Transcript
Philip Stefani (00:00) yo, how you doing garrison?
Garrison Goodman (00:02) Good, man.
Philip Stefani (00:04) Are you at Kyle’s right now? Yeah.
Garrison Goodman (00:07) Nice. He’s actually going to listen in.
Philip Stefani (00:11) What’s up, Kyle? I.
Garrison Goodman (00:12) figured it’d be a good one for him to listen in on.
Philip Stefani (00:15) Yeah. Feel free to join in Kyle if there’s anything you want to say.
Garrison Goodman (00:21) No, no terrible idea. Sign it, sign it.
Philip Stefani (00:29) Yeah. Let’s see.
Philip Stefani (00:34) You guys getting up to trouble?
Garrison Goodman (00:37) Not today, but definitely tomorrow for sure tomorrow.
Garrison Goodman (00:49) Yeah. We, Kyle lives over on the east side here, and there’s some good spots that we can walk to from here. We’re thinking we can maybe go shoot some stuff tomorrow… then happy… hour, then maybe grill some steaks up at Kyle’s house and either just stay here or go out if we want to get into some real trouble.
Philip Stefani (01:21) Yeah. That sounds fun. You guys have like a range that you like or where do you go shooting?
Garrison Goodman (01:27) There’s I’ve been to ones twice south of town. It’s pretty cool. It’s honestly just like a dirt lot next to a field and, you know, they got, you know, just like I’d describe it as like a wood awning with like, you know, wood in between and.
Philip Stefani (01:45) Yeah.
Garrison Goodman (01:47) And, you know, you can use their stuff or not. And it’s pretty affordable comparatively to like west coast or east coast… ammo’s not cheap anywhere, but it’s a good way to blow off some steam that’s for sure.
Philip Stefani (02:06) Nice. Yeah. Maybe that’s what we do with Kirby, maybe we take him to a range shoot some, I’m sure they have.
Garrison Goodman (02:15) That, I mean, if you find it, yeah, that’s a great idea. You know, we’ll have to, I don’t get the sense that he’s the kind of Guy who would be scared off by that politically. So, I think that’d be pretty fun.
Philip Stefani (02:29) Yeah, we could test the waters, but that might be, I was looking there’s. No like sports game or anything with the cardinals away. Yeah, but maybe that’s what we do.
Garrison Goodman (02:39) Yeah. And then just fyi, I’ve got a hard stop at the half hour. So, okay, obviously, you guys can stay on if it makes sense. I think that’d be a great idea, Phil… shoot some stuff and get some ribs. I mean, twist my arm. I gotta look at flights actually.
Philip Stefani (03:00) He seems like the type of Guy who would be into that. Yeah, I haven’t bought flights either I was gonna depending on what he says in this call around lunch or dinner, making more sense. That was gonna determine.
Philip Stefani (03:41) I think flights are gonna be expensive.
Garrison Goodman (03:45) Well, we’ll get his reaction to the pricing and see if we should care or not.
Philip Stefani (04:24) He’s usually back to back. Let me give him a call real quick.
Garrison Goodman (04:53) Thank you.
Philip Stefani (05:08) All right. He’s hopping on.
Philip Stefani (06:21) Hey, how’s it going? Kirby good? Sorry?
Kirby Cole (06:24) I don’t do a very good job managing my calendar when I’m trying to be out. So I was getting ready for lunch and you called me. Oh shit.
Philip Stefani (06:32) Well, good. We’ll make sure to get you to lunch shortly. Are you traveling this week or is Phoenix next week?
Kirby Cole (06:40) Phoenix is next week today. I just took today off because I haven’t there’s just been so much shit going on. And so I just was going to not work, but that doesn’t work at ecp. I’ve been fielding calls since seven 30. So.
Garrison Goodman (06:53) Oh, man. You got something fun going that you’re trying to go do?
Kirby Cole (07:00) It’s my birthday and my wife wants to take me to lunch. So, Kirby. Happy.
Philip Stefani (07:04) Birthday.
Kirby Cole (07:07) I’m not a big birthday Guy, but yeah.
Garrison Goodman (07:10) Feel the same as last year.
Kirby Cole (07:12) Yep. Not much different than yesterday, just old. I.
Garrison Goodman (07:16) suppose that’s a good thing.
Philip Stefani (07:18) Yeah, there it is.
Kirby Cole (07:20) Well,
Philip Stefani (07:20) hopefully you can get some.
Garrison Goodman (07:21) Fun this weekend, yeah.
Philip Stefani (07:23) We’ll try and get you out of here soon so you can celebrate but appreciate you taking the time really for today real quick. I know we got about 20 minutes left. Does that still work for you? Yeah, perfect. So, yeah, we’re super excited to be coming to visit on Monday.
