Q4 2021 Multiplan Corp Earnings Call

Speaker 1: in 2010. He was a tremendous steward of the company's financial position and helped us steer multi-plant growth.

He was a tremendous stewards of the company's financial position and helped us steer multi plants growth.

Speaker 1: instills a mindset of cost control deep into multi-plan DNA, perpetuating our capacity to invest in the company's operating and intellectual capital and to seize on entrepreneurial opportunities. We wish Dave all the best in his life.

He instills a mindset of cost control deep into multi plant DNA perpetuating our capacity to invest in the companys operating and intellectual capital and to seize on entrepreneurial opportunities.

We wish Dave all the best in retirement.

Jim had assumed the CFO post in November after a 30 year career in investment banking. He is a proven leader with the right combination of financial expertise and a firm grasp of the unique dynamics in the healthcare industry. He has hit the ground running and I'm confident that he will build on the incredible legacy that Dave left.

Speaker 1: Jim Head assumed the CFO post in November after a 30-year career in investment banking.

Speaker 1: He's a proven leader with the right combination of financial expertise and a firm grasp of the unique dynamics in the health care industry.

Speaker 1: He has hit the ground running, and I'm confident that he will build on the incredible legacy that Dave left behind.

Hi.

Okay. So moving on to the business at hand, the fourth quarter of 2021 with the Capstone and one of the most successful years in this company's history.

Speaker 1: The fourth quarter of 2021 was a capstone of one of the most successful years in this company's history.

Speaker 1: A year in which, despite numerous challenges in the external environment, we set new records in savings for our customers and in revenues and adjusted EBITDA for the company.

A year in which despite numerous challenges in the external environment, we set new records and savings for our customers and in revenues and adjusted EBITDA for the company.

Let me start by saying that we are very proud of the critical role we play in the health care ecosystem generating savings for payers and employers and consumers in 2021 alone we identified nearly $22 billion.

Speaker 1: Let me start by saying that we are very proud of the critical role we play in the healthcare ecosystem generating savings for payers, employers, and consumers.

Speaker 1: In 2021 alone, we identified nearly $22 billion in potential savings on over $110 billion of medical charges processed.

And potential savings on over $110 billion of medical charges processed.

Our operating assets and platform.

Speaker 1: Our operating assets and platform, deep domain knowledge, our independence, extensive connectivity, and customizable capabilities reinforce our unique value in the marketplace and offer significant competitive advantages and establish the foundation that has enabled us to achieve our strong results.

Deep domain knowledge our independence.

Tensive connectivity and customized customizable capabilities reinforce our unique value in the marketplace and offer significant competitive advantages and established that foundation that has enabled us to achieve our strong results.

Our fourth quarter results, yet again illustrate our strong momentum, marking a sixth consecutive quarter of solid performance as a public company.

Speaker 1: Our fourth quarter results yet again illustrate our strong momentum, marking a sixth consecutive quarter of solid performance as a public company.

Revenues were $298 3 million up three 5% sequentially and up nearly 17% from the prior year quarter.

Speaker 1: revenues were 298.3 million, up 3.5% sequentially, and up nearly 17% from the prior year quarter.

Speaker 1: Adjusted IBITA was $223.6 million, up 2.4% sequentially and nearly 15% from the prior year quarter. Both revenues and adjusted IBITA for the quarter were the highest in our company's history and at the top end of the guidance ranges we provided last November .

Adjusted EBITDA was $223 6 million up two 4% sequentially and nearly 15% from the prior year quarter.

Revenues and adjusted EBITDA for the quarter were the highest in our company's history and at the top end of the guidance ranges. We provided last November .

Speaker 1: For full year 2021, we grew revenues over 19% and we grew adjusted IBITA over 18%.

For full year 2021, we grew revenues over 19% and we grew adjusted EBITDA over 18%.

Speaker 1: If you control for acquisitions the declining impact of COVID-19 and public company costs, our organic growth was over 7% for revenues and over 11% for adjusted.

If you control for acquisitions, the declining impact of COVID-19, and public company cost our organic growth was over 7% for revenues and over 11% for adjusted EBITDA.

We delivered a best in class, 75% adjusted EBITDA margin.

Speaker 1: We delivered a best in class 75% adjusted dividend margin, reflecting the scale of our business and our relentless focus on operational ex...

<unk> the scale of our business and our relentless focus on operational excellence we.

Speaker 1: We generated over 400 million dollars of operating cash flow in 2021. And our levered free cash flow fully burdened by taxes and interest expense. With over 320 million dollars.

We generated over $400 million of.

Operating cash flow in 2021, and our Levered free cash flow fully burdened by taxes and interest expense was over $320 million.

Speaker 1: bringing the three-year total to roughly $845 million, and underscoring our strong capital generation and the financial flexibility we have to invest in and grow the business.

Bringing the three year total to roughly $845 million and underscoring our strong capital generation and the financial flexibility, we have to invest in and grow the business.

We achieved these strong results by single mindedly pursuing our vision to promote affordability efficiency and fairness in health care for all stakeholders in the U S health care system.

Speaker 1: We achieve these strong results by single-mindedly pursuing our vision to promote affordability, efficiency, and fairness in healthcare for all stakeholders in the U.S. healthcare system.

In 2021, we helped our payer customers served more than 45 million unique plan members and more than 100000 employers representing a wide range of plan sponsors using multi plants comprehensive suite of services based on their preferences for health plan design.

Speaker 1: In 2021, we helped our payer customers serve more than 45 million unique plan members and more than 100,000 employers, representing a wide range of plan sponsors using MultiPlan's comprehensive suite of services based on their preferences for health plan design.

Speaker 1: Our services helped over 25 million unique patients, their health plan sponsors, and the payers that served them saved nearly 22 million billion dollars on over 175 million healthcare claims.

Our services helped over 25 million unique patients their health plan sponsors and the payers that serve them saved nearly 22 million billion.

On over 175 million health care claims.

Speaker 1: As shown on page 5 of our supplemental deck, we identified savings for these stakeholders by over $3 billion in 2021, or 17%.

As shown on page five of our supplemental deck, we identified savings for these stakeholders by over $3 billion in 2021% or 17% <unk>.

Speaker 1: excluding savings contributed by the acquisition of HSP.

Excluding savings contributed by the acquisition of HST.

Speaker 1: We grew savings by $1.5 billion, or 9%, by capturing additional claim volume and by more efficiently leveraging our services to deliver high rates of identified savings per dollar of bill charges.

We grew savings by one point.

$5 billion or 9% by capturing additional claim volume and by more efficiently leveraging our services to deliver high rates of identified savings per dollar of billed charges.

Speaker 1: We were able to accomplish this even as COVID-19 pandemic continued to weigh on our claim mix by reducing volumes of higher charge claims for medical services, like elective surgery.

We were able to accomplish this even as COVID-19 pandemic continued to weigh on our claim mix by reducing volumes of higher charge claims for medical services like elective surgeries.

Growth in identified savings is key to how we think about measuring the performance of our business because it represents the value we deliver to our customers shows that value of enhancing the platform.

Speaker 1: Growth and identified savings is key to how we think about measuring the performance of our business, because it represents the value we deliver to our customers, shows the value of enhancing the platform and drives our revenue.

It drives our revenue.

Our results are the direct consequence of providing solutions that deliver value to all stakeholders in a very complex U S health care system.

Speaker 1: Our results are the direct consequence of providing solutions that deliver value to all stakeholders in a very complex US healthcare system.

Multi plan provides an independent needs to adjudicating fair reimbursement between the providers of health services and the Payors planned sponsors and consumers. We do this by seeking to identify rates that are acceptable to all stakeholders with solutions that contractually preclude or significantly diminish.

Speaker 1: Multi-plan provides an independent means to adjudicating fair reimbursements between the providers of health services and the payers, plan sponsors, and consumers. We do this by seeking to identify rates that are accessible to all stakeholders with solutions that contractually preclude or significantly diminish the potential for health plan members to suffer the financial hardship of receiving a balanced bill.

The potential for health plan members to suffer the financial hardship of receiving a balanced bill and.

Speaker 1: In fact, because of our independence and our unique relationships with over 1.2 million providers, our services have always been a solution to mitigate the balance bill problem.

In fact, because of our independence and our unique relationships with over $1 2 million providers. Our services have always been a solution to mitigate the balance bill problem.

Speaker 1: We also play a critical role in helping contain the rapid and disproportionate growth of US medical spend, of which roughly a third, or 1.2 trillion dollars is attributed to some form of waste or abuse that leads to overcharge.

We also play a critical role in helping contain the rapid and disproportionate growth of U S medical spend of which roughly a third or one two trillion dollars.

Is attributed to some form of waste or abuse that leads to overcharges, we do this by ensuring billing and payment accuracy with solutions that identify and remove improper and unnecessary charges before and after claims are paid or that identify and help restore and preserve underpinned.

Speaker 1: We do this by ensuring billing and payment accuracy with solutions that identify and remove improper and unnecessary charges before and after claims are paid or that identify and help restore and preserve underpaid premium dollars.

<unk> premium dollars.

Let me turn now to some of the business highlights for 2021 to say, we had a busy busy year is putting it mildly.

Speaker 1: Let me turn now to some of the business highlights for 2021. To say we had a busy year is putting it mildly.

