Good morning, welcome to ModivCare's Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If you would like to ask a question, please press star one on your telephone keypad. Please note that this conference is being recorded. I will now turn the call over to Kevin Ellich, Head of Investor Relations. Thank you. Please go ahead. Good morning. Thank you for joining ModivCare's Fourth Quarter and Full year 2022 Earnings Conference Call and Webcast. Joining me today is Heath Sampson, ModivCare's President, Chief Executive Officer, and Chief Financial Officer, Ken Shepard, CFO of Mobility, and Scott Kern, CFO of Home. Before we get started, I wanna remind everyone that during today's call, management will make forward-looking statements under the Private Securities Litigation Reform Act. These statements involve risks, uncertainties, and other factors that may cause actual results or events to differ materially from expectations. Information regarding these factors is contained in today's press release and in the company's filings with the SEC. We will also discuss non-GAAP financial measures to provide additional information to investors. A definition of these non-GAAP financial measures and, to the extent applicable, a reconciliation to their most directly comparable GAAP financial measures is included in our press release and Form 8-K. A replay of this conference call will be available approximately one hour after today's call concludes and will be posted on our website, modivcare.com. This morning, Heath Sampson will begin with opening remarks. He will provide an update on our business strategy and review highlights of our fourth quarter and full year 2022 results. Ken Shepard will review our financial results and outlook for 2023. We will open the call for questions. With that, I'll turn the call over to Heath. Hello, everyone, a warm welcome to our fourth quarter and full year 2022 earnings call. Today, we reported strong full year 2022 results with revenue and Adjusted EBITDA exceeding the high end of our guidance ranges. These results were driven by solid growth in our mobility business and a double-digit growth from our home division, which includes personal care services and remote patient monitoring. I want to take a moment to acknowledge and express my appreciation for the hard work and dedication of the entire team at ModivCare. It's because of them that we are able to provide high-quality care and the best experience for our approximately 35 million members. We ended the year with solid momentum heading into 2023. To this point, we issued 2023 revenue guidance of $2.575 billion-$2.6 billion and Adjusted EBITDA guidance of $225 million-$235 million, indicating our confidence in continued growth. In the past two quarters, we have taken significant steps to realign and reallocate resources to drive efficiencies and operating leverage. Our One Modivcare strategy, which is defined as alignment across all of our supportive care services, will help us share best practices, drive scale and efficiencies, and standardize processes to ensure the best experience for our members and our customers within each point solution and more holistically across all our solutions. Our goal for 2023 is twofold: Build for scale and grow our business. To build for scale, we will strive for operational excellence, integrate as One Modivcare, and use technology to enable our solutions. To grow, we will sell our point solutions more effectively, leverage our relationships to cross-sell, and continue to deliberately develop and grow our value-based care solutions. Our approach to value-based care is about driving performance-based payments into each of our point solutions and eventually moving into more shared risk arrangements across our entire platform. I'd like to discuss some exciting advancements from our innovation efforts. Our remote patient monitoring solutions like E3 are the tip of our spear for value-based care, and we are seeing increased activity from payers who want to sign up new arrangements with us. We recently began an innovative value-based care program for E3 with a leading national managed care organization. This program is essentially the next evolution of E3, as it utilizes greater data sharing in partnership with the health plan for gap closures and assessments, allowing us to have a more meaningful impact on improving health outcomes and using our supportive care services. We are in discussions with several other national payers for similar programs, and we continue to look for ways to build off our innovative programs and point solutions shifting from standard benefits to Medicare Advantage supplemental benefits. We are confident about adding more value-based care arrangements to our portfolio and using valuable member data, insights, and analytics to drive meaningful long-term value for all of our stakeholders. Our new sales organization has made very good progress. We have a lot of exciting plans for the year to accelerate our growth. Although most of the sales success will increase revenue in 2024 and beyond. Our sales pipeline has increased by over one-third, and we are close to signing contracts with new customers that we historically did not pursue. Before I dive into our segment highlights for the quarter, I wanted to update you on some of the changes we made to our leadership team. We've hired some great people, including an SVP of Strategic Execution, Matt Snyder, and an SVP of Innovation and Growth, Seth Ravine. We have even more exciting announcements soon to come. As you can imagine, it takes time to find the right people for the job. As we have adjusted our operating model and priorities, it has been necessary to make some personnel changes. I want to thank those who are leaving us for their hard work, but I'm confident that we're putting together the best team to take ModivCare to the next level. Moving on to our mobility