Philip Stefani (07:38) Really for this call, you know, we’re going to show a couple things or intend to show a couple things on Monday around pricing just like current setup on the team, what we think it could look like with medallion a couple of those pieces around Roi in terms of revenue acceleration. And just didn’t want Monday to be the first time you were seeing those numbers. And yeah, want to use this time just to show you what we put together based on what you sent back. And essentially, just like, you know, tell us where we’re incorrect. I think we made a couple assumptions here and there, but we want to be directionally accurate. And then with your help, try and get us as close to the pin as possible. So kind of just want to move through those pieces and get your feedback. But is there anything in particular that you wanted to cover?
Kirby Cole (08:20) No, I did see just one data point. I finally got a report for some of our credentialing denial money. The optical division wrote off one point 4,000,000 last year.
Philip Stefani (08:36) From credentialing or overall that.
Kirby Cole (08:39) They said was credentialing, I don’t know that the… people are going down to a level to actually confirm it, that’s going to be one of the KPIs I’m going to drill in on is what they say is a credentialing error versus what is really a credentialing error, but they wrote off one point four last year that they assigned the two credentialing errors, which is like only like a half a percent of the revenue, but still, I mean it’s money you can go save. So, yeah, yeah.
Philip Stefani (09:08) That’s helpful. So, and you said that was optometry? And then I guess ophthalmology would be still tracking that down?
Kirby Cole (09:15) Yeah, I don’t have that.
Philip Stefani (09:16) One. Yeah. Okay. All good. Well, yeah, we can touch on that when we get to that piece, but yeah, let me share my screen and we can kind of move through this. So, yeah, I was just going to show like, hey, this is our understanding of the current setup. You’ve got a team, 17 ftes across ophthalmology and optometry. Those are the individuals actually doing the application. And then two directors, Andrea and Casey, who we’ve met. The ratio currently with your provider count is about one fte to 60 optometrists or 60 ophthalmologists. It’s a little less for the ophthalmology, we’ll look at the specific numbers shortly, but about an average of 60, I think it’s heavy.
Kirby Cole (09:59) On the optometry side, that’s part of what I’ve been asked to figure out. I’ve done a little bit of searching and talked to some folks in the business that say it should be closer to one in 100.
Philip Stefani (10:10) Okay. Yeah. You all were targeting one to 100?
Kirby Cole (10:15) I think that is likely what I should be doing in the optometry division. Yeah.
Philip Stefani (10:24) Okay. That’s helpful.
Kirby Cole (10:26) There is, I think there’s some bloat… on that side. You know, the two teams are the same size and they have the same number of doctors and MDS are just, you know, a lot more involved. And so they should be closer to that 60 to 75 number, I think… but not the optical team. Okay?
Philip Stefani (10:47) That’s helpful. And I mean, yeah, what we’re going to show you today is, I think, you know, we think we could get that ratio one to 300 or even up to 500 with medallion. So a lot more flexibility there. So, yeah, this is where.
Kirby Cole (11:02) Did the one point five seven come from? Yeah.
Philip Stefani (11:04) I’ll show you that. So this is how we built that out. So you got eight people on optometry and those are the individuals actually doing the application nine on.
Kirby Cole (11:13) Ophthalmology, we pay terrible.
Philip Stefani (11:16) Okay. This was 65 K salary plus 20 K for benefits. Excuse me, 20 percent. Perfect.
Kirby Cole (11:23) You got the load in there? Okay. Then that’s perfect. Yeah, that makes sense.
Philip Stefani (11:26) Okay. And on the managers too, we were doing 90 K plus 20 percent that’s.
Kirby Cole (11:30) good. Yeah, that’s perfect.
Philip Stefani (11:32) Okay. And then from what I’ve seen from qgenda, it’s usually about three K per month. So 36 K on the year. So that’s where we get the.
Kirby Cole (11:41) We’re paying, we’re paying. We’re paying more than that. Hold on, yeah.
Philip Stefani (11:50) What do you guys have for qgenda?
Kirby Cole (11:53) Let me go find the five because I… think it’s a lot more than that actually… found the robot. Maybe the number I saw was a three year price.
Kirby Cole (12:23) Yeah, dude. We’re paying about four X on that five X on that… like are we getting taken to the fucking ringer on this contract we signed? We’re paying… this last year cost us 190.
Philip Stefani (12:38) Okay. I mean, it could be like you guys have a setup that’s per provider. I’ve also, you know, the organizations I work with using qgenda I think are typically smaller than ecp anyway.
Kirby Cole (12:48) Yeah, it’s per member. So it’s 190 for up to 1,200 people. Okay?
Philip Stefani (12:56) And you said you did 190 on that last year?
Kirby Cole (13:01) And then add in another line on this one and add in licensure.
Philip Stefani (13:09) Oh, right. You’ve got the licensure, we.
Kirby Cole (13:12) use a company called onesource for that.
