MultiPlan Corporation

Hello, everyone. The Multiplan Corporation second quarter 2023 earnings conference call will begin in one minute's time to allow all participants to get connected. If you would like to ask a question, please press star followed by one on your telephone keypad. Thank you for your patience. Hello, everyone, and welcome to the Multiplan Corporation second quarter 2023 earnings conference call. My name is Nadia, and I'll be coordinating the call today. If you would like to ask a question, please press star followed by one on your telephone keypad. Please note, we will take one question and one follow-up per person. I would now like to hand the conference over to Luke Montgomery, SVP, Finance and Investor Relations to begin. Thank you. Please go ahead.

Thank you, Nadia. Good morning and welcome to Multiplan's second quarter 2023 earnings call. Joining me today is Dale White, Chief Executive Officer, and Jim Head, Chief Financial Officer. The call is being webcast and can be accessed through the investor relations section of our website at www.multiplan.com. During our call, we will refer to the supplemental slide deck that is available on the investor relations portion of our website, along with the second quarter 2023 earnings press release issued earlier this morning. Before we begin, a couple of reminders. Our remarks and responses to questions today may include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description on our annual report on Form 10-K and other documents we filed with the SEC. We will be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Multiplan's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measure can be found in the earnings press release in the supplemental slide deck. With that, I would now like to turn the call over to our Chief Executive Officer, Dale White.

