Hello, and welcome to Chemed Corporation's second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. I would now like to turn the conference over to Holley Schmidt. You may begin. Good morning. Our conference call this morning will review the financial results for the second quarter of 2025 ended June 30th, 2025. Before we begin, let me remind you that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of this call, the company will make various remarks concerning management's expectations, predictions, plans, and prospects that constitute forward-looking statements. Actual results may differ materially from those projected by these forward-looking statements as a result of a variety of factors, including those identified in the company's news release of July 29 th and in various other filings with the SEC. You are cautioned that any forward-looking statements reflect management's current view only and that the company undertakes no obligation to revise or update such statements in the future. In addition, management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation, and amortization, or EBITDA and adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the company's press release dated July 29th, which is available on the company's website at chemed.com. I would now like to introduce our speakers for today: Kevin McNamara, President and Chief Executive Officer of Chemed Corporation, and Mike Witzeman, Chief Financial Officer of Chemed. I will now turn the call over to Kevin McNamara. Thank you, Holley. Good morning. Welcome to Chemed Corporation's second quarter 2025 conference call. I will begin with highlights for the quarter, then Mike will follow up with additional details. I will then open the call for questions. While the performance of both operating units did not meet our expectations for the second quarter of 2025, we remain confident in the overall fundamentals, growth potential, and strategic direction of both businesses. Admissions and fee costs during the quarter totaled 17,545, which equates to a 1.2% improvement from the same period of 2024. However, it is important to remember that over 600 patients transferred into VITAS in the second quarter of 2024 as a result of our April 2024 acquisition of Covenant Health. Excluding those transfers, admissions increased 4.9% in the second quarter of 2025. Our average daily census, or ADC, expanded to 22,318, an increase of 6.1% when compared to the prior year quarter. In the quarter, hospital-directed admissions increased 9.1%. Home-based patient admissions declined 6.2%. Nursing home admissions declined 2.9%, and assisted living facilities admissions declined 1.4% when compared to the prior year period. We currently estimate that the consolidated Florida program will end the 2025 Medicare cap year with a $19 million billing limitation. As was discussed in our June 27th press release, we were on track to mitigate the Florida Medicare billing limitation risk as of the end of the first quarter of 2025. Admissions in Florida were weaker than anticipated in April and May. Accordingly, our Medicare cap projection was revised. June and July admissions in Florida are within our expected range but will not be enough to offset the overall billing limitation for the 2025 cap year. Management does not expect a significant level of Medicare cap billing limitation in our Florida program for the 2026 cap year. There are a number of initiatives underway that contribute to that expectation, including continued efforts on admitting short-stay patients, mainly through higher hospital admissions, quick ramp-up of the CON startup locations in Marion and Pinellas counties, and other cap management strategies. The current projection for the 2026 cap year assumes that the rate differential that occurred for the 2025 cap year does not recur. The detailed rate information related to the reimbursement increase in Florida for the 2026 cap year will become available during the third quarter. We intend to update our assumptions regarding rates and overall outlook for the 2026 Medicare cap year in Florida in the third quarter earnings release. Now let's turn to Roto-Rooter. Roto-Rooter revenue increased 0.6% in the second quarter of 2025 compared to the same period of 2024, falling short of our internal expectations. Branch revenue, in particular, was softer than anticipated, with less than 1% growth compared to the prior year. We continue to execute on the strategies implemented in 2024 that resulted in improved fourth quarter of 2024 and the first quarter of 2025 revenue trends. Despite these efforts, April and May were particularly weak. Other large consumer-facing companies have discussed the chilling effect that the Liberation Day tariff announcement had on consumer confidence and consumer spending in April and May. We believe that Roto-Rooter suffered from that issue as well. June and July residential revenue has rebounded to a level that is much closer to our internal expectations. Total leads were down 7.2% in the second quarter of 2025 compared with the same period of 2024. This is a slight improvement compared to the trend we saw in the first quarter of 2025. While the second quarter of 2025 resulted in disappointing operating results, we remain optimistic about the overall prospects for both businesses. VITAS is in the process of adjusting their patient mix in Florida to ensure Medicare cap issues