Speaker 1: We grew the business, we integrated two acquisitions.

We grew the business we integrated two acquisitions, we issued our single biggest software release to introduce new services to support our payers compliance with the no surprise attack.

Speaker 1: We issued our single biggest software release to introduce new services to support our payers compliance with the No Surprises Act.

Speaker 1: In our analytics-based services category, we grew identified savings by over 15% versus 2020, not counting the savings delivered by the value-driven health plan services of HST, which we acquired in late 2020.

And our analytics based services category, we grew identified savings by over 15% versus 2020, not counting the savings delivered by the value driven health plan services of HST, which we acquired in late 2020.

Some notable highlights include starting in April we implemented a program to bundle our prepayment integrity edits into the data ISI pricing methodology to improve payment accuracy and savings increasing savings in 2021 by nearly $15 million on behalf of over 80 customers.

Speaker 1: Some notable highlights include, starting in April , we implemented a program to bundle our prepayment integrity edits into the Data I-Site pricing methodology to improve payment accuracy and savings, increasing savings in 2021 by nearly $15 million on behalf of over 80 customers.

Over the year, we more than doubled the savings lift from our operational initiatives to improve negotiation performance generating over $265 million in new savings for our customers.

Speaker 1: Over the year, we more than doubled the savings list from our operational initiative to improve negotiation performance, generating over 265M dollars in new savings for our customers.

We had significant customer wins for example, our plan administrator added 8 million New health plan members to its data eyesight, driven cost management program.

Speaker 1: We had significant customer wins. For example, a plan administrator added a million new health plan members to its data eyesight driven cost management program.

Speaker 1: A large payer expanded its use of data eyesight and a number of regional health plans added or expanded data eyesight or other non-contracted pricing methodology.

Large payer expanded its use of data eyesight, and a number of regional health plans added or expanded data eyesight or other non contracted pricing methodologies.

Speaker 1: We are very pleased with the adoption of our value driven health plan services, which we believe represent the future of reference space.

We are very pleased with the adoption of our value driven health plan services, which we believe represent the future of reference based pricing.

In 2021, we added 132, new employers and other health plan sponsors that together added over 163000, new members to the program, bringing the total number of members to $1 million.

Speaker 1: In 2021, we added 132 new employers and other health plan sponsors that together added over 163,000 new members to the program, bringing the total number of members to a million.

Speaker 1: the majority of these new plants, about 90%, are using the version of the program that integrates our professional provider network.

The majority of these new plants about 90% are using the version of the program that integrates our professional provider network.

Speaker 1: We're the only reference-based pricing company that also owns a national independent provider network, and that network is accredited for credentialing quality by the National Committee for Quality Assurance.

We're the only reference based pricing company that also owns a national independent provider network and that network as a credit for Credentialing quality by the National Committee for quality assurance, we believe the combination of our network our pricing technology, our engagement tools deliver we believe.

Speaker 1: We believe the combination of our network, our pricing technology, our engagement tools deliver. We believe the best reference-based pricing program in the market by a launch.

<unk> the best reference based pricing program in the market by a long shot.

And our network based services category, we grew identified savings in 2021 by about 6% through initiatives such as a regional Blue plan added network access to improved cost management inside service area.

Speaker 1: In our network based services category, we grew identified savings in 2021 by about 6% through initiatives such as a regional blue plan added network access to improve cost management inside of service area.

A new property and casualty Bill review company added access to our network for medical bills stemming from injuries on the job.

Speaker 1: We added another two property and casualty payers in 2021. So expect to see network usage increase in this market segment.

We added another two property and casualty payers in 2021, so expect to see network usage increase in this market segment.

Speaker 1: not included in that 6% savings growth, are a number of other 2021 network initiatives worthy of note.

Not included in that 6% savings growth are a number of other 2021 network initiatives worthy of note.

On the heel of last year's successful completion of a custom Medicare advantage network build we were awarded three build projects for 2023 enrollment comprising as many as 100 counties in overnight in nine states.

Speaker 1: We deployed proprietary network pricing for a customer in support of its compliance with state surprise billing regulations in two states.

We don't we deployed proprietary network pricing for our customer and supportive its compliance with state surprise billing regulations in two states.

Within our payment and revenue integrity services category, we grew identified savings by 9% over 2020 again not counting the services added with the acquisition in early 2021 of Discovery Health Partners. This includes a 40% increase in savings identified through our secondary editor.

Speaker 1: This includes a 40% increase in savings identified through our secondary editing service.

<unk> service.

We had significant new inputs implementations for the service, which is particularly suited to payers in network claims in fact, we have two additional in network editing implementations planned for this year with a large customer reflecting our ability to deepen our penetration in this important target market segments.

We also had a number of significant client wins within our new post payment and revenue integrity services.

Speaker 1: We also had a number of significant client wins within our new post payment and revenue integrity service.

We were awarded expansion data mining business with an existing top 10 customer.

We sold and implemented data mining with a national payer and are now piloting a custom data mining expansion program for another pair.

Speaker 1: We sold and implemented data mining with a national payer and are now piloting a custom data mining expansion program for another...

We implemented pre and post payment integrity services for a blue Cross plan with a total contract value of about $5 million.

Speaker 1: We implemented pre- and post-payment integrity services for a Blue Cross plan with a total contract value of about $5 million.

We added post payment and order revenue integrity services with a number of other regional health plans, notably a regional health plan implementing coordination of benefits business expected to deliver $1 billion in revenues over three years.

Speaker 1: We added post payment and or revenue integrity services with a number of other regional health plans, notably a regional health plan, implementing coordination and benefits business expected to deliver 1Million dollars in revenues over 3 years.

Speaker 1: And of course, we launched a new end-to-end service and separate components to meet our customers varying approaches and needs and complying with the No Surprises Act, which went into effect January 1 of this year.

And of course, we launched a new end to end service and separate components to meet our customers' varying approaches it needs in complying with the no surprises Act, which went into effect January one of this year as.

Speaker 1: As we've mentioned previously, clients have relied heavily on us to help guide them through the complexities introduced by this new legislation. And we spent a great deal of this year last.

As we've mentioned previously clients have relied heavily on us to help guide them through the complexities introduced by this new legislation and we spent a great deal. This year last year deep in the trenches, helping our customers identify strategy and implement operational solutions to comply with the new rules.

Speaker 1: Deep in the trenches helping our customers identify strategies and implement operational solutions to comply with the new rules.

Speaker 1: As of today, we have completed or in process of implementing 94 NSA programs and have over 60 customer opportunities in the sales pipeline.

As of today, we have completed or in process of implementing 94, NSA programs and have over 60 customer opportunities in the sales pipeline.

With the regulation now lies in the operational lift in both the customer environments, and our platform well underway, but no surprises that Doug has begun to settle to date, our larger customers have implemented their compliance approaches and based on our current 2022 client commitments we have.

Speaker 1: With the regulation now live and the operational lift in both the customer environments and our platform well underway, the No Surprises Act has begun to settle. To date, our larger customers have implemented their compliance approaches and based on our current 2022 client commitments, we estimate up to a 2% net headwind to identify savings and revenues related to the NSA.

We estimate up to a 2% net headwind to identify savings in revenues related to the NSA.

The majority of that relates to just a few programs with customers who for various reasons have opted for different approaches to fulfill their compliance to the regulation. We believe there is potential for some of these customers to reconsider their decisions as the year progresses, and which in which event we would recoup those revenues.

Speaker 1: The majority of that relates to just a few programs with customers who, for various reasons, have opted for different approaches to fulfill their compliance to the regulation.

Speaker 1: We believe there is potential for some of these customers to reconsider their decisions as the year progresses, in which event we would recoup those revenues.

Stepping back to the Big picture based on client adoption. Thus far we are confident that the NSA will not significantly impact our claim volumes our pay for performance fee structure or our calculation of identified.

Speaker 1: Stepping back to the big picture based on client adoption thus far, we are confident that the NSA will not significantly impact our claim volumes, our pay for performance C structure or our calculation of identified C.

Before I turn it over to Jim There are a couple of other topics to cover off first we have received questions from investors about the status of the stockholder litigation brought against US in the defendants affiliated with our major Investor Churchill capital.

Speaker 1: Before I turn it over to Jim, there are a couple of other topics to cover off. First, we have received questions from investors about the status of the stockholder litigation brought against us and the defendants affiliated with our major investor, Churchill Capital.

Speaker 1: While we generally do not comment on litigation and are no longer a party to the case, we want to emphasize that we continue to believe this case is completely without merit and should be dismissed. And we will continue to work with Churchill and the other defendants to present a vigorous defense against these misleading claims.

While we generally do not comment on litigation and are no longer a party to the case, we want to emphasize that we continue to believe this cases completely without merit and should be dismissed and we will continue to work with Churchill and the other defendants present, a vigorous defense against these misleading claims.

Speaker 1: Second, I would like to acknowledge our 2,400 multi-plan colleagues whose dedication and hard work enable us to maintain our highest levels of customer service and operational excellence.

I would like to acknowledge our 'twenty 400, multi plan colleagues, whose dedication and hard work enabled us to maintain our highest levels of customer service and operational excellence. They deserve the credit for delivering yet another year of great results.

Speaker 1: They deserve the credit for delivering yet another year of great results. I'd like to hand the call over to Jim. Jim will discuss our results and provide our outlook for twenty twenty two.

