R1 RCM Inc.

Thank you for standing by and welcome to the R1 RCM first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. A reminder that this conference is also being recorded. I would now like to turn the conference over to Evan Smith, Senior Vice President, Investor Relations, please go ahead.

Thank you, Operator, and thank you, everyone, for joining us today. Certain statements made during this call may be considered forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, any statements about our future growth plans and performance, including statements about our review of strategic alternatives, Our strategic and cost savings initiatives, our liquidity position, our growth opportunities, our future financial performance, and the impacts of the change healthcare cyber attack and a customer bankruptcy on our business are forward-looking statements. These statements are often identified by the use of words such as anticipate, believe, estimate, intend, design, may, plan, project, would and similar expressions or variations. Investors are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements made on today's call involve risks and certainties. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Our actual results and outcomes may differ materially from those included in these forward-looking statements, as a result of various factors, including but not limited to the impact that the review of strategic alternatives could have on our business or our stock price, the outcome and timing of the review of strategic alternatives, economic downturns and market conditions beyond our control, including high inflation, the quality of global financial markets, our ability to timely and successfully achieve the anticipated benefits and potential synergies of the acquisitions of CloudMed and Aclara, our ability to retain existing customers or acquire new customers, the development of markets for our revenue cycle management offering, variability in the lead time of prospective customers, the later unsuccessful implementation of our technologies, including AI, competition within the market, and factors discussed under the heading Risk Factors in our most recent annual report on Foreign Trend Kit. Certain results that will be referenced on this call may be rounded to the nearest whole number. We will also be referencing non-GAAP metrics on this call. For reconciliation of non-GAAP metrics to the most closely comparable GAAP metrics, please refer to our press release. Now let me turn the call over to Lee. Lee?

