably, I don’t know. I’m spitballing here, but it’s probably 30 to 40 percent. But there’s prns that are active and are billing monthly, right? Those are like those are prns but like, we know who they are. I can see them in the billing data. I’m not worried about somebody if it’s a PRN and they build in March. To me, they’re still an active employee, but there’s prns that haven’t built in six months that our operations team might just be keeping in their back pocket in case they need them one day, right? So that I think is about 10 percent could be up to 10 percent.
Garrison Goodman (15:46) Okay. And 10 percent of the 30 to 40 percent of total.
Kevin Murphy (15:51) I would say 10 percent of the whole active thing that’s like the 2000 people, on the books. I think 10 percent is probably or out of the 2,100 people that we have on our advantum roster by… just gut tells me that 10 percent of those folks are never gonna bill for us again. Now, I have to identify those 10 that’s the hard part is I don’t know, I have to literally go to, I have to figure out like how do I weed this down to give it to the operations team for them to look at and say, yeah, this person hasn’t worked for us in six months. They’re never gonna work for us again. Let’s terminate them. But that takes it’s an individual person has to lay eyes on every single one of them. It takes time for us to go through. Now we are, I am pushing that project because I want to clean, especially if we come over to you. I want a clean roster. When we come over to you. I don’t want, you know, I don’t want 200 people that I don’t know if they’re ever going to work again on your roster. That doesn’t make sense for me. We should have a clean roster. So when we say, hey, medallion, how many people do we have working for us? We’re not in the same situation again. That would be my ideal state. Now, there has to be some challenges, changes on our end to make sure that happens yep.
Garrison Goodman (17:04) Okay. Yep, this is helpful. Last question I think we have is, and I think you, and Brandon have talked about it before and most customers, this tends to be somewhat of an estimate is number of re enrollments? So it’s going to come down to like, hey, you know, oftentimes how long do people stay with your org? And then you have to re, enroll them with payers every three years. And.
Kevin Murphy (17:33) So, it’s.
Garrison Goodman (17:35) you know, another again estimate because how long do people start for? How long do they stay by provider type? But based upon that, we just wanna know how many re enrollments, which is effectively just, yeah, again doing an enrollment, but we do charge a lesser cost for that. And so it’s gonna be what percentage of the overall steady state will we expect to have to re enroll every year? And we just need like a reasonable estimate to kind of make it there.
Kevin Murphy (18:11) Are we talking about re credentialing or re enrolling? Re enrolling?
Brandon Chase (18:17) It’s like a revalidation for a.
Kevin Murphy (18:21) Given payer, right? Is that what we’re talking about yep? Okay. So I would… say.
Kevin Murphy (18:31) I mean, I think the, I think what Christine has told me is like traditionally payers, it depends on the payer, but it ranges from every three years to every five years. Okay? Does that seem about right? So, yeah.
Garrison Goodman (18:46) Yes, because some payers require every three, some payers require every five, so.
Kevin Murphy (18:51) Right, right. Yeah. I, the turnover data I have, I don’t actually, I don’t have turnover data. I don’t know… I think one, just anecdotally, one challenge that we have is people that start with us sometimes do not last long, but I think if they last past that, I think they do stick around for more than a year… and maybe I just, I couldn’t tell you like how many people last five years? I just couldn’t do that. I have like no idea.
Kevin Murphy (19:34) I would just, I would kind of go maybe pretend… everybody stays five years and they all get enrolled once every five years. So call it 20 percent. I, yeah of the 2000 like that. I don’t really know how I think that’s probably conservative Ish,
Garrison Goodman (19:58) because.
Kevin Murphy (19:58) not everyone’s going to stay that long. Some payers are going to enroll every three years. I.
Brandon Chase (20:07) Don’t know. Yeah, yeah. I was thinking somewhere along those lines too, even if we took the middle four years, right? That’ll.
Kevin Murphy (20:15) be 25 percent that’s kind of what I’m thinking like 25 percent, but that assumes everybody stays that long, you know, right, right. So factoring in a little bit of turnover, I think that’s why I would say 20 percent.
Garrison Goodman (20:29) Is it possible to, I guess, is there anybody could ask me like, hey, what’s the average tenure of our providers? Like is that a crazy question?
Kevin Murphy (20:43) I can ask and see if I can get a quick answer. Yeah.
Garrison Goodman (20:47) And I think if we can use that, then I think we could stand on two feet to Erica and be like, hey, here’s, how we came up with the number of revalidations that we need because to your point earlier, she’s like she doesn’t want to pay for things that they’re not going to use. So it’s like.
Kevin Murphy (21:04) Good point. Yeah, we.
Garrison Goodman (21:06) also don’t want to like so grossly underestimate so that we’re doing a ton and it all of a sudden there’s an extra bill.
Kevin Murphy (21:16) But.
Garrison Goodman (21:17) I don’t feel like that’s going to be the case kind of like what you were just saying. So it’s just like, how can we say here’s? Average tenure? We’ll take a blend across payers, you know, three to five years.