I'd like to hand, the call over to Jim Jim will discuss our results and provide our outlook for 2022 Jim.

Speaker 2: Thanks Dale, and good morning everyone. I'm excited to be part of the MultiPlan team and look forward to meeting and working with the investor community. Today I'll be updating you on a successful year for the company and our outlook for 2022.

And good morning, everyone I'm excited to be part of the multi plan team and look forward to meeting and working with the investor community today.

Today I'll be updating you on a successful year for the company and our outlook for 2022.

Speaker 2: As Dale mentioned, Q4 2021 was an outstanding quarter for MultiPlan with exceptional revenues and adjusted EBITDA.

Dale mentioned Q4, 2021 was an outstanding quarter for multi plan with exceptional revenues and adjusted EBITDA.

Speaker 2: As shown on page six of the supplemental deck, Q4 revenue of $298.3 million was the highest ever quarter in multi-plan's history, increasing 16.8% over Q4-20 and increasing 3.5% from Q3 2021. Organic growth.

As shown on page six of the supplemental deck Q4 revenue of $298 3 million was the highest ever quarter in multi plant's history, increasing 16, 8% over Q4, 'twenty and increasing three 5% from Q3 2021.

Organic revenue growth remained strong.

As shown on page seven of the supplemental deck, excluding the revenue contributions from our acquisitions of HST and discovery and normalizing for the decline and the impact of the COVID-19 pandemic during the quarter Rev.

Speaker 2: As shown on page seven of the supplemental deck, excluding the revenue contributions from our acquisitions of HST and Discovery, and normalizing for the decline in the impact of the COVID-19 pandemic during the quarter.

Revenues in Q4, 'twenty, one were up approximately $24 million or nearly eight 9% over Q4, 2020 and up about $6 million or two 2% sequentially.

Speaker 2: Revenues in Q4'21 were up approximately $24 million, or nearly 8.9% over Q4 2020, and up about $6 million, or 2.2% sequentially.

Speaker 2: Our total revenues for the full year 21 were $1.176 billion, up 19.2% over 2020, and our highest annual revenues ever.

Our total revenues for the full year 'twenty, one were $1 76 billion up 19, 2% over 2020, and our highest annual revenues ever.

As shown on page eight of the supplemental deck in 2021, we experienced growth across all our service lines with analytics based services and payment and revenue integrity services each growing in excess of 25% in 2020 and network based services growing a more modest two 7%.

Speaker 2: As shown on page 8 of the supplemental deck, in 2021, we experienced growth across all our service lines with analytics-based services and payment and revenue integrity services, each growing in excess of 25% in 2020, and network-based services growing a more modest 2.7%.

As detailed on page nine of the supplemental deck, we estimate the COVID-19 related revenue impact in Q4, 2021 was approximately $5 7 million down from an estimated $8 million to $10 million in Q3 2021.

Speaker 2: As detailed on page nine of the supplemental deck, we estimate the COVID-related revenue impact in Q4 2021 was approximately $5 to $7 million, down from an estimated $8 to $10 million in Q3 2021, and approximately half of the estimated COVID-related revenue impact of Q4 2020.

And approximately half of the estimated COVID-19 related revenue impact of Q4 2020.

For full year 'twenty, one the COVID-19 related revenue impact was $40 million to $50 million.

Speaker 2: For full year 21, the COVID-related revenue impact was $40 to $50 million.

Turning to expenses fourth quarter, adjusted EBITDA expenses were $74 7 million.

Speaker 2: Turning to expenses, fourth quarter adjusted EAPDA expenses were $74.7 million.

Speaker 2: The increase of $14.5 million over Q4 2020 is predominantly attributable to the addition of operating expenses of HST and Discovery, which combined were approximately $10.2 million in Q4 2021, as well as increased support function costs associated with being a public company.

The increase of $14 5 million over Q4 2020 is predominantly attributable to the addition of operating expenses of HST and discovery, which combined were approximately $10 2 million in Q4 'twenty one.

As well as increased support function costs associated with being a public company.

Speaker 2: As we have indicated, our annual run rate of public company cost is approximately $20 million.

As we have indicated our annual run rate of public company cost is approximately $20 million.

Speaker 2: Our total adjusted EBITDA expenses for the year were $279.3 million.

Our adjusted EBITDA total adjusted EBITDA expenses for the year were $279 3 million.

The combination of increased revenues and controlled expenses resulted in adjusted EBITDA of $223 6 million in Q4 'twenty one.

Speaker 2: The combination of increased revenues and controlled expenses resulted in adjusted EBITDA of $223.6 million in Q4-21.

Our highest quarter in the history of the company.

Speaker 2: Q421 adjusted to DPDOG grew 14.6% from 195.1 million in Q420, and 2.4% from 218.4 million in Q321.

Q4, 'twenty one adjusted EBITDA grew 14, 6% from $195 1 million in Q4, 'twenty and two 4% from $218 4 million in Q3 dollars 21.

We estimate the COVID-19 related impact on adjusted EBITDA in the fourth quarter was approximately 4% to $6 million.

Speaker 2: We estimate the coven related impact on adjusted in the 4th quarter was approximately 4 to 6 million.

Full year adjusted EBITDA of $838 3 million grew 18, 7% and included an estimated 32% to $40 million of Covid related impact.

Speaker 2: Full year adjusted EBITDA of 838.3 million grew 18.7 percent and included an estimated 32 to 40 million of COVID related impacts.

As shown on page seven excluding the adjusted EBITDA contributions from HST and discovery and normalizing for the impact of COVID-19 pandemic during the quarter adjusted EBITDA for Q4, 2021 was up nine 3% over Q4 2020.

Speaker 2: As shown on page seven, excluding the adjusted EBITDA contributions from HST and Discovery, and normalizing for the impact of COVID-19 pandemic during the quarter, adjusted EBITDA for Q4 2021 was up 9.3% over Q4 2020 and up 1.3% from Q3 21.

And up one 3% from Q3 dollars 21.

Speaker 2: On that same basis, adjusted EBITDA was up 11.1% for the year.

On that same basis, adjusted EBITDA was up 11, 1% for the year.

Turning to our margins adjusted EBITDA margin was 75.0% in Q4, 'twenty one versus 76, 4% in Q4, 'twenty and 75, 8% in Q3 'twenty one rich.

Speaker 2: Turning to our margins, adjusted EBITDA margin was 75.0% in Q4-21 versus 76.4% in Q4-20 and 75.8% in Q3-21, reflecting the revenue and expense dynamics discussed earlier.

<unk> the revenue and expense dynamics discussed earlier.

Our full year adjusted 21 full.

Speaker 2: Our full year 2021 adjusted EBITDA margin was also 75.0%, down 30 basis points from 75.3 for full year 20.

Full year 2021, adjusted EBITDA margin was also 75 zero percent down 30 basis points from 75, three for full year 'twenty.

Speaker 2: As Dale mentioned, we continue to generate significant operating cash flow, which totals approximately $405 million for full year 21.

As Dale mentioned, we continue to generate significant operating cash flow, which totaled approximately $405 million for full year 'twenty one.

Speaker 2: And our full year 21 leverage free cash flow is approximately $320 million.

And our full year 'twenty, one leverage free cash flow was approximately $320 million.

Moving onto our 2022 outlook.

Speaker 2: On page 13 of the supplemental deck, I'd like to frame our guidance by highlighting some of the key assumptions for our underlying business trends in the operating environment. Starting with the revenue side, our expectations include strong underlying revenue growth driven by net growth in our core services and our growth initiatives.

On page 13 of the supplemental deck I'd like to frame our guidance by highlighting some of the key assumptions for our underlying business trends in the operating environment.

Starting with the revenue side, our expectations include strong underlying revenue growth driven by net growth in our core services and our growth initiatives.

Speaker 2: We expect our underlying momentum to help us grow through some modest revenue headwinds this year.

We expect our underlying momentum to help us grow through some modest revenue headwinds this year.

Specifically, we expect the effects of the COVID-19 pandemic on our claim mix in revenues to persist.

Speaker 2: Specifically, we expect the effects of the COVID-19 pandemic on our claim mix and revenues to persist, though moderated from the pandemic.

Though moderated from those in 2021.

Speaker 2: It is difficult to predict how COVID related pressures might evolve over the remainder of the year, given the December and January surge in Omicron cases, which remain elevated today in certain geographies.

It is difficult to predict how COVID-19 related pressures might evolve over the remainder of the year given the December and January surge in omicron cases, which remain elevated today in certain geographies.

Factoring in a six to eight week average lag between the date of medical service and a receipt of a claim.

Speaker 2: factoring in a six to eight week average lag between the date of medical service and our receipt of a claim and the potential delay in the uptick of medical utilization like elective surgeries, we believe COVID-related revenue effects are likely to increase in the first quarter of 22 relative to the fourth quarter of 21. And those effects could extend into the second quarter.

And the potential delay in the uptick of metal medical utilization like elective surgeries. We believe COVID-19 related revenue effects are likely to increase in the first quarter of 'twenty two relative to the fourth quarter of 'twenty one.

And those effects could extend into the second quarter.

Sure.

Speaker 2: Page 9 of our supplemental deck details some of the effects of the Omicron case surge on our claims mix through mid-January.