Philip Stefani (13:15) Okay. And how much is the licensure 60?
Kirby Cole (13:18) Yeah, it’s about, and that’s everything with the pass through plus the fee, you know, the localized fees. So that’s the total.
Philip Stefani (13:27) Okay. So, and that’s for renewals and new licenses?
Kirby Cole (13:30) That’s everything. Yeah. And that’s and we don’t do all of them. We offer it some doctors already have them. So like I wouldn’t want to try to like it’s fluid, but it’s been about 60 grand the last two years actually.
Philip Stefani (13:44) Okay. And you think about half of that is pass through fee. Half of that is like actually going to the vendor.
Kirby Cole (13:49) I think more than half is pass through. They don’t charge us a ton. Okay. Yeah.
Philip Stefani (13:56) Okay. That’s helpful. We will update that. All of this was kind of in service of looking at like, hey, how does this team look today? It’s one point 5,000,000. And then as you add providers, and, you know, kind of maintain that same ratio. How do you have to grow that team? We were modeling one additional fte added per year. So we’ll update the qgenda piece, we’ll add the licensing, but in terms of team growth, like how does this compare to what you guys were talking about?
Kirby Cole (14:24) I think if anything with partnering with you guys, the team’s going to get smaller, not bigger if I’m being honest.
Philip Stefani (14:31) Definitely. Yeah, definitely. If you partner with medallion, but in terms of like if you were to just continue with the qgenda piece, like is this kind of how it’s modeled today?
Kirby Cole (14:40) If we start buying practices again, yes, I would agree with that. And that is what we assume is going to start happening. So if.
Garrison Goodman (14:50) what we like to do Kirby is kind of model out like, hey, on a moderate growth strategy, what your headcount would have to grow to keep up, is this fair provider growth numbers to base that off of? Should we be more conservative? I.
Kirby Cole (15:08) Would be more conservative because the optical division is likely not going to grow at all. Okay. And I don’t know if you’ve had time, we might have to do this in two pieces because it could be half the size, just keep that in mind. And, yeah, and when you’re here, we don’t talk about that, but it could be ophthalmology only. And if it’s that, then it would just be the 300 MDS and like 220 ods. So growth is definitely going to be slower than this… because if we don’t have optometry, it’ll just be ophthalmology. And so like I could see us picking up like one or two big practices a year. That’d probably be, I don’t know maybe 100 providers. So I mean that’s probably close. What do you think about the size?
Garrison Goodman (16:04) Should we go say 80? Just?
Kirby Cole (16:07) To, yeah, I think that’s probably good. Yeah.
Garrison Goodman (16:09) Okay. So we’ll say 80 and then heard you on the, you know, the total number based upon some of the business strategy. Yeah. Do you want us to change anything, how we model it based upon that? Or I?
Kirby Cole (16:24) Think it would be very smart to accelerate the process for you guys to model out just ophthalmology as well. I still think that growth number is the same. I mean that’s really where we’re trying to grow. So, I think for now that’s what I would, I think it would just, it’ll help accelerate if we can just look at it that way too. I think we’ll know a lot more in the next couple of weeks on what’s going to happen.
Garrison Goodman (16:49) Okay. Is it going to be the fifth thing?
Kirby Cole (16:51) Or just ophthalmology? I don’t foresee it being just optometry. Yeah.
Garrison Goodman (16:55) We’ll build that out that’s pretty clear. Phil, do you need any, you got all that information? Okay. Yeah. In terms of what we show Monday.
Kirby Cole (17:06) This is fine. This is fine for Monday. Yeah, I don’t want you guys slaving over the weekend. I just that way we can have an initial look at the all in thing and if anybody sees us talking about, it looks all in too, which is not a bad thing. And then we can kind of sidebar the.
Garrison Goodman (17:21) Yeah, it’s not too much work for us to change this. A lot of it’s just in a spreadsheet so it’s just what you want us to show Monday with your peer show the total number. Yeah.
Kirby Cole (17:33) This is fine. She knows what’s going on but yeah, let’s just start with total because that’ll give us a real good apples to apples comparison to what we have today. Yep. And obviously pricing will probably change if the volume’s less. I get it. So we’ll just figure it out.
Garrison Goodman (17:46) Okay. Yeah. Heard you. Loud and clear. We’re going to show this. Most likely, it’s just going to be optimal optimology. And if, you know, the next couple weeks, you guys say, hey, we’re doing the full thing, then we’ll know what that looks like. Got it cool all.
Philip Stefani (18:00) Right. Sounds good. So, yeah, we can pull that together but we’ll show this on Monday and then, yeah, I know we’re pressed on time. So I want to move quickly through this. But in terms of like bringing Pam up to speed like we’re just going to show, you know, what are the challenges that you Kirby have listed out for us? How are we solving these? You know, don’t have to read through all of this, but also interested in specifically what Pam cares about and, you know, happy to add any of those pieces there. But I’m sure we’ll learn that from talking to her. And then I think the main story here is like, hey.