or NEMT segment. I'm pleased to report that we experienced a 14% year-over-year increase in NEMT revenue during the fourth quarter. This growth was driven by increased trip growth as membership grew to approximately 35 million members, which is consistent with our commentary from the third quarter earnings call. Our focus on disciplined execution and team alignment is working. For example, our fourth quarter on-time performance was at its highest level in two years. We also exceeded service level expectations in our contact centers and reduced missed trips by about a third. We continue to transform our mobility operating model through three main initiatives: provider partnership, multimodal network, and omni-channel member engagement. Our provider partnership initiative involves narrowing our transportation network and creating win-win relationships with only the best providers. Our multimodal network initiative medically tailors the members' ride via a traditional sedan, rideshare, public transit, or a family member. Our omni-channel member engagement initiative meets the members where they are by providing telephonic, IVA, IVR, texting, chat, web portal, or app engagement. Today, our primary engagement channel is telephonic. As such, we have a lot of opportunity ahead of us. All three of these initiatives will further improve the member experience while also driving down operating and trip costs. We had significant improvement in our operating performance in the fourth quarter, and we expect the initiatives we have implemented to have meaningful impact throughout 2023 on both our member experience and cost structure. Regarding redetermination, we acknowledge that Medicaid members can be reviewed by states starting April 1st. However, states are obligated to fulfill various reporting and outreach obligations, which could cause delays in the process, especially in the states where we have significant presence. We expect the impact of this process in 2023 to be insignificant, and we have outlined strategies such as contract repricing, new business wins, and operational enhancements as discussed earlier and at our Investor Day in June, which we believe will enable us to overcome any long-term impact. Moving on to the home division, which is comprised of our personal care and remote patient monitoring segments. In the fourth quarter, our personal care revenue grew 12% year-over-year as we continue to see strong improvement in caregiver hiring trends. We recently implemented a caregiver satisfaction score across our organization, similar to a Net Promoter Score. We improved our caregiver satisfaction by over 50 points in 2022 to the great level by capturing feedback through our Caregiver Advisory Council and by providing additional benefits such as 401(k), new health benefits, and an employee assistance program. We improved our score last year, we know that we can even do better, and we aim to achieve the excellent mark in 2023. All these investments in our team members' experience have helped us maintain an industry-leading retention rate of 65%. Our main goal is to achieve growth in the personal care sector. To achieve this, we are continuing the heavy lift to standardize and centralize non-caregiver functions and certain operational processes. By doing this, we aim to create a more efficient and scalable platform for growth. Our strategy also involves focusing on our efforts on developing standard tools and techniques that can be deployed locally to accelerate caregiver recruitment and retention. We plan to expand our personal care locations through de novo openings and position ourselves to easily integrate any future acquisitions. We expect the reimbursement environment to remain favorable for personal care services, and we plan to add more value-based care arrangements similar to our current value-based care arrangements in Pennsylvania focused on gap closure. We have also added new arrangements focused on changes, condition escalation, as well as Electronic Visit Verification or EVV. Moving to our remote patient monitoring segment, which is a particularly innovative and important part of our business. We saw strong growth during the fourth quarter, with monitoring revenue increasing 18% year-over-year and Adjusted EBITDA margin of 35.8%. We saw a 36% year-over-year increase in total active clients in the fourth quarter, which includes the contribution from the integrated Guardian Medical Monitoring acquisition. Our monitoring team performed exceptionally well last quarter, with a couple of new state Medicaid wins and a strong pipeline for additional business that we can execute on this year. Our Net Promoter Score also remained at an industry-leading 88. As we move into 2023, our priorities are to accelerate Medicaid and Medicare Advantage sales and continue to innovate our monitoring offerings and value-based care capabilities. We expect growth in line with our long-term target of mid-teens revenue growth and a mid-30% Adjusted EBITDA margin. Before I turn the call over to Ken Shepard, our CFO of Mobility, to review the fourth quarter and full year 2022 financial results, I want to remind everyone that the biggest fundamental challenges facing the U.S. healthcare system today are its elevated costs, the inequities in access to care for the most vulnerable patients, and too little focus on care prevention by addressing the social terms of health. We are uniquely positioned to address these challenges. Our supportive care solutions provide the highest quality, best in class member experience in the most cost effective manner for our customers and the healthcare system as a whole. Ken, please walk us through our financial results. Thanks, Heath. Good morning, everyone. We had a strong year in 2022, with consolidated revenue of $2.5 billion, up 25% year-over-year, driven by double-digit growth across each of our segments. Net loss