Page nine of our supplemental deck detailed some of the effects of the Omicron case search on our claims mix through mid January .

In addition.

Speaker 2: In addition, as Dale mentioned earlier, we also expect a modest net revenue headwind up to 2% related to the NSA, as a handful of customers have decided to pursue other options for implementing and operationalizing the new rules for this subset of their clients.

As Dale mentioned earlier, we also expect a modest net revenue headwind up to one up to 2%.

<unk> to the NSA as a handful of customers have decided to pursue other options for implementing and operationalize the new rules for this subset of their claims.

Speaker 2: With these known losses offset by some new NSA-related wins, our estimate of up to 2% is a conservative view.

With these known losses offset by some new NSA related wins, our estimate of up to 2% is a conservative view.

As Dale mentioned earlier, we see potential for some recruitment of this headwind later in 'twenty two.

Speaker 2: As Dale mentioned earlier, we see potential for some recoupment of this headwind later in 22.

Speaker 2: I would further add that all of these clients continue to use multi-plan solutions for out-of-network claims not in the scope of the NSA, which of course make up the vast majority of our total out-of-network.

I would further add that all of these clients continue to use multi planned solutions for out of network claims not in the scope of the NSA, which of course make up the vast majority of our total out of out of network claims.

On the expense side, we expect our adjusted EBITDA margins to remain best in class as we continued the highly disciplined focus on cost control that has been a signature of multi plants culture.

Speaker 2: On the expense side, we expect our adjusted EBITDA margins to remain best in class as we continue the highly disciplined focus on cost control that has been a signature of multi-plants culture.

At the same time, we expect margins to be slightly lower in 2022, driven by three primary factors.

Speaker 2: At the same time, we expect margins to be slightly lower in 2022, driven by three primary factors.

First we expect some structural cost pressures largely related to inflationary dynamics.

Speaker 2: First, we expect some structural cost pressures largely related to inflationary dynamics.

Speaker 2: Second, we anticipate investments in our platform to customize and enhance our solutions for the benefit of our customers and to support our NSA related solutions.

We anticipate investments in our platform to customize and enhance our solutions for the benefit of our customers.

And to support our NSA related solutions.

Additionally, we are focused on supporting our growth initiatives through targeted investments in our products and capabilities.

Speaker 2: Additionally, we are focused on supporting our growth initiatives through targeted investments in our products and capabilities.

Speaker 2: These investments are targeted in large part to support new contracts in our payment integrity segment and value-driven health.

These investments are targeted in large part to support new contracts in our payment integrity segment and value driven health plans.

As shown on page 14 of the supplemental deck based on the confluence of expected revenue and cost drivers. We are guiding to a full year 2022 revenue between 116 2 billion.

Speaker 2: As shown on page 14 of the supplemental deck, based on the confluence of expected revenue and cost drivers, we are guiding to a full year 2022 revenue between $1.16 and $2 billion and fully adjusted EBITDA between $850 million and $875 million.

And full year, adjusted EBITDA between $850 million and $875 million.

Speaker 2: We also provide the other key components of P&L and cash flow to help you calculate our anticipated free cash flow generation for 2022. On page 15.

We also provide the other key components of P&L and cash flow to help you calculate our anticipated free cash flow generation for 2022.

On page 15 of the supplemental deck.

We bridge our revenue guidance.

Overall, we anticipate 4% to 7% revenue growth in 'twenty two.

Speaker 2: Overall, we anticipate 4% to 7% revenue growth in 2022.

But more specifically, we expect approximately 4% to 6% net growth related to our core services.

Speaker 2: But more specifically, we expect approximately 4% to 6% net growth related to our core services based on a bottom-up, client-by-client approach and incorporating recent utilization.

Just on a bottom up client by client approach and incorporating recent utilization trends.

Speaker 2: This includes both underlying growth as we enhance our services, and some abatement of COVID impacts in 2022 relative to 2021, even as we expect COVID to continue to be a net drag of approximately 25 to 30 million dollars this year.

This includes both underlying growth as we enhance our services and some abatement of Covid impacts in 2022 relative to 2021, even as we expect COVID-19 to continue to be a net drag of approximately $25 million to $30 million. This year.

We further expect expect growth initiatives to contribute approximately 2% to 4% to our revenue growth as we extend into continuous contiguous client segments, including the tpa broker and consultant channels with our value driven health plan services.

Speaker 2: We further expect growth initiatives to contribute approximately 2% to 4% to our revenue growth as we extend into contiguous client segments, including the TPA, broker, and consultant channels with our value-driven health plan services, and expand our activity and in-network and Medicare Advantage claims with our post-payment integrity and revenue integrity offerings.

And expand our activity in in network and Medicare advantage claims with our postpaid payment integrity revenue integrity offerings.

Speaker 2: The combination of growth in core services and growth initiatives imply approximately 6-9% underlying growth in revenues.

The combination of growth in core services and growth initiatives imply approximately 6% to 9% underlying growth in revenues.

Speaker 2: partially offset by the aforementioned up to 2% net headwind related to the NSA.

Partially offset by the aforementioned up to 2% net headwinds related to the NSA.

To put that in dollars, we think that the net NSA headwind will be roughly $10 million to $20 million.

Speaker 2: To put that in dollars, we think that the net NSA headwind will be roughly $10-20 million.

Speaker 2: On page 16 of the supplemental deck, we discuss our expense and margin expectations for 2022.

On page 16 of the supplemental deck, we discuss our expense and margin expectations for 2022.

Speaker 2: From a starting point of 75.0% adjusted EBITDA margin for full year 2021, we expect roughly 200 basis points of adjusted EBITDA margin compression in 2022, driven by the three primary factors I mentioned earlier.

From a starting point of <unk> 75.

Adjusted percent adjusted EBITDA margin for full year 2021, we expect roughly 200 basis points of adjusted EBITDA margin compression in 2022.

Driven by the three primary factors I mentioned earlier.

First we expect about 75 basis points of compression related to structural cost in 2022, which includes inflationary pressures on wages and other external spend life insurance premiums.

Speaker 2: First, we expect about 75 basis points of compression related to structural costs in 2022, which includes inflationary pressures on wages and other external spend like insurance premiums.

Speaker 2: Second, activity levels and business momentum in the second half of 2021 was very strong, and we need to make platform investments in 2022 to support that business.

Activity levels in business momentum in the second half of 2021 was very strong and we need to make platform investments in 2022 to support that business.

Speaker 2: That bucket is expected to drive about 75 basis points of adjusted EBITDA margin compression in 2022. Among other things, includes investments in IT and operations to support customizations for clients, as well as deliver our surprise bill solution.

That bucket is expected to drive about 75 basis points of adjusted EBITDA margin compression in 2020 to among other things includes investments in it and.

<unk> to support customization for clients.

As well as deliver our surprise Bill solutions.

Speaker 2: Finally, we are focused on supporting revenue growth through our extend strategy and are making investments in our prepayment, postpayment, and revenue integrity offerings and in our value-driven health plan services to support client contracts.

Finally, we are focused on supporting revenue growth through our extended strategy and are making investments in our prepayment post payment and revenue integrity offerings and in our value driven health plan services to support client contracts.

As noted earlier, we expect our recently acquired businesses to contribute meaningfully to our revenue growth in 2022, and these investments are aimed at supporting this growth as well as driving the products and solutions of those businesses to scale over the long term.

Speaker 2: As noted earlier, we expect our recently acquired businesses to contribute meaningfully to our revenue growth in 2022, and these investments are aimed at supporting this growth, as well as driving the products and solutions of those businesses to scale over the long term.

Speaker 2: We expect this investment spending to drive about 50 basis points of adjusted EBITDA margin compression in 2022.

We expect this investment spending to drive about 50 basis points of adjusted EBITDA margin compression in 2022.

The combination of our adjusted EBITDA revenue and adjusted EBITDA guidance ranges imply an adjusted EBITDA margin of approximately 73% for full year 'twenty two still.

Speaker 2: The combination of our adjusted EBITDA revenue and adjusted EBITDA guidance ranges imply an adjusted EBITDA margin of approximately 73% for full year 22. Still best in class.

Still best in class by any benchmark.

I will also note that we will continue to maintain our cost discipline as a key tenant of our management philosophy.

Speaker 2: I will also note that we will continue to maintain our cost discipline as a key tenant of our management philosophy.

Speaker 2: At the same time, when we see attractive growth opportunities, we will invest in the business to pursue them.

At the same time, when we see attractive growth opportunities, we will invest in the business to pursue them.

Turning to other guidance items, we expect interest expense of $280 million to $290 million intangible amortization of $335 to $345 million.

Speaker 2: Turning to other guidance items, we expect interest expense of $280 to $290 million, intangible amortization of $335 to $345 million.

Capex of 90 to 100 million and depreciation of $65 million to $70 million we.

Speaker 2: CapEx of $90 to $100 million and depreciation of $65 to $70 million. We expect a tax rate between

We expect a tax rate between 25% and 28%.

Speaker 2: Finally, we expect operating cash flow to be between 380 and 420 minutes.

Finally, we expect operating cash flow to be.

Could be between $380 and $420 million.

As outlined.

Speaker 2: As outlined on page 17 of the supplemental deck and in the press release this morning, for Q1-22 we anticipate revenues of $280 million to $295 million and adjusted EBITDA of $210 million to $220 million.

