Earnings Call: Q1 2021

May 7, 2021

Ladies and gentlemen, thank you for standing by. Welcome to the Medtac's First Quarter 2021 Earnings Conference Call. At this time, your telephone lines are in a listen only mode. Later, we will have an opportunity for questions and answers with instructions given at that time. As a reminder, your call today is being recorded. I'll now turn the conference call over to your host, Charles Lynch. Please go ahead. Thanks, operator, and good morning, everyone. Welcome to our Q1 earnings call. With me today are Mark Orden, our CEO and Mark Richards, our CFO. I'll quickly read our forward looking statements, and then we'll get into the call. Certain statements and information during this conference call may be deemed to be forward looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward looking statements are based on assumptions and assessments made by MEDNAX's management in light of their experience and assessment of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward looking statements made during this call are made as of today, and MEDNAX undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results, developments and business decisions to differ materially from forward looking statements are described in the company's most recent annual report on Form 10 ks, its quarterly reports on Form 10 Q and its current reports on Form 8 ks, including the sections entitled Risk Factors. In today's remarks by management, we will be discussing non GAAP financial metrics. A reconciliation of these non GAAP financial measures to the most comparable GAAP measures can be found in this morning's earnings press release, our quarterly reports on 10 Q and our annual report on Form 10 ks. With that, I'll turn the call over to Mark Ordaz. Thanks, Charlie, and good morning, everyone. Along with Charlie joining me this morning are Mark Richards, Doctor. Max Hinson, Doctor. Jim Swift, Dominic Andriano and John Tepea. My comments this morning will be in 3 areas: the results we reported this morning the essence of what we do as a company and how we're strengthening and reshaping MEDNAX. I'm of course pleased with our results for the quarter, which were ahead of what we could have foreseen when we talked to you in February. Our patient volume strengthened through the quarter, ramping up through March and into April. I'm sure most of you saw the statistics published this week by the CDC, which indicated sharp downturn in nationwide births in Q4 of 2020. As you know, we experienced the same trajectory at the end of last year, but to a significantly lesser degree. We believe this reflects the typical profile of the hospitals where we provide neonatology services, which tend to be larger in bigger markets and with extensive labor and delivery services, including robust neonatal ICUs. It may also reflect our geographic footprint, which has a heavier weighting in faster growing states and markets. Fast forward to the Q1 and for the roughly 400 hospitals that make up our own birth statistics, this downward trajectory in births did not continue. Adjusting for the leap year, total births at the hospitals where we provide NICU services were essentially unchanged in Q1, which is better than what we reported in late 2020. Lastly, while it's too early to make a final call, the improvement in our payer mix so far suggests that the volatility we experienced in November December could have been more of an anomaly. To give you one quick insight into how this rebound in trends impacted our results, our revenue for the quarter, excluding the CARES money we recorded, was over $30,000,000 ahead of our internal expectations, which translated into meaningful year over year growth and adjusted EBITDA versus the expectation we shared with you in February that it could easily be down versus 2020. Looking ahead to our full year 2021 expectations, we expect that our 2021 adjusted EBITDA will be at or above $220,000,000 I'll explain. I said last quarter that we're looking closely at our 2019 adjusted EBITDA of $265,000,000 before the pandemic as the best available benchmark for how our business is recovering as well as backing out our estimate that the 2020 impact of the pandemic was roughly $40,000,000 to $50,000,000 If you look at the Q1 of 2021, our adjusted EBITDA of $45,000,000 was still below the Q1 of 2019 and when we reported and that's when we also reported $50,000,000 in adjusted EBITDA. And when you exclude the roughly $4,000,000 in contribution from the CARES fund we recorded this quarter, we were roughly 18% below Q1 2019. So while I'm certainly pleased with our results, it's still clear that we're not back to normal and in fact that our Q1 results reflect a similar run rate of COVID impact to what we experienced last year. I don't think this should be surprising given the unique nature of the services we provide and the time lag of this COVID impact and since much of our patient volume is based on pregnancies and childbirth timing. Lastly, I'll add that our operating results for the past two quarters have been unusually volatile. We're also mindful of the still uncertain nature of how fast or consistently we'll see things recover. Now I've talked for a couple of quarters about my confidence that we can achieve a run rate of $270,000,000 in adjusted EBITDA once we move past the impact of COVID-nineteen pandemic. Our results bolster our confidence that we