Kirby Cole (18:29) Hey.
Garrison Goodman (18:29) Sorry, Phil, just to cut off. Yeah, anything that we should focus on that’s you know, what she cares about more than other things.
Kirby Cole (18:37) So, Pam’s biggest issue with qgenda and this might not actually be a qgenda issue. This could be an effort issue. The more I dive into it is that she can’t get down to the individual plan level. So, I guess like humana could have like five plans under it. And so they have to manually go find everything because it’s not in qgenda. So being able to drill down to that plan detail will be a huge you show her that it should be the first thing you show her. And then the second thing that’s important for her and her team is ease of use as those updates come in because right now they’re either her team or a credentialing team member is going out to a spreadsheet and adding it in I’m saying we got medicare. They can see that now and there’s been some pretty big misses along that whole route. They now have access to qgenda so they can at least go look themselves. But however that process can be easier on her team. For the call center would be something I would think you could share. So.
Philip Stefani (19:42) Plan level reporting. And then just her team having access to all of the credentialing data, especially like who’s effective with which plans? Like at which time? Yeah.
Kirby Cole (19:52) Like literally the ability to just drill in and say this is Phil, this is his plan. It’s humana. Blah blah here’s what’s covered? Like they can’t see that today even on the top level plan.
Philip Stefani (20:05) Yeah, we’ll definitely show that super straightforward and medallion happy to go over it with her. Yeah, cool. So then kind of the high level on like what the move to medallion would mean for the organization. It’s essentially like, hey, we’re going to do this work faster. There’s going to be more accurate output and it’s going to be less overall cost for the function.
Philip Stefani (20:26) So we’ll kind of go through specifically how we deliver these pieces on the demo. But it’s like less than three days to collect all the provider data, less than five days to get those applications out the door, more than 20 days savings on any of those payers that you’re particularly delayed on revenue acceleration or EBITDA enhancement from that timeline savings, one fte for 320 to 500 providers, and then about 450 K annual or average annual cost savings. So we’ll kind of go through those pieces. These are all kind of highlighted here. Again, we put together a lot based on what you sent over kind of want to align this with what you’d be most interested in showing, you know, there’s a lot here. We don’t spend time on every slide. But what I really wanted to go through was on the timeline improvements you had sent over 90 to 120 days. Is what you’re seeing? I know on the first call, we talked about some of the delays are up to 150. Would you say? 120 is like a safe like middle ground for what you’re seeing? Yeah.
Kirby Cole (21:32) And that’s and they’re carrying that number through. Yeah, I would say that’s the middle ground. I think optometry ticks up a little quicker and ophthalmology takes a little bit longer. But, yeah, that the 120 is the number that the entire department says is the minimum. Yeah, that’s the number we use. Okay?
Philip Stefani (21:48) So then the way we would calculate the EBITDA enhancements here are, you know, medallion’s average for these payers is 74 days. So the delta’s 46 days you mentioned 1,100 dollars EBITDA for those providers. So just multiplying that by the 46 additional days. And then this was with the 120 new providers from the workbook you sent back. It sounds like we would have to update that piece to 80 just to be more conservative.
Kirby Cole (22:13) Yeah. But the.
Philip Stefani (22:16) annual total for the 120 would be about 6,000,000, probably a little bit less with the 80. But I wanted to check with you like if we kind of show this on Monday like something that would resonate.
Kirby Cole (22:27) Yeah. I mean, this is, you know, as much as it sucks to say that this is about doing the job better, but I mean we were being asked, to find savings all over.
Kirby Cole (22:36) So, yeah, this is, this will be a big part of the business case that I’ll be using to, you know, try to pull this off and.
Garrison Goodman (22:43) And Kirby just pressure testing when you say like, you know, EBITDA, is this like you’d recognize it as new revenue, pull forward revenue? And is it like if it’s just pull forward? Is that like helping with Ar backlog? Like what is the, I think?
Kirby Cole (22:56) It’s both. I think, it’s new revenue for the new doctors who are getting onboarded. And then also a look back… I was talking to somebody, yes. I was talking to one of our RCM leaders yesterday and he said on the optical side and he said that the primary issue, with most of that right off from the cred side is… lack of preparation for the re, credentialing or re privileging, so like it sounds like my team just sits around and fucking waits to get a letter and then reacts to it as quickly as they can instead of pre planning to say, hey, we know humana is every two years set a reminder six months out. Humana is coming. Go ahead and start the process. So, I think it’s both because that’s where the majority of the, I mean that one point four literally came from a lot of that. Okay?
Garrison Goodman (23:47) So, yeah, if we’re good to that, I mean like that’s really encouraging. It sounds like we can help you out a ton there. You’re saying like some of it’s new revenue. Is there a percentage that makes sense? Or is it just, hey, no, this is new revenue and we can take that to the bank and we can feel confident on that.