On page 17 of the supplemental deck and in the press release. This morning for Q1 'twenty. Two we anticipate revenues of 280 million to $295 million and adjusted EBITDA of $210 million to $220 million.

Speaker 2: I would note our Q1-22 guidance incorporates our view that COVID effects could be weighted more to the front end of the year, given the surge in Omicron.

I would note our Q1 'twenty two guidance incorporates our view that <unk> could be COVID-19 effects could be weighted more to the front end of the year given the surgeon omicron.

Speaker 2: I would like to finish up my remarks by touching on our capital priorities, which are detailed on slide 18 of the supplemental deck.

I would like to finish up my remarks by touching on our capital priorities, which are detailed on slide 18 of the supplemental deck.

One of the things that differentiates multi plan as it's phenomenal free cash flow generation.

Speaker 2: One of the things that differentiates multi-plan is its phenomenal free cash flow generation.

Over the last three years, we've generated roughly $845 million in free cash flow, including $320 million in 2021.

Speaker 2: Over the last three years, we've generated roughly $845 million in free cash flow, including $320 million in 2021.

Our 2021 free cash flow fully burdened by interest expense taxes and capital expenditures was 29% of our 2021 revenues, which is an impressive attribute of our business and provides significant financial flexibility.

Speaker 2: Our 2021 free cash flow fully burdened by interest expense, taxes, and capital expenditures with 29% of our 2021 revenues, which is an impressive attribute of our business and provides significant financial flexibility.

How we allocate that capital we generate is a key area of focus for me as the new CFO of multipliers.

Speaker 2: how we allocate that capital we generate is a key area of focus for me as the new CFO of Multimedia.

Speaker 2: Now, as I've indicated in the past, our highest priority is to invest in the business and to drive organic growth and long-term value.

Now as I've indicated in the past our highest priority is to invest in the business and to drive organic growth and long term value to.

Speaker 2: To that end, we've invested in the platform as part of our enhanced strategy and will continue to do so as we believe it has improved the savings performance of the platform and made us more valuable to customers.

To that end, we've invested in the platform as part of our enhanced strategy and we'll continue to do so as we believe it has improved the savings performance of the platform and made us more valuable valuable to customers.

Next in terms of priority is to pursue growth through strategically and financially attractive M&A like we accomplished with our HFC and discovery acquisitions.

Speaker 2: Next in terms of priority is to pursue growth through strategically and financially attractive M&A, like we accomplished with our HST and discovery acquisitions.

Our next priority is reducing our leverage we have the flexibility to do that through a combination of EBITDA growth and debt reduction even as we focus on our first two capital priorities.

Speaker 2: We have the flexibility to do that through a combination of EBITDA growth and debt reduction, even as we focus on our first two capital priorities.

And finally share buybacks generally that is a lower priority for us in the near term, although we will continue to look at it opportunistically.

Speaker 2: And finally, share buybacks. Generally, that is a lower priority for us in the near term, although we will continue to look at it opportunistically.

Speaker 2: Finally, as to how we allocate between these priorities relative to our overall capital generation, we ask that you measure us on a year-to-year basis versus a quarter-to-quarter basis.

Finally as to how we allocate between these priorities relative to our overall capital generation, we ask that you measure it on a year to year basis versus a quarter to quarter basis.

Thanks, very much again I look forward to working with all of you in the Investor community and with that I'd like to turn it over to Dale.

Speaker 2: Thanks very much. Again, I look forward to working with all of you in the investor community. And with that, I'd like to turn it over to Dale.

Thanks, Jim.

Speaker 1: Thanks, Jim. Operator, would you kindly open it up for Q&A?

Operator would you kindly open it up for Q&A.

Speaker 3: And of course, as a reminder, if you'd like to register a question, please press star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2.

And of course as a reminder, if you'd like to register a question. Please press star followed by one on your telephone keypad. If you change your mind. Please press star followed by two.

Speaker 3: and when preparing to ask your question please ensure your phone is unmuted locally.

And when preparing to ask a question. Please ensure your phone is on mute locally.

Our first question comes from Joshua Raskin of Nephron Research, Joshua where the line is yours.

Speaker 3: Our first question comes from Joshua Raskin of Nephron Research. Joshua, the line is yours.

Thanks, Good morning, guys.

Speaker 4: Thanks. Good morning, guys. My question is just on helping understand the assumptions that went into that 200 basis point headwind from the No Surprise Act. It sounded like that was just a handful of customers that are using different solutions, at least for now. So am I to understand that right? You don't think there's any impact on existing claims activity, et cetera? You think that, you know, the totality of the rest of your business is unchanged? Is that the way to think about it?

My question is just on helping you understand the assumptions that went into that 200 basis point headwind from that I was surprised that it sounded like that was just a handful of customers that are using different solutions at least for now so am I to understand that right. You don't think there is any impact on existing claims activity et cetera.

You think that the totality of the rest of your business is unchanged is that the way to think about it.

Yes. It is Josh at scale, yes. It is look at it and when we talked about the two 2% right. It includes it includes known attrition.

Speaker 1: Yes, it is, Josh, it's Dale. Yes, it is. Look, when we talked about the two percent, right, it includes it includes no nutrition, it includes new wins, and honestly, you know, some visibility around the smaller customers that are in our pipeline but haven't yet made a decision.

It includes new wins.

<unk>.

And honestly some visibility around the smaller customers that are in our pipeline, but but but but haven't yet made a decision.

So thats right obviously.

Yes.

Speaker 4: Yeah, and it's six to eight week claims, so it's not like you've got any data yet, right? This is just based on sort of client activity to date. Yeah, you're absolutely right. We've been, we're 45 days into the new legislation and we're only starting to see claims with dates of service and on or after the first of the year.

Six to eight week claims like so it sounds like you've got any.

Data yet.

Yes. This is just based on sort of client activity to date.

Yes, you're absolutely right. We've been we're 45 days into the new legislation.

It's only starting to see claims with dates of service and on or after the first of the year.

Yes.

Speaker 4: Yeah, gotcha. And then can you talk just broadly expectations? I know you talk about your customer concentration and your filing. So I'm sure we'll see it in the K. But as you move into 2022, the totality of your top 10 payer contracts, any material changes to you know, again, I don't want I know you don't give customers specific, but in the in your top 10 payers, any any major change any material change in that group.

And then can you talk just broadly expectations I know you talk about your customer concentration in your filings I'm sure. We will see it in the K, but as you move into 2022, the totality of your top 10 payer contracts any material changes to again I don't want I know you don't give customer specific but in the in your top 10 payers any any major.

Change any material change in that group.

Speaker 2: No, and Josh, this is Jim. We will be filing our 10K and it's typical. We'll give you visibility on that, but I think we can tell you there's no material changes in that composition.

No.

Josh This is Jim.

We will be filing our 10-K and as typical we'll give you visibility on that but I think we can tell you. There is no no material changes in that composition.

I meant more into 2022.

Speaker 5: Yeah, and we feel comfortable with that statement as well.

Yes.

We feel comfortable with that statement as well.

Got you and then I'm sorry, one last one but the 200 basis points of margin compression in 2022 70.

Speaker 4: And I'm sorry for one last one, but the 200 basis points of margin compression in 2022.

Speaker 4: You know, 75 basis points is coming from, you know, what you're calling structural cost increases. And then the other another 75 from investments to support growth initiatives.

75 basis points is coming from what you can like structural cost increases and then the other another 75 from investments to support growth initiatives I would assume those are pretty those are buckets that are kind of every year right. So that 150 basis points as sort of incremental maybe $17 million to $18 million above and beyond the growth that you typically.

Speaker 4: I would assume those are pretty, you know, those are buckets that are kind of every year. Right. So that hundred and fifty basis points is sort of incremental, maybe seventeen, eighteen million dollars above and beyond the growth that you typically see.

We see that just screens is relatively large and so just wage inflation is a lot worse is it.

Speaker 4: That just screens is relatively large. Is it just, you know, wage inflation is a lot worse? Is it, you know?

Speaker 4: the integration of the new products or, you know, new things. How do we think about that? And and, you know, should we be I'm just thinking longer term, right, in terms of the next couple of years, should we be thinking about margin pressures going forward as well?

The integration of the new products or new things, how do we think about that and should we be I am just thinking longer term right in terms of the next couple of years should we be thinking about margin pressures going forward as well.

Yes, it's a good question, Josh and I think.

Speaker 2: Yeah, and it's a good question, Josh. And I think the starting point is.

Starting point is.

Our best in class margins, which from the outside coming in is still.

Speaker 2: Our best-in-class margins, which from the outside coming in, is still pretty amazing to me.

Still pretty amazing to me.

So.

Speaker 2: So we're going to be on the podium every year in this regard, and we don't see that changing dramatically. But we have seen some structural cost increases, and it's hard to hide when your expenses are 25% you know, it's personnel and it's 25% of your revenues.

We're going to be on the podium every year in this in this regard and we don't see that changing dramatically, but we have seen some structural cost increases and it's hard to hide when your expenses are 25.

Personnel and it's 25%.

Of your of your revenues.

Speaker 2: But we will see a little bit of that this year. The investments in the platform this year are a little bit of catch up from last year.

But we will see a little bit of that this year the investments in the platform.

This year are a little bit of catch up from last year.

