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spk03: Obviously, the step up on the buybacks, I wanted to ask you about that. Is that an opportunistic buy you did in the second quarter, or should we begin to think that you're going to commit more capital to that going forward?
spk01: Well, I have the classic CEO answer. These are the kind of decisions that we work closely with our board, and when we think that there's a strong use of capital, that's where we put our capital, and the board felt comfortable unanimously that this was a good time to be buying back our shares. So I can't comment on future activity.
spk03: Okay. A lot of back and forth on the R1 transition and the impact it's had on revenues to date. I wondered within the context of that, I'm not 100% clear, is that something you would characterize as just what can happen when you make a transition like this? Do you feel like Are ones dropped the ball? Is there something you did that has resulted in this? And is there any recourse to try to – do they owe you any kind of concession because this has happened?
spk01: I said in my comments, AJ, that we had, in retrospect, moved too abruptly. So I'd say we had an RCM team, a big RCM team, And in the move from our RCM team to R1, I'd say with hindsight, which is always handy, we should have retained our team longer to give R1 more time to get up to speed. And we did that more abruptly. That's what I mean by more abruptly than I wish we had. There's no recourse to... to R1, and I would say, just collectively, it didn't go as smoothly as we had hoped. Now, this is the kind of thing that can happen. We have an enormous RCM function, so I think we did it pretty well, but not as well as I wish we had. Having said that, importantly, we're at a point today where we have a very solid RCM function, and as I mentioned, In addition to that, we have an arbitration capability that we would never have been able to match on our own. So as Mark rightly pointed out, that the other side of the RCM effort right now is collecting as much as we can from the earlier months to recover as much as possible. But I think that it was a very good transition, a very good move to transition to R01. We're not disappointed with our decision at all. we're disappointed by the turbulence and by the fact that had we, we believe had we kept people on our team longer, it would have been, it would have been a better transition and less costly for us.
spk03: Okay. You did mention with respect to no surprise act in your comments that you, you've geared up your team to be able to deal with any arbitration issues that might result. I just wondered if, Are you seeing, is that gearing up for something that may happen? Are you actually seeing more cases go to an arbitration at this point? Or is your arbitration going to be more?
spk01: We're overwhelmingly in network, so we haven't seen an increase in arbitration. The only areas where we're out of network and we have had arbitration, we've been very pleased with the results. But we know that one of these days there will be a There will be some final ruling, and things will settle in, and we will need to have a process to settle these in arbitration.
spk03: And it doesn't sound like you're seeing any delay in MCO recontracting as people are waiting for those final rules to come out. It's just sort of normal course, it sounds like, is the way you're describing it. Is that correct?
spk01: Yes. That's correct. And I would say the latter part of last year, a lot of people were expecting it to be a much tougher environment. We haven't, certainly to date, we haven't seen that.
spk03: All right. And just my last area, just a quick question, is on the push for the pediatric urgent care centers. Obviously, you've known some of them for a little while now. Anything developing, either making you more or less optimistic about the economics of that business and the opportunity set. Um, and you know, a lot of this, uh, during COVID was put in place, uh, and maybe parents were saying, Hey, I've got a pediatric urgent care center because I want to keep my kids away from, you know, places where they might catch COVID from adults. Uh, are you seeing any change in the demand profile as we progress through the pandemic?
spk01: We weren't basing our decision on what we saw at the time was a COVID bump. Like any acquisition, you look not only at what's going on at the moment, but what went on historically. So we weren't moving into this because of a COVID froth in earnings. So no, we continue to be very pleased with the P&L of these operations and the economic opportunity in our thinking about it hasn't changed. If there are times when there's an upward blip because of the COVID, which obviously, for all reasons, you don't want another COVID, but obviously that's not the driver of our reason to do this. Our reason to do this is, as it's always been, that we are, in our major markets, the the largest employer of pediatricians, we have an enormous impact on what happens in pediatric care in our markets. And we think that this is a very important step to filling out our ability to help mothers and babies and children.
spk03: Okay. That's great. Thanks so much.
spk02: We have a follow-up question from the line of Kevin Fishbeck with Bank of America.
spk00: Great, thanks. I just wanted to get maybe a little more color about what you mean about the arbitration improvements with R1. What exactly are you guys have in place now that maybe you wouldn't have been able to do before?
spk01: Well, the arbitration process right now is only where we are out of network, and we're the only place where we're principally out of network is in Texas. And I would say that we have the arbitration process, which maybe people don't know, is a case-by-case process. So you can imagine how laborious a process like that could be if it ever became significant. So you have to have a machine in place to handle that and to handle that intelligently. And I think we have that today thanks to our partnership with our team, our managed care team and R1. And I think that would have been very difficult to build on our own.
spk00: Okay, I guess, do you have a sense about where your pricing is versus kind of the median in-network? My assumption is that if you're out of network, almost definitionally, it's because you'd be above the median in-network rate. So I guess in that 5%, there might be some risk. But broadly speaking, any way to think about that?
spk01: No, we don't. It varies payer by payer and contract by contract, so I don't have that.
spk02: Okay, great. Thanks. And gentlemen, we have no further lines in queue at this time.
spk01: Great. Well, thank you all for your understanding, your support, and we look forward to updating you on our progress as we move forward. Enjoy the rest of your summer.
spk02: Ladies and gentlemen, that will conclude your conference call for today. Thank you for your participation and for using AT&T Event Teleconferencing. You may now disconnect. We're sorry. Your conference is ending now. Please hang up.
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