from continuing operations in 2022 was approximately $32 million or $2.26 per share. Adjusted net income for the year was approximately $103 million, or $7.32 per diluted share, and Adjusted EBITDA was approximately $222 million or 8.9% of revenue. For the fourth quarter, revenue increased 14% year-over-year to $654 million. Net loss from continuing operations was $7 million or $0.49 per share. Adjusted net income for the fourth quarter of 2022 was approximately $30 million or $2.11 per diluted share. Fourth quarter Adjusted EBITDA was approximately $60 million or 9.1% of revenue. Fourth quarter Adjusted EBITDA included approximately $7 million of one-time benefit, about half of which was related to our year-end accrual adjustments and the other half related to a one-time revenue recapture in our NEMT contracts. Excluding this benefit, Adjusted EBITDA for the full year would have been near the midpoint of our guidance range, which we think is a good baseline when thinking about growth in 2023. Transitioning to the financial results of our segments, starting with Mobility or NEMT, fourth quarter 2022 revenue increased 14% year-over-year to $459 million, driven by a 16% increase in average monthly members. For the full year, NEMT revenue increased 19% year-over-year to $1.77 billion, driven by a 14% increase in average monthly members and a 4% increase in revenue per member per month. Service expense for the NEMT segment, which includes all direct costs, increased approximately 22% year-over-year in the fourth quarter of 2022 to $387 million. The increase was driven by higher service expense costs associated with higher trip volume related to increased monthly membership and a 13% increase in transportation cost per trip due to the general inflationary environment. On a sequential basis, purchased services per trip were flat at $42 per trip. Utilization, which is defined as monthly paid trips per member, was flat quarter-over-quarter at 7.5%. That said, we expect utilization to gradually increase throughout 2023. NEMT net income was $17 million in the fourth quarter of 2022 and approximately $79 million for the full year. NEMT Adjusted EBITDA was approximately $46 million in the fourth quarter of 2022 or 10.1% of NEMT revenue. Full year NEMT Adjusted EBITDA was approximately $169 million or 9.6% of NEMT revenue. NEMT margins for the fourth quarter and full year were lower, primarily due to higher transportation costs, partially offset by G&A cost leverage. While we experienced higher transportation costs throughout the first three quarters of 2022, we expect cost per trip to stabilize and gradually improve in 2023. Turning to our personal care segment, revenue in the fourth quarter of 2022 was $176 million, which was a 12% increase year-over-year. We saw increases in caregiver hiring throughout the quarter. We typically see a seasonal slowdown in hours in December around the holidays. This resulted in fourth quarter hours remaining flat sequentially at 6.8 million, which was still an improvement from typical Q4 seasonality, as we typically see hours decline in the low single-digit range from Q3 to Q4. Full year 2022 personal care revenue increased 35% year-over-year to approximately $668 million, driven by the full year contribution from our CareFinders acquisition, which annualized in September, as well as improvements in recruiting, retention, and a 6% revenue per hour increase during the year. Personal care service expense per hour, primarily representing caregiver wage expense, increased approximately 6% sequentially from the third quarter of 2022 due to increased wage expenses, particularly in New York, where there was an increase in caregiver minimum wages and a corresponding reimbursement rate increase during the fourth quarter. Going forward, we expect caregiver wage inflation to continue to be offset by reimbursement rate increases. Personal care segment net income was $2.3 million, while segment Adjusted EBITDA was $16.6 million in the fourth quarter of 2022, or 9.4% of revenue. For the full year, personal care Adjusted EBITDA increased 67% year-over-year to approximately $70 million, which was 10.5% of personal care revenue. While we were able to drive some G&A leverage during the fourth quarter, higher service expense led to a 160 basis point sequential decrease in Adjusted EBITDA margin. Moving on to our remote patient monitoring. Revenue in the fourth quarter of 2022 increased 18% year-over-year to approximately $19 million, which included approximately $4.6 million of contribution from our Guardian Medical Monitoring acquisition. For the full year, remote patient monitoring revenue was $68 million, which included approximately $12 million of contribution from Guardian. On a sequential basis, average monthly members increased approximately 3%, driven by consistent growth in referrals across the legacy and recently acquired RPM business. RPM segment net income was $0.7 million in the fourth quarter, while Adjusted EBITDA was approximately $6.8 million, and Adjusted EBITDA margins improved 50 basis points sequentially to 35.8%. We remain confident in our long-term targets for RPM revenue growth in the mid-teens and margins in the mid 30% range. Turning to our cash flow and balance sheet, consolidated cash flow from operations in the fourth quarter of 2022 was the use of $56 million due to payments on contract payables, partially offset by solid cash flow from our core operations. During the fourth quarter, we reduced our contract payables balance net of our contract receivables by $61 million to a net balance of $123 million. For all of 2022, we reduced our net contract payables by $134 million, which primarily relates to overpayments and liability reserves on certain NEMT contracts. Excluding the combined negative impact of $61 million from these items during the fourth quarter, cash flow from our core business remained solid. As