Q4 2020 Select Medical Holdings Corp Earnings Call
Overall, we continue to post strong financial results as fourth quarter growing Revenue 6.2% adjusted ebitda, 28.7% EPs, 137.5% and adjusted EPS 83.9% versus the same quarter prior-year excluding. The provider relief funds recognized in the fourth quarter adjusted ebitda was up 7.7% in the fourth quarter compared to the same quarter prior-year total company revenue for the fourth quarter was 1.46 billion dollars. I mentioned a 6.2% increase compared to the same quarter prior-year for the full year total company Revenue increased 1.4% to 5.53 billion dollars compared to 5.5 billion in the prior year.
revenue and
Calling this recovery Hospital segment in the fourth quarter increased 18.2% to $538 compared to $455 million the same quarter prior-year patient days were up 10.1% compared to the same quarter prior year with over 285,000 patient days that Revenue per patient day increased 8% to $1,886 per patient day in the fourth quarter as case mix index was up from 1.26 in Q4 2019 to 1.31 in to 4 a.m.
For the year revenue and are critical illness recovery Hospital segment increased 13.1% to almost two point 1 billion dollars compared to one point eight billion in the prior-year driven by birth volume and rate increases patient days were up 7.1% and revenue per patient day include 6% compared to the prior-year.
Revenue and our ability in hospital segment in the fourth quarter increased 7.2% to $196 compared to $183 million in the same quarter prior-year days off 2.4% compared to the same quarter prior year and net revenue per patient day increased 5.8% to $1,839 per day in the fourth quarter for the money revenue or Rehabilitation Hospital seven increase 9.5% to almost seven hundred thirty-five million dollars compared to $671 million in the prior year driven by both volume of a great increases patient days were up 5% in Revenue per patient day increased 6.4% compared to the prior-year revenue in our outpatient Rehabilitation segment fourth quarter declined 5.3% to $257 compared to $272 million in the same quarter prior-year patient visits were down 5% compared to the same quarter prior-year with over to Thursday.
1 million visits in fourth-quarter. Our Revenue per visit was a hundred three in the fourth quarter for the year Revenue our outpatient rehab segment declined 12.1% to nine hundred twenty million compared to a little over a billion dollars in the prior-year patient visits were down 12.9% compared to the prior-year. However, we did see quarterly improvement from the shortfalls off at the start of the pandemic second quarter volumes were down 39.1% third-quarter 10% and 45% When compared to the same respective quarters in the prior-year revenue per visit was a hundred and $4 for the full-year revenue in our Concentra segment for the fourth quarter increased four tenths of a percent $399 compared to $397 million the same quarter prior year for the Occupational Health Centers agent visits were down 4.5% with 2.77 million visits in the fourth quarter dead.
Revenue per visit and
Was $122 in both the fourth quarter this year and prior year for the year revenue and our Concentra segment declined 7.8% to 1.5 billion dollars compared to 1.6 billion in Prior year for the Occupational Health Centers patient visits were down 11.9% compared to the prior-year revenue per visit the center of $122 for the year compared to $122 in the prior-year total company adjusted ebitda for the fourth quarter was up 28.7% off $221 compared to to 171.9 million in the same quarter prior-year are Consolidated adjusted ebitda margin was up with 515.2% Margin for the fourth quarter compared to 12.5% in the same quarter prior-year as I mentioned the adjusted ebitda results in the fourth quarter included 36.2 million bath.
And income recognized from the provider relief funds for the full year total company adjusted ebitda increased 12.6% to $826 compared to 710.9 million in the prior-year are Consolidated adjusted ebitda. Margin was 14.5% for the year compared to 13% in the prior year adjusted ebitda bath salts for the four-year included ninety million of Grant income from the provider relief funds.