do not persist past 2025. This will cause some disruption in VITAS' operating metrics but positions them to return to a consistent higher growth rate for the long term. Roto-Rooter remains the most recognized brand in the plumbing and drain cleaning industry. We remain confident that the competitive advantages enjoyed by Roto-Rooter will return its financial performance to a steadier growth trajectory. With that, I would like to turn the teleconference over to Mike. Thank you, Kevin. VITAS net revenue was $396.2 million in the second quarter of 2025, which is an increase of 5.8% when compared to the prior year period. This revenue increase is comprised primarily of a 6.1% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 4.2%. The acuity mix shift negatively impacted revenue growth 71 basis points in the quarter when compared to the prior year revenue and level of care mix. The combination of Medicare cap and other contra-revenue changes negatively impacted revenue growth by approximately 379 basis points. The $16.4 million Medicare cap billing limitation accrued in the second quarter of 2025 is comprised of three components. First, a catch-up entry of $9.5 million was required to recognize the Medicare cap billing limitation in Florida related to the first six months of the 2025 Medicare cap year, which includes our fourth quarter of 2024 and first quarter of 2025. Second, $4.8 million was recorded related to the Medicare cap billing limitation for the current quarter of 2025 related to our Florida combined program. Third, $2.1 million was recognized for the current quarter of 2025 related to all other VITAS programs, mainly in California. The amount recognized for all other VITAS programs is in line with the historical run rate for these programs and our original projections for 2025. Average revenue per patient per day in the second quarter of 2025 was $207.03, which is 350 basis points above the prior year period. During the quarter, high acuity days of care were 2.5% of total days of care, a decline of 15 basis points when compared to the prior year quarter. Average length of stay in the quarter was 137.1 days. This compares to 100.6 days in the second quarter of 2024. It is important to remember that length of stay statistics are calculated based on discharged patients, not active patients. This increase in average length of stay between quarters represents the effect of the patients admitted during our community access initiative, which was designed to identify appropriate patients earlier in their disease trajectory being discharged. Our median length of stay was 20 days in the second quarter of 2025 compared to 18 days in the same period of 2024. Adjusted EBITDA, excluding Medicare cap, totaled $66.8 million in the quarter, which is essentially flat with the second quarter of 2024. Adjusted EBITDA margin in the quarter, excluding Medicare cap, was 16.2%, which is 163 basis points below the prior year period. The lower EBITDA margin in the quarter reflects the impact of admitting more short-stay patients. While this is the right thing to do to mitigate Medicare cap billing limitations, it has the effect of slowing revenue growth and reducing overall margin. VITAS management is currently reviewing expenses at all levels of the organization to reduce costs wherever possible to help offset the lower EBITDA margin. Now let's turn to Roto-Rooter. Roto-Rooter branch residential revenue in the quarter totaled $156.4 million, an increase of 0.9% from the prior year period. The residential revenue increase was driven by a 16.9% increase in water restoration, offset by declines in drain cleaning, plumbing, and excavation revenue. Roto-Rooter branch commercial revenue in the quarter totaled $53.2 million, an increase of 4.4% from the prior year. The commercial revenue increase was driven by a 24.4% increase in excavation and an 11.7% increase in water restoration, offset by slight declines in plumbing and drain cleaning revenue. Revenue from our independent contractors declined 4.4% in the second quarter of 2025 as compared to the same period of 2024. Our independent contractors are generally smaller operations in middle-market cities. In most instances, they do not have the capability to perform the add-on business that is currently the primary driver of revenue growth at Roto-Rooter branches. Adjusted EBITDA for Roto-Rooter in the second quarter of 2025 totaled $48.6 million, a decrease of 18.7% compared to the prior year quarter. The adjusted EBITDA margin in the quarter was 21.8%. The second quarter adjusted EBITDA margin represents a 517 basis point decline from the second quarter of 2024. The EBITDA and EBITDA margin decline was the result of a number of factors. Based on the improved revenue results seen in late 2024 and early 2025, Roto-Rooter began to selectively increase its productive workforce in certain high-performing branches. With the sudden weakness in residential revenue seen in April and May, margins suffered from inefficiencies within the labor force. Technicians were sitting idle more than expected. This has a few effects in addition to the impact of inefficient labor use. First, when a technician knows they may only have one or two opportunities for commission on a daily basis, they are more likely to provide discounts to secure the paying job. Second, Roto-Rooter routes jobs to its highest performing technicians first. The