a reminder, we expect more normalized level of activity for these contracts payable moving forward, and therefore, a more normalized environment for our free cash flow in 2023. We ended the fourth quarter of 2022 with approximately $14.5 million in cash and had no amounts drawn on our $325 million revolving credit facility. Our principal debt balance was sequentially flat at $1 billion, and our consolidated pro forma net leverage was 4.3x as of December 31st, 2022. We remain committed to delevering over time. Our target net leverage ratio of 3 x remains unchanged. In 2023, we expect net leverage will be gradually reduced to the high 3 x range through debt reduction and EBITDA growth. As a reminder, 100% of our current debt structure is at fixed rates. Our capital allocation strategy remains unchanged as we are committed to a disciplined and balanced approach towards capital deployment, with the primary focus on delevering our balance sheet. This morning, we provide 2023 guidance that included revenue in a range of $2.575 billion-$2.6 billion and Adjusted EBITDA of $225 million-$235 million. Here are some of the puts and takes to consider as you think about the year ahead. Within our home division, which includes personal care and remote patient monitoring, we expect revenue and Adjusted EBITDA to increase double-digits on a combined basis in 2023. For personal care, we expect high single-digit to low double-digit revenue growth driven by continued improvement in the caregiver hiring, leading to growth in hours along with reimbursement rate increases. For remote patient monitoring, we expect revenue growth in the mid- to high-teens driven by new client growth. We also expect to see increased utilization of our suite of monitoring services led by our E3 engagement solution. In our mobility segment, we expect revenue and Adjusted EBITDA could approximately be flat in 2023. While we have had several new NEMT wins in 2022, the timing of our larger opportunities has been pushed out to the extent that we don't expect a meaningful impact in 2023. Our contract pipeline is as strong as ever, and we are confident that we will continue to win our fair share of competitive contracts going forward. We also believe that the impact from redetermination in the second half of the year and normal attrition could be a headwind, which could offset potential wins, contract expansions, and repricings that are expected in 2023. As we suggested last quarter, we expect our full year 2023 Adjusted EBITDA to be more back-half weighted due to our ongoing operating initiatives, investments we are making during the first half of the year, as well as normal seasonality impact on profitability. We expect these initiatives to drive lower costs and improved margins in the second half of the year. Overall, we think current consensus estimates capture the quarterly cadence fairly well for 2023. Again, we also expect to generate solid free cash flow in 2023 and remain committed to delevering and expect to achieve our net leverage of 3 x over time. Lastly, we remain confident in our long-term targets for $3 billion of revenue and $300 million of Adjusted EBITDA in 2025. To wrap things up, we were pleased with our strong fourth quarter and full year 2022 financial results. We are confident that 2023 will build upon the progress that we have made in 2022, and we look forward to reporting meaningful progress on our operational and strategic initiatives over the next several quarters. I would also like to take this opportunity to thank the entire team at ModivCare for the hard work and dedication throughout the year to generate these results while providing high-quality care, improving health outcomes for our members. This concludes our prepared remarks. Operator, please open the call for questions. Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, we do ask you please limit yourself to one question and one follow-up. Again, that is star one to register a question at this time. The first question today is coming from Brian Tanquilut of Jefferies. Please go ahead. Hey, good morning, guys, congrats on a solid quarter. Hey, good morning, Brian. Good morning. No, Heath, as I think about cash flows, obviously, you burnt, you know, there was cash burn in Q four. That was expected. How should we be thinking about cash generation going forward and the rebates? You know, is that an issue that's behind us at this point? Yeah. Consistent with what we've been saying for the last four quarters, 2022 involved us paying off the cash that we accumulated on our balance sheet through COVID in 2020 and 2021. The bulk of that accumulation or a disproportional amount of that accumulation was all paid off in 2022. The COVID payoff was finished in 2022, and that was the main driver, as you can see in our about a $50 million decrease quarter-over-quarter that we paid above and beyond our kinda normal working capital fluctuation. Another item that just to note for everybody, when we pay our debt as well, we pay it semi-annually, that also happened in this quarter. Those two reasons are the main reasons of why we are for cash. Again, for your question going forward, now we're at normal levels of working capital, and we expect to be generating free cash flow each quarter going forward. Awesome. Heath, as I think about the NEMT business, obviously it was pretty strong in Q4. I know in the past you've talked about redeterminations being a headwind for this year, and you've even quantified that. How should we be thinking about margins for NEMT over the course of the year and also as we normalize post-redeterminations? Yeah. Margins for 2023 and going forward will be on the lower end of our range, as we work through the transition. There's mainly two reasons for that, and it has primarily to do with cost. Last Q3 and Q4 really hit the high mark on our unit costs within the Mobility segment, primarily