Hello, everyone. Welcome to the third day of the J.P. Morgan Health Care Conference. I'm Elizabeth Egan, and I'm an associate in Health Care Coverage Group. It is my pleasure to introduce Heath Sampson, CEO of ModivCare. I will let Heath take it away. Yeah. Good morning, everybody. Hope everybody's had a good conference. I look forward to spending a few minutes, I think 20 minutes, and then hopefully there's some questions afterwards. The first slide here, this is important, especially if you're new to us, it's important to talk about kind of who we are. We really are supportive care, and we're an integrated program. Supportive care is all non-clinical. As the data shows and as we know, having these supportive care services are critical to helping people and helping lower costs. That's the wheel that you see here. On the left-hand side are the services that we have. I'll get into these a little bit more. Personal care, meals, medication management, our largest, transportation, and then remote monitoring, which is really broad. All those, no question, affect the clinical outcomes of that. Our focus and strategy is on supportive care. The wonderful thing about being able to do supportive care, we have 36 million members across the nation that are either in Medicaid or Medicare Advantage. Many of those 36 million are hard to get to and are high need and really need our supportive care services. These supportive care services address the social determinants of health directly, and I'll get into that in a little bit. We also have to meet these members where they are, so very high touch, whether that's a phone call, driving somebody, and you need technology to enable those services. Of course, as I'm sure just about every presentation you've gone to today, the focus on collecting data and having insights, and we'll get into that a little bit more. That leads to really improving outcomes. With these supportive care services, and really for the high-risk, high-need members, we can lower those costs. A little more data around supportive care and what it does to the determinants of health. The wheel on the left here, you could see what does impact determinants of health, the behavior, the social circumstances, the environment that someone lives in. Moving to the top right. Eighty, close to 90% of the healthcare occurs outside of the clinical space, but 60% of the cost is in medical care. There's that misbalance, and everyone knows, how do we fix that misbalance? Which is why there's a move of healthcare into the home. A few facts below that impact what we do is in our monitoring business, Vitals, it shows 58% reduction in admissions, a 3-to-1 ROI just by using our services. In our personal care business, prevention of falls, ensuring that someone's in the house, making sure there's not cords around. That prevention in falls directly 67% reduction in emergency room visits. In transportation, and you can't really go a week without seeing this, people need transportation to ensure they're healthy, whether that's for dialysis or mental health. It's especially since really the last five years. A study here in 2018 shows that NEMT saved Medicaid $30 million per 10,000 members. The industry as a whole, for dialysis, needs to get better at connecting those dots, that's a big part of our strategy. We can do that 'cause we're the largest by far. This slide gets into the individual businesses that we have and really talks about the size and scale and the market opportunity. I'll just take a couple highlights on this. The first are transportation or NEMT. We have a national reach, we're in all the big states that NEMT is offered. That's where the 36 million lives we have. We do about 30 million trips a day. In addition, this market's growing as well. It's about $6 billion now, for where it is and what the needs are, it will grow to about $14 billion. Personal care, really over the last five years as well, is really accelerating because we know that having someone in the home to take care of everyday living is beneficial. We're the largest in the Northeast. Density matters, concentration matters to ensure that you deliver. Right now we're in seven states. Our strategy is to have a national platform. We want a national platform across all our services. Right now it's about 27 million hours of care. We have about 15,000 caregivers. Most importantly here, you see that the market currently is $55 billion, growing to $100 billion. The remote monitoring, we're at the beginning stages of where remote monitoring's gonna go. For us, we're the number one or number two largest player there. Again, licensed nationally. We have about 240,000 patients, 2.5 million interactions, that's a differentiator for us. 2.5 million interactions where actually we want that device to either be hit or to go off, we can engage with that member to change outcomes, to push information, to collect data. That market as well is at $9 billion, growing to $15 billion. A little more on each of the individual businesses. First, non-emergency medical transportation. This probably makes sense, It's good to highlight it's more than just a ride. It could be that someone needs a wheelchair, someone needs a stretcher. It also is, again, this is about meeting the members where they are, it also could be that they take public transportation. Very valuable. In addition, this is a wonderful benefit, because a lot of people that have a sick parent or a sick person can drive themselves. So we facilitate that via mileage reimbursement, and we even use rideshare. It makes a lot of sense in certain circumstances to leverage either Uber and Lyft. They're big partners of us. The differentiators for us, I'll just cover a couple here. This is important. It's size and scale. That gives obvious benefits around size and scale from a leverage on expenses. It also really allows us to attract, recruit transportation providers, as well as be that one partner for large