highest performing technicians generally have higher commission rates. As a result, commissions as a percentage of total revenue were higher than they have historically run. These issues should moderate as revenue rebounds in the third quarter. Higher casualty and workers' compensation costs negatively impacted margins by approximately 220 basis points, due mainly to actuarial estimates, assuming significantly increasing costs of settling claims. Finally, as discussed in prior quarters, our cost per click for internet marketing leads has continued to decline. However, a much greater percentage of our leads are currently coming from paid searches as compared to unpaid searches. Paid searches in the second quarter of 2025 represent over 50% of all leads during the quarter. Paid searches have historically represented closer to 40% of all leads. This has the effect of increasing costs as a percentage of revenue for our internet marketing program. Roto-Rooter management is also reviewing expenses at all levels of the organization to reduce costs wherever possible to help improve adjusted EBITDA margins going forward. Now let's turn to the revised guidance for the remainder of 2025. VITAS full-year 2025 revenue prior to Medicare cap is estimated to increase 7.5% - 8.5% when compared to 2024. Full-year adjusted EBITDA margin prior to Medicare cap is estimated to be 18.2% - 18.7%. We are currently estimating $28.2 million in Medicare cap billing limitations in calendar 2025. This is comprised of $19 million related to the Florida combined program and $9.2 million for all other VITAS Healthcare Corporation programs. There's no Medicare cap billing limitation in the fourth quarter included in the guidance related to the Florida combined program. This expectation assumes that the rate differential that occurred for the 2025 cap year does not recur in 2026. The detailed rate information related to the reimbursement increase in Florida for 2026 will become available during the third quarter. We intend to update our assumptions regarding rates and the overall outlook for the 2026 Medicare cap in Florida in the third quarter earnings release. Roto-Rooter is forecasted to have a 1.25% - 1.75% revenue increase in 2025 compared to 2024. Roto-Rooter's adjusted EBITDA margin for 2025 is expected to be 23.5% - 24.5%. Based on the above, full-year 2025 earnings per diluted share, excluding non-cash expenses for stock options, tax benefits from stock option exercises, costs related to litigation, and other discrete items, is estimated to be in the range of $22 - $22.30. This guidance assumes an effective tax rate of 25.3% and a diluted share count of 14.7 million shares. Chemed's previously issued 2025 guidance range was $24.95 - $25.45. Chemed's 2024 reported adjusted earnings per diluted share was $23.13. I will now turn this call back over to Kevin. Thank you, Mike. I will now open this teleconference to questions. Thank you. Ladies and gentlemen, as a reminder to ask a question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Brian Tanquilut with Jefferies. Your line is open. Hey, good morning, guys. Maybe my first question is, I think about your comments on the cap, right? It sounds like we shouldn't see any impact or carryover of that after Q3. If you can walk us through the levers you're pulling to ensure that that happens, and then maybe how you're thinking about the carryover impact of that in 2026 on margins and the growth rate in VITAS revenues. Thanks. Mike, why don't you start with some of the technical aspects? Sure. From a levers standpoint, we're still emphasizing hospital admissions, short-stay patients over long-stay patients. That's, I think, job number one in the levers we're pulling. The other thing to keep in mind is the community access program that we ran in 2022, 2023, and some part of 2024 has created a bubble of long-stay patients. Those patients will, just by definition of what we do, attrit over time. That bubble is going to moderate just with the passage of time as well. I think shorter-stay patients and the moderation of the bubble we essentially created with the community access program will certainly help over time. As far as adjusted EBITDA margins, probably, and we haven't put pen to paper, so I'm speculating a little bit, but they're going to be below, say, what we were in 2024, which is a little over 19%. I'm guessing, and again, we haven't really put pen to paper, but I would suggest maybe 17.5% - 18.5% is probably a pretty good range for 2026. Again, we're coming up with those numbers as we speak. Yeah, I'd just like to reiterate some of the things Mike said with regard to why it was that we have a cap problem this year. It started with the fact that the national rate for hospice went up approximately a little over 2% last year. That's what the cap limitation, the cap percentage, goes up to, that number. The differential, or 3%, I said 2%. 