Thank you. Good morning, and welcome to Community Health Systems’ third quarter 2022 conference call.

Joining me on today’s call are Tim Hingtgen, Chief Executive Officer; Kevin Hammons, President and Chief Financial Officer; and Dr. Lynn Simon, President of Clinical Operations and Chief Medical Officer.

Before I turn the call over to Tim, I’d like to remind everyone that this conference call may contain certain forward-looking statements, including all statements that do not relate solely to historical or current facts. These forward-looking statements are subject to a number of known and unknown risks, which are described in headings such as risk factors in our Annual Report on Form 10-K and other reports filed with or furnished to the Securities and Exchange Commission.

As a consequence, actual results may differ significantly from those expressed in any forward-looking statements in today’s discussion. We do not intend to update any of these forward-looking statements.

Yesterday afternoon, we issued a press release with our financial statements and definitions and calculations of adjusted EBITDA and adjusted EPS. For those of you listening to the live broadcast of this conference call, a supplemental slide presentation has been posted to our website.

We will refer to those slides during this earnings call. All calculations we will discuss also exclude loss or gain from early extinguishment of debt and impairment expense as well as gains or losses on the sale of businesses, expense from government and other legal settlements and related costs, expense related to employee termination benefits and other restructuring charges, and gain on sale of equity interest in Macon Healthcare, LLC.

With that said, I’d like to now turn the call over to Tim Hingtgen, Chief Executive Officer.

Thank you, Ross. Good morning everyone, and welcome to our third quarter conference call.

During today’s call, I will share highlights of some of the progress being made across our organization, and I’ll discuss why we believe our strategies continue to position the company for long-term growth. Despite current industry dynamics, we are producing incremental and sequential improvements in many key areas.

I’ll also cover some of the adjustments we are making in light of inflationary pressures and other factors impacting healthcare operations. But first, I want to acknowledge and express gratitude to our healthcare leaders and teams in Florida, who did a truly remarkable job before during, and after Hurricane Ian.

Our presence along the west coast of Florida included eight hospitals and more than 80 outpatient sites of care. Our ShorePoint Health network, which includes affiliated hospitals in Port Charlotte and Punta Gorda were most directly impacted by the hurricane.

While our facilities sustained damage, our team maintained operations and continued to care for patients throughout the storm. And in the aftermath, they worked around the clock to ensure emergency, surgical and other services would be available to their community.

For several days, ShorePoint Health was functioning as the sole healthcare provider within a 30 mile radius. While ShorePoint provided emergency and acute care services, we experienced significant disruption to elective procedures, which continued into early October.

Work is ongoing to restore full operations including affiliated and independent physician practices. One other important note, we are pleased with the progress we made across the capital structure.

During the quarter, we took additional steps to improve our capital structure with the successful open-market debt repurchase program extinguishing approximately $267 million of notes outstanding during the quarter. We continue to pursue our opportunities to lower our overall debt and leverage.

Kevin will share more details in his remarks. Now, I will turn to our third quarter results.

As we shared last quarter and continuing into this quarter, demand for non-COVID healthcare services has returned more slowly and later than most predicted, leading to softer than anticipated volumes during the middle of the year. Moving through the third quarter, we did see volumes, especially surgery and outpatient visits picked up by mid-August coinciding with the end of summer travel, return to school, and more normal schedules.

Those improvements continued throughout the rest of the quarter. In the third quarter, same-store admissions were down 2.2% on a year-over-year basis reflecting a lower COVID impact as well as continued migration of certain surgical and cardiac procedures through outpatient status.

For comparison, COVID-related inpatient admissions were 5% this quarter compared to 13% in the third quarter of last year. Our focus on expanding outpatient access and volumes as well as capturing procedural cases that shifted from inpatient through outpatient classification resulted in a same-store adjusted admissions increase of 5.2%.

Same-store surgeries increased 5.3% and continue to beat the 2019 pre-pandemic baseline. We ended the quarter with surgeries at 101% compared to 2019.

Even though we are seeing a shift of some procedures to outpatient, we are also experiencing higher surgical acuity overall as we focus on service line investments. Surgical case mix increased 5% compared to the 2019 baselines across service line categories; we saw the strongest growth in orthopedics, spine, neuro, GI and colorectal procedures.

ED volumes are rebounding versus the 2019 baseline too, and in the third quarter at 99%. We continue to invest in ER services and capacity, freestanding emergency departments, EMS partnerships, and ER marketing and outreach programs in our communities.