payers. That's really important. Really, over these last couple years, we are contracting in each state, but our relationship is at the highest level of these large players, the C-level relationships, which is really unusual in healthcare services, that really matters. More so at the bottom here, the member experience. If you talk to any of the payers or states, the number one thing is member experience. Are we picking people up on time? Are we ensuring that our services are easy to use? They know it's the lowest cost way for them to keep people out of the hospital. Of course, in MA, Medicare Advantage, they're competing every day for each other, member experience is at the top of the list. When we're large and have that scale and have all these services, not just the one-point solution, that member experience is accelerating. If anyone has elderly parents, unfortunately, everyone will go through this. I went through this as well. The services that I wish that I had for my father are the exact services we have. Getting to the hospital, care in the home when needed, some type of monitoring, and then when needed, some healthy meals. Those are the four things that we know change people's lives. Transportation is our largest segment, it's about $1.7 billion in revenue, close to $170 million-$175 million adjusted EBITDA. Again, 36 million lives. From a growth perspective, even though we're the largest, still around 7%-10% CAGR. The next business, personal care, these businesses we bought over the last couple years to fulfill this strategy of healthcare going in the home and personal services to ensure that we address people's needs. It's been very successful for us. A couple things that you do. Again, non-clinical. Meal prep, ensuring somebody that can get around, making sure that things are clean, medication adherence, and then companionship. Companionship is really underrated, but it's probably one of the biggest benefits that our caregivers give is to ensure that these people have companionship. This market is made up of 150,000 mom-and-pops. It works because... Why does that work? These mom-and-pops that are in a small community in some part of, say, Miami, they're important to be... The caregivers, that they look, live, and act the same. That model of engagement is critically important. That's how it grew up. Now we leverage that, and companies now that can have the sale and size to get the necessary synergies, but still have that community-based approach are the ones that are winning. There's a few companies out there that are really changing this industry, and it's good for this industry because we know the growth opportunity, and we know what it does. Scale and density does matter. It allows the capital allocation to the right things and again, ensure those margins are tight. For personal care, if you've been around any company around this or healthcare in general, it's all about recruitment and retention. Retention and recruitment. That is the limiter. The market, this is an unusual place where there's more demand than there is ability to fill it. If you have a differentiated model, and you have the capital that you can allocate to that, you can recruit and retain differently. A caregiver, giving them a free cell phone, giving them a community-based approach to collaborate, giving them healthcare is different than what a small mom-and-pop can do. Companies that do that are really seeing an advantage in recruitment and retention. Really, coming out of the pandemic and over these last couple of months, the market tailwinds from people going back to work, coupled with that, is allowing good companies to grow and really ensure that they retain and recruit new people. I mentioned community-based experience. That is critical. It's critical to the member experience, but it's also critical to recruitment and retention. Lastly, you'll hear this from everybody, when we do these point solutions well and ensure people are taken care of, we can even do more than what we do. We know that being in someone's home, we can change that outcomes. It's that connection of what we do to the clinical change, that's a big part of what we're focusing on, we are impacting patients' lives. You'll see that accelerate in how things are contracted. Normally, it's a fee-for-service business, but we're moving to bonus payments across many different states and many different of our payer relationships. For us, this business right now is around $650 million in revenue, with $66 million EBITDA. Growing, again, 7%-9% growth. It could grow even more as we come out of this, out of this, recovery out of the pandemic. Right now, around 27 million hours. You can see where we're concentrated in the Northeast with primarily New Jersey, Pennsylvania, and New York. All right, remote monitoring. The focus of this is primarily the personal emergency response systems, and most people in the room probably don't know this, but if you... It's the fall and I can't get up. Actually, I saw a commercial on that a little while ago. If you're in the 80s, you really remember it 'cause they were really terrible commercials. The point is, that's a big part of it, and it really helps. It really matters. That's the core of monitoring for us. The wonderful thing about that is it's broadly reimbursed, and that's where you get that national footprint. It allows you to get those access to the patients and then capture this tailwind of additional monitoring devices, whether that's helping somebody with hypertension, whether that's ensuring somebody, when they step on a scale, is maintaining the right weight to... You can think about it. The monitoring world of monitoring somebody in their home and intervening is critical. This is a differentiator for us relative to some of our competitors in the PERS side, is we want engagement. A lot of times people wanna... It's also like your security. No one wants you to hit your security button. For us, we want that button