Are critical in this recovery Hospital segment adjusted ebitda for the fourth quarter increased 24.5% 275.3 million dollars compared to 60.5 months in the same quarter prior-year City, but that margin for the segment was fourteen percent in the fourth quarter compared to 13.3% in the same quarter prior year for the full-year Chrome OS recovery Hospital segment adjusted ebitda increased 34.4% to 342.4 million dollars compared to two hundred fifty four point nine million in the prior here just to make sure the margin for the shaking was 16.5% for the school year compared to 13.9% in the prior year just East. Margin Improvement for the year was driven by increases in Revenue, which were offset part by increased expenses is resolved COVID-19.
Point four million dollars compared to forty three point nine million in the same quarter prior-year adjusted ebitda margin for the rehabilitation hospital segment was 21.6% in the fourth quarter compared to 23.7 in the same quarter prior-year for the full-year rehabilitation hospital segment adjusted ebitda increased 12.8% Mm. M53 point two million dollars compared to 135.9 million in the prior year adjusted ebitda. Margin for the segment was 20.9 Million.
For the full year compared to 20.2% in the prior year adjusted ebitda margin and margin Improvement for the year was driven by Improvement of the hospitals. We open in 2019.
As well as increases in Revenue.
Does it even more proof of the year was driven by Improvement in the hospital? We open 2019 as well as increases in revenue from some of our existing hospitals are all set in part by increased expenses a result of it.
our outpatient Rehabilitation
segment adjusted ebitda for the fourth quarter was 27.7 million dollars compared to forty point two million the same quarter prior-year adjusted ebitda margin was 10.8% in the fourth quarter compared to 14.8 in the same quarter prior-year adjusted ebitda margin decline continued to be adversely affected by volume declines related to code for the full year or outpatient rehab shankman adjusted. Ebitda was 79.2 million dollars compared to a hundred fifty one point eight million in the prior year adjusted ebitda margin was 8.6% for the full year compared to 14.5% in the prior year custody been done margin or impacted by volume declines related COVID-19 beginning in March off Concentra adjusted ebitda for the fourth quarter increased 22.9% 69.4 million dollars compared to fifty six point five million the same quarter prior year.
Justin ebitda margin was 17.4% the fourth quarter compared to 14.2% in the same quarter prior year while we continue to experience visiting volume shortfall in our centres. We've made reductions were possible and our operating expenses and increase Covetous Ting Services, which broke drove Improvement in both adjust adjusted ebitda and margin in the corner to the same for prior year for the full-year Concentra Justin even like declined to 252.9 million compared to two hundred seventy six point five million in the prior year adjusted ebitda margin was 16.8% for the full year compared to 17% in the prior year adjusted ebitda. Margin were impacted by volume declines home related to COVID-19 in March.
Which we were able to partially offset by reducing our operating expenses and increasing our service related to Covent.
Earnings per diluted share for $0.57 for the fourth quarter growing 137.5% over the same quarter prior you earnings per share of $0.24 adjusted earnings-per-share or 31 cents in the fourth quarter of 2019, which excluded the loss on retirement of debt and related tax effects for a four-year earnings per diluted share increased over 75% to a dollar ninety $3 compared to a dollar ten per share in the prior-year just ignore adjusted earnings push off. The leash are increased 52.4% to a dollar eighty-nine for the full year compared to a dollar $24 in the prior-year adjusted earnings-per-share excuse the non-operating gain and they're related tax effects in 2020 and 2019 include the loss on retirement of debt and related costs and not operating gains and then Thursday.
and tax effects
This point I'll turn it over to Marty Jackson for some additional Financial details and then we'll open the call up for questions.
Thanks, Bob and good morning everyone for the fourth quarter our operating expenses which include our cost of services in general and administrative expense or 1.3 billion thousand and eighty 7.8% of revenue for the same quarter prior-year operating expenses were 1.2 billion dollars and eighty percent of revenue for the full year. Our operating expenses were 4.5 billion dollars and eighty 7.6% of Revenue compared to four point seven seven billion dollars and eighty 7.5% of Revenue in the prior-year cost of services were one point two five billion dollars for the fourth quarter. This compares to 1.1 billion dollars in the same quarter prior year as a percent of Revenue cost of service Thursday. We're 85.4% for the fourth quarter compared to 85.5% in the same quarter prior-year for the full year cost of services for 4.71 bath.