While improving sequentially net revenue in the third quarter declined year-over-year due to both lower admissions and lower acuity of inpatient admissions versus prior year, which again was a COVID search period. Inflationary pressures continue to impact operating expenses and margins.

While we remain highly confident in the potential of our overall portfolio, the growth in margin development opportunities in a small number of markets have been hindered in this rising cost environment. We are taking swift and necessary steps to mitigate these headwinds.

During the third quarter, we accelerated efforts to adjust operations in these markets by consolidating, or reducing some services or even opting to close facilities. We expect an overall positive impact from these changes as we close the year and even more long-term impact moving into 2023.

Last quarter, we discussed four areas of focus for this year and next, and I’d like to provide some updates now. The focused areas are opportunistic growth, strengthening the workforce, incremental expense reduction initiatives, and leveraging CHS centralized resources.

Starting with opportunistic growth through prioritized capital investments and service line expansions, we continue to add more capacity in both inpatient and outpatient services. For example, the addition of 112 new beds in our Naples, Florida market are slated for phased opening this quarter and into early 2023, adding capacity and service to all three of our campuses.

Our new Northwest Healthcare Houghton facility opened in the Tucson market in June and volumes are ramping up nicely there and should benefit from a favorable seasonal impact in the coming months. We will open a new 120-bed inpatient behavioral health facility, a joint venture with Acadia in the Fort Wayne market in December.

And as we’ve mentioned before, we believe JVs and other partnerships can help accelerate our growth strategies in a number of markets. On the outpatient side of the business, we’ve continue to add new primary care and specialty practices, urgent care centers and freestanding EDs in select markets with a good pipeline at future development opportunities.

And we added ambulatory surgery centers in the Tucson and Huntsville markets during the quarter. As we continue our focus on ASC growth opportunities.

Our balanced growth strategy will remain a central theme as we continue to demonstrate the ability to shift from inpatient to outpatient settings within our systems of care when that is the preferred or most appropriate setting. Our proprietary transfer center is driving admissions with strong year-over-year and sequential growth in accepted patient placements.

However, as request for placements have increased due to staffing and capacity constraints, some markets have had to occasionally decline some inbound transfers. We expect incremental progress as our capacity optimization and workforce development initiatives open up more available beds in key markets.

As a result, we expect volumes from the transfer center to grow further and to be a continued source of incremental high acuity admissions. Regarding capacity optimization, our emphasis on reducing overall length of stay is also working with the 6% sequential improvement shown in the third quarter.

Finally, on the subject of opportunistic growth, provider recruitment enables more access and service line development. It is up 9% year-to-date compared to the prior year and continues to surpass 2019 levels.

Moving on to initiatives underway to strengthen our workforce, we are rapidly reducing contract labor. Contract labor declined each month of the third quarter and totaled $100 million in Q3 compared to $150 million last quarter.

Our centralized nurse recruitment team is generating solid results, and our retention strategies are also working well. On a year-to-date basis RN hiring is up 12% over last year, and our retention rates have improved 300 basis points.

Resulting in a strong net gain in nursing FTE’s overall. Incidentally, as we have hired more RNs and other permanent workers over the past several months, we also incurred higher than normal on-boarding and orientation expenses, especially in the third quarter.

Our Jersey College Nursing School relationship is expanding. We just announced new campuses in Tucson, Arizona and Spring, Pennsylvania, and in a matter of days had more than 900 potential students express interest.

Our first cohort of approximately 30 students in our ShorePoint market will graduate in January, 2023. When the Jersey College partnership is fully deployed, we expect to graduate approximately 1,000 new nurses every year, and our investments in the Pathways Program, which includes enhanced tuition reimbursement and student loan repayment programs, has been very well received, and that is also having a positive impact on both employee recruitment and retention.

Under incremental expense reduction initiatives, I’ve already mentioned the service consolidation and closure activities in a small number of markets, which will reduce expenses and investments where we simply do not foresee long-term return. These were thoughtful and deliberate decisions and we have been careful not to disrupt long-term growth potential while recognizing that in today’s environment, sometimes some operations are not sustainable given these dynamics.

Our margin improvement program now in its third year also continues to yield strong results and Kevin will provide more details in his remarks. Finally, we are leveraging our centralized resources to benefit all of our markets.

I’ve mentioned several of our programs such as our transfer center, centralized nurse recruitment and physician recruitment programs. Other centralized programs include utilization review and case management.