hit. 9 out of 10 times when someone hits that button, it's not because they need something. It's because they're bored, it's because they're lonely, it's because they wanna check something, and that's a wonderful time for engagement. That's a deliberate strategy for us 'cause we know who that member is, what their illnesses are, and now we can have a conversation. A conversation that many of our payers or states don't get an opportunity to have that conversation. Either we can collect data and give that information to the payer, or we can start pushing information or requirements. "Mrs. Smith, did you get your colonoscopy? Did you get your flu shot?" Those direct impacts that we have, really payers love. Changes their star rating. If you think about the cross-selling opportunity of having all these services together, this one service is selling itself for us. It's a wonderful opportunity and really is the tip of the spear for how we engage across all our services. It's how we ensure that we have a deep understanding of that member and when whether that's a ride, whether it's a connection with a personal device, or whether that's somebody in the home, this model with the CRM on this patient, we can engage. It's a wonderful business. For us right now, it's $76 million in revenue. Strong EBITDA margins. Strong EBITDA, close to $30 million at 35% margins. A lot of tailwinds and growth on this industry as well. Briefly, just I won't go through this a lot, but the whole point I wanted to share on the financial outlook. The individual point solutions that we just talked about, growing at those CAGRs that I articulated with a little bit of cross-selling, we can hit this, we call it three and three, $3 billion and $300 million in revenue in 2025, just on those point solutions alone. The value-based care items that I talked about, the contracts that we currently have on getting bonus payments would be incremental to this. We like that approach. We think it's the right thing for us. Versus jumping to value-based care, it's important to have the strongest point solutions to ensure that we get the right revenue, stability, growth, and then at the same time work on this one mode of care vision and moving to value-based care. For the last slide, I wanna talk about... We're talking about this here now internally and just about everywhere we go right now. If you think about all our services, they could be very different. They're really one mode of care. It's the same client, it's the same member, and really bringing these solutions together fulfill that mission of taking care of people and lowering the cost of income. Lowering the cost of healthcare, sorry. Right now, where we are, the foundational excellence, building these best-in-class point solutions, leveraging our scale, bringing shared services together to ensure that we have the best back offices, so we could free people up to focus on delivering these best point solutions. No question, continue to enhance our digital capabilities, and then obviously focused on the member experience and changing outcomes. As we move forward to that, we're doing this right now, establish shared risk pilots. Looking in a specific area and having a cohort and having all our services or some of our services, collecting data, proving to our customers what we can do differently with all these services. When we do that, we'll demonstrate the population-based care with gap closure and accelerating avoidance. Have real-time actionable interventions in the non-clinical side, and that's relatively unique. You don't hear that a lot. A big part of what we are doing and many other people are doing is connecting those dots. Connecting those dots versus someone not falling to actually someone not going to the emergency room. This industry doesn't do that well. That's a big focus for us to connect those dots. You know, about 20%-30% of our transportation trips are for dialysis. If people don't get to their dialysis, especially end of life dialysis, that's not good, right? We haven't really connected those dots, and our customers has not connected those dots. Really excited about what we're doing with data and ensuring that these real-time interventions really make an impact. Of course, moving to value-based care. The ultimate of taking risk is, yes, what we need to do, but we have this journey where we can get these bonus payments. When we take full risk on a, on a specific population or area, that's gonna be great, but right now it's this journey towards that and building that partnership with our customers and ensuring that all our services result in a great member experience, and again, lower the cost of care. We'll do that again, data-driven insights, analytics. Then lastly, again, hopefully sometime when it makes sense, capitated carve-outs for specific SDOH needs. Again, these services really impact health inequity and really help ensure that we're addressing the social determinants of health. A couple highlights. The first one, and everyone probably says this, but really it is, uniquely integrated supportive care platform. We're on that journey, but that's a differentiator. Then again, long-standing relationships with MCOs at the highest level from CEO down to case manager. Our services and what we do in our business model makes it easier for that case manager, makes it easier for that CEO to have one throat to choke or one partner to ensure nationally that they can impact their members. Then lastly, again, a point from a financial perspective, our goal around 2025, three and three, $3 billion, $300 million, and that's just on our point solutions with incremental upside as we move through value-based care. Pretty good. 20 seconds left, right on, right on track. Now I think we're gonna open it up for questions and for the next 20 minutes or so. Look forward to some good ones. Thank you. All right, everyone. We're gonna open it up to the crowd, to ask a few questions. Just