Thank you, Luke. Good morning, everyone, and welcome to the call. As many of you heard at our investor day on June 28th, Multiplan is in the midst of a transformation. This transformation began with our strategy review late last year, which resulted in our refreshed growth plan and led to the steps we have taken to reset the business in 2023. and it is continuing with the execution of that plan, which pivots our business through a number of actions. First, we are capitalizing on the strength of our platform and our deep payer relationships. Second, we are enhancing our core business by becoming a product-centric organization and investing in new services and solutions. Third, we have created a new data and decision science service line, and partnered with Echo Health to offer B2B payments, both to further our footprint in network and government market segments. And finally, we are focused on using our cash flow to improve our capital structure. All of this, we firmly believe, helps unlock the enormous potential value of our franchise to the benefit of our shareholders. I am pleased to say that during the second quarter, we have made significant strides towards realizing our transformations. In our view, the second quarter marked an inflection point for the company in terms of both the results we delivered and the execution of our strategy. Let me take each of these points in turn. Beginning with our Q2 results as shown on page 4 of the supplemental deck, we reported revenues of $238 million and adjusted EBITDA of $152.7 million. Excluding the contribution from our newly acquired data science company, Benefits Science Technologies, or BST, revenues of $235.9 million were above the high end of our guidance range and effectively flat from the prior quarter. Adjusted EBITDA, which was not materially impacted by BST, was near the top end of our guidance range and down about 2% from the prior quarter. Our adjusted EBITDA margin was 64.2% versus 66% the prior quarter, which was in line with our expectations, including a modest drag from the addition of BST's results. Through the first half of the year, results played out as we forecasted, validating our view that our results are stabilizing. We have absorbed the impact of the contract renewals discussed on previous calls, which are now fully reflected in the quarterly run rate. That impact has been partially offset by the combination of underlying organic growth in our core revenues and a normalizing volume environment. As many of you are aware, there are a number of indications that healthcare utilization has been picking up. You saw it in the earnings commentary from some of the hospitals, medical suppliers, and payers, and we have seen it in our first half savings volumes and revenues. As shown on page six, during the second quarter, identified potential savings for our commercial health category increased 2% sequentially, following a 3% increase in Q1. As shown on page seven, Identified potential savings from our percentage of savings revenue model were flattish sequentially, effectively maintaining the step up in volumes in Q1 when identified potential savings increased 4% sequentially. Underneath the headline volume trends, we saw a positive mixed shift in our identified savings, which helped our revenue yield. Specifically during the second quarter, Growth and utilization was strongest in facility services, which includes surgery, radiology, and lab services. These dynamics are reflected in the revenue yield of our percentage of savings revenue model, which declined just one basis point, despite previously anticipated incremental pressure in Q2 related to the aforementioned contract renewals with larger customers. At the beginning of 2023, our guidance incorporated a modest lift from a recovery in volumes, and we were uncertain as to how quickly we would see it. The lift occurred a bit earlier in the year than we anticipated, which in part explains why revenues in each of the first two quarters of 2023 were at the higher end of our guidance range. Looking forward, we continue to believe the second quarter will be the low point for the year for revenues and adjusted EBITDA, and we continue to expect results for the second half of 2023 to be higher than the first half. Given these considerations, we are narrowing the range of our fiscal year 2023 guidance with a slight increase at the midpoint before the contribution from BST. driven largely by our year-to-date results and reflecting our continued expectation for modest growth in the second half of the year. Jim will share the details with you momentarily. As I mentioned, we have been busy executing on our transformations since late 2022. As shown on page 8, during the second quarter, we advanced several critical initiatives within our growth plan. These included establishing our new data and decision science service line with the acquisition of BST and adding a B2B healthcare payment service through our new partnership with Echo Health. These actions, along with further progress we have made toward the launch of several new products to enhance our core business and position us for growth in 2024 and beyond. As many of you heard at our recent investor day, we could not be more excited about the acquisition of BST and the formation of our new data and decision science service line. We believe this is an absolute game changer for Multiplan. It is the key element in our plan to expand our footprint beyond out-of-network claim processing, deepening our penetration in large and faster growing markets like in-network commercial and Medicare Advantage. Founded in 2012 by data scientists and benefits experts from MIT, BST's mission aligns perfectly with ours, which is to improve health outcomes and reduce the total cost of care. This acquisition is consistent with the strategic priorities and the acquisition criteria we have communicated over the last several quarters. By combining BST's cutting-edge technology solutions with Multiplan's core strengths, namely our strong payer relationships and our expansive and growing claims flows, we will efficiently deliver enriched and actionable data and insights into our customers' hands with decision analytics and software tools that allow our customers to manage the health risk of a population, benchmark important network contracts, assess their plan's financial performance, and use machine learning and AI to achieve other important business imperatives. Our data and decision science service line will deliver what we believe are clear market-leading value propositions versus our competition. The combination of BST's industry-leading products and enormous power of Multiplant's platform addresses some of the most pressing challenges facing our customers across the wide and expanding range of channels we serve. As I have said, demand for these solutions is already high, and we expect it to increase as we continue to introduce our customers to the new capabilities we offer. As a result, we expect the financial impact to be significant. We believe our new data and decision science service line could become a $100 million business, perhaps even larger over the next several years, generating significant value for our customers and significant returns for Multiplan shareholders. And we are confident we can capture this revenue because so much of the opportunity is simply about unleashing the enormous potential of what is already within our walls. As we noted a few weeks ago, we have $400 billion of incremental charge volume already on our platform that we can now begin monetizing with the products that BST added to our platform. We are also very excited about our new partnership with Echo Health. Echo helps us deliver a B2B healthcare payment service that will streamline provider reimbursements and drive further efficiencies in the end-to-end claims adjudication process. We believe this offering enhances the value we provide across our solution set and strengthens our competitive position in the key channels we are focused on, including the third party administrator and regional health plan channels. As we outlined at our investor day in June, we expect to generate between $50 million and $75 million of incremental annual revenue from this new service within the next several years. As we have discussed, we have identified a deep pipeline of products and product enhancements to accelerate our growth in our core out-of-network payment and revenue integrity, and HST businesses. As shown on page eight of the supplemental deck, we remain on track with all of the initiatives slated for 2023, and I am pleased to announce that our new balance bill protection service for HST's platform already has 11,000 lives contracted. This new service provides health plans and members with an additional layer of protection from the increased medical costs that result when providers balance bill. Specifically, it helps alleviate the stress, the wasted time, and the administrative burdens that balance bills create for all parties involved by working through the provider settlement process from start to finish on the member's behalf. The launch of our balance bill protection service marks the achievement of an important milestone within our growth plan. The market reception has been highly enthusiastic. Their early returns from this initiative are included in our second half forecast, and while it will not have a material impact in 2023, we expect it to be one of the springboards for our growth in 2024. Further, this new service is one of several new features we have planned to evolve HST's platform and advance our vision to create an employer healthcare solution in a box. The market opportunity for this turnkey solution is large and is growing as employers and other plan sponsors of all sizes are increasingly shifting to self-insured plan arrangements in an effort to more actively manage medical cost pressures. Despite the appeal of self-insuring, many plan sponsors continue to struggle with the hurdles to adopting this plan structure. Our expansion of the features on our HST platform, including the balance bill protection service, is aimed at removing many of these hurdles. Balance bill protection is but one example of how we are pivoting to a product-centric organization. We are hard at work on our other 2023 core business initiatives, and we have high expectations for the contribution of these products to our growth. In total, We expect our 2023 core business initiatives to generate incremental annual revenues of $50 million to $100 million in the coming years. And as we've discussed, we aren't stopping there. We are already making progress against new core business products scheduled for launch in 2024, and we have a pipeline that stretches out several years. It's all part of our plan to leverage our embedded position in the commercial health ecosystem continue to expand what is already the broad set product suite amongst our competitors, and grow our core business. Stepping back, our opportunities are significant and within our reach. All told, we are targeting $200 million to $275 million of incremental annual revenue within the next several years from these initiatives. As we move forward, it's all about the execution of our transformation. As the second quarter attests, we have already begun to deliver, and we will continue to do so. I look forward to updating you in the coming quarters as we further progress along our journey. With that, I'd like to turn it over to Jim. Jim?

