Transcript
Nick Scallion (00:00) hey morning, folks, morning. How’s everyone doing today? Doing well, doing well… good. We’ve been in the midst of some good sporting highlights here with our conversations tune in to the masters?
Don Borchert (00:18) Oh, I haven’t watched anything on the masters today.
Nick Scallion (00:21) It just started but I put my annual lottery tickets in on some picks that I have no, no idea about. All feels and people who’ve won in the past, which isn’t the best indicator. But you never know… I’m just waiting on Cameron on our side. So we’ll just give it another quick second.
Nick Scallion (00:56) Hey, cam.
Nick Scallion (01:02) Well, cool. I prepared. It should be short and sweet today. In terms of what we’re going to share, basically got four, you know, points of interest from you if you will from the last conversation that we needed to address. So let me pull that up here.
Nick Scallion (01:21) Cool. So just to sort of recap when we went over the and I’m kind of doing a before and after here. But to look at what we talked about last week, the investment for medallion was going to be close to half a 1,000,000 dollars. And you’re saying, yeah, that’s a pretty significant uptick for the four dedicated or five dedicated ftes we have doing this and verifiable only coming in at 100,000 dollars. And then year one had the implementation fees. There’s naturally a little bit of an uptick in year one for our standard contracts. And you’re saying, you know, that’s kind of a value realization period where we’re kind of seeing if you guys can prove this thing. We know that there’s some Roi tied to doing this faster. But significant uptake is even more of a problem in year one. And with our invoice structure by default being upfront, you know, we’re talking about, you know, half a 1,000,000 dollars that would have been payable within 30 days of the contract execution. And then the last piece. And we’ll talk about this more in two slides. But our service level agreement was based on the time it takes to submit the payer enrollment applications. And you were saying, you know, there’s a little bit of the gamble or not as much guarantees on how this is going to impact the billing side of the house if you guys are just submitting applications faster, but there’s no guarantees. We’re getting our providers in network faster. So that was the crux of the asks that we took back to the team. So I’ll go through this in order. So we got the annual investment figure down over just over 100,000 dollars. So, you know, trying to approach or get as close to break even as possible and then also having a scalable infrastructure. So I don’t know what your growth ambitions are. But should there be another state being added or some acquisitions happening, right? We have this infrastructure, two ftes plus the medallion investment kind of built to scale and getting close to where we are today on the investment. And then year one specifically, we got 120,000 dollar reduction by kind of moving around and discounting further in that first year and that sort of pre bit or value realization piece or time period. And with that fee going down and breaking that down into quarterly installments, we’re talking about instead of half a 1,000,000 dollars, payable 30 days after the contract execution, we’re talking closer to 90,000 dollars, right? Broken down into four payments for the term. And then on the service level agreement, right? Breaking that down to what we ultimately based our business value assessment on down was that, hey, it takes between 60 and 120 days to get par approval, participating in network approval from your payers and states today, and medallion is seeing closer to 60. So, what we did is we’re now having teaf in the agreement. That also says the average time to par approval is going to be 75 days from the time that it’s submitted cam, do you want to add anything on the submission? Can.
Don Borchert (04:04) you walk me through what the participating network? Maybe it’s more of an Amanda phrase that she understands. I don’t understand what the par stuff is.
Nick Scallion (04:13) That’s essentially the acceptance that you’re getting from the payer that the provider is in network that their application has been approved.
Don Borchert (04:22) Okay. And so it’s going from 10 days to 75 days.
Nick Scallion (04:26) So, no. So this is, so our standard service level agreement is that we guarantee all the payer enrollment applications are submitted to the payer within 10 business days, but there wasn’t any guarantee on how fast we get that response time from the payer. Does that make sense?
Don Borchert (04:42) Okay. And so you’re saying like, hey, after we get it back, we, as long as they’re in network… with you guys, right? Is we’ll guarantee that we’ll have something back credentialing, like everyone will be credentialed within 75 days, on all of the payers.
Nick Scallion (05:05) Right. And that’s the biggest impact for most of the payers granted. Some will backdate, but for all those payers that they require the actual acceptance that’s where the, that’s the biggest lever, right? In terms of getting those claims approved?
Don Borchert (05:17) Do you guys know or do you need information from us? Like how many of our payers are you in network with? How many of them are you not in network with?
Cameron McCormick (05:28) This is, this is based on all of your, the payers that you’re currently contracted with. So, these are the payers that you’re getting your providers enrolled with right now, Nick? What is Amanda? Do you know what your average turnaround time is for enrolling providers between?
Nick Scallion (05:47) 60 and 90 days?
Cameron McCormick (05:49) Yeah. So what we’re saying here is that we’re going with the same payers that you’re enrolling your providers with. Now, we’re going to guarantee that across all those payers. And if we do not, if we miss that, it takes longer than 75 days. You do not pay for the enrollment. So that no other vendor offers this. Every other vendor would say that’s out of our control. That’s up to the payers. We have done so many that we’re confident that we can put dollars at risk on these times.