Dollars is compares to four point six four billion dollars in the prior-year as a percent of Revenue cost to the services. We're 85.2% for the full year compared to 85.1% off in the prior-year expenses were thirty five point two million dollars in the fourth quarter is compared to thirty four point 1 million dollars in the same quarter prior-year GNA as a percent of Revenue was 2.4% in the fourth quarter compared to 2.5% in the same quarter prior year for the full-year GNA expense was $138 compared five hundred twenty eight point five million dollars in the prior-year GNA is a percent of Revenue was 2.5% for the full year compared to 2.4% in the prior year.
As Bob mentioned total adjusted ebitda was 221.3 million and the adjusted ebitda margin was 15.2% for the fourth quarter this Compares off of 171.9 million dollars and then adjusted ebitda margin of 12.5% in the same quarter prior year for the full year total adjusted ebitda wage eight hundred point six million dollars and adjusted ebitda margin was 14.5% This compares to Total adjusted ebitda of 710.9 million dollars and adjusted ebitda margin of 30% in the prior year depreciation and amortization was fifty one point five million dollars in the fourth quarter this compares to fifty two point five million dollars in the same quarter price for the full year depreciation and amortization was two hundred five point seven million dollars compared to two hundred twelve point six million dollars in the prior-year.
Will generate at nine point eight million dollars in equity in earnings of unconsolidated subsidiaries or in the fourth quarter is compares to 6.3 million dollars in the same quarter prior-year for the full-year home equity in earnings was twenty nine point four million dollars this compares to $25 million dollars in the prior-year.
also had a
On operating loss of $303,000 in the fourth quarter of this year and lost his own retirement of debt of nineteen point four million dollars in the fourth quarter of 2019 for the dog. We had non-operating gains of twelve point four million dollars in 2019. We had non-operating games of six point five million dollars as well as losses on retirement of debt of a great Point 1 million interest expense was thirty five point five million dollars in the fourth quarter. This compares to $44 million dollars in the June quarter prior-year for the full year interest expense was $153 million dollars is compares to two hundred point six million dollars in the prior-year.
The reduction in interest expense that the result both refinancing activities we complete it in the second half of 2019 and a reduction in the Libor rates and the current interest rate environment may be recorded income tax expense of 35.1 million dollars in the fourth quarter of this year, which represents an effective tax rate of 25.5% This compares to income tax expense of eleven point six million dollars in an effective rate of 21% in the same quarter prior year for the full year. We recorded income tax expense of 111th South 111.9 million dollars, which represents an effective tax rate of 24.5% compared to income tax expense of sixty three point seven million dollars and an effective tax rate of 24.1% in the prior year net income attributable to noncontrolling interests was twelve
Calling $9 in the fourth quarter. This compares to eleven point six million dollars in the same quarter per year for the full year. Net income attributable to noncontrolling interests were eighty five or six million dollars is compares to fifty two point six million dollars in the prior-year net income attributable to Select Medical Holdings was 77.3 million in the fourth quarter and fully diluted earnings per share. We're 50 Cent's net income attributable to select the Holdings $259 billion dollars for the full year and fully diluted earnings per share with a dollar ninety-three.
Excluding the non-operating gains and the related tax effects or adjusted earnings-per-share was a dollar eighty-nine for the full year at the end of the year. We had three point five billion dollars of debt outstanding and $577 of cash on the balance sheet our debt balance at the end of the quarter included two point 1 billion dollars in term loans off one point two billion dollars and six and a quarter percent seen your notes and seventy-four million dollars of other miscellaneous debt. We ended the year with leverage for our senior secured credit agreement of 3.48 times for the fourth quarter operating activities provided two hundred seven point four million dollars of cash flow. This included wage unearned government assistance of fifteen point seven million dollars in the quarter investing activities used 53.2 million of cash in the quarter.
is included for
Three point nine million dollars and purchases a property and equipment and 12.3 million dollars and acquisition and investment activities during the quarter financing activities used 217 million in cash in the fourth quarter. This included two hundred ten point two million dollars to repurchase the membership interest in Concentra.