Our patient access centers for physician practice scheduling, ACOs and managed care contracting. These programs continue to inform best practices and they help us to achieve efficiencies across the organization.

In closing, we are pleased with many sequential improvements in the third quarter, and believe this progress bodes well for the future. We will continue to intentionally and aggressively adapt our portfolio services and operations to step over inflationary impact and other industry headwinds, which we believe will position us for better results in 2023 and beyond.

And we are supporting our markets with enhanced resources to accelerate growth and revenue, which we know is essential to address fixed and higher variable costs and to restore stronger earnings in margin performance. Kevin, at this point, let me turn the call over to you.

Thank you, Tim, and good morning everyone. As Tim mentioned, impacts from the top-line, including lower admissions and acuity, along with elevated contract labor and wage inflation continued to affect our EBITDA performance.

However, while navigating through these challenges and simultaneously focusing on future growth, we exceeded expectations in outpatient visits leading to strong year-over-year volume growth and adjusted admissions and surgeries. Sequentially we saw improvements in admissions, adjusted admissions and ER visits.

We also improved length of stay, reduced contract labor expense, made improvements to our capital structure, maintained strong liquidity and produced positive free cash flow during the quarter. Moving to the third quarter results, net operating revenues came in at $3.025 billion on a consolidated basis.

On a same-store basis, net revenue was down 2.3% compared to the third quarter of 2021. This was the net result of a 5.2% increase in adjusted admissions and a 7.1% decrease in net revenue per adjusted admission, which was negatively impacted by the reduction in COVID cases in lower non-patient net revenue.

Adjusted EBITDA was $400 million. During the quarter, we recorded $115 million of pandemic relief funds compared to $19 million recognized in the prior year period.

Excluding pandemic relief funds, adjusted EBITDA was $285 million with an adjusted EBITDA margin of 9.4%. As a reminder, we have not included any pandemic relief funds in our adjusted EBITDA guidance.

Further, we do not expect to receive any meaningful pandemic relief funds going forward. Hurricane Ian resulted in an approximate $10 million hit to the third quarter, and on a sequential basis.

Closure costs and incremental healthcare provider orientations accounted for another $20 million of sequential headwinds. With regard to expenses on the labor expense side combined salaries, wages, and benefits and contract labor expense remain elevated on a year-over-year basis.

Specifically related to employee costs, we experienced an increase of approximately 5% in our average hourly rate for employees on a year-over-year basis, which was largely offset by a reduction in hours worked from a combination of operational adjustments, lower inpatient days, and conversion of employees to contract labor. On a sequential basis, base pay inflation grew only 1%.

However, an additional calendar day incremental costs associated with on-boarding new employees and costs associated with increased position starts, which is typical in the third quarter, led to an overall sequential increase in salaries, wages, and benefits of 4%. On the contract labor expense or our contract labor expense, while still elevated over the prior year, continued to show sequential improvement.

During the third quarter of 2022 contract labor was approximately $100 million compared to $60 million in the prior year quarter. This compares to $150 million in the second quarter of 2022 and $190 million in the first quarter of 2022.

We anticipate continued progress in reducing contract labor going forward. Non-labor related expenses continue to be well-managed despite inflationary pressures.

We experienced a moderate increase of 2.5% over the prior year. This is the first increase in seven quarters, and it is primarily attributable to medical specialist fees, increases in utility costs in the timing of certain provider tax payments, while all other increases and decreases netted to zero.

We’ve been able to make able to keep the growth of these costs well below inflationary levels due to the commitment of our employees to execute on our margin improvement program. Turning now to cash flows.

Cash flows provided by operations for $291 million in the first nine months of 2022 compared to $400 million in the prior period. Excluding the repaid Medicare accelerated payments made in the first nine months of 2021, cash flows provided by operations were $667 million for the first nine months of 2021.

Lower net revenue and higher labor costs contributed to the lower cash flows during the first nine months of this year. That said, it’s worth noting that despite lower year-over-year EBITDA, we still delivered positive free cash flow during the quarter.

Moving to CapEx. For the first nine months of 2022, our CapEx was $284 million compared to $334 million in 2021.

We effectively adjusted our capital expenditures without materially slowing down our growth opportunities. On the capital structure side, we executed an open market debt repurchase program in the quarter during which we’ve purchased $267 million of debt with $174 million of cash resulting in an approximate gain of $78 million.

