Q4 2021 CareMax Inc Earnings Call
Greetings welcome to Coeur Max incorporated fourth quarter 2021 financial results conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Please note. This conference is being recorded I will now turn the conference over to Samantha Swerdlin.
He is president of Investor Relations I can't Max. Thank you you may begin.
Thank you and good morning, everyone welcome to the care Mac This fourth quarter and full year 2021 earnings call on the call with me today are Carlos to sell all our Chief Executive Officer, and Kevin We're just our Chief Financial Officer.
During the call we will be discussing certain forward looking information. These forward looking statements are based on assumptions and assessments made by Terramax of management in light of their experience and assessment of historical trends current conditions expected future developments and other factors they believe to be appropriate.
And forward looking statements made during this call are made as of today and Carmax undertakes no duty to update or revise such statements whether as a result of new information future events or otherwise.
Port and factors that could cause actual results developments and business decisions to differ materially from the forward looking statements are described in the company's filings with the SEC, including the section entitled Risk factors.
In today's remarks by management, we will be discussing non-GAAP financial metrics. A reconciliation of these non-GAAP financial metrics to the most comparable GAAP measures can be found in this morning's earnings press release with that's that I'd now like to turn the call over to Carlos.
Thank you Samantha good morning, everyone and thank you for joining our call today I am proud to report that we closed our fourth quarter with strong revenue and membership growth and a quarter over quarter decline in our medical expense ratio for the full year 2021, we delivered membership and are ahead of expectations.
Despite COVID-19 and feel encouraged by our momentum entering into 2022.
We are making meaningful progress towards achieving our 2022 de novo goal and are pleased to announce that we recently opened our first two centers in Memphis, Tennessee, and our first center in New York City.
Our expansion into these new markets is an exciting milestone in our national de Novo strategy and will be and will serve as building blocks to bring our transformative whole person health model to more communities than ever.
We believe our strong growth while still maintaining a best in class <unk> is a testament to our team and our model.
By utilizing our whole person health clinical program and our integrated proprietary point of care.
RG platform care optimize our physicians and care teams truly partner with our members to improve health outcomes and overall well being.
We do this by working in some of the most underserved neighborhoods many of which are otherwise healthcare desert addressing patients with significant barriers to care our model does well by doing good and we look forward to expanding to those communities that will benefit the most.
Now to our performance for the fourth quarter 2021 pro forma for the combination of <unk> and IFC, we achieved revenue of $118 million up 34% from $88 million in the fourth quarter of 2020.
Notably we saw a 95% of our members during the year and to date in Q1 have seen risk reimbursement rates returned to pre COVID-19 levels, our fourth quarter GAAP net loss was $3 6 million, bringing our full year GAAP net loss to $6 7 million.
Our 2021 pro forma run rate revenue was $515 million and our pro forma run rate adjusted EBITDA was approximately $35 million both in line with the expectations, we set last year.
As a reminder, these were illustrative figures that help frame our steady state earnings power heading into 2022.
But all 2022 guidance given today as Kevin will discuss will reflect performance we expect to report in the current year.
Our total membership as of December 31st 2021 was over 83000 and our Medicare advantage membership was over 33500 Boe.
Both exceeding our guidance our focus on de Novo openings, specifically in areas, where our partners have a concentration of membership and our own grassroots marketing efforts are expected to contribute to strong membership growth in the future.
Like others early in the first quarter, we experienced higher COVID-19 cases related to the army cornbury. It however.
Hospital admissions were below levels seen during prior spikes and if those members admitted to the average length of stay was shorter than in prior waves. We attribute this to our Covid rapid response program.
Our medical staffs have been diligent about the outreach in educating our members, which has led to early diagnosis and more effective treatment plans.
Despite the continued impact from Covid during the fourth quarter, our clinical model continues to perform well.
For the fourth quarter, we recorded a healthy 71, 5% medical expense ratio, which has an improvement of approximately 400 basis points from the third quarter of 2021, nor.
Normalizing for estimated direct impacts from Covid are M E. R. It would have been 69.5%.
To provide a bit more context, how we are lowering overall health care costs. Our results show that ex Covid, we've continued to reduce our external provider costs and absolute dollar spend on a per member per month basis. It bears repeating that historically, we have achieved and I mean, a reduction by patient.
Cohort of 47 percentage points over three to four years, including a 40% reduction in medical expense per member per month, which contributes to much needed savings in our health care system.
Next I would like to provide an update on our operational initiatives.