2% delta, we got 5% in Florida. That 2% delta is about $22 million. In other words, we started the year with the fact that the same reimbursement, the rate of reimbursement we were currently getting then, was going to be $22 million higher than the cap limitation that we were going to face in the 2025 cap year. We started last year, 2024, with about a cushion of about $15 million, a little over $15 million. We said, okay, we've got to make some, you know, we have to make some changes. It turns out that we were on par to make those changes. Two terrible months with regard to admissions, for whatever reason, occurred in April and May. That was enough to knock us off the trend that we were on. Given the fact that we were starting with an approximately $22 million hole to get out of, that explains why 2025 is so unusual. The other point that I was going to make with regard to this bubble of patients that we're going through, the bubble is getting smaller at this point. I think, and this is going into something very subjective, but during the pandemic, we saw a change in the type of, we're talking about super elderly patients. A lot of those super elderly patients, with COVID, perished. The ones that came out the other end were a little bit hardier and tended to have, for us, a very long length of stay. Our average length of stay went up substantially, particularly in Florida. Those conditions are abating. Those are two significant levers. The other thing, not to be discounted, is something that VITAS is spending night and day working on, which is getting a good running start on the new CON properties for our programs. I think that should, that almost alone is enough to carry the day. Be that as it may, yes, we are very confident that on a run rate basis, we're not looking at any, we're projecting a surplus next year. Let's put it that way. I would also say that we've always been attuned to cap in Florida, but we've never had a cap in Florida. I mean, yes, the organization starting at the Chemed level has changed its orientation and its attention levels to this issue, and we're confident we will keep it under control. In other words, internally, we say it's 19 going to 0, not 19 going to 40. We're pretty confident on that. That makes sense. Maybe, Kevin, just to follow up on that comment you made about the COVID impact. Is that, you think, what's driving the relative underperformance or kind of just trend below average on admissions? I mean, 4.9, pretty good number, but still below trend. Just curious what your thoughts are. Is that just the flow-through of hospital admissions being soft as we look at the HCAs and Tenets of the world putting up lower admissions? I think it's possible, but I think the biggest issue in that is, remember, basically all of Florida averaged this 5% increase for this planned year. That put pressure on hospices everywhere in Florida to avoid a cap. Some of the dynamics for attracting particularly short-stay patients changed. The answer to your question is, why is it 4.9% instead of 6.9% as far as increase? You might say, a little bit harder fight on the short-stay patients. Again, we don't have the community access orientation. We're not pushing to, we could admit a lot more patients and have a lot more revenue, but the number one thing we're trying to avoid is providing service for free and not getting any reimbursement for it. I think the proof in the pudding is that, as Kevin made in his prepared remarks, hospital admissions in the quarter were up over 9%. The thing that brings that down is that we are admitting fewer patients from all the long-stay pre-admission locations like ALFs. That's intentional for the Medicare cap. In total, in aggregate, you're right, the 4.9% is a little bit less than the admissions we've had in the past. There's some intentionality to that because the hospital admissions are the ones we're really focused on, and we have to take in fewer admissions from those long-stay things to right-size the patient mix in our portfolio in Florida. Yeah, it makes a lot of sense. Thank you so much. Appreciate it. Thank you. Please stand by for our next question. Our next question comes from the line of Ben Hendrix with RBC Capital Markets. Great. Thank you very much. Appreciate the commentary around those post-COVID demographic factors that point to a more stable cap environment next year. I wanted to talk a little bit about the assumption you made for 4Q this year and into next about the spread between the wage-adjusted or wage-indexed rates and the cap, and your assumption that that doesn't persist. Can you talk a little bit about how you're thinking about that ahead of the final rate and what’s informing your view that that might not persist? Let me start by saying, it's a good thing if it's higher. As far as we're concerned, we want it to be as high as possible. We will manage the business as though it was the same as the national average. In other words, if it comes in at 5% and, I mean, if the national average comes in at 2.1% and it comes at 4.1% for Florida, that would be a good thing. All we're saying is that probably the first month or the first quarter, the first numbers you'll see, we'll probably assume that there'll be a Medicare cap in Florida equal to that difference. We will manage the business as though we were just getting a 2.1% increase. In other words, we'd have it in a sense of reserve. We would reserve anything over that national average. To the extent the admissions then, in fact, came in, they would all fall to the bottom line. I mean, it would, but we wouldn't get to the position we're in this year, which is being dependent on a continuation of a positive trend, for instance. It is a good thing if it's higher. To answer your question, I think it will be a little bit higher. Just because you look at the factors that we look at that are informative on a prediction of rate