Don Borchert (06:23) Okay. That makes sense.
Nick Scallion (06:27) Any other feedback on the general contract I can share? This is kind of just what the actual breakdown would look like, right? So, year one was the 373. Just noting here that the actual investment in the solution is closer to 350 plus the 20 implementation. So ultimately getting this average down to just under 380,000.
Nick Scallion (06:46) Okay? And then I did want to kind of revisit this. I was revisiting some of my notes Don and we were looking at this and you said, okay, so this is more of like kind of we’re not generating any faster revenue, but we are maybe accelerating an Ar backlog. And I just, I was thinking to myself well, if providers today at acorn, from what I understand. So there is patient access that’s occasionally, right? We’re trying to mitigate this as much as possible. But there are on occasion patients being seen with providers that they’re not in network. But the default is, it sounds like, you know, it’s gonna take you’re giving a provider who you’re onboarding, you know, a 90 to 120 day window that says things outside of compliance control, right? Training, right? Opting into insurance, things like that, right? Like that’s, gonna happen.
Nick Scallion (07:27) But ultimately, it’s a 90 to 120 day window before a provider is inducting care. And so, by getting the credentialing piece, right? With the guarantee that we’re getting these providers in network in 75 days, right? I do think they’re gonna be a little bit of a shift with your operational team, you know, at a regional level saying, hey, you know, now as we’re onboarding providers, we can have their start date 90 days instead of or even 75 days instead of a 90 to 120. So, yes, this could, you know, and again, if there’s backdating claims, some of this may be just kind of cleaning up an Ar backlog. But I also think there is revenue and claims that can be generated that aren’t today. If you’re having to keep those providers on the sidelines. So just wanted to highlight that piece as well. Okay? And then just kind of going back to the overall, like what we’re really looking at here. So now, with the spend down to 380,000, we’re talking about this idea of recognizing additional revenue. So this is either cleaning up the Ar backlog and, or seeing more patients more quickly by getting this administrative onboarding done faster and the write offs trying to get this cumulative benefit closer to 5,000,000 dollars per year.
Cameron McCormick (08:29) Gotcha.
Nick Scallion (08:31) So I told you it’d be short and sweet. That’s what I have prepped for you now. Just kind of trying to seek some feedback here. And I can keep these slides up if you want me to go back on any.
Don Borchert (08:38) No, I appreciate the movement. If you can send this to me, Nick. When you guys are done, Amanda and I have had lots of discussions over the last couple of days just trying to figure out like where you guys are coming in. And then I need to spend some time with money. And then I need to spend some time likely chatting with the board because even at 350, I still think it’s going to be some incremental cost. And while some of that, we can get away with not delving too deep into our dirty laundry. But from an SG a perspective, we have a lot of SG a compared to our peers. So this adds more SG a to it while the benefit, is down the line. So I just got to figure out, is this where I want to place my bet? You’re talking about, putting your bets on the masters and your lottery picks, etc, right? This is like, where do I feel like? I want to, I want to, you know, wager my money on. So, let me give it some thought. We will get back to you. I do appreciate the movement if I can get like dispensation from the board like, yep, let’s work like here’s the question for you if it doesn’t work. And I’m not getting the incremental… savings. I’m not really that concerned on the 4,000,000. Is it’s just be like we’ll bill faster but I don’t think anything changes dynamically for the business. It’s the same 4,000,000 that I would have had. Where the savings is going to be, is on the 1,000,000 dollars on bad debt that I would have had, that’s just going to take it will take longer, it’ll take the full year for me to be able to see like, am I getting it or not getting it? What happens? I’m not getting it? Like you guys are great and everything else. But I’m not getting it and I have, I still have an extra 100,000 to cost. Then then what happens in year two? Like is there what, what’s my out versus just, hey, I’m sorry, you’re stuck with an extra 100,000 of cost? Yeah.
Nick Scallion (10:42) So, to give you an idea of what the out is, so the out is based on the performance language that we looked at, right? The time it takes to submit the applications and the time it takes for us to get that payer response. And then there’s going to be language in the contract. One suggests that, hey, if we’re missing, this is dollars back that we’re crediting to you. And then in the contract, you’ll see that if you’re eligible for credit back three times, you are able to turn, at your doing so without any additional fees, to medallion.
Don Borchert (11:10) Okay. If you guys, if you can send me this and if you can send me what the contract would be because a lot of it, it’s money and I both are contract sticklers, and, it takes us time to go through that. So, if you can send us, hey, here’s, our proposed contract, let us go through that as well. I’ll work a little bit with money, on the dollar side, but then a lot of it gets hung up on the legal language as well. Yeah.