will reach and exceed that run rate. But I'm not confident just because we saw better trends over the past couple of months. I'm confident because we continue to push our operating plans and because we are reshaping how we do things here. Our singular focus at MedMenax is to reinforce our position as a foremost provider of women's and children's healthcare in the markets we serve and to do so efficiently and as the best partner we can be to the patients we serve as well as to the payers and health systems we work with. So let me talk about what we've been focused on and speak to you about our core pediatrics and obstetrics medical groups. It's all about the patient. Since MEDNAX first began caring for mothers and babies in their most challenging times over 40 years ago, the only absolute imperative that our founder and board member, Doctor. Medel, prescribed has been take great care of the patients. Much of my time is spent with our clinicians, hospital partners, prospective partners and of course with my team and I can attest to this unwavering commitment. There is an unshakable conviction at MEDNAK that we always take great care of the patients, everything else will follow. Now that's easier said than done. To take the best care of the patients, the mothers, babies and children requires a lot of work and investment. First, we have to recruit and retain the finest physicians and clinicians. 2nd, to do this, we try to provide more support for our affiliated clinicians than anyone else in our field. 3rd, we have a foremost independent research organization in our field of medicine. Including complex newborn screenings, 1 in 4 babies in the U. S. Are patients of ours. We have more knowledge and data in these areas than anyone else. And since our care is provided, of course, at the very local level, we have to provide more support for our affiliated clinicians in each market where we are in than anyone else. Finally, with Rima's always lead in our field. For example, one of the most critical and active parts of our organization is our clinical support group. This group along with our full support team make sure that we can continue to advance our skill and knowledge for the sake of our patients. In 2 weeks, as we did even during the death of the pandemic last year, we will be holding our Annual Medical Directors meeting. Over 2,000 clinicians will actively participate and will learn from research, quality and clinical experts. On top of these areas, we provide system support, recruiting support and every other kind of help to allow our clinicians to again take great care of the patients. This long winded tour of what we do is what I believe makes us the choice among our nation's hospitals. This is what makes us a leading choice of partner to great medical practice. This is what makes us the leading referral choice of physicians who want their patients to be in our care during their most difficult minutes, days and weeks. I've spoken about our drive to employ our practice data and dashboards to improve patient access. This has and continues to be a paramount importance to us. It's a steady drumbeat. We want to be certain that a patient who needs care from one of our affiliated physicians gets that care as soon as possible. I'm sure anyone on this call can relate to how a medical appointment process can win or lose loyalty. And we know as business leaders and owners the effect that this can have on volume. So we're working with all of our practice to help them make scheduling as driven and efficient as we can, making sure that appointments are kept, immediately rescheduling no shows, back billing cancellations, using our scheduling tools to open additional slots, staggering staff, outreach and referral management. They're all part of this necessary equation. We've already seen improvements in many practices, particularly in terms of higher percentages of kept appointments and reductions in no shows. This focus is also helping us to share best practices and create benchmarking capabilities so we can measure how effective our data has on practice scheduling and every measurable factor beyond just the post COVID recoveries we've recently seen. We also recently welcomed a new leader in telehealth to make us to help make that buzzword a truly active part of what we are for our patients. We all know that a physical visit is not only needed or possible, and we will make our telehealth process fluid to help our patients and attract new patients. This efficiency and effectiveness also applies to our growth plans. Our sales and business development team has reengineered a focused market by market approach that's driven by local intelligence and relationships. We've also added resources to this team to make sure that we're highly integrated, not just in identifying and winning new business, but providing services quickly and seamlessly to the partners who put their trust in us and in pediatrics affiliated physicians. In my view, we've lacked until now 2 other major ingredients to propel us forward. First, our patient relationships have not extended past our subspecialty practices. We need to make sure as well as we can that when a patient needs to see a physician in our network, they can do so as quickly and easily as possible. We're moving forward in pediatric urgent care to develop plans for expansion of their business in markets where we have a significant presence and we will expand with our brand name pediatrics. We believe that providing pediatric primary and urgent care in patient friendly dedicated clinics will allow us to give patients easier access to the exceptional specialists across our organization when they need it and will also help strengthen our relationships with the communities where we provide services and with our hospital partners. And maybe most significantly, we believe nobody knows how to care for babies, children and mothers like we do. And we want to fully extend the types of relationships we currently have. When a mother and child want to find the best primary and urgent care practice, our answer should be and will be right here with us at pediatrics. 