driven by the pressures that everybody's feeling and we've been feeling around inflation, fuel, that in general. However, we expect that to start coming down in the latter half, primarily because of the initiatives we have in place, which is mainly involving narrowing our network to the key providers, therefore ensuring that we can pay them the right level of unit cost at a higher level. Hit the high watermark, that will come down, but that would be the latter part of this year. In addition to that, in our kind of operating expense, which a big chunk of that has to do with the calls we take. The majority of the interactions we have with our members still are telephone. We are doing kind of common practices around call avoidance, whether that's text messages, apps Those two things will allow us to reduce the cost, increase member experience, and I expect us to start moving to the middle part of the range of our expectations in 2023. Awesome. I'll jump back in queue. Thank you. All right, thanks. Thank you. The next question is coming from Bob Labick of CJS Securities. Please go ahead. Hi, good morning. It's Pete Lukas for Bob. You guys covered a lot, answered most of my questions here. Just if you could give a quick update on labor conditions and staffing levels in personal care. What are the expectations for the year, and how much closer do you think you can get to pre-pandemic levels? In terms of any improvement you're seeing in hiring and are making to achieve those goals. The amount of work that we've done in the personal care segment, led by Janae Haynie there, has been tremendous. It really is transforming that organization where we have these 100-plus locations that are really used to doing everything from the beginning to the end on how you deliver the service and how you even account for it. We've made a lot of progress in centralizing and standardizing a lot of those. Kinda halfway through that journey. 2023 is a big part of that. Those efforts, we had some investments that we needed to make at that corporate level, and we'll start to see those investments pay off as we finish with that integration. The point around that is that frees up the resources, whether that's the bodies or even capital, to ensure that we are properly investing in our caregivers with increased pay or, as importantly, and in some cases more importantly, giving additional benefits that ensure that we can recruit and retain. That is showing up in our recruitment and retention numbers. We have grown relatively consistent with the high-performing players within personal care. Very successful, made a lot of progress. The labor challenges have stabilized, and we expect it to stay at that stabilized level. The initiatives that I just articulated before is gonna allow us to really accelerate beyond the market in recruiting and retention. As we noted as well earlier, our retention rates are high, higher than normal. Labor in a good spot, always gonna be challenging hiring hourly people and specific caregivers. We feel good about where we're going. Pre-pandemic levels, we're not there yet from a standpoint of meeting that demand. I think that's related to your question. That will. We won't get all the way back to that even at the end of this year, but we will have significant growth. The point of that is, I think we have a reasonable plan, and then after that, I do think we'll continue to accelerate beyond that. That's kind of the update on the labor market and what we're doing to push beyond that. Extremely helpful. Thanks. I'll jump back in the queue. Thank you. Thank you. The next question is coming from Brooks O'Neil of Lake Street Capital Markets. Please go ahead. Well, good morning, Heath. I have a couple questions. I guess first, I'd love to hear a little bit more about the response of state governments and managed care companies to the One ModivCare initiative that you discussed in your prepared remarks. Yeah. So yeah, the One ModivCare vision is resonating well within, with all our payers and even internally for us, it's allowing us to work cross-functionally across all of our divisions. It's really resonating with the senior c-level people within each of these, specific payers or states. Why is that? 'Cause they're having the same challenges and struggles within their patient population. It's all about how do they identify the higher risk people and get ahead of that, so one they can help them and also kinda lower that cost of care. Almost every week or every month, there is some study that comes out around the benefits of supportive care services and the direct impact that has on changing outcomes. That acceleration, that data is really resonating with executives, and we are in front of a lot of clients either doing pilots right now, doing contract work where we are actually helping them change outcomes, and then even in broader discussions on how we bring them all together to help their population. Long story short, resonating very well. And we expect our contracts to increase this year around that and then do a lot of work to ensure that that continues to happen. Fantastic. I think it's a great initiative. Let me just ask one more. I see some activity in the personal care, arena. I guess I might call it consolidation activity, but it's really more just various corporate changes happening. Do you guys see that as opportunity or threat to you in the personal care arena? The personal care industry as a whole continues to mature. You know, it's still made up of primarily mom-and-pop organizations, you know, 150,000 +. It's a normal cycle of almost every industry that goes through that consolidation. More so in personal care, and this gets back to your even your previous question, the value of these services for people's members are valuable. And that shows up in our increased reimbursement rates. It shows up in increased regulation, by the way, which sounds