We believe we have now captured substantially all $5 million of the previously announced combination synergies that we anticipated with IMC, including benefits from the consolidation of member panels under certain health plans.
As you might imagine human capital is our most valuable asset and we are continually looking for ways to invest in our talent first and the fourth quarter. We brought up on key leadership to support our regional and corporate operations, including a southeast market President a chief compliance officer, and a chief people officer.
We believe that we have assembled the right talent to execute on our growth plans and we will continue to add capabilities to our regional and corporate teams.
Second our frontline associates worked tirelessly tirelessly last year to keep our centers operational during the pandemic and to keep our members safe.
We're in the process of adjusting compensation across medical and center support staff, knowing that employee retention and experience translate into higher quality of care for our members.
We are already benefiting from the investments we made last year in patient experience I am pleased to announce that in 2020 . One we achieved a five star quality ratings across all of our centers.
This underscores our ability to maintain best in class care as we grow rapidly further we received the net promoter score of 96 remember satisfaction and had a 98% physician retention over the past year.
Yeah.
Moving to our strategic initiatives.
We continue to be impressed by the amount of inbound interest from those looking to collaborate with us to improve outcomes inefficiencies in the health care system.
Two of those which we will provide an update on related and anthem.
The related collaboration gives us the opportunity to work closely with one of our largest owner operators of affordable housing in the U S.
The initial focus of our collaboration with related has been in New York City, where we are on track to opening centers. This year. Our vision is to bring terramax as vertically integrated whole person health care model directly to affordable housing communities providing.
Providing convenient access to care to those seniors who needed. The most we have demonstrated that this model works well as we have highlighted in the past with the growth of our Pembroke Pines, Florida Medical Center, which opened on the ground floor of a retirement community. This center experience among the fastest membership ramp and path to profitability.
And our center footprint.
With related we look forward to bringing this model to communities across the country to expand convenient access to value based care.
We are also progressing nicely with our strategic collaboration with anthem and are encouraged by the level of engagement anthem as provider to help us fill our centers with their support we believe we are able to reduce upfront operating losses are de novo's speed up the path of full risk economics and pull forward breakeven platform contribution.
Margin, all while accelerating the shift of anthems membership to value based care.
In addition to these two important strategic collaborations that we continue to work with our other payers to assist in our collective goal, bringing best in class medical care to underserved communities.
As we've discussed in prior presentations, we believe de novo's represent our highest ROI use of capital.
And that we have the right team the right infrastructure and the right secular tailwind in place to pursue that opportunity.
In some instances, we are able to get a de novo breakeven centre profit with as little as $1 million to $2 million of upfront platform contribution investment.
After leveraging tenant improvements financing and funding from strategic payer partners.
This is possible through our disciplined strategy for de Novo openings, when assessing new markets, we look for where our partners have a concentration of membership. The partners are looking to improve cost quality outcomes or both our motto is specifically designed to deliver these outcomes and a replicable way.
By going where patients already exist, we lower our patient acquisition cost and ensure we have a large local time to deliver our model.
Our members sourcing is supported by these partners and our own grassroots efforts by embedding ourselves in the communities through our local events and hiring from within those communities, we bring a unique culturally sensitive and hyper local focus to our medical centers, so that our model resonates with our communities.
That we are serving.
Financially this approach results in a scaled a member base that generates attractive predictable cash flows in any economic environment. We believe each of our standard size de novo's has the ability to generate $4 million to $5 million of platform contribution at maturity.
We are reaffirming prior guidance of opening 15 de novo's in 2022 we have already executed leases across Florida, Tennessee, Louisiana, and New York, While we are experiencing very high interest in building out more locations than we've highlighted we remain disciplined and deliberate.
And our approach by selecting quality sites that we believe will provide the best returns and allow us to make the biggest impact in improving health outcomes for our members.
Lastly, I'd like to touch on our tech enabled msos strategy and how it plays into our national expansion plans. Our NSO has been part of our model for the past 11 years and gives it providers in the community a pad to pad.
To value based care.
As we have previously communicated we have begun transitioning our optimized platform into our NSO from its prior use as a consulting SaaS based model. Our MSL provides independent physicians with a technology education and support to deliver better outcomes for their patients with more favorable financial results for all stakeholders.
Payers and health systems have expressed interest in this model as it is system and reliably managing their independent physician networks. These arrangements provide us with the ability to reach critical mass in a market, while giving us.
US a faster path to profitability.
We have the flexibility to begin these contracts as a non risk or partial risk with a path to full risk as we professionalize the practices and historically these arrangements have generated margins comparable to those of our owned centers.