The company’s net debt-to-EBITDA increased to 7.3 times due mostly to lower EBITDA impacts attributed to the current operating environment. Our free cash flow was positive in the quarter, and as we manage through this environment, we remain focused on our longer term goals of lowering our leverage and increasing our free cash flow.

In terms of liquidity, at the end of the third quarter, we have $300 million of cash on the balance sheet and we have no outstanding borrowings under the ABL with $935 million of borrowing based capacity. As a reminder, we have no debt maturities due until 2026.

We continue to receive interest related to potential divestitures. As this occurs, we analyze the future growth and earnings profile specific assets and assess the impact potential divestitures would have on our future financial leverage and free cash flow generation.

During the quarter, we divested one small facility in Oklahoma. We are engaged in an advanced discussion to about other potential transactions.

If these transactions come to fruition, we believe that in addition to paying down debt opportunities also exist to reinvest resources and those can be directed to areas of our portfolio to advance their long-term growth and earnings. Tim highlighted a number of initiatives to deliver growth.

Many of these strategies are delivering the desired results now. Some are ramping up or expanding to generate greater returns and others earn the development phase to enhance our revenues and earnings potential.

We remain committed to our objectives and focused on our opportunities, which are designed to position the company for long-term and sustainable success. Ross, at this point, I’ll turn the call back to you.

Thank you, Kevin. At this point, we’re ready to open up the call for questions.

We will limit everyone to one question this morning, but as always, you could reach us at 615-465-7000.

Hi, good morning everyone. This is Taji Phillips on for Brian.

Thanks for taking my question. So just thinking through bridging your year-to-date numbers and your EBITDA guidance for 2023, this is assuming if you back out COVID relief funds, projections for Q4 between $400 million and $500 million.

So can you just talk about what’s informing that performance for Q4? Also within the context of normal seasonality where Q4 is higher just providing any color on Q4 EBITDA performance would be great.

Thanks.

Sure. This is Kevin, and I think I can take that.

So, as we think about Q4 seasonally Q4 has always been our highest EBITDA quarter of the year, and we would expect that to be the same this year. As we think about, our volume at trends as we came out of what was really, an impacted second quarter and early part of third quarter with some disruption, we did see improvement throughout the third quarter on those volumes.

As we mentioned as kids return to school, the end of the summer travel season and returned to some kind of normalcy. We did see volumes pick up in the back half of the quarter and continuing on into the fourth quarter.

So, we would expect that to continue throughout the remainder of the quarter. A couple other things I’d point out, we did have sequential reduction in contract labor and that contract labor even throughout the third quarter each month, a decline each month.

So, we would expect our fourth quarter results from a contract labor expense to continue to trend in the same direction, albeit probably not reduced as much as the 33% reduction we saw sequentially in Q3, but we would still expect Q4 contract labor to be lower than Q4. The other last item maybe I would point out is, we think about inflation and the potential recession that’s ahead of us, we think that there’s a theory that as most people, try to get healthcare in before the end of the year, before their co-pays and deductibles reset we think the kind of economic environment will actually add to that pressure this year for people to think about getting their healthcare in before the end of the year.

So, we think that, again it’s going to look a little more like what we’ve seen in the past with more services performed in 4Q.

All right, great. Thank you.

I mean, I guess there’s been a little bit of confusion certainly on our part about what you were saying for Q4. Would you just clarify for everyone exactly what the Q4 guidance range actually is?

But then, the real question just about labor costs. I guess everyone seems to be saying that labor is getting better.

Everyone seems to be saying it’s getting better slower than they thought. So, I guess, can you give us a sense about how you think about labor trending into 2023, and then what factors in retrospect made it improve more slowly than you thought this year?

Thanks.

Sure. So our full year guidance, which does not include any pandemic relief funds I think for the fourth quarter would imply something in the $400 million range to get to the low end of our guidance of 1.3 [ph].

So, I think hopefully that that clarifies that for you. In terms of labor, we did see labor inflation in the third quarter, at about 5% on a base pay rate basis.

That was a little higher than we had previously expected. Sequentially the base pay increased only about 1%, so we – and if we think about the first couple quarters of the year we were in the 8% to 8.5% year-over-year inflation.

So, we are seeing some moderation in that, in labor and we think going into 2023 although it, probably will make remain higher than it has been historically. We do think that there’ll be some continued moderation and we’re probably looking at something in the 3% to 4% labor inflation range for 2023.

Great, thanks. Good morning.

Just wanted to ask a couple quick questions on your balance sheet and cash flow. Just first on the balance sheet.