like a bad thing, but it's actually a good thing. You're seeing more sophisticated people realize that and continue to roll that up and consolidate. I view what's happening in the marketplace as a positive thing for the industry as a whole. There's plenty of hours out there, and I expect and hope that continues. Not a threat. I think good for the industry, and I expect that to continue. Perfect. Thank you very much. Thank you. The next question is coming from Scott Fidel of Stephens. Please go ahead. Hi. Thanks. Good morning. Good morning. First question, just interested if you've got any insights into just how Matrix has been doing with their operational turnaround. Then I know that you've talked about, you know, potentially seeing an opportunity to looking out to the back half of 2023 for monetization opportunity. Just interested in your updated thoughts around that potential catalyst. Yeah, you know, we're really proud of what Matrix has done over these last six-nine months. Completely new management team, restructuring, divestiture of businesses that really popped in COVID, but the thesis of them continuing post-COVID was not there. A lot of heavy lifting to get those away and not be a distraction, and then even take out the costs that are related to that. Pretty much done with all that restructuring and cost. More importantly, this gets to the team that they brought in. The levels of performance within the risk adjustment business, they're back to the way it was pre-COVID. Unfortunately, we kind of lost our focus on that in those kind of 20, 2020, 2021, and even kind of early part of 2022. They're back and increasing beyond that. That's tech, process, new people. I'm really encouraged about what they've been doing there, showing up in the numbers, and I expect that to accelerate and the related financial performance to continue to improve each quarter. You know, I know I've said that potentially there's something in 2023, that could happen. Really for us and what we're seeing now is watching them perform and helping them perform. Again, the monetization will be there. I still think that's early. It would be in 2023. Yeah. We look forward to watching them do it, and at the right point in time, they'll be an exit for us. Understood. Then just my follow-up question, just getting back to redeterminations, and obviously that's a trickier, you know, sort of modeling exercise for all of us until we just see the tempo start to kick in. Does sound like you're building in some mixed impact, right, in terms of assuming some higher utilization in 2023, which I think seems prudent. You know, would be interested in sort of how you're modeling in average membership, you know, just as we sort of play out over the course of the quarters, just as we factor and think about redeterminations. Thanks. Yeah. You're right. We expect that what we have modeled into our numbers, that coming down, membership coming down in Q3 and Q4. We also do have offsets with other new wins that we're doing, expansion of certain portfolios that we do have. That's why we're saying we think it's something we'll be able to manage through. I also do think if it does start happening in redetermination, our model is probably a little conservative for what's likely going to happen. If you talk to, and I know, Scott, you talk to everybody a lot around this. The requirements and the appropriate requirements for states and what they have to do before they roll people off are laborious and detailed. I, and I do think that's going to take some time, and I do think we'll figure out that a lot of people will probably stay on. Again, I think it's we're modeling it. I think it's conservative, but the way it is in our model, we're offsetting a good chunk of that, with new volume and new business on the latter half of this year. Okay, great. Thanks. Thanks. Thank you. The next question is coming from Pito Chickering of Deutsche Bank. Please go ahead. Hi there. This is Kieran Ryan on for Pito. Hey, Kieran. Thanks for taking the question. How's it going, guys? Can I just start off with guidance? Looks like the margin assumptions within guidance are about 8.6%-9.1% versus, you know, 8.9% in 2022. I think you've given us some good color on, you know, the top line growth across the businesses, but is there any key expense swing factors that you would call out between the low and high end of the range, whether it's, you know, wage growth, turnover, transportation costs? Like, is there anything that sticks out more than the others? Yeah. A couple of things. Getting back to mobility and where we are in the life cycle of the initiatives that we are doing. The cost structuring with mobility at the high point right now, both on the unit cost, so in our COGS, as well as in that operating expense side. We expect those to start coming down in the latter part of this year. That cost structure is high. Again, if it's not rolling off to the end of the year for the full year, it still remains elevated to how we'd be exiting. That's one explanation for the margin that we have. In the personal care business and deliberate and absolutely the right thing to do, and I said this a little bit earlier, is we're moving into this new model where we have back-office centralized as well as other processes in the operations actually centralized. We're investing in that now. The reason why we're doing that now, 'cause we need to catch the changes that we're making with those people. That cost shift, basically getting the other costs out, will also start happening the latter part of this year, and it makes a lot of sense. We're building it up centrally, but as we finish with the integration in the right deliberate way with people, process, and tech, we'll be able to lower that operating cost in the field in the latter part of this year. Again, we're probably at the high point from a cost perspective in the personal care