With that I will turn it over to Kevin to provide more color on our results and our outlook for 2022.
Thanks, Carlos and good morning.
We reported another quarter of solid revenues, despite COVID-19 headwinds.
As a reminder, our GAAP fourth quarter financials include full quarters of Carmax, IMC SMA and DNS.
Any full year 2021 numbers that I will be providing our pro forma for the business combination between Terramax and I N C in historical periods.
You can find a reconciliation between our GAAP net income and adjusted EBITDA in our press release our earnings presentation.
In addition, as noted in both documents, we expect to disclose in our 10-K, a reclassification of earn out shares related to the business combination as a liability instead of equity for.
For the period from closing to July 9th when the first earn out tranche was earned.
We will be providing restatements of our <unk> and <unk> 2021 financials to reflect this reclassification, which for the year resulted in a onetime noncash net gain of approximately $5 $8 million with no impact to historical revenue adjusted EBITDA or cash flow.
Our total reported revenue was 118 million for the fourth quarter and $403 million for the full year.
Adjusted EBITDA for the quarter was $4 $3 million, bringing adjusted EBITDA for the full year to $13 3 million.
Excluding the estimated impacts of Covid, our adjusted EBITDA would have been $7 4 million for the quarter and $36 4 million for the full year.
Medical expense ratio was 71, 5%.
For Q4, but we believe we would have been 69, 5% normalizing for direct COVID-19 impacts to revenue and external provider costs.
Okay.
For the full year 2020 , one we estimate the total impact of Covid on legacy <unk> and IMC adjusted EBITDA was $23 million.
Roughly split between.
Risk adjustment headwind to revenue and direct COVID-19 related claims costs.
Pro forma for the combination of Carmax and I N C. Despite multiple pandemic waves, we achieved a reported 2021 medical expense ratio under 75%.
And if you were to back out the impacts of Covid to risk based revenues an external provider cost in New York for 2021 would have been below 70% in line with our targeted performance.
As you can see in our earnings presentation Covid utilization. During Q4 was the lowest we've seen in 2021 and represented only a 200 basis point impact to MBR in the quarter.
And despite record positivity rates in hospitalizations across Florida due to the Omicron variant January and February Covid admissions for us were lower than even July and August of last year.
Finally in person P. C P visitation for our Medicare members as well as the acuity re validation rates continue to trend trend strongly through Q4.
Consistent with that data we received from the health plans. So far this year supports a full recovery of risk adjustment impact experienced in 2021.
Now, let me turn to guidance.
We feel well positioned to execute against the membership growth opportunities and expect our Medicare advantage base to end the year at 38000 to 40000 or 13% to 19% growth over December 2021 members.
This represents organic growth, which includes tuck in acquisitions and does not assume contribution from larger scaled acquisitions.
This organic growth will be champion by our restructured sales organization, which has been enhanced with key regional talent.
We have initiatives underway that are designed to boost sales productivity and improve member retention.
Recall, our capacity utilization in our 45 centers is still only a little above 50%.
As such we have ample runway to increase penetration in our current footprint alone.
It is important to note that even in a mature Medicare advantage market like Florida, MMA eligible exist across the spectrum of payment models.
Although revenue P. M. P M from Nan and partial risk members is lower than that of full risk strategically we make little distinction between full partial and non risk members.
We see a path towards getting patients to full risk and driving down medical expenses for all patients with our technology and medical management process, including at our MSL business.
We've recognized partial and non risk revenues and other revenue with no corresponding external provider costs.
As we consolidate members into full risk plans that revenue would step up to the full premium less the payer admin fee and move to Medicare risk revenue.
For that reason GAAP revenue growth may differ from member growth at times, but we believe non risk non full risk members can embed full risk economics that can be unlocked over time.
As Carlos mentioned, we also see opportunities to grow membership at our MSL or affiliate providers.
Just like members at our centers affiliate members can be full partial or non risk.
We find the affiliates can be an efficient way for us to expand our relationships with health plans provide value added services to recruit resource constraint providers and members on a path towards full risk economics.
Our 2022 guidance includes a modest contribution to membership growth from de novo's.
We are being appropriately conservative given entry into our first markets outside of Florida. So I think the related and anthem collaborations can provide tailwind to growth.
By design to Novo members initially will be non risk, earning a nominal flat capitation P. M. P M.
This is intended to mitigate downside risks in an unknown underserved population, while we take the time to document their chronic conditions coach them on basic health habits and address other needs like mental wellness and access to social services.