For the full-year operating operating activities provided 1 billion dollars of cash flow this included 318.1 million dollars in Medicare advances in eighty two point six million dollars and unearned government assistance. In addition. We deferred approximately one hundred six point two million dollars in payroll taxes related to the cares act investing activities used 115 point four million dollars of cash for the full year is included one hundred forty six point four million dollars in purchases of property and equipment and fifty two point two thousand dollars and acquisition and investment activity for the year. These were offset in part by 83.3 million dollars in proceeds from assets and business sales during the year month financing activities use 670 1.5 million dollars of cash for the full year.
This includes five hundred and seventy six point four million dollars to repurchase membership interest in Concentra select now owns close to 80% of the voting interest in Concentra The Joint life Partners continue to have the right to put the balance of their initial membership interest to select and twenty twenty-two with select returning retaining the right to call any remaining any remaining membership interest outstanding in 2022 our total of our total available liquidity at the end of the year with just one point 1 billion dollars this includes $577 of cash and close to $500 in revolver availability under the select and concentric credit agreements.
Our earnings press release also include our business outlook for calendar year 2021 as well as a three-year compounded annual growth rate targets for 20-21 through 2023 our business outlook for the full year 2021 includes expected Revenue in the range of 5.65 to 5.855 billion dollars expected adjusted ebitda in the range of $840 to $800 million dollars expected fully diluted earnings per share to be in the range of $2.26 to $2.48.
For the three years 2021 through 2023. We are targeting compounded annual growth rates for Revenue in the range of 4 to 6% adjusted ebitda of seven to eight percent and earnings per fully diluted share of Seventeen to twenty percent. This concludes our prepared remarks and at this time we would like to turn it back over to the operator to open a call and Reflections as a reminder to ask the question, please press star then the number one on your telephone keypad. Again. That's Star Wars song released on bail while we compiled the guinea roster.
Your first question comes from Justin Bowers from Deutsche Bank.
Thank you and good morning, everyone and congratulations on on the execution this year and and laying out the 3-year targets. I think that will be well-received. But as we think about those with with the segments is how are you thinking about the segments? Is there any so in other words is growth kind of uniform across those segments or is one segment of the portfolio growing more than the other just at a high level. And then also took how much of that is organic in denovo's versus m&a just at a high level off.
Thanks, Justin all started at a high level of way. We're thinking about the business and our execution results for this year, you know, the dead were thinking about it is we believe that the success that we've had in our impatience segments both the critical illness recovery hospitals and Inpatient Rehab can sustain itself. So Thursday the the results that we saw last year will will continue throughout this year and the Concentra in the outpatient segment. We see those recovering and and growing to Cove it levels so that that kind of gives you the the sense of at a very high level of how we see the business and the growth continuing all that Marty add to that. Yeah Justin it's if you take a look at the
The positive and negative variances between our business segments critical illness recovery hospitals and Inpatient Rehab they did they really did a terrific job 2019-2020 growing ebitda by a close to a hundred and $5 and it's Bob mentioned, you know, because of some of the governmental shutdowns that we had on the outpatient side. We saw a negative variances in the ninety six million dollars. We expect that $96 to come back and we expect all of our business lines to grow.
from that base
got it understood and then you know was I kind of look at my model and and how much cash the business throws off. You know, you guys are going to be accumulating a lot of generating a lot of cash over the next few years, you know, even that of the of the Concentra off the interest which you'll be able to fund. So does the does the growth algorithm contemplate additional m&a and then just with respect to twenty Twenty-One. There's you know some moving pods with you know, some of the deferrals et cetera, et cetera. Can you just help us think about you know what you're thinking about for cash from operations this year.
Welcome aboard.