segment aside, and I expect that to improve and exit and be on the higher end of our range from a margin perspective exiting 2023. Really the same with monitoring as well. We're, for us, the focus and the opportunity is all about selling. Margins are very strong. We are getting minimal leverage on the G&A side. I expect that to improve nominally this year and then 2024 beyond. The other thing that we are doing, and you'll you can see this if you look at our ad backs, we are ensuring that we have the right people in the right seats. A part of that with what I talked about earlier around how we're investing in different parts of the business, we're also releasing people. We did that, and we did that in Q4. I expect that to happen as well going forward to ensure, again, that we have the right people in the right seats. All that putting aside, we feel really comfortable with the margin ranges that we have in 2023 and feel really comfortable about our cost structure and leverage from the people we get going beyond that. The other comment that I would add is if you take out what we mentioned on the call, the $7 million of one-time benefit that we experienced in the fourth quarter, the margins will be right at that low end of the 8.6%-9.1% for 2022. Really we feel like the jumping off point is appropriate, and so we feel like we have upside opportunity in 2023. That's very helpful. Thank you. Just a quick follow-up. You touched on RPM there. Top line growth holding up well, but, not as quite as much G&A leverage there. Would you attribute most of that just kind of to these contract repricings that you talked about last quarter? I know there's some negative pricing impacts from the Guardian acquisition. To get back to a point where you are generating operating leverage and EBITDA is growing faster than revenue, do those dynamics just need to annualize out, or is there some other factor there that we should look for that? Yeah. Yeah. Thanks. The Guardian actually has the pricing's right in line with the rest of it, so it's not a drag. The Guardian acquisition, really successful, integrated. We are getting leverage off of that from just within the RPM group. Congratulations to the team. That's really successful, and it's good for us. On the pricing side, definitely related to the margin that we had coming into 2022 is the MA pricing that we had for a large payer. Deliberately doing that because we're getting a national license to hunt. I'll do that every day, all day for MA business. That's the main reason for the delta and the decrease in margin. It's because of the MA business that we brought on. That, again, that will help grow the dollar amount going forward. We're really excited about that. For us, it's really about growth, and ensuring we are growing, that business as a whole. Margins are still strong, but those lower levels are on purpose and as expected, and I'll continue to do that if necessary on the MA side. Then the leverage on the G&A side, I don't wanna overplay that 'cause they are still performing well. The point there is I do think there's an opportunity to get more leverage around the One ModivCare, G&A platform as well. We're just. We're prioritizing stuff and right now that's. We're fine with where we are now. Long story short, great margins on purpose based on the MA business, and I expect that to continue from 2023 and beyond. Thanks so much. Thank you. The next question is coming from Brian Tanquilut of Jefferies. Please go ahead. Hey, guys. Thanks for letting me do a follow-up here. Heath, as I think about the longer term guidance ranges you had previously provided, say for 2025, both in revenue and EBITDA, I think about where you are for 2023, it implies a little bit of acceleration in 2024 and 2025 for either that or conservatism in 2023, right? Anything you should, you wanna call out for us or we should be thinking about that would drive some growth acceleration next year and out years? Thanks. The growth within the home division is very reasonable. If you look at where we are and what we expect to have, those are really in line with what we talked about last June, in line with the market, in line with just kind of steady performance. Where the additional growth really needs to happen for us. And I'm comfortable in this is in the NEMT business. Primarily that has to do with selling. There's two dynamics around what has happened in the NEMT business and why I feel comfortable with that, with that accelerated bump going into 2024 and 2025. One is the really the pushback of many large RFPs. And yeah, I think we've been talking about these RFPs for 12+ months, and every month I say they keep getting pushed out. Many of them have been pushed out for a year. This year, the latter part of this year, a lot of these larger RFPs will come up, and we expect to win more than our fair share of those. That volume won't come on till 2024. The other half of that is selling. Our focus, we've hired, I call them hunters, right? We have great account management people, but we've also hired hunters. Our focus in the past hasn't been on growth beyond really our current Big clients. That is our focus. There's a lot of other clients. We focus on the Big Six. We know there's many more big payers out there, we are really close to signing a large deal with a large payer that we haven't even talked to before. We didn't even talk to before. The pipeline as we articulated, is significantly up since kind of the August, September time frame. Those two together on us hunting, coupled with the timing of large RFPs, winning our fair share will allow us to hit those growth targets in mobility and therefore the growth targets across the company as a whole through 2025. That's awesome. Helpful. Very helpful. Thank you. Thank you. The next question is coming from Mike Petusky of Barrington Research. Please go ahead. Good morning. Hey, just one real quick one