We've established the two year path to full risk, but have the option to pull that point forward. If we felt confident in being able to manage members profitably earlier.
For these reasons de Novo revenue will be relatively modest in 2022, but we anticipate it will start becoming a topline tailwind in 2023 as member volume ramps and some member panels potentially get converted to full risk.
Our 2022 total revenue guidance of $540 million to $560 million reflects a full recovery of last year's risk adjustment headwinds, partially offset by a partial year of Medicare sequestration in 2022.
In spite of member growth, we think quarterly revenue will be distributed relatively evenly throughout the year driven by the phasing in of sequestration in Q2, and Q3 and by a gradual mix shift from tenured higher P. M. P. M members to newer lower P. M. P M members.
As a reminder, our GAAP revenue recognition adheres to ASC 606 guidelines and does not accrue for risk adjustment benefits that may potentially be earned in future years.
Excluding de Novo losses, we expect 2022 adjusted EBITDA to be between 30 and $40 million.
We refer to this as our core business representing earnings from our current base of 45 clinics in Florida.
Our core centers are at various stages of maturity, but they are profitable and we feel confident in our ability to scale them to historical care Max platform contribution margins around 20%.
At the same time, we continue to rightsize the cord business to reflect cost of operating as a public company and to support our strategic our strategic initiatives.
We incurred six months of public company expenses, including D&O insurance last year. Following our go public in June .
Second as Carlos mentioned, we are redeploying cost savings to boosting benefits and pain are hard working frontline staff.
Finally, we anticipate investing in areas like our call center and field sales reps to execute on growth opportunities in our core markets and then clinical areas to enhance our medical management capabilities.
It's important to remember that these investments have near term impacts to profitability, but can drive meaningful benefits over a six to 12 month timeframe, including accelerated growth and better long term margins.
We believe our core EBITDA guidance strikes an appropriate balance between growth and profitability.
It's a good picture of what the steady state might look like for our de Novo centers.
In connection with our plans to open 15 de Novo's. This year, we believe adjusted EBITDA losses for our de Novo's would be approximately 10 million.
Mostly weighted towards the back half.
As I noted the notable revenues will initially be from non risk arrangements and will be a more material tailwind to growth in 2023.
We have line of sight into dozens of center openings in the coming years, but intend to proceed at a measured success based pace leveraging tenant improvement financing and support capital from our partners to expand in a capital efficient manner.
To round out our capital position. We ended 2021 was $48 million of cash and $117 million of debt under our term loan a.
Our revolver is undrawn and has $40 million of total capacity less approximately 5 million in letters of credit outstanding something to $83 million of total liquidity at the end of the year.
Yeah.
2021 was a transformative year for us despite the challenging environment.
We remain optimistic about the growth ahead of us having conviction in our de Novo strategy and plan to continue to make investments in our platform to execute against our growth goals.
With that I'll turn it back to Carlos for closing remarks.
Thanks, Kevin in closing I want to thank all our dedicated team members, who continue to exceed our expectations with their commitment to growing our business, while always keeping the needs of our members first 2021 was a great opportunity for us to demonstrate our best in class medical performance and medical health.
Outcomes I'm very optimistic about the year ahead as we move into the next phase of our growth strategy.
Operator, we'll now open it up for questions.
Thank you if he would like to ask a question. Please press star one on your telephone keypad.
Information tone will indicate your line is in the question queue.
Press Star two if he would like to remove your question from the queue and fair part you said using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Our first question is from Josh Raskin with Nephron Research. Please proceed.
Hi, Thanks, Good morning, guys.
My first question is how you're thinking about some of these new market expansions and specifically I'm looking for any color on physician recruiting and maybe the cadence of how membership is expected to ramp up through the year.
Hey, Josh.
So we're going to continue we've been very successful in physician recruiting one by partnering.
With community organizations.
Universities and institutions.
Some here in Florida that have reciprocity and some of the institutions and some of the areas in New York and in Tennessee that we're working with additionally.
We are also looking at what we call Aqua hires and what we're finding is that a lot of physicians specifically in the New York area are burnt out and are really looking for another alternative and for the most part we're able to offer more favorable economics for them and the ability to provide medicine in.
And the way that they they had initially wanted an intended so we have not had an issue with with physician recruitment here.
Here in Florida, or as we've contemplated the new markets as well.
And where are they coming from Carlos or are they private practice, mostly.
Yeah, a lot of the Aqua hires are private practices.