Kirby Cole (24:05) I think that if you throw that down to ad providers, that section is really just new revenue for this piece that’s great man.
Garrison Goodman (24:12) That’s exciting.
Philip Stefani (24:14) Okay, super helpful. The other pieces are pretty straightforward. I think the one piece we’re missing is just the claims write downs that you said you were tracking down. We were targeting to 285 K and 665 K just held in. Ar. It sounds like there will be some updates there which we can pull in as well.
Kirby Cole (24:34) Once we get access to the actual bi dashboard, I’ll be able to flip it. I was just watching him roll through it on his screen so I couldn’t switch divisions. I’ve requested it three times and now they’re going to use some stupid ass form. So I’ll have it eventually.
Philip Stefani (24:49) Okay. Sounds good. And yeah, we can update once you have that. So yeah, we’ll go through the proposal. Now, real quick. This is what I want to talk through here is just what are the inputs for the proposal? And what do they mean? I had one at the meeting?
Kirby Cole (25:03) My friend had one at the meeting. Do you want to see if he’s going breakfast is fine? He wants to know where he is. Breakfast is fine wherever you want to go. Sorry all.
Philip Stefani (25:09) Good. So I was just going to talk through what are the different inputs and what do they mean? So pretty straightforward, there’s an implementation and onboarding line item just in the first year that’s the setup cost medallion, core and ncqa, monitoring our, the medallion software platform plus verifications on license and sanction checks. So you can make sure those providers are in compliance. The 647 is the current providers across both oph and opt. It sounds like we might be updating that just to the oph, but 647 is the combined. So that’s what we’re starting with.
Kirby Cole (25:43) So that number’s off just so you know, the total number of providers is really about a 1,000 right now.
Philip Stefani (25:52) Oh, okay. I, the number I saw in the workbook was the 647. But, if we want to look at the, it’s.
Kirby Cole (25:58) a 1,000, so you can like then like it’s dead on, right? Just it’s 305 ophthalmologists and then the rest are optometrists, like I’ve been having to beat that number to people left and right lately. So, okay.
Philip Stefani (26:11) Yeah. So I mean I can make that change pretty easily then. So that would change for the medallion core, the ncqa monitoring. And then the other piece that is for all the billing providers is caqh management. So that’s medallion automating updates to caqh. Then there’s credentialing, ncqa. This is just for your one delegated plan. So it assumes 15 new providers joining that plan, and then 100 recreds. But I wanted to check with you. You don’t need it off the top of your head right now. But if you do know or if you can track down, would love the number of total providers on that one delegated plan.
Kirby Cole (26:45) It’s about 80. Okay. There is likely going to be very minimal growth there. I wouldn’t put in a whole lot of future. I’d put in maybe five a year max. They’re not expanding that market at all, if anything. It’s constricting.
Garrison Goodman (27:03) Kirby one question with 20 payers and that many providers, is it really only one delegated contract?
Kirby Cole (27:15) Is that in a way that somebody new to this can understand?
Garrison Goodman (27:18) So usually it takes what 150 providers to get to the volume necessarily to be able to be, you know, approach delegation with payers?
Kirby Cole (27:30) Got it.
Garrison Goodman (27:32) You know, and so it would seem a company of your size would have probably more delegated agreements, which would you?
Kirby Cole (27:38) Know, kind of we don’t we’re a train wreck. So it’s just really that group. It’s I don’t know how they were able to, they had delegated authority when we bought them. I bet you the reason why they had it was because we bought them from national vision and so they were probably tied into their thousands of doctors to get it and they were able to grandfather it in.
Kirby Cole (27:55) But I mean we can start an optometrist in nationwide in like two weeks like we just it’s and it’s all plans.
Garrison Goodman (28:03) Okay. And based upon your model, that makes sense is I… don’t know if we’ve talked about this yet is approaching more delegated contract. We would love to be able.
Kirby Cole (28:15) To, we’ve been scared to try it because everything has felt like such a shit show on the back end between cred and RCM and payr contracting that we really have never gone down that route. If we can get this stabilized in a manner where we can do that. I think that the organization would be beyond thrilled.
Garrison Goodman (28:33) I think that’s something that we could really help you with. Cool because we’re ntqa certified contractors. It’s once you have the volume and you tell the payers that you’re working with us, we’ve probably got relationships with them already and.
Kirby Cole (28:49) that makes.
Garrison Goodman (28:50) that process really easy. Yeah.
Kirby Cole (28:52) The one challenge we’ll have with that is if we can convince the payers to look at us in totality and our top level npi number… because in North… Carolina, we have 30 doctors, right? So we’re never going to get 150 there, but we have a 1,000 total. That might be part of the reason why I don’t know, but that’s the only thing I would say might be an issue. Okay? We could do that. I mean, there are absolutely other cities where we have over 100 150 that we could do that.