Kevin Murphy (21:28) And, you know, well.
Garrison Goodman (21:30) It might, we might end up at 20 percent, but then we could say, hey, here’s, how we got to 20 percent versus it’ll. Feel like less of a dart. Yeah. Okay. Yeah.
Brandon Chase (21:44) And if on the other side of that coin, if it’s like 18 months or two years, it’s like it’s the revalidations almost become a moot point at that point, you know? So… okay, I want to real quick. I do want to go back to the steady state real quick. So we’re going to use 2000, but we’re going to provide this range for Erica, right? And then obviously unlocking at certain points… our current range is like 2000 to 3,000, but I’m almost thinking like it.
Kevin Murphy (22:16) Should be, you should go below 2000. Yeah, the range 2000 should be like the middle. Yeah. So it’s like maybe 1,000.
Brandon Chase (22:26) To, I don’t know, do you guys ever think you’ll get to 3,000? Like what’s the… I guess what’s the average like year over year? Like do you experience, is it, does it, is the steady state kind of stay the same year to year based on, you know, turnover attrition and recruiting?
Kevin Murphy (22:45) I mean, I’ve only been here for, I haven’t even been here two years so, and neither is Erica. Yeah. And last year, we had a pretty sizable like we cut down a bunch of sites, yeah, but didn’t really trim our workforce all too much. So, I don’t that one I like really don’t know. I don’t think three like I don’t think three thousand’s out of the picture, not like this year, no, next year, if we grow, if we’re doing like, you know, the growth is on the roadmap, you know, can we execute on that and deliver? Like I think it’s possible. I think the three thousand’s probably at the top end especially if we’re cleaning this, cleaning up our roster along the way. Like, I think that’s probably the high end. I don’t think that we would get there and a 1,000 on the other direction unless we shuttered a significant portion of the business. I don’t think we would get to a 1,000 either. Yeah. So, and I don’t again, unless there’s some exogenous shock to the economy that causes us to close half the business. I don’t see us, you know, which again could happen. So.
Garrison Goodman (24:02) Brandon, why are you thinking? Go below the 2000 steady state?
Brandon Chase (24:07) I’m just thinking from a commitment standpoint, if.
Kevin Murphy (24:11) Erica?
Brandon Chase (24:12) Is like, yeah, 2000 is like the max. What if I only want to commit to, you know, however… many, you know, I understand like 2000 is the, you know, it’s kind of like the today state. I’m just thinking from, if I was Erica and, you know, if she’s having doubts on all this stuff.
Brandon Chase (24:38) And like what Kevin said, she doesn’t want to over commit to anything and just be super conservative. If she commits to a lower number, understanding that like the per provider cost would probably be more, you know, do we just model that up? Yeah, maybe I don’t think a 1,000 is the right number. I was just throwing that out there. But like, you know, it might be, I don’t know 1,800 or something like that.
Garrison Goodman (25:03) Yeah. Okay.
Kevin Murphy (25:04) That’s yeah, that’s where I was gonna, I was gonna.
Garrison Goodman (25:07) Yeah. Okay. All right. That makes sense. Yeah, because that accounts for some of the variance that Kevin was talking about earlier. What we don’t know that way we don’t commit to a total volume. We said, it’s just a little bit more conservative than saying like, hey, we’re at 2,100. Now, let’s go down to 2000. Let’s give them some room 1,800.
Kevin Murphy (25:29) 1,800 builds in like, hey, we’re gonna lose business or we don’t hire as quickly as we want. Or there’s more prns that we can take out like there’s just a lot of factors here that could like 1,800. Could that could be our today? Like it could be. I just my gut tells me that we can’t if we really put the screws to operations and said, you know, if this person hasn’t billed in three months, we’re kicking them off, then we could get to 1,800. I just don’t know if we have the appetite to do that, right?
Brandon Chase (25:58) Yeah. And, you know, sometimes exercises like this.
Kevin Murphy (26:03) Yeah. Well, I mean, depending on what pricing you give us like maybe that gives us the incentive to go in and say, you know, what? Like this is too expensive to have these people just be floating out there. We need to clean it up. And there needs to be rigor around this for our operations team. Like that is entirely a possible like that’s a plausible outcome from this where it’s like we need to get to like who are the absolute necessity people? Not the people that, you know, you might use, you know, it’s like the Marie kondo, like we gotta go in and clean the shit up type of approach, right? Have you used that? Have you worn that shirt in the past six months? No, throw it away. So, speaking of some with a lot of T shirts that I gotta get rid of. This is top of mind for me. So.
Garrison Goodman (26:54) I’m terrible at that. I have shirts from high school.
Kevin Murphy (26:56) Still, yeah, exactly.
Garrison Goodman (27:00) Okay. Brandon, is there anything else we should reconfirm? I think pressure… testing with you the peds number helps we’ll try to.