Thanks, Dale, and good morning, everyone. Today I'll do the usual walkthrough of our Q2 financial results, provide some commentary on our second half outlook, and discuss the revisions to our 2023 guidance. And as usual, I'll close with a review of our balance sheet and an update on our capital allocation plans. As shown on page four of the supplemental deck, second quarter revenue was $238 million, declining 18 percent from Q2-22 and up 0.6 percent from the prior quarter. Excluding a $2.1 million contribution from VST, which closed on May 8th, second quarter revenues were $235.9 million, down a modest 0.3 percent from the prior quarter. Turning to revenues by service line, as shown on page five of the supplemental deck, network-based services revenues declined about 10 percent from the prior year quarter and were effectively flat sequentially. And analytics-based services revenues declined about 22 percent from the prior year quarter and were also effectively flat versus the prior quarter. We saw relative strength in payment and revenue integrity services revenues, which declined about 12 percent from the prior year quarter but increased about 9 percent sequentially. through strong performance from our clinical negotiation, clinical review, and discovery health products. Our second quarter revenues were driven by a modest sequential uplift in savings volumes. As detailed on page six of the supplemental deck, medical charges processed increased 8% from Q1 23 to 43.1 billion, and potential medical cost savings increased 2% from Q1 23 to 5.7 billion. In the core commercial health plans category, The sequential increases in medical charges processed and potential medical savings identified were both 2%. Identified potential savings in our PSAVE revenue model were effectively flat sequentially, despite our typical seasonality in the second quarter. As Dale noted, as patients reengaged and capacity returned in the system, we saw a positive mix shift within our savings volumes. With relative strength in both inpatient and outpatient facility claims, and in more discretionary categories of care, including surgery, radiology, and lab services. As a result, we saw an uptick in our clinical negotiation and financial negotiation services. This mixed shift represents a partial reversal of some of the mixed shift pressures that negatively affected our second half 22 results. Accordingly, as shown on page seven, revenues as a percentage of identified savings are revenue yield, was effectively stable this quarter, declining a modest four basis points for our overall business, which includes both PSAVE and PEPM. The revenue yield for our core percentage of savings revenue model, which is approximately 90% of our revenues, declined just one basis point, as our positive savings mix shift largely offset the anticipated incremental pressure of the contract renewals with larger customers. Turning to expenses, second quarter adjusted EBITDA expenses were 85.3 million, up 4.8 million from prior year quarter, and up 5.0 million sequentially. For both the year-over-year and sequential comparisons, about half the increase in adjusted EBITDA expenses was driven by the combination of forecasted structural cost increases, such as merit increases, and investments in new products and services. The remainder of the expense growth reflects the expenses contributed by BST in Q2 of 23. Adjusted EBITDA was $152.7 million in Q2 23 versus $209.6 million in the prior year quarter and $156.3 million in Q1, which landed in the top half of our guidance for the second quarter despite a bit of drag from BST. Our second quarter adjusted EBITDA margin was 64.2 percent, including the impact from BST, versus 66.0 percent in Q123 and 72.3 percent in the prior year quarter. Moving on to our outlook, as shown on page nine of the supplemental earnings deck, we have revised our full year 2023 guidance to $950 to $980 million, which includes an estimated $12 million of revenue contribution from BST under our ownership. Excluding BST, we are narrowing our revenue guidance to 940 to 970 million versus our prior guidance of 925 to 975 million, which is an implied 5 million increase at the midpoint. On page 10 of the supplemental earnings deck, we bridge our revised revenue guidance from our first half 23 annualized revenue of 945 million. As we have mentioned since our initial guidance in February, we continue to expect second half results to be higher than our first half results. This incorporates a few notable assumptions and moving parts. First of all, in second half 2023, we expect an incremental 1% headwind to reflect the run rate impact of larger customer renewals. While the first half had some residual benefit of a prior contract through January, the second half will not have that benefit. We are maintaining our initial full year 2023 expectations for the environmental drivers of our volume, including healthcare utilization and healthcare inflation. This conservatively implies a steady underlying volume environment going forward with modest annualized volume growth of approximately 1% in the second half. As noted, volumes of billed charges and identified savings began normalizing in the first half, arguably a bit earlier than anticipated, And while we believe this volume level seems likely to hold in the second half, at this juncture, we aren't ready to assume an additional step up in healthcare capacity or utilization. And finally, we continue