You extinguish the $267 million in a quarter, you have no maturities until 2026, but I was curious if there’s more opportunity for similar actions down the line. And then on cash flow, you’ve done just say about $300 million of operating cash flow year-to-date on a $1.06 billion, EBITDA baseline, including cares, but you maintain your cash flow guide that would suggest also a pretty sizeable step up and cash conversion in four quarter.

So, I guess anything on your confidence on that conversion in 4Q, and how should we think about the EBITDA to operating cash flow conversion down the line as you continue to grow your EBITDA base? Thanks.

Yes, it’s a couple things there. So yes, I mean, we do feel confident in our cash flow for the fourth quarter.

I mean historically, along with the fourth quarter being the highest EBITDA quarter of the year. Historically cash flows are the strongest quarter of the year as the fourth quarter.

So, we would expect some of the – there’s some one-time payments that, that often come, in the fourth quarter and generally your fourth quarter is your best cash flow quarter of the year. So that kind of coming into the fourth quarter gives us some confidence that we will continue to – or we’ll be able to meet our guidance for that.

Hi, this is Robin on for Andrew. Can you walk us through the sources of the $115 million in pandemic aid, and as some of your peers have indicated, do you think pandemic relief funding has largely ceased?

Thanks.

Sure. So in the, if you recall, there was a rule grant in a Phase 4 grant that was announced back in December of 2021.

And that was the source of what was paid to us this quarter. It had just been delayed and did not get to us until this quarter.

So, we recognize it accordingly. And going forward we do not expect there to be any future material pandemic relief fund at grants coming from the government.

Yes. Hi, thanks.

Just a couple of questions here. I guess some companies have helped size the magnitude of COVID support received in 2022.

As we think about maybe the moving parts going into next year, I’d be curious if you could update us on what you’re thinking is there, and to be clear, I’m thinking about it excluding things like the $115 million that you received this quarter, so like DRG support, sequestration 340(b) changes, items like that, any sizing you could provide on those as we think about next year?

Yes. So look we really haven’t given any guidance, for next year particularly kind of the, the, all the moving parts in there are several including, some probably the largest increase in inpatient rate lift as well.

I think there is the way we’re thinking about it at this point, maybe what I would say about that is, we’re thinking about 2023, is we expect kind of consistent with our medium term goals that our same-store net revenue growth into 2023 would be in the mid single-digit range. And that would be a combination of, kind of the net impact of these programs as well as the rate lift that we’re seeing on commercial, from commercial payers, which is also higher than we have historically received in the past we’re probably in the 5% range or, 4% to 6% range on commercial contracts.

So all that being said, I would look at it is about a mid single-digit same-store net revenue growth going into next year.

And this is Tim; I’ll jump in just a little additional color around that. And we also believe our focus on driving acuity and service lines, will be a net impact, positive impact for 2023.

And I referenced some of the declines in the transfer center due to capacity, and typically those are, some higher acuity admissions we’re able to bring into our locations of care. And I also mentioned the large increase in provider recruitment in 2023 that we on-boarded.

Those, a lot of those are procedural specialists. We should see more surgical acuity growth through that as well.

So that should really pull forward with some nice uplift in 2023.

Hi, thanks. Quick one on the divestitures.

It sounded like you were in advanced discussions. If you could just flesh out what the potential sizing of that would look like, just on – just the ones that are in advanced discussions there.

And then my real question just, if you think about the margins of roughly 11% [ph] this year and ultimately trying to get to that long-term, 16%, could you just refresh, where you think the major buckets of improvement, sort of what line items and obviously a focus on SWB, so let’s contract labor and maybe what that means for volumes. And then I guess the specific question would be how much progress do you think you can make next year?

What’s a reasonable assumption for margin improvement in 2023?

Yes. So starting with the divestures, I think we’re a little early to size because there’s a couple different deals.

And we’re probably a little bit early to size that, but we’ll certainly give more indication, as we continue to progress in those discussions. In terms of some of the other moving parts and improving our margin into next year.

So, I kind of mentioned, a mid single-digit revenue increase and some, higher than historical rates lift that should help us certainly get there. It’s a little early.

We’ve not yet kind of commented on volume trends for next year. If we think about labor, as I mentioned, kind of in the 3% to 4% range for labor inflation is how we’re thinking about next year.

Contract labor is, probably an interesting one and will certainly contribute to the lift in EBITDA and margin next year. If you think about the progress we’ve made already coming down from $240 million in the first half of the year, $100 million in the third quarter and continued reduction that we expect in the fourth quarter.