2nd, our brands, pediatrics and obstetrics, are not widely known. We do believe our hospital partners know our name very well and more importantly, they know that they can rely on us for what we can do for their patients. But patients learn about us and count on us at their most challenging times and then they move on. Our prospective practices and clinicians do not always think of who we are and what we provide as they slot their career path. To address this and all of our work, we've launched a marketing campaign and its obvious key theme is trust. Our ads are going to be widespread and they're completely authentic. They feature only our own doctors who speak about why people should trust them and trust us. We will continue to reach out to reinforce the very unique importance of pediatrics and obstetrics. In hospitals, pediatrics and obstetrics mean trust, life saving, world class clinicians. Our brand will be known for that. I'll finish this morning where I started. We're working to ensure that MEDNAX can be the best possible partner to the patients we serve and to the physicians, payers and health systems we work with, all driven by our mission to take great care of the patient while at the same time taking great care of the business. This isn't always easy, but we have a long track record of working hard to the best solution when we need to. With that, I'll turn the call over to Mark Bridges to provide some more details. Thanks, Mark, and good morning, everyone. I'll add some detail to our Q1 results, including some of the bench making versus 2019 that Mark mentioned and touch on some of our G and A expectations as we move through the Q2. Lastly, I'll touch on our financial position as it stands today. Turning to the quarter. At the top line, our net revenue grew by $5,500,000 or just over 1% year over year. We recorded about $8,000,000 in revenue from the Provider Relief Fund established by the CARES Act during the quarter. Overall, same unit revenue increased by 2.5% year over year or 3.6% excluding the additional calendar day in February 2020 for the 2020 leap year. Same unit volumes declined 2.5% year over year or 1.4% adjusted for the leap year compared to a 6.6% year over year decline in the 2024 quarter. The table in our press release provides some detail breaking down our hospital based versus office based patient volumes, and I'll add a little more color. First, as Mark mentioned, patient volumes improved throughout the quarter, such that we saw same unit growth in March across all of our service lines, with the exception of PICU and pediatric hospitalist services. 2nd, our NICU days for the quarter as a whole were down slightly more than total births at the hospitals where we provide coverage. This reflects a modest year over year decline in average length of stay, partially offset by a year over year increase in rate of admission. I know that the rate of admission was an area of interest for many of you following our Q4 release. So I'll point out that in Q1, our admit rate reverted to its historical level after being modestly lower through the latter part of 2020. Lastly, I'd like address our 2021 volume relative to 2019. Our first quarter same unit volume was than office based volume. We'll continue to look at this 2 year comparison throughout this year since it's likely that comparisons to 2020 will not be relevant based on the pandemic related disruptions we experienced last year. On the pricing side, we had a couple of favorable items in addition to our usual rate growth, which has been typically in the 1% to 2% range based on managed care and administrative fee revenues. First, the Cares revenue we recorded added a little under 2% to our pricing growth. 2nd, as we detailed in our press release, our payer mix was 110 basis points favorable compared to 2020, which added roughly an additional $5,000,000 in revenue or a little more than 1% to pricing growth for the quarter. On the expense side, our practice level salary, wage and benefit expense was up by 2 points year over year. This increase mostly reflects variable incentive compensation tied to practice level revenues, partially offset by a decrease in malpractice expense, which was higher in 2020. Our G and A expense was down nearly $1,000,000 year over year despite incurring groups. The reimbursement for those expenses is reflected in our investment and other income line item. So there's minimal impact to our adjusted EBITDA, but those costs do inflate our reported G and A expense. In the near term, I'll note that while the radiology PSA arrangement has concluded, we do anticipate that we'll continue providing services under our anesthesiology PSA at least through the