to believe we will capture some net new growth and early gains from our 2023 growth initiatives in the back half, driving about one to two percent annualized growth consistent with our initial guidance. Moving to our revised adjusted EBITDA guidance, we are narrowing our estimate to 615 to 635 million, which includes a net contribution from BST of approximately negative 2 million. It implies no material change at the midpoint. We expect adjusted EBITDA expenses to be between 330 and 340 million, with some additional expenses in our core business driven by hiring related to new products, as well as some additional NSA expenses as IDR volumes have increased significantly in 2023. Of note, BST will experience some extra cost burden in the next few quarters to reflect cost of integration and product development. The combination of our revenue and adjusted EBITDA assumptions imply adjusted EBITDA margin of 64 to 65 percent, consistent with our prior guidance, but reflecting about 100 basis points of mix-related compression from the impact of BST for the year. Moving to other notable changes in our full year 2023 guidance, we're reducing the top end of our guidance range for interest expense to reflect reduced gross debt balance on our fixed rate debt, partially offset by interest rate increases on our floating rate debt. And now expect full year 23 interest expense of $325 to $335 million. We're reducing our guidance for operating cash flow to $160 to $190 million versus prior guidance of $175 to $215 million. This reduction in operating cash flow includes the impact of approximately 20 to 25 million of burden from two primary factors. Number one, additional cash taxes related to the gain of 74 million from the cancellation of debt. This is from our 274 million of debt repurchases over the last few quarters. And two, seven million of cash transaction expenses related to our acquisition of BST. Excluding these items, Our operating cash flow would actually be tracking very closely to our initial expectations. I would also note that both the prior and revised guidance includes a $22 million cash outflow related to the settlement of the Delaware defense shareholder litigation, which was one-time and non-recurring. And finally, we're adjusting our CapEx guidance to $110 to $120 million from the prior guidance of $100 to $115 million. reflecting a more aggressive plan for our product launches than initially budgeted, and investments in BST. Our other guidance items remain unchanged. For Q3, we anticipate revenues of $235 to $250 million, and EBITDA of $150 to $160 million, as shown on page 11 of the supplemental deck. This implies about 2% sequential growth over Q2, driven by the combination of BST, core savings performance, and net new sales. As Dale mentioned, results are stabilizing, and we feel Q2 was the inflection point which provides the base for growth in Q3 and beyond. Our Q3 adjusted EBITDA guidance reflects modestly higher expenses versus Q2, about $1 million on a core basis, and about $5 million including the contribution of expenses from BST. Turning to the balance sheet and capital management, operating cash flow was $7.7 million in the second quarter. As a reminder, the second and fourth quarters are typically our lower quarters for cash flow, given the timing of our interest and tax payments. Q2 also included the additional cash taxes related to the gain of the cancellation of debt that I mentioned previously. Leveraged free cash flow was negative 24.3 million in the quarter, reflecting the lower operating cash flow and an increase in capital expenditures driven by our product rollouts. As shown on page 14 of the supplemental deck, We ended the quarter with $90 million of unrestricted cash, down from $266 million the prior quarter, largely due to the $141 million of cash used to finance the BST acquisition. Net of cash, our total and operating leverage ratios were 7.1 and 5.1, respectively. Our long-term capital allocation priorities remain unchanged. Our highest priority is investing in the business, both organically and through M&A, to drive growth and long-term value. followed by debt reduction, and then share repurchases. So those are the long-term priorities. But as I mentioned at our investor day, it's going to look a little different over the next few quarters next year, as shown on page 12. We'll continue to make organic investments in the business to support our platform and invest in our new data and decision science service line. But that will require a relatively small allocation of our capital. Our main priority near term is debt retirement. We'll continue to look at acquisitions, but that is likely to be a lower priority for the next year or so, as we focus on the BST integration and the rollout of BST products. Frankly, we have a ton of opportunities with the assets currently under our roof, so our focus is on executing on our plan and capitalizing on those opportunities. Finally, we'll continue to assess share repurchases. We did repurchase about 7 million shares during the second quarter to take advantage of price dislocations in our stock. However, it's likely to continue to be a small allocation of our capital going forward. In summary, we feel very good about our execution in the first half, and we're very confident we can deliver on the expectations in the second half. That brings me to the end of my comments, and I'll turn the call back over to Dale. Thanks, Jim.