and then, maybe possibly one or two others. On the payables issue, I just wanna make sure, you're essentially saying, the impact is sort of completely gone, not way reduced, but the impact on cash flows in 23 is essentially X'd out. Is that a fair characterization of what you're saying? Yeah. There's a couple things that there's a little, like always, there's a little bit more I should explain. Okay. Consistent with what I said before, anywhere kind of that kind of $40 million-$60 million paid out that is unusual that happened in 2022, that happens. You see that happen. Yeah. You see that happen in the fourth quarter. Yeah. We are still seeing in certain contracts that still increase a little bit. There is going to be some, a little bit of lumpiness in our contracts payable for a few contracts. I don't want that to distract from the message that I've been consistently saying, I said earlier, is that we're back to normal working capital and that kind of big COVID bump is behind us. There is a little bit that we will still be working through increases and then therefore some lumpy decreases in the next couple quarters, but not to the extent of the $40 million-$60 million each quarter. Okay. I mean and I'm not trying to put words in your mouth, just in terms of magnitude, I mean, it could be maybe, you know, sort of, you know, $10 million or $20 million, something like that over the course of a year in terms of drag, possibly, or. Yeah. Or... Yeah, that's the right way to box it in. Okay. Okay, perfect. Perfect. Then on the contracts pushout, then you sort of seem to allude that there could be some attrition in the second half, which I'm assuming is around, you know, existing obviously attrition, existing relationships. I guess, can you sort of size up, I mean, you know, in any way, the contract size that, you know, in aggregate that had been, sort of been pushed out in your mind and also sort of the, you know, potential attrition risk in the second half associated with transportation. Thanks. I don't see this, the second half having incremental attrition. I think what's in our current numbers right now has. You know, we continue to win well beyond what we've won, and we are continuing to get new volume. We haven't got the increased volume that we expected. That's the main message. Again, I don't expect any more attrition happening in Q2, Q3, Q4. What's in our numbers right now is in our numbers. I expect actually wins in the latter part of this year, you're right, that wouldn't come on till 2024. I don't wanna, I'm glad you asked that question 'cause I don't expect additional attrition happening. From a size perspective, the good thing with us, there's nothing that is material as a standalone, right? Because we don't wanna have the risk or on the other side, we don't have the opportunity either for us to really get one contract and it's gonna have a material impact. That being said, there are large contracts that can have an annual equal to range of kinda $5 million-$10 million. Okay. Which is very good. At the same time, from a risk perspective, we can manage through some of that. I don't expect anything this year from a risk perspective to come off. I expect all the opportunities to come on, going forward. The right range of that, there's probably four to five contracts like that will be coming up over the next 12 months in that range. Gotcha. All right. Let me, let me sneak last one in. you know, and I've asked about this a couple times, and it seems like maybe this is more of a back burner long term, but any update on meal delivery and how you guys are thinking about that? Or should we just sort of back burner that for 2023 and think about it more realistically down the road as something you guys might really go all in on? Thanks. For what? Sorry. Meals. Oh, meals. Meals. Meals. Meal delivery. Yeah. I feel really good about our plan for what we wanna do in meals. We have new people that have taken that over, and it's actually the platform that it's on is the platform that we have in our home division, which makes a lot of sense 'cause it's a referral-based business. They have that, the tools, the people have that skill set, and we have the right partner, and we have the right states picked to start to grow. We have clear objectives, OKRs, that we have in 2023, and I expect that we will achieve that. The revenue and EBITDA contribution will be nominal as designed because we wanna make sure that we continue to prove out this model and have the right mousetrap in place before we really accelerate it. This year, and I do, I look forward to each quarter updating you on how we're doing, and mainly to show, yeah, we're getting it. This is the right thing. Here's my conviction around what it's gonna do in 2024 and beyond. It's gonna be a good year for meals. It actually could get to a point in 2024 where you actually start talking about it as. Better, right? Well, better. I say that. I don't mean that from a hope perspective. I mean that from the team that's working on this and the disciplined actions that we have in place, the customer commitments we have. We gotta execute on that. I expect that we will. All right. Very good. Thanks. Thanks, guys. Really appreciate it. Thank you. At this time, I'd like to turn the floor back over to Mr. Sampson for additional or closing comments. I want to thank you for participating in our call this morning and your interest in ModivCare. Our updated investor presentation and quarterly supplemental deck are posted on the Investor Relations website. If you're interested in scheduling any follow-up calls, please contact Kevin Ellich, our Head of Investor Relations. We look forward to speaking with many of you over the next couple number of days, weeks, months before we report our quarter results in May. Thank you again for all the support. Have a great day. Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.