I'll cash from operations, but I'll say that what you can expect from m&a would say that it's incremental. I mean, we don't I wouldn't expect any huge deal big deals in the current year, but you can expect in each of our segments that will be doing de-novo development and some small m&a certainly on the Concentra side outpatient side, even the critical illness side and then more de-novo growth in the Inpatient Rehab side. So that's how we we think about the incremental new business growth between development acquisition de novo. Yeah, Justin when you take a look at three years out, you know, the way we've developed the model is very little in in terms of of Acquisitions as Bob said, you know, we continue to do small Acquisitions on the outpatient side, but those are really three to four times l t m e Baton Rouge
And very little dogs there. It's really taking a look at same store growth as well as the pipeline that we have in all of our business lines. So when we take a look at that, we're very comfortable when I'm you know, when we took a look and putting these numbers out for the next three years.
And you know, I think the other point that you you mentioned as far as generating substantial free cash flow, you know hopes Concentra. I mean select should be generating somewhere in the neighborhood of 450 to 500 million dollars of free cash flow of year.
Yep, got it. So yeah, I mean the extra cash is I mean there's there's you know, it sounds like most of the growth is organic denovo's and then there's there's no upside from Capital deployment there. So, all right. Thanks so much. I'll have to thank you. Thanks.
Your next question comes from Frank Morgan from RBC Capital markets. Good morning, and congratulations. Yeah, I'd like to dig a little bit deeper into to the office this impressive growth that you put up your the Top Line growth really in the CCR of the critical care units and the and I'm just curious when you break down the components there between Mission Grove. It looks like you had pretty strong link to stay growth and then obviously the Acuity that you talked about the case-mix growing there. I'm just curious any one of those components that you think are wrong those components sustainable or is it is we think about the year ahead it would it be more likely to be driven from you know, one of these areas and then when I think about admissions, I also think about just about any evidence so far early into the first quarter in terms of how those uh, those admission Trends or page of De Trends or or or or going so far, that'd be my first question.
Yeah Frank, this is Marty with regards to you know, all for business.
Segments, we expect to see nice growth from all of those with regards to you know, the critical in this recovery hospital as well as the Inpatient Rehab, you know as as you know, I think we ended the year or 71% occupancy rate on the on the critical in this recovery hospital for the year-to-date including January's and where we are today in February the occupancy rate for critical in this recovery hospital is running about 75% So about four four points ahead of where we were the end of last year and and actually need a year-over-year basis. We were at 70% in q1 of twenty-twenty. So, you know that bodes well for us and then if you take a look at the Inpatient Rehab Inpatient Rehab we're averaging January and February about 83% which is about three four points ahead of where we were at the end of 2020. So all that bodes well for Thursday,
Future for us and you feel comfortable. So sounds like occupancy is up a lot. Do you think the the intensity the case-mix would be able to stay at that level? And is there any concern that may be linked to Stage do come back in? I think I had calculated that link to stay up maybe over twenty eight days or so. But what about on that area any concerns there? The issue is Frank and and we've been talking about this for five and I've been talking about this for a couple of years and that is the educational process that we go with our referral sources and what's happened is wrong with the pandemic.
You know its accelerated that education process so, you know in many cases our referral sources in particular the tertiary hospitals are hesitant to send some of the more quickly complex patients to us and what we've seen and what they have seen is that we can handle those patients and we think that that's you know, when I talk when I just talked with the occupancy, I I think that's a good sign that they're continuing to send us those patients. We think that we can continue to do that.
Gotcha, and then I guess maybe on the ebitda side obviously very impressive in the critical care part of the business. You got 24% ebitda growth on 18% Revenue growth wage not it's so much on the earth side. So I just wondered is there anything that you would call out there where you you you still had great top-line growth in the earthside, but you didn't get as much off eBay leverage with that is was that because of maybe startups or was it any any other factor? I think you mentioned you have a couple of your markets where the Earth didn't recover. So in any car around that would be appreciated.
Your friends there were we did have we did in North Jersey? We did have some issues as it relates to covet we're senses wasn't really dead where we thought it should be we think that we should recover there. I think the other thing is when you saw both in the critical illness recovery hospitals as well as the wage you saw labor costs higher than they normally are and you know, what we saw was a nice volume increases from Q3 to Q4. Some of those additional costs were over time for some of our clinical staff. Um, and then in addition to that we had agency costs that were abnormally High wage and actually we've seen that mitigate in the in q1. So we saw agency hourly rates are much higher than we normally see.