Before we open up the call for questions, I'd like to circle back where we started this call. Multiplan is working hard to execute its transformation. That means investing to capture meaningful opportunities in growing markets and implementing our growth plan by expanding our products and services. And while it's still early, we have a clear line of sight on where our transformation leads us. In short, we believe the execution of our transformation will unlock the value of our franchise over the next few years by making us a company with an accelerated growth profile, a more diversified mix of revenues by product, by channel, and by customer, and a stronger capital structure that will provide us more flexibility to shape our destiny. As I said at our investor day, the leadership team and all of our employees are aggressively going after it, and we will be relentless in our execution. We know we have to deliver the results, and we're on track to do just that. Operator, would you kindly open the call up to Q&A?

of course if you would like to ask a question today please press star followed by one on a telephone keypad if you choose withdrawal question please press star followed by two when preparing to ask your question please ensure your phone is unmuted locally please note we will take one question and one follow-up per person our first question today goes to joshua raskin of nephron research llc joshua please go ahead your line is open hi thanks so good morning

My question is around traction with health plan conversations on all the new product launches, including BST for 2024. I'm curious where the plans are showing the most interest. And then conversely, with all that's going on for the payers in terms of utilization changes and some of the impacts they're seeing there, big changes for Medicare. Are you seeing that slow down their process at all? Do you think you're hitting a little bit of a wall as payers are prioritizing sort of fixing things internally this year? Or do you feel like the traction is picking up?