Speaker 2: So, I'm not so sure we're going to, we're going to see that going forward. And then last, but not least the investments to support the growth initiatives. It's a little bit of a mismatch. As we ramp up some client contracts.

So I'm not so sure we're going to.

We're going to see that going forward, and then last but not least the investments to support.

To support the growth initiatives, it's a little bit of a mismatch as we ramp up some client contracts and.

Speaker 2: And some of these have more labor intensity to them in the payment integrity and subrogation arenas. So we see a little bit of expense pressure there. So I don't view these as a step down that we anticipate every year. We may see a drift downwards by basis points, not percentage points over time by a mix. But we don't see this as a long term trend.

Some of these have more labor intensity two of them in the.

Payment integrity and subrogation arenas, so we see a little bit of expense pressure. There. So I don't view these as a step down that we anticipate every year.

See we may see a drift downwards by basis points not percentage points over time by a mix, but we don't see this as a long term trend.

Okay perfect.

Our next question comes from Daniel gross light of City Daniel Please go ahead.

Speaker 3: Our next question comes from Daniel Grosslight of Citi. Daniel, please go ahead.

Hi, guys. Thanks for taking the question and congrats on a strong quarter and congrats Dale on the promotion and Jim on joining the team.

Speaker 6: All right, guys, thanks for taking the question and congrats on a strong quarter and congrats Dale on the promotion and Jim on joining the team.

Speaker 6: Um, you know, the, the cobit impact for 2022 is a bit higher than we anticipated. If you listen to the managed care organizations or provider commentary. During their 4 Q earnings calls, they're clearly anticipating the return of non utilization this year.

Yes.

Covid impact for 2022 was a bit higher than we anticipated if you're listening to the managed care organizations are provider commentary hearing therefore, Q earnings calls quarterly anticipating the return of non Covid utilization. This year. So can you just break out a little and a little more detail, where you expect to see the most.

Speaker 6: So can you just break out a little in a little more detail where you expect to see the most impact from COVID? And it sounds like it's mostly first half weighted. Should we anticipate any COVID impact in the second half of this year?

Impact from Covid and it sounds like it's mostly.

First half weighted should we anticipate any COVID-19 impact in the second half of this year.

Speaker 2: Yeah, and thanks, Daniel. Listen, this is our crystal ball of today. And, you know, we actually did the fourth quarter, which is, you know, seemingly a pretty good environment with still a little bit of COVID impact, which was largely in our network businesses. And a little bit, quite frankly, we still see suppressed, you know, kind of non-COVID activity vis-a-vis where we were in 2019 on, you know, roughly the same, you know, kind of the same store concept.

Yes.

Thanks, Daniel listen this is our crystal ball today.

And we exited the fourth quarter, which is seemingly a pretty good environment with still a little bit of Covid impact, which was largely in our network.

Network.

<unk> and a little bit quite frankly, we still see suppressed.

Kind of non COVID-19 activity vis vis where we were in 2019 on roughly the same kind of.

Same store concepts.

Speaker 2: So we still will see that. I will agree with you that we are anticipating a heavier weight in...

So we still see that.

I will agree with you that we are anticipating a heavier weight in.

At the end of the first quarter, and maybe going into second quarter.

Speaker 2: at the end of the first quarter and maybe going into second quarter of this year. So think about the entire year, more front half weighted. But again, I think we're all gonna have a better sense of where we are probably at the end of the second quarter as to whether or not COVID abates or whether we're gonna see some persistence. There's just a lag in particular on elective surgeries that's gonna occur. And I think that's the big question mark for us.

This year.

So to think about the entire year more more front half weighted but again I think we're all going to have a better sense of where we are probably at the end of the second quarter as to whether or not COVID-19 abates or whether we're going to see some persistence. There's just a lag in particular on elective surgeries that that's going to occur and I think thats the.

That's the big question Mark for Us.

Okay. So it.

Speaker 4: Okay, so it's, again, like last quarter, it's mostly being felt in the networks business, and you expect that dynamic to continue into this year? Well, we have said differently. We haven't seen it. We haven't seen it be removed yet.

Again like last quarter, it's mostly being felt in the networks business and you expect that dynamic to continue.

Into this year well, we have said differently, we haven't seen it we haven't seen it be removed yet.

And so.

Okay.

Speaker 2: I think we admit that this is

I think I think we admit that this is.

Speaker 2: a little bit of a crystal ball given the fact that we just don't know where COVID's going. But we just see the claims popping up on the Omicron.

A little bit of Crystal ball, given the fact that we just don't know where COVID-19 is going but we just see the claims popping up on the omicron side and Daniel you know this.

Speaker 1: And Daniel, you know this, we have that six to eight week lag in claims. So the claims were we've seen now in January and February thus far really for dates of service back to where services were provided in November and December . And that, as you well know, was the height of the Omnicron variant. So we're definitely feeling it in the early Q1.

We have that six to eight week lag in claim so the claims we have seen now in January and February thus far really for dates of service back to.

Where services were provided in November and December and that as you well know it was the height of the omnicom variance. So we're definitely feeling it.

And the early.

In Q1.

Yeah makes sense, okay, and it sounds like Youre, making some very good progress in payment integrity.

Speaker 6: Okay, and it sounds like you're making some very good progress in payment integrity and you're investing a lot in that space for 2022, but if I just look at the quarter, it was a little bit lighter than we anticipated, down around 7.5% sequentially. Can you spec out the reasons for the sequential decline in payment integrity and how we should think about the growth in that segment specifically in 2022?

You're investing a lot in that space for for 2022, but if I just look at the quarter. It was a little bit lighter than we anticipated down around seven 5% sequentially.

You Spike out the reasons for the sequential decline in payment integrity, and how we should think about the growth in that segment specifically in 2022.

Yes.

Speaker 2: Yeah, Daniel, I would separate 2021 versus 2022. In 2021, we had a little bit of softness in our clinical negotiations in 4th quarter, but not something we think is a long term issue. But what's really going on in the payment integrity side is new customer wins and those ramping up. Particularly in the 2nd, half of 2022.

Daniel I would I would separate 2021 versus 2022 and 2021, we had a little bit of softness in our political negotiations in fourth quarter, but not that's something we think is a long term issue, but what's really going on in the payment integrity side as new customer wins and those ramping up particularly in the second half.

2022, so we're starting to get some momentum and a shift.

Speaker 2: So we are starting to get some momentum and a shift in the business in payment integrity in 2022, and obviously seeing some good pipeline across those lines of business.

In the in the business and payment integrity in 2022, and obviously seeing some good pipeline.

Across those across those lines of business.

Got it Okay and one last one for me on the capital deployment flat Slide you are currently levered around five seven times and it seems like M&A is taking priority over that at least in the near term.

Speaker 6: Got it. Okay. And one last one for me. On the capital deployment slide, you know, you're currently levered around 5.7 times. And it seems like M&A is taking priority over debt, at least in the near term. Where are you comfortable operating on a leverage basis? And if you make an acquisition, can you flex up much on your leverage?

What are you comfortable operating.

On a leverage basis, and if you make an acquisition can you flex up much on your on your leverage.

Speaker 5: Yeah, and maybe we can, maybe we can look in the rear view mirror and talk about the balancing act that we achieved because we don't have a target. But I do think we do believe that we need to migrate the leverage ratio down and we were actually successful doing that in 2021.

Yeah, and maybe we can maybe we can look in the rearview mirror and talk.

Talk about the balancing act that we achieved because.

We don't have a target, but I do think we do believe that we need to migrate but the leverage ratio down and we were actually successful doing that in 2021.

Speaker 2: We took it down a turn despite the fact that we actually, you know, made some acquisitions. Discovery was funded in 2021, HSC was funded in 2020.

Took it down a turn despite the fact that we actually.

Made some acquisitions.

Discovery was funded in 2021 HFC was funded in 2020, but we've been able to use that free cash flow to continue.

Speaker 2: But we've been able to use that free cash flow to continue to do acquisitions and using growth to deliver. So I think the emphasis that I'd like to give the audience here is we are trying to balance growth and deleveraging, but we absolutely understand from the investor community that leverage is an issue and we're working to migrate that down over time.

Continue to do acquisitions and using growth to Delever. So I think the emphasis that I would like to give the audience. Here is we are trying to balance growth and deleveraging, but we absolutely understand from the investor community that Leverages, an issue and we're working to migrate that down over time.

Got it thanks guys.

Thanks, Dan.

Our next question comes from Franklin Chairman with Goldman Sachs Franklin. Please go ahead.

Speaker 3: Our next question comes from Franklin Jarman with Goldman Sachs. Franklin, please go ahead.

Great. Thanks for taking my questions guys. I guess, just first to follow up on the NSA impact of zero to 2% for the year.

Speaker 7: Great. Thanks for taking my questions, guys. I guess just first to follow up on the NSA impact of zero to 2% for the year. How do we think about sort of longer term implications as you think about your discussions with customers and their implementations. What percent are you sort of fully complete on and should we think about any follow on effects in 2023. Thank you.

How do we think about sort of longer term applications. As you think about your discussions with customers and their implementation.

What percent are you.

Fully complete on and should we think about any follow on effects in 2020. Thank you.

Speaker 1: Franklin, thanks for the question. Look, I think, you know, NSA, we're 45 days into it, and we have a good sense of our

Franklin Thanks for the question look.