And they said that's we've seen that.
But those are the two major impacts that we saw.
Got you last one on Concentra 23% growth on the flat Revenue. I think you called out better expense management. Is there is there anything else that you would call out there? I mean, just just the the testing to that have any kind of outsized effect on you. And and how do you feel about the sustainability on that part of the business and and I'll hop back in the cube. Thanks.
Well, we we feel good about concentra's return to even enhance profitability just as employment and as the economy ramps up and the Pistons management was mentioned and the testing the only comment I would make Frank to your question was the testing was not so much drug testing, but it was coded testing. So, uh, it is a testimony to the platform and the the the the market share that Concentra has, you know, it's platform across the entire United States and being literally, I think the only Nationwide Occupational Medicine provider that we are able to accommodate some very large employers for services that they need uniformly across their business that maybe involves, uh, testing for their employees that like as you recall during the pandemic many employers who had essential workers were doing a job.
Testing temperature testing and other testing at their workplace and Concentra was able to accommodate many of those large employer clients that we have. So we think that some of that will not continue but on the other hand as the economy opens up, it'll be a more return to the more traditional business that they have as we think that injuries will naturally go up. So we'll we'll get a return of the the volume on on injuries even if testing May Abate although at life as far as the eye can see right now testing is is still going on and perhaps we may have some opportunities even of doing some vaccinations for some of our large employer clients.
Okay. Thank you very much. Congratulations.
Your next question comes from Kevin fish back from Bank of America.
Great. Thanks. You know it sounds like you know, you guys are pretty optimistic that the progress in the in the critical illness recovered business will be sustainable even as COVID-19. I can not only take a lot of different types of patients and maybe even take them earlier than you then. They would have thought you could and this been more about deepening relationship to the existing referral sources or or have you a call a standard the referral source, uh, you know that you're getting volumes from because of Kroger over the past year.
Kevin I would say that the the
Pacific missed your question is both I think is as we as we look at the critical of this recovery hospitals certainly COVID-19.
We've been able to as I mentioned showcase our clinical capabilities and and have are those referral sources have an appreciation of the types of patients that we can take off and take care of safely. Okay, that's helpful. And I guess we think about your your multi-year guide is that you guys looking for it to come in to grow faster than your own no Revenue growth. Is there some segments in particular that you would point to was having, you know, maybe the most opportunity for margin expansion over the next couple of years.
Hi Kevin, I mean we think that critical in this will continue to you know, as you saw there was a nice growth from thirteen. I think we were young and half person that grew to 16 and half percent on a on a year-over-year basis and as we've shown is through increasing occupancy rates that has a significant benefit on on leveraging that margin and we think that as we've shown, you know, we just talked about you know, where we are in the first quarter. I mean, we expect something that will have a significant benefit to us. As far as Market is concerned, you know going from seventy 71% occupancy to 75% And if you look at growth, even though our small division, we believe that the the growth rate in our Inpatient Rehab will be very strong and we also I'm very bullish on the prospects the growth prospects of ethers.
For Concentra that that business has Consolidated. Well from the u.s. HealthWorks consolidate our positions. We've done tuck-in Acquisitions. They refined their operation a strategy. So I think that the Concentra business also is a strong tower and outpatient can return to the the kind of even thought of levels that they had three pins emack and we have opportunities there for denovo growth and tucking so I feel pretty bullish about the growth across all four of our business segments.
All right, great.
Questions, you might get a little bit about labor costs being I guess during the herbs segments in Q4 starting a moderate. I guess. What is your name and labor cost kind of going forward. It seems like a lot of providers think that it will see the moderation of Labor expense, you know, but the nurse staffing companies seem to think that the labor market and remain tight for for quite some time and you know nurse burnout at cetera. So I guess how are you thinking about the trends there a couple of years on on labor?