Josh, thank you. No, we're not seeing a slowdown of payer interest. In fact, it's the opposite. There's an acute interest in managing their uptick in utilization, helping them to manage their total cost of care, including the out-of-network claims that they see, particularly as utilization returns. And so there's a strong interest across all of our payers, including our larger customers, our regional health plans, and our third-party administrators for all of our products and services. We're really excited about the introduction of the BST product line. As you know, we were collaborating with them since last fall around price transparency. And we're pleased that we're rolling out our first phase of our price transparency product called PlanOptics. And we've already been in front of our customers, telling them about the product and our plan to launch it. So, we're excited. We haven't seen a slowdown of interest. And the two products from VST that we're focused on is price transparency. But the second is what we call claims risks, claims restoring, and Ben Insights. And so all three, we're out in front of our customers with those focusing on those three products. But there's an array of products behind them that we plan to launch later this year.

Gotcha, gotcha. And then just a quick follow-up. you know, top line number came in a lot stronger than the bottom line relative to our estimates. And I understand some of the costs. But maybe, Jim, if you could just refresh, like, you know, why are we not seeing that flow through? And if utilization were to persist a little bit better than expected, should we expect that to flow through more to the bottom line, you know, going forward?

Yeah. Thanks, Josh. You know, we talked a little bit about first quarter, in the first quarter call, about the step-up in costs. And that's really just investments, Josh. And it's not, you know, it's a little bit more of a step up in time, but it doesn't just step up every single quarter. As you saw, we're going to step up maybe another million in Q3. So it's a little bit of a sawtooth as we move forward. But as we start seeing volumes, it's incrementally going to drop to the bottom line, which is why we feel comfortable that we can make some investments. And when we see the volumes, you know, we can maintain our margins. So I wouldn't look too much into that. I would look at the Q3. And we also get some burden from benefit science, which is about 100 basis points for the year in our full-year guidance. So there's a little bit of burden as we make some investments. But, again, we're making investments because we see demand, Josh, and that's kind of the main message here.

Okay, thanks.

Thank you. And as a reminder, if you would like to ask a question, please press star, fill it by one on your telephone keypad. And our next question goes to Daniel Grosslight of Citigroup. Daniel, please go ahead. Your line is open.

Hi. Thanks for taking the question. I'd like to focus a little bit on the revenue guide for the remainder of the year and really that 1% to 2% net new sales and growth initiatives. Are you able to provide any more detail around that, which segments, products, will drive that growth this year, and how much of that has been sold already versus what you need to go out there and get. And then as we think about 24, is there anything that would prevent you from hitting that 4% to 5% core long-term growth rate that you provided during the investor day?

Okay, so let's break it down into the two parts, the net new sales, new growth initiatives. You should assume if it's going to be in our Q3, Q4 guide, there's a fair amount of visibility because it's implementing new products and new sales, et cetera. We're seeing it. We're seeing strength in our HST platform. We're actually seeing strength in some upsells in our core. So it's relatively broad-based. And then we've got some early returns from some of our new products like balanced bill protection. I think the right way to think about it is it's kind of in motion and dispersed broad-based, which is exactly the way you want it to be. It's not that lumpy. As it pertains to the second question on 24, we think there is plenty of opportunity in the core. You're going to see a couple dynamics. First of all, I think as capacity increases in the system and medical inflation continues to roll through the system, you're going to see those tailwinds very much in line. But it's also the enhancements to our core that are helping. We're always going to see those little headwinds on the margin, as we talked about in our investor day. But as we think about the core tailwinds in the main part of our business, it feels pretty healthy.