suggest that Florida is higher than the national average. It will be a good thing if it's higher, but we'll manage differently this year than last year. Does that make sense? Absolutely. That's very helpful. I appreciate that color. On the Roto-Rooter side, I think you noticed in, or mentioned in recent quarters that there were some local management issues at some of the locations that had driven some weakness. I was just wondering if there's any linkage between efforts you've made or initiatives you have at the local management level and some of the recovery you've seen in June and July. I don't think, I think we're pretty much past the management issues that we've talked about in the past. I think a lot of those were caused by people, particularly private equities poaching some of our management, not only General Managers, but also the next level down where we have Water Restoration Managers. I think that's pretty much abated. I do think that in general, if you look at our management team in the field, not at the corporate level, but at the field, probably the tenure is a lot less than it would have been, say, pre-pandemic. I don't think, I think we're past that now. There's always going to be, we have 51 branches, all with General Managers, all with Excavation Managers. There's always going to be a subset of those that are going to be on some sort of performance improvement kind of plan. I think we're more in a normal cycle as it relates to managers. I don't think that's a huge factor. No, I would say if I was to summarize, just to think of remedy, you know, to answer your question, if I saw two issues currently at Roto-Rooter revenue, they'd be, and they're not small. The small one is that Mike, what Mike mentioned is, you know, we had a new insurance program for basically general casualty last year. I mean, it also covered workers' comp and whatnot. Workers' comp costs tend to go higher as revenue goes down. Employees are more likely to take time off for injuries, that type of thing. That was a little bit higher than it's usually a credit for us because we're pretty conservative in our accounting for that. It's usually a credit. When they did the, and on the casualty side, it came as a surprise because you look at the number of car accidents and the severity of car accidents, they were reduced. They were lower than the expectation. You might say when we expected the outside firm to analyze our exposure, given the fact that there were some differences in our ultimate coverage for those accidents, we expected a credit. It came out to a big negative. It was half of our decline of the margin in Roto-Rooter. Do we expect that to reoccur? No. We're continuing to work on the safety, and our actual results with regard to the number of accidents and severity is getting better. I think that, but that's an issue that wrecked the second quarter in many respects for Roto-Rooter. Their sales, aside from the fact that they also had a bad April and May, no question about it. They're there. I would put all the other issues as one other, what's the problem at Roto-Rooter? Why is it underperforming? It's not management. It's not the labor force. The labor force has good close rates. We have good retention. As Mike said, the outflow of managers, the private equity firms, if anything, is reversing. They're realizing trees don't grow to heaven, and they're coming back or attempting to come back, some of the managers. The biggest issue is the phone is not ringing like it did in the past. One answer for that is that most, currently, and this is changing, we're in the process of making some groundbreaking changes with AI and whatnot. The phone's not ringing as much. Where potential customers go, they go to the internet, they go to Google. If you were to type in Roto-Rooter plumbing in Google, before you even see the word Roto-Rooter, there'd be probably four other advertisements for rival plumbing. It's just, Google does an excellent job monetizing that monopoly position. It's changing. We're making adjustments. Mike made a reference to the fact that we used to get 60% basically of order output, as we used to get 40% of our calls from paid search. Now it's 50%. The reason that is, is because the free ones, where we used to appear on maps on the Google entries, we don't appear anymore. They're saying if we can get money for making them pay for advertisements, we'll make sure they don't show up in the free areas. We deal with it. It's a bit of adjustment for us. I think we ultimately will win that battle. We're doing better, I think, at this point every month. It all relates to what's the problem with Roto-Rooter. The phone isn't ringing as much as we'd like it to, plain and simply. We've got the workforce. Our development of water restoration and the continued refinement of our excavation business, we're as much of an excavation and water restoration business as we are plumbing and drain cleaning at some point. One business feeds the other. A lot of our services are those ancillary services. We have no worry with regard to the long-term persistence of success at Roto-Rooter. A bit of a problem right now, no question about it. We have to say that we've really had some tough issues at Roto-Rooter, but it's not nearly as many on the horizon. Mike, anything, what's your reaction to that? Yeah, I would say there's no doubt, as we've talked about in the past, that the private