Garrison Goodman (29:24) Okay. As long as you have the volume, I mean, we helped, you know, customer a little bit smaller than you. I’m thinking family care center Phil they were like 400 grew to a 1,000. We helped them get 10 in a year.
Kirby Cole (29:38) Yeah, that’d be awesome.
Garrison Goodman (29:40) But we can table that and talk about it later. Yeah.
Kirby Cole (29:43) It’s not a skill set we have in house that’s for damn sure. So to go do it.
Garrison Goodman (29:47) Here’s what I’d say if we start getting friction anywhere from finance team or whatever anywhere the payer team, anybody. And, you know, that there’s particular areas of the business where you have the volume like that could be like a it’s always something we can add on later too, like throughout the relationship. But it could be something where it’s like a, it becomes a no brainer. Cool. Perfect.
Philip Stefani (30:11) So, yeah. Happy to take that up. If interesting. The other pieces here are the actual individual applications. So payer enrollment, new licenses, renewal, licenses, and privileging. So payer enrollment, what we are targeting is or what we’re modeling rather is 20 payers for each new provider. So obviously, we’ll have to update this to 80 providers, but wanted to see like it sounded like based on the workbook that it was about 20 payers for each new provider. But is that, does that still?
Kirby Cole (30:43) Resonate I think that’s fair. I think on optical, it’s probably less, but I think it’s a good average. I think there’s probably going to be a few more in some of the ophthalmology. So I think it’s fine. Okay?
Philip Stefani (30:51) Yep. Again, just want to be directionally accurate here and happy to update this one when the rest of the numbers are available. And then, yeah, for state licensing assumes, you know, 15 percent of providers need two licenses at least. So we’ll update this with the new provider count. But there’s one 38 for that. Renewals are a little bit more. So it assumes that there’s in total 744 licenses across the whole network. And then… those are renewing on a three year cadence. And so that’s about 370 per year… grows with the provider count as well, privileging applications and credentialing for joint commission. These are the pieces that I probably will want to refine with you, but it’s just the number of privileging applications that you’re doing per year. I targeted 150 here based on the numbers you sent over, but, you know, happy to revise this. If you are like, no, it’s way more or it’s way less. I don’t know if you have that number on you currently or if, you know, I.
Kirby Cole (31:48) don’t but I do think that once now that Casey and Andrea are engaged and know this is going on, I think even in those work sessions, they might be able to give you some of the numbers, okay? Perfect.
Philip Stefani (31:59) So, yeah. These are the inputs for the proposal here’s. What this looks like for the first year, broken out line item by line item. So it’s the quantities that we just went over there’s. A list unit cost which is there in the middle. And then with these volumes, we’re actually into volume based discounting for most of these. So there’s a significant reduction there. But yeah, want to make sure you know, this is something you would be comfortable standing on two legs in internally and that it’s also a win. So super curious for your feedback on this?
Kirby Cole (32:34) I mean, it’s definitely more than we’re paying today. So I’m going to have to, you… know, that will be an issue, just full disclosure.
Philip Stefani (32:44) More than like the qgenda spend specifically.
Kirby Cole (32:48) Yeah. Kirby.
Garrison Goodman (32:49) The idea is that… you would, but,
Kirby Cole (32:54) this includes those pass through costs, right? I’m just talking qgenda. This is what I have in my brain, right?
Garrison Goodman (32:58) Yeah. If you’re just looking at the software costs, it’s more but I.
Kirby Cole (33:02) got you our understanding.
Garrison Goodman (33:04) Is that team would be thinned out and that your overall and Phil’s got a slide on that your overall expense would be lower. I.
Kirby Cole (33:12) Was comparing just the cost of the qgenda software and thought that you were showing me just the cost of the software, not the pass throughs and everything else. I’m good. I’m tracking.
Garrison Goodman (33:20) Okay. Well, maybe, you know, given your reaction, do you think we should show like maybe this slide first where it’s like, hey, like here’s your current spend and here’s how it would grow as you grow. We’ll change it based upon the growth figures you gave us.
Kirby Cole (33:36) I would. And then I don’t know if you guys are comfortable with separating out the actual, I mean, the platform fee or if it’s all tied to those, you know, the incremental pieces… but it would be really good from my perspective to be able to say, look, the platform that we have today is X, the platform that we need tomorrow is X because everything else is it… is, we have to pay it either way, right? I mean, I got to pay the licensing fee either way and I can’t do it myself if you guys aren’t comfortable with that. I get where we’re going this way is fine. But that, just if I can walk up to my CFO and say, hey, this is, you know, the platform is going to cost whatever it could be helpful, whatever. Well, yes.