Q2 of this year. So you should expect a similar expense and reimbursement dynamic in the second quarter. We expect to wind down the anesthesiology PSA services sometime after the second quarter, at which point we'll also be able to begin winding down the expenses we're incurring and move toward that future state expectation for G and A. Again, there may be some period of time when we're still incurring some of those expenses but not being reimbursed for them. Lastly, our balance sheet reflects our reduced leverage profile and strong liquidity position. We ended the quarter with $270,000,000 in cash and net debt of $730,000,000 implying leverage just north of 3 times. With that, now I'll turn the call back over to Mark. Thanks, Mark. I think we are ready to take questions. Charlie? We'll first go to the line of Kevin Fischbeck with Bank of America. Go ahead please. Okay, great. Thanks. Just wanted to understand a little bit the way that you're thinking about volumes coming back for the rest of the year. I know you guys talked about COVID having an impact on volume. Just trying to see if you could tease out exactly how much you thought about that and the fact that the volumes in the non hospital setting are coming back faster, is that a bullish time for birth coming back? Or is that really more just a reflection of how quickly you're growing that business that was under penetrated? Or I'm trying to understand if that's a unique indicator or not. Well, Kevin, it's Mark. I'd start by saying that, look, I talked about volatility and we've seen in the last two quarters volatility, obviously with an upward trend. So we're trying to see where all of this shapes out. As I mentioned, because of the markets we serve and since we tend to be in larger hospitals Level 3 and Level 4 NICUs, we think that that helps boost what we do in an otherwise sluggish period. But I'm not making a bullish pronouncement here that we don't have a basis to see. We are certainly working the operating initiatives that we talked about in our that are mostly in our ambulatory practices. We think will obviously increase volume and efficiency. So that would have the effect of having them take up a larger part of our business. So I would say that we're doing everything we can to maximize our results in uncharted territory. I might ask Mac to comment Mac Hinton to comment on any thoughts about what we're seeing in our practices that could help shed some light here. Yes. I would agree with Mark. I think the volatility makes it difficult to comment on on definitively on a trend. Historically, the markets we are in have we have been less affected by the total birth rate, because we've tended to be in markets that total national birth rate being down we tended to be in markets that were a little more favorable to this. And certainly on the ambulatory side, there's a whole host of work. Again, the initiatives we've discussed before and the ability to see in real time the data about what's happening in our ambulatory practices, I think are making us significantly more efficient and we believe having drive our unique patient volume. Okay. And then I guess as far as the TSA goes, I understand that you're kind of backing it out for the number, but you mentioned that the reimbursement will drop as the year goes on. It may not be one for 1, that's how quickly you're cutting costs. Does your guidance assume it's a net 0? Or does your guidance assume that there isn't a drag from that in the back half of the year? We really don't have guidance out there, but our ongoing assumption is that as we wind down the TSA, there will be a residual cost component that will flow through the remainder of 2021 where we're not collecting fees for some of those stranded costs. The bulk of what we have here aside from human capital is really IT related costs that are under various contracts. So there will be a lag. It's not one for 1, but it's materially in that range. Yes. And the only other thing I would add looking forward is once we're past TSA, since a lot of the work that we're being doing while we're reimbursed for it, it does take a lot of our team's time and attention as it needs to. So I do think that as we move past it, we will find a lot of ways to be much more efficient. And I would also say going to enable our team to be less distracted by outside interest to be fully focused on our needs. H. So I would expect it's going to be a net positive. Okay. And then my last question, you mentioned about prices down year over year. Was that your view because last year was insulated? Or how do we think about what you saw this quarter? Hi, Kevin. It's on MEDMEL. Yes, Kevin, we were our MEDMEL expense was a little bit above trend in the Q1 last year on a a temporary basis. So what we pointed out is that for this quarter, we were generally in trends and that's where we got the tailwind for this quarter. Nothing unusual in 2020 1. Okay, perfect. Thank you. One moment, please. Our next question will be from A. J. Rice with Credit Suisse. Go ahead. Hi, everybody. A couple of quick questions here. The pickup in the commercial mix, are you rationalizing that that basically the people that made decisions to sort of postpone extending families or starting families were tended to be people that were more commercially covered and maybe therefore a little more sensitive to the economy. And therefore, as you see it come back, you're