equity competition is hurting us, particularly on the drain cleaning and the plumbing side. The number of jobs we do in those two segments are continuing to decline slightly. We would love to see those increase. We're doing everything we can to combat that. One of the things you see in the results specifically is, as Kevin mentioned, we are doing a much better job at identifying and converting add-on sale opportunities. We've really supported the revenue at Roto-Rooter with water restoration and excavation, which a lot of our private equity competitors do not do. We're never going to be in a place where we offer $77 or $88 drain cleaning. We view that as a race to the bottom, and we're not going to engage in that. It's the loss leader. They're doing that for air conditioning business, really, is why they're offering that. We're doing everything we can to combat that, get around that. We've talked a lot about the app. We've talked about the service agreements that we've started selling. Like I said, our conversion rate is higher now than it's ever been. In the second quarter, we converted almost 50% of our leads to paying jobs, which is significantly higher than the historical average. I think we're doing a great job when the calls come in. We would like to have more calls, but I think from an operating standpoint, we're doing a really good job at Roto-Rooter, making sure that every opportunity is converted to a paying job. I appreciate that color, guys. Last thing for me, just if you could comment on the tax rate favorability you saw in the second quarter. I just want to see if that's a timing issue or what was behind that. Looks like about 120 basis points sequential, decline in effective tax rate. That's it for me. Thank you. It's a bit of an accounting thing, but we get a credit when people exercise stock options. The company gets essentially a larger tax deduction when the stock option, with what they realize compared to what we've recorded as the expense. It's just a function of how the accounting works. Obviously, with where our stock price is, we haven't had too many stock option exercises in the quarter. That really drives the change in the rate. When we get a credit in our expense, when we have a lot of exercises, it drives down the rate. We didn't have as many exercises in the second quarter, and that's really the big driver. Thank you. Please stand by for our next question. Our next question comes from the line of Joanna Gadjuk with Bank of America. Your line is open. Hey, good morning. Thanks so much for taking the question. First on VITAS, the comment around the weaker admissions, right, especially the short-stay in Florida. Why that came at that time versus earlier if you're saying that everyone was chasing, so to speak, these short-stay patients? Why did it show up kind of later versus, say, when the Medicare cap situation started already in October of 2024? What gives you confidence in being able to get this higher mix of short-stay patients going forward? Joanna, I think our confidence in the higher things going forward is really that we've seen a trend. April and May were pretty bad. Before that, I think we were on track. June and July seemed to be back on track. I can't tell you exactly why April and May weren't that strong. What I can tell you is when we model out the current operating statistics that we have for June and July, we are pretty confident in the $19 million number for 2025. We are also pretty confident, excluding the impact of the rate issue, that 2026 will not have a cap problem. Let's say this. We need, we like admits, number one. We like all admits. We want the mix to be right. How do you get a lot of admits? You have a good reputation. You keep doing what we've been doing. We could probably have 5% higher admits right now if there was no Medicare cap limitation just by snapping our fingers. That's there, it's more than doable. How do you get the right mix is really your question, Joanna. The answer is, it's by what we've historically said, pulling the right levers. It's emphasis. It's where your salespeople are calling. It's how fast you respond to a lead, where somebody has expressed an interest in having a meeting or a discussion. You make sure that with regard to the hospital referral, you make sure you're there within an hour. It's that type of emphasis which can put this over the top. Just so you know what we're talking about, we're talking about small changes. We're talking about small improvements affecting the results by 1% or 2%, which is more than what we're talking about as far as the issues we're facing. I'll just say that one of the things, the point that I made during the point is the type of things we've done in the past when we wanted to emphasize more short-stay admissions were a little less, they were a little more unavailing just because other people were doing the same thing. They were following our lead. We just had to refine our efforts. As Mike suggested, the results of those refined efforts are suggested to be more than adequate. We'll continue those, and we'll continue to refine them. All right. The other piece, when you were talking about your confidence in not having the comp issue, is the new counties that you're entering in Florida. Can you talk about the ramp-up there? Is there a way to think like how much offsets could come from that growth in Florida? Let's put it this way. We