Yeah, Kevin, the one of the things with where we have been with occupancy rate is any time we had increases in pages but we had to do in many cases is to go out to agency. If we see that occupancy rate climb and stabilized. We will have full-time employees. There will bring the labor costs down.
I think the other thing that and you point out Kevin you may have a better Insight because of all the different companies staffing companies that you talked to I mean trying to project kind of overall where labor is going to go I think is difficult, you know for us historically in in times of Full Employment labor costs particularly on the nursing side are tough for us in in periods of where where the economy is growing robustly on the other hand. If if you have a A downturn in the economy that the pressure on our type of Staff the nurses tends to Abate a bit. So I think that the the direction of the overall economy and unemployment and returned to work will also on a systemic level will have some impact and that I think is harder harder to predict right now.
But you know, the the key for us is as much retention because that will help bring down the temporary staffing cost.
Make sense. Thank you.
Your next question comes from Sutherland from The Benchmark company Airlines open.
Thanks and good morning, guys. Most of my questions have been asked I one one one little particular one. I was looking at the change and facilities for rehab and for a critical illness. What's the new facility in rehab Consolidated? And and what's the in the critical illness was that daily? What happened there?
Yeah, there was one Hospital Davey that we had which we were was an on consolidating sub and there was always a plan at some point both in that relationship. Once we hit some certain benchmarks in terms of quality and performance that select wood in or toward the edge over 50% to 51% ownership. And then that would would trigger from an accounting standpoint for us to consolidate. So it it was so it's not a big mover other than on on the accounting on accounting front but a good catch on that.
Okay.
Just I just curious and I know you've got plans for growth, uh at this point. You probably don't want to really signal too much. But have you got anything that you've been announced for for rehab for instance in 20 G?
Well, the last announcement that we made was the joint venture with Rush in Chicago, which I think is a very big deal of Premier system in a major Metropolitan Market for us. We don't generally we don't talk about any deals until they are signed but I I can say that in terms of our wager pipeline for new joint ventures probably never been stronger and that's a combination of new potentially new partners that were working with to sign off and some growth significant growth with existing Partners. So the the company has gotten to a point where our stable of joint venture partners with very large systems. I think one of the things that's not well appreciated outside. The company is the opportunity that we have to grow with existing partners, and we see that accelerating and Thursday.
Just in one segment. So where we have a joint venture for Inpatient Rehab. For example, we may be working with adding a critical in the recovery hospital to that joint venture or one that's started with rehab then add outpatient to the joint venture. So we're seeing that inside our existing joint ventures and with our existing partners and we're still seeing a really strong Pipeline with for new partners, right one little additional color. I was interested in looking into this year for a critical illness is I know the case-mix I was very strong in 20 and when the case-mix begins to change in terms of fewer COVID-19 charges off, I mean, is it overall probably going to stay at this level or is that or I mean, I'm just kind of getting a feel for directions like what's going to happen in the case of an expense.
Well, we we would like to see that case Smith case mix index Stay High. I mean the a couple of factors one is I think most experts believe that we will still have to us for sometime. It may go down with the vaccine but we're we we think about COVID-19 and of being seasonal almost potentially like the flu, which is normally has it increased in our business. But number two, we we look at the relationships we have with the icy use of acute care hospital in the markets of our critical and Recovery hospitals. And we we believe that their recognition of our ability to handle the more highly acute patients girer case mix index patient will continue. So even if it's not covet patience, we believe that through COVID-19
The perception of those referral sources of our capabilities so that we hope to be able to continue to get their High Acuity patients.
Even if they're not covet and we've known for some time in Marty and I have talked about it that those patients exist and it's just a question of the education and the Trust In The Physician knows I see used move those patients whether they be transplant patients or trauma patients or other multi-system problem patience to be able to move those to the month to our critical illness recovery hospitals. So we we do believe that that can continue
great. Okay. Thanks for taking the questions guys.