Garrison Goodman (34:25) Absolutely. We can do that. I think the way like approaching your CFO is like, look, our current opex, is this with people and software? Our future opex would be this much software which is going to go up, but we’re going to have way less people and therefore our spend goes down.
Garrison Goodman (34:42) So, like in theory or not in theory, in actuality within the first year, you’re saving 400 grand and fixing everything.
Kirby Cole (34:50) How many years is the contract that we’re looking at? It’s a five year contract?
Philip Stefani (34:54) This is a five year contract. Yeah.
Kirby Cole (34:57) So, the only other thing I mean, I’m jumping, I’m definitely putting the cart before the horse here. But one thing, well, fuck, we’re going to do it in this year. If there’s a way we can limit expenses in 20 26 and backload a little bit of it that might be beneficial… just knowing that our 20 26 financial performance is going to be what leads into a potential exit in 20 27. So that’s really why there’s some cost cutting stuff going on in 26 again that’s confidential. And we don’t need an NDA but that’s part of what’s driving some of this stuff. So just again, don’t have to do that. But I know that I have negotiated with some other vendors where we could push some things around or, you know, so just so.
Garrison Goodman (35:49) The answer is the answer is, yes, it’s also like given what you just talked about the initiative like, it feels like it would be, it would deliver a significant amount of enterprise value to have that team extremely thin before negotiating whatever.
Kirby Cole (36:08) future.
Garrison Goodman (36:09) Strategy you’re doing. And so I think what could be helpful is demonstrating like, hey here’s what an implementation timeline looks like. And by the end of this go live phase, you know, and provide some buffer, we’ll be able to become a technology enabled product or company that can now make the transition and cut over and start off boarding people. How do you, how do you think you’d want to do that? Because like I hear what you’re saying, the answer is, yes, we will obviously put together a package that helps you, but I think that.
Kirby Cole (36:47) Is part of the story too, right? But, that part of the story like that sits with us like, I can’t have Casey paymentcare but I can’t have Casey or?
Garrison Goodman (36:57) 100 percent 100 percent.
Kirby Cole (36:58) Like Pam can see this stuff. She can see math. She’s she knows what we’re doing here. Casey and Andrea are not strategic and they will freak the fuck out if they hear us talking about this stuff. So, yeah.
Garrison Goodman (37:09) I was talking more about when you go to your CFO here’s, like the timeline to cut over because working… with customers in the past, we were like, hey, our opex has gone down. We’re increasing value, our margins. Are, you know, this directly impacting our margins in EBITDA, each dollar translates 10 X of that in terms of value when you’re going through some type of you.
Kirby Cole (37:34) Know, acquisition or strategy.
Garrison Goodman (37:39) The thing we will not speak.
Kirby Cole (37:41) Of.
Philip Stefani (37:45) yeah. So, happy, to kind of work with you on those pieces, I guess as it relates to conversations on Monday, like in terms of like showing this to Pam, I guess like, okay.
Kirby Cole (37:56) Pam’s fine. Pam, Pam’s totally fine. I think actually, it would be good to have her review as well, just for sanity testing. So, she’s definitely senior enough at this organization. She can be engaged.
Garrison Goodman (38:07) And, and Kirby, for showing the rest of the team, you can be like, hey, we’re going to spend a 1,000,000 bucks, but we’re going to reduce denials and deliver 6,000,000 dollars in new revenue. Like we don’t have to show the other part, you know? Yeah.
Kirby Cole (38:19) Okay.
Philip Stefani (38:21) Cool.
Philip Stefani (38:22) I know we’re over time a little bit. Do you have another, just like two minutes to talk about Monday some more?
Kirby Cole (38:26) Yes. Two minutes. My wife’s going to come out there and find you guys if you don’t all.
Philip Stefani (38:30) Right. We’ll do it in less than two minutes, just in terms of meeting on Monday. I know you mentioned like your boss, Andrew was potentially going to be involved in this conversation, just in general, probably some other folks at, on the executive team. I guess just curious like is there anybody when we’re in town on Monday that like we should meet with whether it’s like at the water cooler or doing a lunch together?
Kirby Cole (38:54) Yeah. I told Andrew you guys were going to be there. I got to see. He’s not sure if he’s going to be in the office or not? He’s on the team going to Arizona Tuesday. So, but he would, he’ll be the most important person for you to talk to right now and get to know, so.
Philip Stefani (39:09) Andrew, and then we did have an org chart put together. Is there anybody else like kind of involved early that we haven’t, talked about?
Kirby Cole (39:20) No, you can take, Carol… Taylor doesn’t work here anymore. Kaveh’s, gone, there is no division CFO.
Philip Stefani (39:34) Okay. So, it sounds like primarily like Andrew and then maybe.