think it's tough. I mean, because we, you know, we're new in one, and it's been a big success. Pinellas County is one that we got most recently. It's big. I mean, I'll just give you an order of magnitude. Mike, what do you say? There's 8,800 admits? Yeah, 8,600 admits in 2024. If you multiply that number by $36,000, you see that that's maybe $350 million for coverage for Medicare cap billing. The opportunity is there. Now, with regard to, let's say, Pinellas County, we just have awarded it. There are elements of finalization and dealing with appeals that we have to do. In our projections, where I said we're projecting no cap in the fourth quarter or any significant cap next year, that does not depend on Pinellas County. None of our projections include any projection for Pinellas County. Now, if you ask me, will we be operating and thriving in Pinellas County in the next governor plan year? I have no doubt we will. That is not the basis. Our basis is just making slight improvements in the state as well as a whole. Those are, we mention those regularly for the next, it begs the question, what about the next year? The answer is Pinellas County, for one, should be booming by then. Let's put it that way. Yeah, I mean, ultimately, the new CON locations will buy us a little bit of extra time to right-size the patient mix, which is what we're doing and which is what we've talked about for, you know, the second half of 2025 and all of 2026. Right. I guess you alluded to the idea of like you don't know for sure in the Florida rate update yet, right, because we didn't see the details yet. It sounds like you, based on some other data points, where you're thinking that it's likely that it's going to be some of that issue with, repeat. It sounds like you think it's smaller, right? I guess you're saying that despite the fact that you think that there's a consideration that there could be the gap built out, there's enough of these other things you could do in terms of the mix, and then potentially, you know, that's not even a considerate the new counties, right? Right. Our current models would show that we are projecting a $15 to $20 million cushion next year in Florida. That does not include any potential credit we could get in Pinellas County. It also doesn't include any of the rate differential. I think we've done some analysis on what we think the hospital wages look like in Florida. We think it is going to be above the national average. Having said that, what we saw in 2025 was a wider spread than we've ever seen in the 20 years we've owned VITAS. Keep in mind. I don't know that we would expect that to continue, but even if it does, we will manage to that number either way. We want it to be as high as possible. Okay. We'd like it to, we'd like a 3% delta. I mean, give us, but we would reserve it. In other words, all we're saying in that case, if they get, if there was a 2% delta, if we got 4% in Florida and 2% nationwide, that Medicare cap limitation went up 2%. The first month, what we would do in our results, until proven otherwise, we would take, we would then say we have quote Florida Medicare cap billing limitation until we, you know, and we'd take the money that we got from the government. We'd set it aside knowing we were probably going to have to give it back unless the admits, you know, came in the door, the additional admit. It's a heads, you win, tails, you don't lose situation if the cap is high. If the increase in reimbursement is higher than Florida national average, it's good. Ultimately, what we're trying to say, Joanna, is that our current operating model and the current trends that we're on will not result in any cap in 2026. There's an unknown with the rate differential. We'll deal with that when that comes. We'll let you know what it is when it comes. Our current operating model will suggest that we will not have any cap. It's a little bit like. If we tried to put into the model some sort of rate differential, it would purely be a swag. We don't think that that makes sense to do, when we're trying to essentially portray that the 19% is going to 0%, not 19% to 50%, as Kevin mentioned. I guess what you'll see next year, and I'm putting myself in your position, you say, okay, what should we do for estimates and expectations? Just for Florida, you should assume that the Medicare cap limitation will go up in a sense, the national average. Anything above that, ignore because we will, it'll be like California for us. In other words, we know right now California is very profitable. Why not? We make all our estimates. We say, you know, okay, there's going to be about $8 million of cap in the state. If we got an increase of, if it was 2% higher than the national average, we'd say, well, technically, we're going to come in exactly where we thought, but we will have a Medicare cap reporting of, in Florida, in that case, all things being equal, let's say $20 million. Okay? We would know that. We would state that on the day that we had the information from the Florida reimbursement, you know, what it was. We will ignore that internally. We suggest analysts kind of ignore that and just say, you know, they may have to give $20 million back to the state of Florida, but there's a good chance they'll do better than that and have to give less or none back to the federal government. I mean, it, we'll see how it comes, but it's not a big issue to us. Our view