Your next question comes from EJ rice from Credit Suisse torrential. Hi, everybody. Maybe just a couple of quick ones here going back to the question of Labor. Are you experiencing much of a a pressure from staff out on quarantine and is the vaccination rate for your positions goes up to do you think you could see some boxing there?
we are not a j i mean we're you know, I think is really driving, you know, the use of agencies really increased patient Choice as opposed to
You know nurses or clinicians not being available because of covet.
Okay. All right. No problem on the 2021 guidance. What did you assume for the public health emergency? And how much does that help you if that gets suspended would be my question. Well, let's see what happens in an extension of Public Health Emergency. We do get a continued home on sequestration which has some effect but it it's it's not Material. So I would say incremental maybe eight nine million dollars through an extension. So I mean, it's it's it's not nothing material.
I understood you got some help in the critical illness hospitals the L tax because of they were making everything, you know, the off-side neutral pavement part of the reimbursement goes away. I guess or something is that not the case is that that part significant for you folks that that part is insignificant for us. We're are if you look at our case makes in if you look at the case mix index would suggest the hi cutie patience the the vast vast majority of our patients are coming from I see use and will continue to be eligible patients and we have not had any meaningful admissions of sight neutral patients that are getting higher reimbursement. And and so quite honestly in the in kind of the regulatory World, we're not even advocating for an an increase extension of that pod.
Okay, and then just lastly.
Come up this uh, i r f demonstration project is slated to go into place next year. If you guys looked at that. Do you have any early read whether public administration is going to continue to go forward with that or they looking at that and any any thoughts on it to speak of?
Yeah, the the the American Hospital Association and the other trade groups have weighed in heavily on that. We we we oppose it off not so much because of any concern about the are perhaps meeting the strict criteria. We just think that there is enough if there is enough regulatory oversight in in play and in place through Audits and disallowance that it's really just not necessary and it's it's kind of a a slippery slope to put that kind of pre-admission protocols in place for impatient providers. This is something that was used initially with wage durable medical equipment, and we don't think that it's appropriate for Rehab so we oppose it but mainly because we think that there are a large.
Other mechanisms in place to guard against any inappropriate admissions to the rehab hospitals. And so we think that if that does go into play it's it's going to be an additional burden on us in in some markets where they do the demonstration, but we don't expect it to have a negative effect on the business office the patients that were made. No, no really read about whether the new Administration is even committed to phone through on that or not too early. Know. It's a good question, you know where they're they're putting in place all the new heads of the CMS and we just don't know what this point where they're both priorities are going to be you can recall AJ back in the Obama Administration the the most of the the efforts
Screw CMS were really on the Accountable Care Organization and getting more people enrolled in that it really more on the insurance and coverage side and so we just don't suck but but we we are monitoring.
Okay. All right. Thanks a lot.
Again to ask the question, please. Press star and then the number one on your telephone keypad.
Your next question comes from Frank Morgan from RBC Capital markets. Thanks one quick follow-up on the guidance. I'm curious. Is there any considerations we should take into account with regard to the Cadence of the earnings for the year. We'd had providers, you know have unusual cadences implied in their gowns this year. So Thursday just kind of high-level way. We should think about that is is it would it be sort of a normal type of cadence? Is there anything special that happens early in the year? Is it back in loaded because of a ramp up any considerations there and just thousand other one is the clarification there is no incremental, uh type of relief built into that 2021 guidance. That's it. Thanks.
Yeah, Frank is Marty. There is based on the guidance that we provided. There's about twenty to thirty five million dollars of care dollars off in that guidance. And as you as you know, the tears package goes through June 30th. And so any of the incremental costs that you may incur during January through June you will be able to utilize so that guidance does include that and in terms of cadence on the quarterly know we we've we we probably won't give you any any guidance on this at this point and what we're just continue to update we give you the next update and met with Chris. What's the first quarter?
I think you do some work Frank. We're not going to give you the quarterly splits when we gave you the year. And yeah years now, you know, you gotta go back and do your model. Okay? All right. Thank you.
There's no further question this time you may continue.
Okay. Thank you operator. Thanks everyone for your participation in your questions, and we'll look forward to updating you again next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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