Kirby Cole (39:39) Yeah, the downstream team like I’m not going to include them until like, hey, here’s, what we’re doing and it’s going to make your lives easier on RCM. Don’t you agree? There’s the more I can poke around, they don’t even know they don’t touch qgenda like they don’t do anything with it. So, it’s not really. They just are left with whatever we get right or wrong in qgenda. So, I think that they would be on board Sunil or sorry. Chatty knows that we’re doing this, our CFO, Sunil knows, but he’s pretty, he was ready to wash his hands of all this stuff because this was, this group used to sit under him. So.
Philip Stefani (40:15) Okay. I guess like, you know, we’re kind of talking about like a big transformation of how it gets done. Like where do you anticipate, the pushback being, if anywhere? Yeah.
Kirby Cole (40:25) I mean, honestly, I think that the pushback is going to be primarily around lower level, right? Andrea, I think is going to be the hardest one. I’ve told her pretty straightforward that I, you know, I talked to, the forefront CFO or coo and gave her his feedback and I’m pulling her along with the idea that, you know, if this does what you guys say, it does that like she needs to wrap her head around it. Like… you know, Andrea knows that we’re doing this. I think if there’s savings that we can discuss in 26 too. I think that pulls our CFO even further into the pro side. The biggest thing we’ve got to make sure that we address is Andrea’s biggest question. And Andrea’s biggest question is that implementation, not just how long it takes, how hard is it? The last time we did an implementation, we were going from two systems to one. So it was incredibly harder because the fields had to be mapped completely different. So it should be easier, but that’s going to be the biggest concern from ecp is, can we get it done quickly and accurately? What’s the workload for the team that’s got to be doing their day job in qgenda too while we cut over, that’s like from what I can tell that’s the biggest concern? Yeah, there’s like that’s. Not except for Andrea. Okay?
Garrison Goodman (41:44) There’s there’s two pieces there. And what we’ll do is we’ll bring on our implementation team and scope everything out. But two pieces, one is like for any new credentialing or enrollments, like we can be up and running very quickly. And then there is a data transfer element which tends to be the longest piece, Phil for a deal.
Kirby Cole (42:06) You.
Garrison Goodman (42:06) know an op, you know, for a project this big, I think conservatively, we can say 16 weeks, Phil, check me on this.
Philip Stefani (42:16) Yeah. I.
Kirby Cole (42:18) mean, Kirby.
Philip Stefani (42:20) all the data is in qgenda, right? Like it lives in one place. Yeah, yeah, 12, 12 to 16 weeks probably. And we’ll loop in Sammy on this and.
Garrison Goodman (42:29) Then there are some things that we can do depending how the data is stored to make that even faster. But given where we’re at and your guys’ timeline on when you need to give, the cut off window, it’s I think it’s timed well. We don’t we don’t want to wait too much longer, but, it is timed well in terms of like the level of effort, it might require some, it resourcing again. We, I don’t know how the data’s stored, but we typically see, you know, five hours per week from one person on your side, just helping us with data stuff. And then there will be depending on how the data is stored, might be some work up front to do that. Okay?
Kirby Cole (43:07) We’ll figure it out. Okay?
Philip Stefani (43:08) And yeah, we’ll map this super specifically. So, yeah, I know we’re way over time here. Last question when we are with you on Monday after the call or after the meeting, would you want to hit like a range or something, with me and garrison?
Kirby Cole (43:24) Normally, I would say, yes, 1,000,000 percent, but I got to get home and pack because I’m hopping on an airplane first thing the next day. There is a… top golf right down the street if you guys want to go without me though.
Garrison Goodman (43:36) We were, we were thinking I found this place that, how far is, where… is it, hazelwood, from your all’s office?
Kirby Cole (43:45) It’s a bit of a drive. Let’s.
Garrison Goodman (43:47) Say, there’s a gun club where you can run 50 cows, which sounds pretty fun.
Kirby Cole (43:52) So, that would be amazing. Next time you come. We will absolutely fucking do that. The gun club that I, I’m a member of you. The biggest I’ve seen somebody shoot the desert, a desert eagle once. That was incredible, but they’re not a 50 cow shot. Yeah, I know there’s one in hazelwood. The only other one that does 50 cow that I know of is further west. So, I bet I’d be down for that, but I’ll probably have to bring my daughter because she’s the best shot in the family, no.
Garrison Goodman (44:18) Kidding. Wow. Yeah. Great. Graduation.
Kirby Cole (44:20) Present was an Ar, hell, yeah.
Garrison Goodman (44:24) All right. Well, we’ll get, we’ll ask your advice for some fun depending on our flight times, but, yeah, you’re right. Next time we’ll schedule it.
Kirby Cole (44:31) Yeah. Okay. All right. Gents. I gotta go to lunch. I’m gonna get in trouble. Have.
Garrison Goodman (44:34) Fun, man.
Philip Stefani (44:35) Appreciate it. Happy birthday. See.
Garrison Goodman (44:36) Ya later.