raise your hand, and we'll have someone come around with a mic. Don't be shy. You can yell. Yeah. You can yell. Yeah. Thank you. You talked about the journey to value-based care. Mm-hmm. I mean, can you break out how much is kind of a percentage of revenue? Hmm. If any, you guys have in capitated or bonus payments right now? Well, there's a couple questions you have within there, I should have clarified this specifically in our NEMT segment because about 85% of our contracts are capitated. So that we take risk, and it's either full risk on a specific state, or it's some collared risk where the upside is limited or the downside's protected. All that is about 85% capitated. When you get to bonus payments for changing outcomes, that's primarily right now in our, in our home business. Leading that is the RPM or the monitoring side, and then also on the personal care side. From a revenue perspective, those bonus payments are relatively immaterial. Then we'll update each quarter on where they are. Two questions. One, now that the Medicaid redetermination is happening April 1. Mm-hmm. Any updated thoughts on how this is gonna affect your business? Mm-hmm. Then, any new words on the CFO search? Yeah. I get the CFO search a lot. I have three great people back there that are in the CFO organization that are doing a wonderful job. I'll start with that. The CFO search, I was close to a couple candidates, but for me, just in general, and I know this is true for many great companies, we just cannot compromise. I was almost there, but it wasn't perfect. TBD, lots of great candidates. The one thing I did on the CFO side, and this is probably an error, I just was focusing on Denver. I thought I could get the great candidate in Denver, but I didn't find somebody I like. We pivoted to national. It's probably a month behind my expectations, but we'll get the right person sometime over the next couple months. Your question around redetermination, the big question that everybody has, and we have calls on that and engagement with our customer. You know, recently you saw that the last bill that passed, that there's some information around the timeline that happens on redetermination. The one thing that's probably, ironically, that makes it even maybe more challenging for people, there's a lot of requirements and rules if you're going to take somebody off of Medicaid. Very laborious in some cases. At a minimum, the information that's come out has probably extended the timeline for when states are gonna do this. Even more likely than so, it's actually, it's gonna move to when you have... You're probably gonna keep people on longer. That coupled with that, with where we are with the economy and potential recession, that's counter cyclical. Actually, there's the other tailwind that maybe offsets those. Two other points on this. We know in our contracts where there would be potential risk with redetermination. It gets to the question around capitation and where our full risk contracts are, where we'd be exposed there. We know those states, and we know their timelines or what they're gonna not do around redetermination. Lastly, this is something that's happened over the last couple of years since I've been here, and it gets to our strong relationships, and I like this. Our strong partnerships will reprice if appropriate. We've proven to do that up or down over these last couple of years. You put all that together, similar to even what I said back in June at our investor day, we think we'll manage through that, and we think the impact will not affect the growth targets that I laid out. You gotta be deliberate about it, ahead of it, and ensure any lever that we can pull, we'll be able to manage through, but we think we can. Maybe just one more on redeterminations. Mm-hmm. Do you have any insight into how your state partners are thinking about it? Mm-hmm. Are they thinking about it at all through the lens of maybe what's holding back some of the job market returning to work? Through the lens of the job market. Just clarify that a little bit. What do you mean by that? Yeah, that maybe this benefit is helping keep some people on the sidelines, and redeterminations could free up more workers. Yeah. Haven't had that discussion. It probably makes sense, right? You know, the labor market's improving and anything that would push people back to work, that could happen. The states where we have those discussion, all those big states and primarily are Democratic, and they either have an extended timeline or, and this is clear in a lot of the rules on whether or not you're gonna move someone off, where are they gonna go? A lot of those would go to a program that we actually cover under the benefit as well. With the large states, primarily in the Democratic, we feel good about them managing through it, and therefore, the impact that it has on us, which again, it could is positive. Again, we gotta manage it, gotta be close to it. It's a good question. I'm sure I'll get it every time that we get in front of investors. When you think about your growth trajectory, any de novo strategy versus M&A, I'm just curious. Mm-hmm. Which lever is the most efficient for you when you talk about, you know, really scaling up across the country? Yeah. In the personal care business, right? Where it's very community-based, that's where de novos make a ton of sense. We met our goal last year on opening de novos. My expectation, that's a heavy strategy for us, and I think we've underdone that in the past for whatever reason. Now, if you build the mousetrap, which is what we're doing, integrating, then you can just plug those offices in. As opposed to creating a whole new small business, if it is just, not just, recruiting and delivery, you can move fast on that. De novos is a major part of our future strategy, and it's gonna be a big component of meeting our organic targets in the personal care side. Could you talk about debt and what your targets are? Mm-hmm. They're I think you were four times at the end of the third quarter. Yeah. What would be the, corporate goal going forward? Yeah. Debt's too high. This is it. We knew this. We've been talking about this for the last two years, but really the last 12 months. 