is, we're not holding our breath waiting for that number. The bigger it is, the better upside for us, but we're going to try and make it next year for everyone, for people whose job it is to predict and analyze the results of the company, a non-entity, something that does not affect the ultimate task that you're doing. Does that make sense, Mike? I have a, Yeah. I mean, it's kind of a tough one because we, it sounds like a bogeyman, Medicare cap, but that wouldn't surprise me at all if it's different. I mean, what are the odds it's going to be exactly the same? Right. Right. All right. Thanks for that. Maybe just quickly on the other business, just to clarify, you called out this higher insurance, I guess, accrual in the quarter, and then you said something about you don't think it's going to persist, but you did lower your margin for the segment, for the Roto-Rooter segment by 200 basis points. Do you assume that the issues you're seeing in Q2 persist for the rest of the year? First of all, there's a catch-up element to it. I mean, the extents we took is more than what we took in the, you know, effectively a quarter is more than one quarter's result impact, number one. Number two, the point that if Roto-Rooter can continue to do a good job reducing the number of accidents and the severity of them, it's got nowhere to go but down. Let me start by saying that we had a new, you know, based on the insurance market, we have a new policy, different deductible, different elements. There are some adjustments we have to make as far as managing it. No, we don't expect big surprises in the Roto-Rooter expense side of that regard. When I say don't persist, there's no magic bullet other than it was a lot to take in in one quarter, number one. Number two, we're going to do a better job managing and predicting it. Ultimately, the answer to your question, Joanna, is just that our emphasis on safety and reducing those types of expenses, doing a much better job monitoring the insurance adjusters who are settling these claims, that type of thing, that's where we're going to see the improvement. If you combine it with good experience and much more emphasis on what happens after the accident occurs, there's a lot of confidence on our part that, you know, that level of expense you saw and the level of deterioration in the margin that you saw in the second quarter will not persist. As Kevin mentioned, in the almost $5 million extra hit we took, there's probably at least some of that that is out of period. Just so you know, when you're doing your model, Joanna, we did include an increase in those costs of $4 million in total for the second half of the year. We didn't want to be caught short again, not at least considering those costs in the guidance we put out. The improvements that I'm talking about will take some time to put in. In the guidance that we've put out, Roto-Rooter has baked in $4 million, so $2 million each quarter of additional expense for this issue. Could it be better than that? We think it could be, but it's hard to say, but we didn't want to get caught short. We won't have a hard bat until the next report by the outside auditing firm. All right. That's helpful. If I may say a last one on capital deployment, raise the cash flow pretty good. Note that, yes, there's, you know, issues in one business and the other. Do those things change your view of things? I want to say, you did this hospice acquisition, and at that time, you kind of were alluding that there could be more like that. Can you kind of refresh your commentary around that? Is there any change in that thought process around maybe there's some consolidation in the hospice to be done? Thank you. There's no change in strategy, Joanna. We would love to make acquisitions that are at the right valuation and on the VITAS side in the right location. We continue to monitor and have those conversations. It's a bit of a long lead time because we're contacting people, we're contacting organizations, essentially cold calling them in some instances to see their appetite for making such a transaction. There's a bit of a long lead time for those, but there's no change in the direction of what we would like to do. Having said that, regardless of the cash or what's on, you know, no debt on the balance sheet, we're not going to just buy things to grow. They have to be at the right valuation. They have to be at the right place in the right location. I would also tell you, there's no change in the idea that because of the strength of our balance sheet, significant share buybacks and acquisitions are not mutually exclusive. We can do both. That's why we've kept the balance sheet the way it is. I would expect some movement in the third quarter, probably on a share buyback perspective, but otherwise, there's no change to our overall strategy. Great. Thank you. Thank you. As a reminder, ladies and gentlemen, that's star one one to ask the question. I'm showing no further questions in the queue. I would now like to turn the call back over to Kevin for closing remarks. I just want to thank everyone for their kind attention. It was going to be a tough quarter for our operating units, and I think we're well on the way to improving the outlook. We'll see in our next report three months from now. Thank you. Ladies and gentlemen, that concludes today's conference call. 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