going to get that pickup in commercial and that's something that will persist? Or is there something about this quarter that drove that commercial mix improvement? What I would say is, as I commented, A. J, that we now look at the results in the latter part of the 4th quarter and say those were more of an anomaly. So I would say that the payer what we see is that the payer mix is more in line with what we've expected before, not that there's a difference, a new trend. So I think that so far, and it's still early in the year, if the Q4 was an anomaly, then we would say that we're going back to the kind of payer mix that we've experienced in the past. Okay. Any update on the deal pipeline and acquisitions? Obviously, with your leverage where it is, you've got plenty of firepower. I think you spent about $6,000,000 in the Q1. Is there anything to comment on what you expect for the rest of the year there? Yes. Actually, I might ask Tim to make Doctor. Swift to make a couple of comments. As I said, we are operating in a more organized fashion I think than ever before with obviously the first time in years where all of our focus in growth is in pediatrics and obstetrics. So we do see a very strong pipeline and I would say a full court press from all of us to make that happen. Jim, you might want to? Yes. I think both on the acquisitive side and on the organic growth side, we've seen in the quarter, especially on the organic growth side, an acceleration in terms of contract signings with our hospital partners. On the acquisitive side, I think we'll see the pipeline is very full right now. In the second quarter, we'll have some and growth in pediatrics in the but and growth in pediatrics and obstetrics was relatively small in 2019 2020. So we do think that's going to become a more meaningful part of our story going forward. Okay. And then just last question. I know in the prepared remarks you're saying you expect 2021 adjusted EBITDA to be at or above 220,000,000 dollars We look back and it looks like in a normal year, who knows what a normal year is, but you get about 15% to 20% of your earnings in the business in Q1. If you were to apply the midpoint of that, you'd probably end up with an EBITDA range given what you reported in Q1 more in the $245,000,000 range. I know you said something about you're just given the volatility being conservative, but is there anything specific that you know now that suggests the trend in the quarters over the course of this year might be different than the normal seasonality or factory? Well, Aimee, it hits an L on the head. We've looked at this every way we can with a very different shade of light. It's not a normal time and 2020 wasn't normal. So we can only go by our current trends and look and compare that to 2019 and say not that we're trying to be conservative, but to say that we don't have a basis to project that what we saw in Q1 2021 is the start of a normal pattern. But as we've gone a month into Q2, we see that we would expect I see that for Q2, the consensus seems to be around $50,000,000 to $55,000,000 of EBITDA. And we think that that's looking like that's about right. So $220,000,000 seems like without providing guidance, seems like not a conservative number, but a justifiable outlook. We don't have a reason to think that yet that the quarters will follow a traditional pattern where we've had the volatility we've had and we're coming off of what we have. So that's why I wouldn't be throwing out numbers in the 240s, 250s. That seems a bit robust. Okay. All right. Thanks a lot. We'll go next to Brian Tanquilut with Jefferies. Go ahead please. Hi, thanks. Jack Sullivan on for Brian. Congrats on a good quarter. I think I just want to piggyback on AJ's M and A question here, but more looking at it from a strategy perspective, seeing what you did with Nightlight, do you think I guess trying to understand how you're thinking about balancing tuck ins and smaller acquisitions that you can then kind of take the blueprint and push it over to the organic growth side of the equation versus maybe slightly more sizable deals given the flexibility you have in the balance sheet now? Well, we're always open to a more sizable deal, but we think that there's not the key to our the key to MEDNAX is to be the best partner in our markets that we possibly can be. And we think that starts with tuck ins and being able to do things that make our relationships with our hospitals really deeper and more lasting. So that's why our focus is absolutely on that to make sure that our core business is as strong as we can be and we're being the best possible partner. And then we have a position in each of these markets so that a clinician or a physician who's looking for a place to land wants it to be with one of our affiliated practices. So that's our thrust there. Now as we've spoken about for the last few quarters, we it's sort of a frustration that we care of mothers and babies and then we wish them well. And we know that there's an enormous opportunity in many of our markets, which we lead in pediatrics and obstetrics to be able to build that part of our business. So strategically, we think it's a major plus to be able to be in a combination of primary and urgent care. We think it's a natural extension of what we do. We think we have more local knowledge about that than anybody else and we have the best relationships with local hospitals than