So that's just small providers that that may have a small panel of one.
100 M a physicians.
A lot of fee for service and they're just looking for something different those are really great opportunities, where we can just bring them into one of our care Max medical centers. A side benefit is you you you get a small panel that generally comes in follows those positions. So when you start those centers.
Nice to have even a small base.
When you open up.
And the other the other way is a lot of our folks who just finished their residency that are also.
You know there were coming aware of through our relationships with universities and different entities in the community that helped us recruit.
That makes sense and then my second question is just are you seeing a difference in the behavior of year, a Medicare advantage plan partners you know any differences in competition more focus on retention sort of anything that they're doing differently.
Just in general or in different locations. So to make sure I have a question in general just sort of thinking about you know as we move into 2022 right. There's been a lot of conversation around competition and a higher.
The levels of churn and things like that and it's my sense that yeah.
Yeah, they can implement companies like not to say that I'm just curious yeah yeah.
I think the biggest thing that we're seeing the biggest focus on health plans right. Now is on providers that are that are five start providers that really impacts the retention numbers and it also impacts the revenue number significantly for the health plans. So we've seen a lot of support from the National health plans wanting to partner with them.
Because we are five star providers across the board throughout all of our centers. So that has really allowed us to position ourselves very favorably with them and has also provided us the opportunity.
<unk> talked a little bit about at the beginning of the earnings calls on being able to benefit from that Msos auto assignment, where we can help manage that membership and bring them to a five star rating as well.
I think that's the biggest focus.
Our next question is from Andrew Mok.
With UBS. Please proceed.
Hi, Good morning, first on membership <unk> 'twenty, one at MA membership of 33 5000.
Came in above your previous expectations of 30000, what drove the higher than expected membership in the quarter.
Yes. It was it was a combination of various different levels a lot of that was organic growth a lot of a lot of that with some small tuck in acquisitions.
As well as some MSR auto auto assignments as I talked earlier on Joshua's response, you know one of the things that we think will be a key driver for us moving forward is the ability to position ourselves with.
With our payer partners as we enter new markets.
And benefiting from from potential auto assignment.
Got it and when we think about the 15 de Novo clinics. This year, what's the expected cadence of those openings and can you size the de novo losses for the year for us.
Yeah, we havent guided to the cadence you. We just opened up three centers two in Memphis.
One in New York in Brooklyn, We have five other leases coming on in the New York region, a lot of those will be opening up in the middle and end of next year as well and we reaffirm that guidance of opening up 15, 15th centers this year.
Right, Okay and on the financing side can you help us understand how much of the expansion cost is expected to be shared by your strategic partners and maybe talk to your expected cash flow from operations for the year.
Yes, I don't think we.
We're giving guidance on on which centers are gonna be opened specifically with our collaborative relationships. What I would tell you is I think we've you know we've guided to roughly 10 million of losses relate specifically related to handle those those are post opening losses a lot of those are in.
The last half of the year. So you know we won't see I'll tell you won't see a significant drag on the cash flow throughout 'twenty, two it's really going to be really more towards the latter part of Q4.
Yeah, no what I would say as we were working very closely with anthem and identifying all of the regions and all of the states that we discussed are to create a cadence of opening up those centers that we're gonna be opening up.
And partnership.
Got it that's helpful. I guess related to that anther partnership can you provide an update on the group MA contract in New York, how much membership are you expecting from that contract goes here.
Yeah, I think that's you know we're gonna be opportunistic about that as we open up our care Max boxes in our in our locations.
To the extent that there are potential unassigned members in those regions.
You know, we're not factoring any of that growth and in the numbers that we projected but we do think that there's a significant opportunity to benefit from a lot of that membership that would be unassigned unmanaged or are wanting to potentially move to a different to a different provider is still too early to tell.
Got it okay. Thank you that's all the color on the questions.
Our next question is from Jessica <unk> with Piper Sandler. Please proceed.
Hi, Thank you for taking the question so cash burn looks like it stepped up to 21 million in Q4 can you just help us understand maybe what drove that and I guess youre not going to guide 22 cash flow but.
Just any any themes that are consistent from Q4 into 'twenty.
Yeah.
Hey, Jessica it's Kevin Yeah. So we did have some tuck in acquisitions that we did in Q4, which results in about $12 million to $15 million.
Of that cash burn the other thing is as we get reimbursed for our full risk.
Patients that it's typically a three to four month lag.
So the cash flow that's coming in in Q4 is really the activity that happened. If you will in Q3 right. So there's a little bit of a delay between when we earn and win that cash flow happens so that would round up.