NSA were 45 days into it and we have a good sense of our how our larger customers are approaching compliance with NSA.

Speaker 1: how our larger customers are approaching compliance.

Speaker 1: with NSA and we're continuing to move forward with our larger customers. And as you heard me say, we have over 90 implementations and

And we're continuing to move.

Move forward with our larger customers and as you heard me say, we have over 90 implementations in.

Speaker 1: and over 50 implementations in the pipeline. So we feel there's going to be, it's not our solutions, as you think about it, you know, then the 2%, that would be up to 2%.

And over 50 implementations in the pipeline. So so we feel.

There is going to be it is not our solutions as you think about it than the 2% that would be up to 2% that we mentioned that Jim and I mentioned, it's all look it's known attrition, it's new wins.

Speaker 1: that we mentioned, that Jim and I mentioned, it's all, you know, look, it's known attrition, it's new wind.

Speaker 1: It's some lack of visibility around our smaller customers that have yet to make a decision.

It's some lack of visibility around our smaller customers that have yet to make a decision.

Speaker 1: But we think it's a modest step down. It's not in it's not a recurring incremental headwind

But we think it's a modest step down it's not and it's not a recurring incremental headwind.

Speaker 1: And we don't view our offering at all as a stopgap measure for our customers.

And we don't view, our offering at all as a stop gap measure for our customers.

Speaker 1: We think there will be continued persistence in the use of our NSA solution for a couple of reasons.

Think there's there'll be persistence continued persistence in fact in the use of our NSA solutions for a couple of reasons.

Speaker 1: We're an independent, and we're an independent NSA compliance solution. We have the back-end negotiation, post-paying negotiation and arbitration management capabilities that many of our payers don't possess and will need in the NSA world. And this is really complex.

An independent and we're independent NSA compliance solution.

We have the backend negotiation postpaid negotiation and arbitration management capabilities that many of our payers don't possess and we will need.

And the NSA World.

And this is really complex.

Speaker 1: It's a really complex piece of legislation for our payers to implement, and you need the agility and the operational excellence that Multi-Plan brings to the equation for a payer to fully comply and to do this really well. And that's what we do and have always done and will continue to do going forward.

Really complex piece of legislation for our payers to implement and you need the agility and the operational excellence that multi plan brings to the equation for a payer to fully comply.

And to do this really well and that's what we that's what we do and have always done and we'll continue to do going forward.

Great. Thank you for the color and then just a follow up on the balance sheet.

Speaker 7: Great. Thank you for the color. And then just to follow up on the balance sheet, the year, you know, as you think about the, the, the debt pay down appetite balance against MNA, you know, this year, your, your bonds have drifted below par. So just curious, if you think about, you know, deploying capital and looking at your bond prices, you know, roughly 10 points below par, how do you think about the appetite to buy back bonds in the open market versus versus other opportunities for growth?

As you think about the debt paydown appetite balanced against M&A.

This year your bonds have drifted below par. So just curious as you think about deploying capital and looking at your bond prices.

Yes, roughly 10 points below par how do you think about the appetite to buy back bonds in the open market versus versus other opportunities for growth.

Yes.

Speaker 2: Yeah, and I so I start with the.

So I'd start with the.

The balancing act that we're talking about which is <unk>.

Speaker 2: the balancing act that we're talking about, which is, you know, how to deploy capital as between, you know, M&A opportunities and debt reduction. But if we're in the debt reduction arena, I do think we will look at all options to optimize that, Frank. So I think, you know, in some ways, I don't want to speak to specific tools that we may use, but I think all those tools are available.

To deploy deploy capital.

As between.

M&A opportunities and debt reduction, but if we're in the debt reduction.

Arena I do think we will look at all options to optimize that Frank So I think in some ways I don't want to speak to.

Specific tools that we may use, but I think all of those tools are available.

Sure.

Okay, great. Thanks, so much guys congrats on the results.

Our next question comes from David Common with Jpmorgan, David The line is yours.

Speaker 3: Our next question comes from David Common with JP Morgan. David, the line is yours.

Speaker 1: Very good, thank you. Good morning all. It's very helpful that you could put a best guess on the NSA impact and also frame it as not a stopgap measure. I had a couple of follow-ons.

Perfect. Thank you and good morning all.

It's very helpful that you could put a best guess on the NSA impact and also frame it is not a stop gap.

I had a couple of follow ons so.

To what extent.

Speaker 1: to what extent does the tussle over the mechanics of arbitration affect you? And are you able to give us any more color on, just so even lay people could understand, when you said it was the single biggest software release, I think, what's involved in that, to the extent that we might understand?

Tussle over the mechanics of arbitration.

Affect you.

Are you able to give us any more color on just so even.

People could understand when you said it was the single biggest software release I think.

Whats involved in and not to the extent that we might understand it.

Okay.

Yeah.

Speaker 1: Yeah, if our CTO was on the phone today, he would attest to it being the single biggest release and effort that we've ever had in the history of the company.

Got it.

If our CTO was on the phone today.

Test to it being the single biggest.

Our release and effort that we've ever had.

In the history of the company by.

Speaker 1: By that, we mean it touched all of our operating platforms. And so we were, we spent the better part of 12 months.

By that we mean it touched all of our operating platforms and so we were we spent the better part of 12 months.

Going.

Speaker 1: going, you know, doing what we needed to do in terms of understanding the legislation, listening to our customers, understanding their needs, wants, and desires.

Doing what we needed to do in terms of understanding the legislation listening to our customers understanding their needs wants and desires.

Speaker 1: as they interpreted and implemented the No Surprises Act, and we're sitting here today on January 1, we were ready to implement the No Surprises Act.

As they interpreted and implemented the.

<unk>.

No surprises act and.

And we're sitting here today.

We were on January one we were ready and with.

Implement.

Speaker 1: the act on behalf of our customers. And so it touched most of our operating platforms and it was a heavy IT lift. But again, our agility, our nimbleness, our expertise.

On behalf of our customers and so it touched.

Most of our operating platforms.

And it was a heavy lift but our again, our agility, our nimbleness our expertise our understanding of our customers' needs and the requirements of the law.

Speaker 1: our understanding of our customers needs and the requirements of the law. We were ready and on January 1st to do it.

We were ready and on January 122 to do it.

Speaker 1: The biggest, sort of the newness of the law was arbitration. That was probably, you know, arbitration services was a new service for the company. Everything else in terms of, you know, claims mechanics.

The bigger that sort of the newness of the law the law with arbitration that was probably arbitration services was a new service for the company.

Alex in terms of clay.

Claims mechanics.

Speaker 1: re-pricing of claims, data analytics.

Repricing of claims.

Data analytics postpaid negotiation those were all things that are in our wheelhouse and those are the things. We do every day and Thats why our customers turn to us to help them implement the law arbitration management with our new services for us, but we had the benefit of discovery health partners and third year.

Speaker 1: post-pay negotiation, those were all things that are in our wheelhouse.

Speaker 1: And those are the things we do every day. And that's why our customers turn to us to help them implement the law. Arbitration management was a new services for us, but we had the benefit of Discovery Health Partners and their years of experience with subrogation.

Ours have experience with subrogation and so we asked Liz Longo, who is a long time long tenured discovery executive to take over that service that would be ready and build our arbitration support.

Speaker 1: And so we asked Liz Longo, who is a longtime, long-tenured

Speaker 1: Discovery executive to take over that service and be ready and build our arbitration support. Um, you know, service on for our, on behalf of our customers and we're ready today. Uh, you know, and, uh, in the event, uh,

Service for on behalf of our customers and we are ready today.

In the event.

Speaker 1: There is a claim that goes through the, you know, that is disputed and we aren't able to negotiate successfully, we're ready if it goes to arbitration and work with our customers.

There is a claim that goes through the <unk>.

Is disputed and we arent able to negotiate successfully.

We're ready if it goes to arbitration and work with our customers.

Okay, and if I.

Speaker 1: Okay, and if I interpreted this right, it sounds like the great majority of surprise

Interpreted this right it sounds like the great majority of surprise.

Speaker 1: bill claims volume will be staying with you in one way shape or form arbitration, processing, what have you.

Bill claims volume will.

I'll be staying with you in one way shape or form arbitration processing what have you.

Yes.

Thank you.

Okay.

Our next question comes from Steven Valiquette with Barclays. Steven. Please go ahead.

Speaker 3: Our next question comes from Stephen Villiquette with Barclays. Stephen, please go ahead.

Great. Thanks, good morning, everybody.

Speaker 8: So, yeah, Dale, you've been with the company for a while, but obviously with the change to the CEO role now official, I guess I'm curious if you're able to share any preliminary thoughts.

So yes, you are fine with it.

Company for a while but obviously with the change to the CEO role now official I guess I'm curious, if you're able to share any preliminary thoughts just around any potential strategic changes and product or service offerings or just any other operational expansion or other adjustments that they.

Speaker 8: just around any potential strategic changes in product or service offerings or just any other operational expansions or other adjustments that may take place following your transition to the CEO ? Or should we just assume kind of more of the same for multi-plan? Just curious to get your thoughts around that. Awesome, thanks.

That may take place following your transition to the CEO or should we just assume kind of more of the same for multi plan just curious to get your thoughts around that thanks.