2022 was us working through the. We could spend a lot of time on this, but the COVID payments that we got over and above since 2020. 2020, 2021, we built up this cash that we had to pay back. We paid this all back, the majority of it back in 2022. 2023 now, because of that's where our net leverage is at that highest point for. Which is above what I want as three. I think three is the right target for us to ensure that we have lower leverage and then can allocate our capital to growth. We're too high. We're committed to delevering. I talk about it. For us right now, delevering is a priority. Where we are between $100 million-$125 million of free cash flow now that we have, that we can do that. The goal is to get back to that three times net target, and we'll start seeing that in 2023. The ability to delever. Okay, last one. Could you talk about your value-based care pilots with payers and how they're coming along? Yeah. Kind of a start/stop from a standpoint of where we were before. There's a couple reasons for that. It's, I've been new on this and making sure we have all the right people in the right seats and ensuring that we do things in the right manner. All of our large payers, it's just a matter of when we do it, and now it's about how we are doing it to ensure that we do it at the right level. We have a couple. We have a goal for a number that happened in 2023, there'll be a couple of them will be in certain states with all services. Some of them will just be home services. We're still early stages on that, to ensure that we have the right people in the seats and are aligned with how we execute. We'll learn a lot. Let me back up a little bit. Even before the pilots that I was talking about, we now have contracts. We just won a contract that is directly related to value-based care to change in outcomes for somebody. That has accelerated in 2022, and in essence, we're getting paid for that, but we're also learning. We just never had a deliberate approach on selling that way. We've been, rightfully so or wrongfully so, focused on our current revenue model or our current way of doing things. Now we've changed that, and specifically, we've isolated off a group to focus on these innovation and growth. It's not stuck in the day-to-day. That's enabled us to get these contracts and get this momentum around value-based care. In one side, it's worked very well, and we're actually getting contracts on it. The other side, on the pilot side, I think it's a little bit slower, but I have high expectations for that to be a big part of our strategy in 2023. It's the transportation side that has slowed things up, that this industry as a whole, and really the way that customers think about it really was either historically utilization management and fee-for-service, just getting paid by kind of a drive or even though it's capitated, just being paid on that population at this amount. They haven't thought about outcomes before. That's really where we've had to take a step back and be really thoughtful, which we are. It's great. Dialysis. We know that that affects people's outcomes and now we're measuring, monitoring that, and that's gonna be part of the pilot. Maybe regarding the state of the portfolio, you guys have done a number of deals. Mm-hmm. You mentioned you've got some leverage on the balance sheet now, but how satisfied are you with the current state of the portfolio, and are there other areas? Mm-hmm. You know, beyond 2023 that you might be looking to expand? From a strategic perspective, extremely satisfied, right? You saw the wheel, the supportive care wheel. We have all those. If you pulled one up on.gov something, you're gonna see that. We're probably missing mental health, but we really think what we do is a part of that. Strategically, we have all the right assets. Again, down the road, having the right leverage and having the right balance sheet to ensure you can do stuff. It'd be maybe tuck-in stuff that would help complement what we have, whether that's technology or again, building out personal care. Strategically set. Integrating is probably where I think we were behind, and that's a major part of what we've been doing over the last six months, and it's a big part of these next six months. That we build this organization where we are one mode of care, and I would have gave us a B or a C on that, and we're moving to an A in 2023. Any further questions from the audience? We've got one from the webcast, which I'll ask. This is from Rishi Parekh, Managing Director at J.P. Morgan. On dialysis. Mm-hmm. Given the pressure seen on new starts. Mm-hmm. Are they seeing any volume pressure on the 20%-30% of NEMT trips that are for dialysis? Who funds/subsidizes these trips? The pressure, no. There's no. What's happening in the whole dialysis market, which is very challenging for companies that are focused on that, we're not impacted in that way. Dialysis is just a mix of how we underwrite and understand any population. It hasn't really changed for us, on how we price or fund. When we go in and if we're on a full risk state and the mix is 25% dialysis, our data people know that, their data people know that, and we price appropriately. It's, it's the same it's been, and it's working well. The thing that, again, just to continue on to that, the one thing that we haven't done is connect that dot to how it changes the outcomes. Pricing pressure, not there. We feel really good about that. Then now how do we connect the dots to value-based care and outcomes is the new thing. Okay. Great. Are there any further questions? All right. In which case, thank you very much, Heath. Yeah. Yeah. We're gonna applause. Thank you, everybody. Thank you. Thank you.