The remaining balance.
Okay.
Got it and then just.
And adjusted EBITDA losses anticipated from didn't know about it can you just what is kind of driving that losses. If you guys are not taking risk on those patients until the second year. Thank you.
Yeah. Thanks, Jessica Yeah, it's mostly capacity right. So I think we've taken a conservative approach in building the model out we're not assuming that there's going to be a large ramp in membership.
Typically what we see in our South Florida clinics, and so we've taken a conservative approach. We obviously are going to be you know the facility cost the fixed cost or their physician costs are there, but we do anticipate a steady ramp in membership and so therefore that J curve is just a little steeper than in the early parts of the year as we start to build up capacity.
And we wanted to make sure we took a conservative approach on that you know part of the reason we've partnered with related anthem and several other payers as well as to potentially reduce or shorten the duration of that J curve on path to profitability as we fill up those centers and go through that Opex cost.
That's helpful. If I could just.
And then one more on the anthem group contract in New York is there a sort of hard start date for that contract I, maybe I misunderstood.
A response to a question can you just clarify that had the hard part D. At some point in 2022.
Yeah, we're we're not aware of yet I know that they were there they were going through some.
Through some issues.
It sounds like that was resolved, but we still don't have a are we still don't have a start date for us in on when we're going to be.
Potentially benefiting from that from that arrangement.
As a reminder, this star one on your telephone keypad, if he would like to ask a question. Our next question is from Brian Tranquility with Jefferies. Please proceed.
Hey, good morning, guys.
For all the color today.
And everything going on but one question what are your expectations for Capex requirements in 2022, especially given the 15 de novo openings and I. Appreciate the color you gave on how much liquidity you have but as we think about kind of like your three to five year plan do you think you have ample capital access or liquidity right now to fund all your.
Plans for the next three to five years.
Yeah, Hey, Brian .
It's Kevin Yeah. So you know.
We're obviously always looking at that but it's not it's not an item that's first and foremost for US we do have liquidity on the balance sheets to execute on our near term plans are what I would tell you is we are executing on capital light plan, so leveraging our tenant improvement.
You know relationships as well as the relationships with anthem and related to kind of shorten that J curve. So.
From a capital standpoint, it's going to it's going to be relatively light in 2022, and again a lot of those centers.
Centers are opening the probably half of those centers are opening in the back half of the year. So.
We're comfortable and confident on where we are from a cash standpoint to execute near term.
I appreciate that and then I guess for Kevin or Carlos can you give a little bit more detail and kind of like your msos strategy, specifically, how do we how do you view the size of the opportunity there would have been the early signals in terms of success in converting care optimize flights NSO and then how should we be thinking about the typical timeline for conversion to full risk and that's where it is.
Sure.
Yeah look this is this is a great question. This is something we've talked about for a while now and kind of converting the business into a fully integrated M. S. O offering we've been managing and M. S. O for the past 11 years as I spoke on the call very successfully.
And similar margins that we've been able to achieve in our in our own centers.
So I think that the opportunity is pretty significant a big part of that is you know the ability to demonstrate to providers to be able to take a fragmented book of business Professionalize that book and work on the medical management and medical economics, and really educating those providers and in maintaining our five star status I think.
As we continue to perform.
The opportunities more often than not are going to come from the AR from the health plans and going into new markets, even in existing markets here in Florida, where we're in today and just potentially auto assigning us a significant tranche of membership and an IPA network that they have that's otherwise unmanaged. So we think it could be a pretty significant opportune.
In 2022.
Got it and then Kevin just a couple of quick questions. Here. So any color you can give us a cadence for 'twenty, two EBITDA improvement from acquisitions and synergies and then that's it.
Second part is what leverage covenants on your credit facility.
Yeah sure so from a cadence standpoint.
What I would tell you is obviously were making investments.
To ensure that.
Those new acquisitions adhere to our Paramax models. So that we can reap the benefits of those so I would expect the steady cadence from from an MBR improvement throughout the year.
And then as far as the covenants here I think I think those are filed publicly we have them out there nothing has changed.
Since our amendment that we filed out and.
In December 30th or early January of this year.
Alright I appreciate it thank you.
Yeah.
We have reached end of our question and answer session I would like to turn the conference back over to Carlos for closing comments.
Great well I'd just like to thank everybody for attending our Q4 earnings call today, and we're excited and look forward to 2022. Thank you everyone.
Thank you. This does conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
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