Yes.

No.

Speaker 1: No, that's a great question. I appreciate it. And you're absolutely right. Jim and I, we inherited a very successful company with a 40-year track record of growth.

That's a great question I appreciate it and Youre, absolutely right, Jim and I, we inherited a very successful company with a 40 year track record of growth.

Speaker 1: in particular in the last 20 years, you know, since Mark and I were operating partners, you know, at the company.

In particular in the last 20 years.

Since Mark and I were operating partners.

At the company.

Speaker 1: You know, we have been and will continue to be effective in achieving our mission to deliver affordability, efficiency, and fairness to the U.S. healthcare system.

We have been and will continue to be effective in achieving our mission to deliver affordability.

Efficiency and fairness to the U S health care system.

Speaker 1: There's not a lot that needs to change as we continue to execute on our enhanced and extend elements of our growth strategy.

There is not a lot that needs.

There's not a lot that needs to change as we continue to execute on our enhance and extend the elements of our growth strategy.

Speaker 1: We're now more deliberately focusing efforts on the expand element, and we're starting to look out to a longer term horizon to determine the best way to leverage our data, our extensive data, services, and connectivity to bring new value to the healthcare delivery system.

Now, we're now more deliberately focusing efforts on the expand element and we're starting to look out to a longer term horizon.

To determine the best way to leverage our data our extensive data services and connectivity to bring new value to the healthcare delivery system.

Okay Alright.

Speaker 8: Okay. All right. I think if I said it, I would simply say that we're just investing in our growth. We want to invest in our growth.

Alright.

Said simply set a record of investing in our growth for just that we want to invest in our growth.

Okay got it.

Speaker 8: And speaking of that, you touched on this a little bit, but as far as the operating cash flow, we got a couple inbound questions just on the operating cash flow guidance going down a little bit in 22 versus 21, despite the guidance for EBITDA to be up a little bit in 22. And my guess is that's related to the investment spending you alluded to on slide 18, but just looking for more color or just some confirmation around that. Thanks.

And speaking of that.

That's a little bit, but as far as the operating cash flow. We got a couple of inbound questions. Just on the operating cash flow guidance going down a little bit in 'twenty two versus 21, despite the guidance for EBITDA to be up a little bit in 'twenty two.

Is that related to the investment spending you alluded to you on slide 18, but just looking for more color or just some confirmation around that thanks.

Yes and listen.

In some ways our guidance on cash flow is pretty consistent with last year, and we had a little bit of a.

Speaker 5: In some ways, our guidance on cash flow is pretty consistent with last year, and we had a little bit of last year's 21 guidance.

Last years, 'twenty, one guidance, but a little bit softer.

Speaker 2: It's a little bit softer, two or three reasons. Number one, on one hand, we have more EBITDA. On the other hand, we have more interest expense because of the refinancing.

Two or three reasons number one.

On one hand, we have more EBITDA on the other hand, we have more interest expense because of the refinance that with determining terming it out so it got to a slightly higher burden on the interest expense side, we are taking capital expenditures up a bit and there is just some working capital and other stuff that is.

Speaker 2: That was terming it out. So we've got a slightly higher burden on the interest expense side. We are taking capital expenditures up a bit. And there's just some working capital and other stuff that is taking that down a little bit. But over the course of the year, we'll have a better sense of how some of those elements will play out. And we were a little bit light on taxes last year with respect to where we thought we'd be, in terms of cash taxes.

Taking that down a little bit but over the course of the year, we'll have a better sense of how some of those elements will play out and we got we got we were a little bit light on taxes last year with respect to where we thought we'd be in terms of cash taxes.

Speaker 5: So I don't think it's a fundamental change, but you rightly point out we're slightly relative to Aribidal, we're a little bit below where we might have been for those reasons.

So I don't think its a fundamental change, but you rightly point out we're slightly.

Relative to our EBITDA were a little bit below where we were we might've been for those reasons.

Okay.

Speaker 8: Okay. And I also got a couple questions on the 2% headwind around NSA, but I'll just follow up with you guys offline later on that. Thanks.

Got a couple of questions on the 2% headwind around NSA, but I'll just follow up with you guys offline later on that.

Sounds good thank you.

Our final question comes from Rishi Parekh with Barclays Wishy. Please go ahead.

Speaker 3: Our final question comes from Rishi Parekh with Barclays. Rishi, please go ahead.

Speaker 9: Hi, thanks for taking my questions. You know, with the litigation that's going on around the surrounding the NSA, if there were any changes to the QPA, how does that change your plan offering? And does that 2% headwind, do you feel that that headwind will decline if the QPA is not the primary focus or their presumptive default rate? And I have a follow-up.

Hi, Thanks for taking my questions.

The litigation that's going on around the surrounding the NSA. If there were any changes to the tpa how does that change your plan offering and does that 2% headwind do you feel that the headwinds will.

We will decline if the tpa is not the primary focus or their presumptive default rate and I have a follow up.

That's a great question Youre right were 45 days into it into supply.

Speaker 1: That's a great question. You're right. We're 45 days into it with into surprise bill with with two sets of interim Interim regulations and as you know, there's always

Surprise Bill with two sets of interim interim regulations and as you know there is always there is theres been two lawsuits filed by.

Speaker 1: There's there's been two lawsuits filed, one by the Texas Medical Association, and I think the other by a by an emergency room physician group. And since then, I think there's been a 4 additional suits that have been bought filed by providers all raising complaints.

By the Texas Medical Association and I think the other buyer by an emergency room physician group and since then I think theres been a poor additional suits that have been filed by providers all raising complaints similar to the Texas one.

Speaker 1: similar to the Texas one and about the provisions of NSA and the IDR process and the ban.

And about the provisions of NSA and the <unk> process and the ban on on balance billed.

I think.

We hope to get clarity.

As the.

Speaker 1: around the legislation as the year unfolds. I think the federal government is expected to issue a final IDR by May of this year. And, but I don't think in either direction, we're well positioned if they move away from QPA, if they allow greater flexibility by the provider in demanding higher, you know, in getting higher rates of reimbursement because of the complexity or the severity of the treatment or illness that they're doing, all of our services will be applicable in that regard, no matter which way it goes. So we feel we're well positioned and of course we'll pay attention to the law and say any changes in the law. And again, we'll adjust, we'll course correct if needed, but we're not concerned. And then earlier you highlighted a number of customer wins and I believe 69% growth in revenue.

Around the legislation as the year unfolds I think the federal government is expected to issue a final IPR.

<unk> may of this year, and but I don't think in either direction, we're well positioned if they if they move away from Cuba, if they if they if they allow greater flexibility.

By the provider in demanding higher.

And getting higher rates of reimbursement because of the complexity or the severity of the treatment or illness that theyre doing.

All of our services will be applicable.

In that regard no matter, which way it goes so we feel we're well positioned and of course, we'll pay attention to.

To the law into any changes in the law and again, we'll adjust.

Of course, correct if needed, but we're not concerned.

Speaker 9: And then earlier you highlighted a number of customer wins, and I believe 6 to 9 percent growth in revenue. And I know there's a startup cost before you actually start to realize those wins. So I assume a lot of that growth is going to be second half way to this, hoping that you could confirm that. And then you also noted that you have some wins for 2023. Can you quantify the expected revenue around those wins?

And then earlier.

Earlier, you highlighted a number of customer wins, and I believe 6% to 9% growth in revenue and I know theres, a startup cost to before you actually start to realize those wins. So I assume a lot of that growth is going to be second half weighted is hoping that you could confirm that and then you also noted that you have some wins for 2023 can you quantify.

The expected revenue around those wins.

Sure.

Speaker 5: I don't think we're going to give too much specifics on the winds, but just to clarify on the growth, we have some contracted winds that are going to ramp up in the second half of the year and will not achieve run rate.

I don't think we're going to go.

Give too much specifics on the on the on the wins, but just to just to clarify on the growth. We are we have some contracted wins that are going to ramp up in the second half of the year and will not achieve run rate.

Speaker 2: So we are going to get some additional benefit going into 2023, and those contract wins are in spots where we have to stand up the service for important clients.

So we are going to we are going to get some.

Additional benefit going into 2023 and those those contract wins are in spots, where we have to stand up the service for important clients and have the kind of have the teams ready and subrogation and some of the.

Speaker 5: and have the teams ready and subrogation and some of the more labor intensive data mining opportunities. So, as we go into 2023, you'll see some benefit of that and we can be more explicit in terms of how we see the growth going. But again, these investments are against contracted business, so it's all positive from our perspective. 7

More.

Labor intensive data mining opportunities so.

We go into 2023, you will see some benefit of that and we can be more explicit in terms of how we see the growth growth going but again. These investments are against contracted business. So it's all positive from our perspective.

Okay. Thank you.

Speaker 3: That was our final question, so I'll hand back for any closing remarks.

That was our final question, so I'll hand back for any closing remarks.

Speaker 1: Listen, we appreciate your time and support and continued confidence in the business and we look forward to working with you and thank you for today.

Listen we appreciate your time and.

<unk> and continued confidence in the business and we look forward to working with you and thank you for today and.

This concludes today's call. Thank you for joining you may now disconnect your lines.

Speaker 3: This concludes today's call. Thank you for joining. You may now disconnect your lines.

Okay.

Speaker 10: ?? ?? ??