Nick Scallion (11:41) Totally get it. So here’s what will happen, I’ll I can even send what this would look like in an order form. The order form itself is, very light that’s going to talk about the number of enrollment applications we can handle per week, how the fee structure works, how you’re drawing down from credit? So that’s going to be like two pages that’ll also link out to our master services agreement that I suspect you’ll want to take a peek at as well. So, both of those will come in there and happy to work through any questions or concerns you have, on that front. When you’re taking this to the board for feedback, where is your gut with the movement that we have today? Is this something you’re thinking about sponsoring and then going to get everyone else’s feedback or you’re still on the fence?
Don Borchert (12:17) If, if they’ll allow me to like, hey, you can just run over on cost. Great. I can tell you that that’s not tend to be where our board goes.
Don Borchert (12:28) it’s why, aren’t you cutting and cutting fast enough? Which is why what’s one of the reasons why prod is here with us is like, here’s, a bunch of solutions to go look at in ways to cut costs. Like, one of the things that we’re doing on the authorization side, is there’s another company that’s coming in and we’re going to save 100,000 a year, 100,000 dollars a year based upon their technology and eliminate people check easy one, right? I mean, that’s the easy one. This is a harder one. This one is like, well, I don’t really know if it’s going to work or not. They have a lot of, their product is slick. It looks great, but it’s going to cost an extra 100,000 dollars a year. And if it doesn’t work, in the end as far as getting the extra 1,000,000 dollars on bad debt.
Don Borchert (13:13) Like I don’t know what their appetite for it will be just being Frank and honest with you. Well being Don and honest, cause I’m not Frank. But anyway, I’ll let you know, just give me a little bit of time to digest, with Amanda and mony and Brian.
Nick Scallion (13:31) Okay. Very good. I know like our finance with all, the gives that we had there. They are kind of trying to time box this. We’re not going anywhere in may, right? We’re still agreeable, to working together and making something work out. They, you’ll see in the slide deck that, the offer is going to say contingent on an April partnership. Okay. Lights, lights are still on in may, but that’s kind of where we’d want to drive if we’re going to be able to stick with this approval.
Don Borchert (13:55) Gotcha. Understood. That?
Nick Scallion (13:57) Said, you know, we’re wrapping here in about 15 minutes. So, are you okay? I don’t know when you’re meeting with your board next, but I would love to just get 10 or 15 with you after you’ve had that sync just to understand the direction we’re going from there?
Don Borchert (14:09) I don’t I, the next time I’m meeting with them is right at the end of April, when our audit is due, that’s our next kind of scheduled call that I have with them. So once I, before I go to them, I want to, I want to have some further dialogue here with mony and Amanda.
Nick Scallion (14:25) Okay, go.
Don Borchert (14:26) Over some stuff. So we.
Nick Scallion (14:27) should be able to get back to you in the next couple of weeks. I would say, so, okay, look for our response in a couple of weeks. One thing that we can do and this is contingent upon Amanda’s availability. But typically, once we get approval on the commercial piece, a necessary step, we also want to set some expectation with the team on is what the implementation looks like. And also, if there is anything that you folks need this system to integrate with, also getting an idea of what that looks like, to provide some guidance as well. So, if there’s going to be a couple of week lull before we’re getting approvals, we can have that session with Amanda.
Nick Scallion (15:03) Shouldn’t take longer than 30 minutes just to set expectation on what the data migration looks like. And, and kind of like, give a more concrete timeline on what that looks like. So, if it makes sense, we can check that box and maybe that’s something that even comes up in the board too. They might have some, you know, reservations like, you know, is this like an epic implementation that takes 18 months? No, that’s not the case, should take closer, to 12 or less.
Don Borchert (15:27) Yep. Yeah. I wouldn’t be surprised if one of the teachers people. So we’re owned by ontario teachers pension that’s.
Nick Scallion (15:37) right.
Don Borchert (15:37) That’s right? If you go, look it up there’s, billions and billions of dollars whatever. And, we are like a small potato for them, but we’re important, we’re an important potato. We’re just one of those small like golden potatoes, we’re not in, the big 10 pound bag. But, they may likely be interested kind of given the trajectory of what acorn has done, we’ve gone from not performing well to performing every year has been incremental profit for us just not at the level with which they thought they bought. So, but we will get back to you if you can send that to us. I would appreciate it. Yeah.
Nick Scallion (16:15) Perfect. We’ll send all this over. And then I think we can also go into a little bit more detail on that SLA adjustment piece, the submission to completion guarantee. So, Amanda, maybe I’ll sync with you to see if we can get together next week just as you’re putting your head around this as well. So implementation process overview as well as the SLA process overview, just to get you comfortable with all this as well. Cool. All right, folks. You just hear her. I saw the nod, I saw the nod. All right, very good. Well, I’ll give you folks a couple minutes back. Thank you for the time you’ll get this note from me in the next hour or so.
Don Borchert (16:54) All right. Thanks a lot.
Nick Scallion (16:55) All right. Bye all. See ya.