Got it. Okay. And then on capital deployment, obviously repayment of debt is taking higher priority now that you are integrating BST. I'm just curious if you have a target leverage ratio that you guys are aiming for and how quickly you can get there.

Yeah. And we talked a little bit about it at the investor day. We don't really have a target per se. I would actually flip it around and say it is a function of Two things, the leverage ratio is a function of us growing the business in 24 and beyond. It is a function of us deploying our capital. We're much more in a, now that we've kind of used up that excess on our balance sheet, we're in a little bit more of a pay as you go realm. If acquisitions are on hold, at least for the time being, just because we're integrating BST, you should assume most of the cash flow is going to go towards a little bit of cash flow towards investing in the business, but most of it's going to go towards debt retirement. By definition, it's not so much cash flow that it's going to be a game changer on our leverage, so it is really a function of growing our business. But we indicated at our investor day, we definitely want to get to a reasonable level by the time we get to, you know, kind of that refinancing window on our debt in the 26, 27 timeframe. Got it. Thank you.

Thank you. We have no further questions. This now concludes today's call. Thank you all for joining. We've just had one question come through. from Rishi Parekh of JP Morgan. Rishi, please go ahead, your line is open.

Hi, thanks for taking my questions and getting me in. Just one, and I apologize, I've been bouncing on through a few other calls, but as it relates to utilization for the second half of the year, can you just maybe break down your utilization expectations, just given what you're seeing out there and just from everything that we're hearing from providers relative to, I just want to isolate that versus the pricing that we're seeing in the second. Outside of the NSA, can you just talk about overall what are the volumes X the NSA-related activities that you're seeing? Thank you.

Yeah, and I guess we'll start with, by the way, I think it is fair to say that the visibility in our business has really gone up. And, you know, we're seeing, you know, an uptick in our PSA volumes. And if you think about it, over the first half of the year, we're up about 5%. from Q4 of 2022. Now, it is important to recognize we are skewed towards out-of-network, we've got a claims lag, and we've got a broader book than maybe just surgery, right? Because we've got general physician activities, just a broader base of healthcare. But those qualifiers aside, we're actually seeing very similar trends, albeit on a lagging basis, to what the hospitals are seeing, which is upticks in ASC, and inpatient surgeries. And so inside that portion of our book, we're seeing behavior that's very, very similar. Where we've lagged a little bit or just haven't seen the growth is on just kind of the classic physician office claims, which are relatively stable, and our NSA is relatively stable. So with our unique platform, it's actually very consistent with what we're seeing out there. I think the other part about it is, hey, okay, sequentially the hospital's up a couple percent on surgeries, et cetera. Can that sustain itself? Can it sequentially grow every single quarter? And what you heard from Dale is we're not ready to call that yet because I think there's a capacity issue here. It's not a demand issue. It's a capacity issue. If you get injured and if you go out and play pickleball and hurt your knee, my guess is you're probably three months away from seeing an orthopedic surgeon just given the backlog that happens. So by definition, the system had an uptick in capacity, but it's hard to tell whether it will sustain. So we're just not ready to call that yet.

Rishi, you also asked about the NSA claims and the process itself. We're seeing an uptick in NSA claim volume over fiscal year 2022. And as importantly, we're seeing increases in And the number of claims that we negotiate post-payment, when a provider is unhappy with the payment, we're seeing an uptick in the number of claims requested for negotiations, as well as the number of arbitration cases that have been initiated. So significant increases in the process itself related to post-payment negotiation and the initiation of arbitrations. Rishi, are you there?

Thank you. Thank you. Okay.

Thanks.

Thank you. We have no further questions. This now concludes today's call. Thank you all for joining UNL Disconnect Your Lines.