Thank you, Evan, and good morning, everyone. Our first quarter 2024 revenue results reflect positive trends in the underlying business. as we continue to demonstrate our ability to drive value for our customers. The quarter includes Eclera contributions from the closing date in January, investments to onboard Providence, and continued investments in our multi-year technology transformation. We believe these technology investments will enhance our platform and drive innovation with new AI and advanced automation tools and solutions in development. We delivered approximately $604 million in revenue and $152 million in adjusted EBITDA for the first quarter. Before I provide more detail on our progress in the quarter, I want to reinforce my commitment and belief in R1's vision and strategy to deliver long-term sustainable growth and performance to our shareholders. Our vision is to be the automation platform of choice for the provider industry. We are distinctly positioned to solve a highly complex problem across the provider ecosystem with our combination of technology, global scale, and industry expertise to deliver revenue yields and cost reductions to the largest health systems and physician groups in the country. Today, we operate with the most scale of any technology and services provider in our space with over 90 of the top 100 health systems as our customers. Our addressable market is large at over 100 billion and growing, and we are well positioned to win more than our share of this growing market over time. Technology is the foundation of our strategy, our value proposition to customers, and our place in the industry. We apply automation, AI, and large scale analytics to the revenue cycle. We have visibility to large sets of structured, and unstructured data across over 500 provider customers. This is where the scale of our platform matters most. For example, we apply machine learning models to automate clinical appeals and reduce payment timelines. We see clinical care episodes across all payers, all care settings, and all reimbursement model types. enabling us to apply models to validate certain charges and reimbursement levels for underpaid claims. These examples scratch the surface on the potential for the application of automation and AI when we are embedded in our customer's workflow. Global service capabilities are also core to our strategy. We are unique in that we operate our own facilities with our own people, our own processes, and IP. The combination of technology plus global scale is what allows us to deliver best-in-class unit economics and increase revenue yield to our customers. Now let me shift to execution on our priorities and our near-term outlook. We entered 2024 in a strong position to support long-term growth and improve performance. We have executed for our end-to-end clients achieved solid bookings for our modular solutions, closed the Aclara acquisition, and started our 10-year strategic relationship with our largest new enterprise customer. We believe the continued strength of our commercial engine, delivering results to our existing clients, and ongoing investments in AI-driven technology and solutions will further support our growth throughout 2024 and over the coming years. Now let me turn to the Change Healthcare cyber attack, which had an impact across the healthcare industry. Given the central role R1 plays in the revenue cycle for our large, diversified customer base, it has impacted our near-term operating performance as well. Our operating team mobilized quickly and worked closely with those affected. In a matter of weeks, the team was able to successfully migrate 100% of affected customers to alternative claims clearinghouses. We also implemented technology and automation solutions to help mitigate both near-term and longer-term impacts surrounding claims submissions, processing, and ultimately cash collections. Our unified data exchange, which is designed to integrate with every major EMR, payer, clearinghouse, bank, and other data sources, enabled R1 to support the implementation of alternative solutions and uphold data integrity and facilitate connections. We believe the challenges faced by providers as a result of the cyber attack have the potential to enhance demand for partners like R1 over time. Over the past several months, we have made progress against each of our focus areas for the year. As a reminder, these are, one, ensuring our growth strategy aligns with customer needs to meet them where they are on their revenue cycle journey. Two, continuing to deliver excellent operational results to our customers to maximize revenues and cash yield in these challenging times. And last, executing our technology roadmap to deliver innovation on behalf of our customers and drive measurable results above and beyond what they would otherwise be able to do on their own. First, our growth strategy. During the quarter, we saw traction with our flexible engagement model, enabling R1 to quickly align with new customers wherever they are in their revenue cycle journey. We demonstrated continued strength in our modular bookings and expanded our end-to-end pipeline, enhancing its breadth with additional opportunities for medium-sized health systems. We are also gaining traction in our sales activities for our functional model, adding new opportunities to our pipeline which will support additional embedded growth opportunities over time. Second, operational execution. Our modular business remains central to our business model, driving diversification, delivering further cross-sell opportunities for both modular and end-to-end solutions, and providing the core advantage of data visibility across a wide spectrum of provider customers. We are succeeding in cross-selling and have grown to an average of more than three modular solutions per customer with a long runway to drive additional growth. During the quarter, there was considerable interest in our physician advisory solutions, DRG validation, charge capture, and underpayments, and we expect to see an increase in demand for denials and AR recovery going forward as a result of the change healthcare incident. Let me provide a couple of examples of our commercial success. We are already expanding the managed services or functional partnership we discussed in our year-end 2023 earnings call, having signed two new modular solution offerings in the recent quarter for both underpayments and retrospective Medicare bad debt. Another example is a longstanding multibillion dollar NPR modular customer who uses most of our solutions which further expanded the business for AR recovery solutions. Over the last three fiscal years, we have delivered over 60 million in value to this customer in AR recovery and denial solutions alone. We are also seeing success with regional hospitals. In 2023, we contracted with a 400 million NPR regional hospital to provide DRG and charge capture solutions, and were named vendor of choice for our CDI total performance solution. In the first quarter, we added a larger deal for inpatient clinical denials, and we are in discussion to expand our relationship across multiple solutions. Finally, we are also executing on our technology roadmap. With access to large-scale clinical, financial, and patient data powering our technology platform and advanced analytics, R1 remains at the forefront of helping leading providers transform their approach to financial performance and patient engagement. we have continued to apply technology to the revenue cycle to help our customers drive cost and revenue improvement. We have increased our technology investment in key areas of the revenue cycle to develop new GenAI solutions to further enhance or eliminate processes and leverage our global scale to address critical issues for our customers. In 2023, you heard me discuss several large language models that were launched. This included denials automation, next action prediction for AR management, and physician evaluation and management coding. As a result of these automations, we have identified additional value for our customers, improved the efficiency of our operators, and expanded our quality assurance capabilities, enabling continuous technological advancement and improvement. We anticipate launching several new solutions throughout 2024 which will put it at the forefront of innovating on behalf of our customers. An example of a particularly high impact use case delivered this quarter was our clinical appeal summarization large language model. This model is designed to reduce the time spent on denial appeal generation by 75% from an hour on average to 15 minutes. Instead of taking time to read through hundreds of pages of medical records, crafting the appropriate clinical argument and drafting an appeal. This model is designed to complete this process and generate a draft letter. Our auditors then complete quality control to validate and edit the content as needed. We expect this use case will expand over time as we continue to review additional areas of our business that could utilize this automated drafting capability. In summary, we believe our vision to be the automation platform of choice for the provider industry is clear and achievable. Our strategy to meet providers where they are in their needs today matches a large and growing $100 billion addressable market, and we expect will help us continue to grow and further diversify our business. Lastly, our value proposition to the provider industry is strong, combining technology, global scale, and the best people in the industry. Thank you. And with that, I'll turn the call over to Jennifer to discuss our quarterly financials and updated outlook.