Kevin Murphy (27:13) Again, we’re.
Garrison Goodman (27:15) trying to do it on like a way that’s.
Kevin Murphy (27:17) like giving?
Garrison Goodman (27:18) You guys the ability to scale on a per provider without having to totally account for the number of enrollments, but we also just can’t be in a position where it goes so far beyond what we’re expecting. What do you understand? So we’re targeting somewhere in the realm of an average from an adult provider of like 12 to 15.
Kevin Murphy (27:42) I think that’s too high to be honest. Really, I think that’s too high. The data, I find my thing, right? This is advantum, and they’re tracking the providers and the payers that we asked them to enroll. And I pulled this at the end of last year… there were just over 700 adult providers and they enrolled them in 6,500 payers. So it’s about nine point one payers per therapist and peds. There were 250 providers and 520 payers that we enrolled them with, which is an average of two point one. So, I think, you know, instead of using 12 to 15, I would use nine to 11. If you, if you want to be conservative, you can go the higher end, 10 or 11 for adults and two to three for peds, conservative from your perspective, right? But I would not do 12 to 15. I think that’s far too like we, there might be some states where we had 12 to 15, but I think a lot of our states are way lower than that.
Garrison Goodman (28:51) What do you think it, does? It’s just like what, do you, what do you think Erica will say? That? Do you think she’s going to be like we just won’t know and I don’t want to crack it or, you know, what do you, what do you think?
Kevin Murphy (29:05) Well, I don’t really, I don’t… how are you building this in? I guess maybe I don’t understand the question.
Garrison Goodman (29:18) It’s I guess like would Erica become like we’re basically going to do a per provider model? But like, you know, we’re modeling it on our side to factor in an average of like 12 to 15. You’re saying that’s too high. What Erika was saying on a previous call is we don’t know if some providers are 20, some are three, you know, we might open up to more states and it’s like, yes, we’re trying to come up with a way that this works without knowing what the future holds. But we also have to protect our side too. And so the way in which our cost model works is same way it would work for doing this by hand is each enrollment does take some cost and so we have to look at it that way. Yeah.
Kevin Murphy (30:05) I understand that. So this is the most accurate data that I have on this. And this is literally what advantum has done. So I don’t think she can challenge those numbers. I think what she… like if anything she would, I think she would say the enrollments could come down because we would be more aggressive in managing the payers that we’re going to enroll with. Because… we’re being charged per enrollment, right? Like that is kind of where her head went. If we go into a new state. The average enrollment in that state is going to be way less because we don’t have an established payer mix there yet. So like if we were going to start a new site in let’s say New Mexico where we have no business, we would enroll with medicare probably optum. And then we’d have to go out and find payers there. And that takes time. So we’re never going to get to 1,112 13 in New Mexico until, you know, 10 years from now because it takes forever. The places where we have the most are the places we’ve been the longest Illinois. I think some places in South Carolina. So like the sites where we have, you know, higher than 11 or 12 are those, you know, it is Illinois that’s the one big one I’m thinking of. So the only way we would ever hit 12 to 15 is if we only hired people in Illinois.
Garrison Goodman (31:40) Okay. So that’s helpful. We’ll take this information back. We’ll try to detail out. Hey here are the numbers that we’re going to use here’s, why, and.
Kevin Murphy (31:51) then.
Garrison Goodman (31:52) Make sure, you know, just kind of get your eyes on that. And then before we go back to our team to be like, hey here’s, what we can build on. Okay. Well, thank you so much. I know it’s appreciate… the time and effort going into this and thanks for, you know, just like kind of we are in the middle here trying to find something that makes sense. Yeah.
Kevin Murphy (32:17) No, we appreciate the effort here trying to get this to go.
Kevin Murphy (32:22) And it sounds like Ari had some good conversations while she was in California. So that’s good, too good. Brandon you sent a note about the implementation scoping call? I, yeah, we just, I think we have too many open questions on like the onboarding call. We’re going to have Monday and then I think just those two days Eric is not going to be able to join. So can we, I think we should just push that to when Sammy gets back? Yeah, we’re also onboarding a new CIO in a week or two. I don’t know if it’s necessary to have him on the call right then and there for that first call, but I’d at least like to give the Guy the opportunity to, if he wants to, because I do think there will be some it resources that are needed. There always are for implementations like this. So I just think the timing is going to work out better if we push it. Yeah, also like these conversations I think are still going to continue and, you know, if we end up going with a per provider that should like that might per provider or your normal contracting approach, your normal pricing, those could have different impacts on our workflow because if we need to manage enrollments, we might need to think about setting up the, our process differently and that may impact the implementation that’s just like kind of how we’re thinking about it.
Garrison Goodman (33:45) Okay… that.
Kevin Murphy (33:48) Makes sense. All right.
Garrison Goodman (33:50) Thank you. We’ll be back shortly. Yeah, thank you, Kevin.
Kevin Murphy (33:53) Have a good weekend, you too.