I would look at next year and we believe we’ll see a 40% to 50% production in contract labor compared to 2022. So that should give us some meaningful lift.

On the, supply side, it’s a variable cost, but we – with our margin improvement program with the efforts that our supply chain team that has been executing on we think that we can keep that relatively consistent and or offset any inflationary pressures on our supplies as well as on some of the other non-labor expenses where we’ve made great progress over the past couple of years. We still believe that there’s some runway on that to continue to hold prices down.

And although we may not have as much success and keep it absolutely flat like we have for a number of quarters. We think we can certainly keep those non-labor expenses increasing at less than inflationary trends.

Josh, this is Tim. Good morning.

Just a few things to add. In terms of margin improvement for 2023 we really believe that the fixed cost leverage opportunity exists.

We saw what happened obviously with lower revenues on higher costs in the second quarter, and some of that certainly bleeds into the third. And as we pointed out, we’re working through that with our initiatives, making really good sequential progress.

So, as we grow the volumes and the revenues, obviously we still expect the higher net revenue conversion rate to lift earnings and margin. The other part of that equation is taking some costs out that we’re not being paid for in terms of length of stay management.

We’ve been very, very vigilant in our efforts to control what we can control and that goes into our, length of stay or our case management programs as well. We did see great improvement in the third quarter with our non-COVID length of stay.

Actually it’s better than 2019, better than sequential quarters, better than last year at this time. So for what we can control, we’re definitely making improvements and bringing down patient days that in many cases, we’re not being reimbursed for.

That has another benefit, as I pointed out in terms of opening up capacity for us to bring in new incremental admissions through the transfer center, through the recruitment and initiative that we have in play to further expand our market share and our patient base in our communities.

Great, thanks for the follow up. I just wanted to ask quickly on that market share argument.

Clearly the hospital industry and its entirety is realizing heightened inflationary pressures, but from a competitive perspective, non-for-profits are also dealing with investment income declines, given what’s going on in the equity and bond markets. So, I’m curious if you’re seeing perhaps opportunities to take share in that context and what it could mean on building out capacity or heightened investment in general, just given the overall backdrop?

Thanks.

Great. Jason, this is Tim.

I’ll kick us off on that one. To answer your question, it varies by market.

We have some really, really strong, not-for-profit, non-tax paying competitors, but in other markets we do see that type of opportunity. We kind of label it as being appropriately opportunistic in this environment, kind of leveraging our ability to shift resources and CapEx into markets where we have a really good line of sight on long-term growth.

We do see some opportunities to accelerate that. I don’t want to call out any markets specifically today for fear that the competition will know we’ve got our site set on them, but at the end of the day, we do see some opportunities in that regard.

We’ve demonstrated, I believe some really good capital controls across the company throughout the course of last couple of years in particular. And as Kevin pointed out, we were able to moderate the spend quite nicely, but we still had a whole host of better expansion projects, service line editions, robotic program initiatives underway that will again, I think bode well for us to really take advantage of this somewhat challenging inflationary operating environment.

Yes. And maybe I’d just add to that, and I think you covered it really well, Tim, but is there some demographics in our market are improving, and if we think about our footprint across primarily the southeast and southwest, many of those states being lower tax jurisdictions are benefiting from some of the demographic move as well as some of the economic move, as companies are relocating to lower tax jurisdictions.

So all that we believe bodes well for many of the markets we’re in, and we think that not only, can we capture some incremental market share, but we’ll also be capturing our share of a larger market.

Yes, hi. Thanks for the follow up.

Just wanted to ask real quick, it was helpful, the commentary on, some of the swing factors as we move from Q3 to Q4. Can you just remind us, are you expecting to record in the fourth quarter, any dollars related to any out of like period Medicaid payments, things like Florida DPP or Texas QIF, anything of that nature?

Just remind us, I guess, how you guys approach accruing for any of those programs, if there’s anything else that we should be considering? Thank you.

Sure. We have probably every quarter; some puts and takes on those programs.

There’s nothing material that I would call out for the fourth quarter.

Thanks Matt, and thanks to everyone for spending time with us today. Let me end by thanking our local health system and company leadership teams who’s sharing our commitment to achieve the best results possible and remain optimistic about our company and where we are headed now and into the future.

We look forward to updating you on our progress as we move forward and to continue to work diligently to achieve our goals. As always, if you have any additional questions, you can reach us at 615-465-7000.

Have a good day.