anybody else. So we think that's a major strategic advantage. Certainly, we could do that in a combination of organic growth and acquisitions. The most important thing is to get it right, is to get the combination of primary urgent care right so that we are in great locations in facilities that are really welcoming, that are very patient friendly, where we're backed by systems and apps that enable you to make appointments and do the things that we all know have been vexing before the pandemic and certainly heightened by the pandemic. This is unscripted. So Jim, do you have anything to leave it out here? No. Just and we see that primary care piece fitting nicely into our sub specialty support and the other subspecialty areas where again we that's more of an intermittent road in terms of care. But the primary care and subspecialty care will tie that in with urgent care. Okay, great. No, that's super helpful. I think next one I wanted to touch on just on that delta between births and NICU days. Appreciate all the color on admission rates and length of stay. I guess maybe just looking back to the last quarter, I know you talked about no changes in clinical protocols. I guess, with 3 more months to look back and reflect, any color you can give on that delta normalizing and perhaps what exactly the anomaly was in Q4? It's Charlie. Let me just give a quick point of clarity on that because I know this is a question last quarter. Our rate of admission, the percent of deliveries in hospitals that are admitted into the NICU is in the low to mid teens. And when we discussed rate of admission being down a little bit to the back half of last year. To put that in perspective, in the Q4, our rate of admission was down by 30 basis points. So it was not an exorbitant difference or any kind of significant departure from trend, but it did nonetheless depress our 80 days versus births. So I just want to put that into context. And on a pure percent basis, it had begun trending upwards from the Q2 to Q3, Q3 to Q4, but was still below year over year. And as we get to the Q1 here, it appears to be right back on the trend line, a longer term multiyear trend line and was up year over year. So I hope that's a little bit helpful. I might turn it to Mac to talk about protocols and the like, but just from the statistical side, that's what we saw. Yes. I don't think that we can point to any substantive differences on how babies are evaluated and admitted to the NICU. It's a case by case basis based on best available evidence based medicine that our clinicians are making in bedside. So there's certainly nothing we would point to systemically that would be different than our normal course of business. We'll next go to the line of Dito Chickering with Deutsche Bank. Go ahead please. Good morning guys. Nice quarter on a very challenging quarter. A couple of questions here. The first one is, it seems a lot of aspects of this business are fairly hard to manage, whether it's payer mix or acuity or to your point, pay submissions into the NICU or like to stay in the NICU. Looking at your Q1 guidance you gave us in mid February versus what you guys just posted, obviously huge inflections there on I think mostly driven by the paramedics you're talking about. So I just wanted to see if you can give us some color on how much visibility and control you guys have on EBITDA? Or is it more sort of macro driven sort of who shows up into the hospital? Well, I think it's not different than in the past. I think we can look at our core business trends in our core business. And normally payer mix has a more linear pattern than we've seen. So I think, again, that the last several months saw more volatility than we're accustomed to. As far as being a difficult business to manage, I don't want Matt to hit me up for a raise. But yes, it's there are a lot of components what we do. And but I do think it tends to be especially in the major markets that we're in, I think it tends to be relatively predictable unless we use different tactics, different tactics in both growth and in managing the business with the analytics that we have are the real changes. So I don't think it's not that it's so unpredictable. We obviously are subject to the birth rate in the hospitals that we serve. But beyond that, I think other than what looks like, again, the anomaly in the 4th quarter, it's generally predictable. Now obviously, the wildcard is COVID. And we have aspects of our business, we are like in pediatric intensive care and other areas where children haven't been getting as sick of these as they traditionally do, which is a good thing overall, but not robust for our business. So we'll see how that comes back. So certainly, a pandemic has a lot of barrier effects on the healthcare company. But beyond that, we're trying to just run as steady as we can and with very close contact with our NICUs or ambulatory practices to see how things are shaping up. Okay. And then as a follow-up one, as you think about sort of revenues and costs relative to 2019 levels, you remind us how much salaries or practices increase each year via the contracts with the doctors? What is the mix of the pay of the doctors on fixed versus variable? That'd be great. Yes. When you look at that practice level SWB has a number of components in it and probably the largest is the underlying salaries for the clinicians at all the practices that are part of MEDNAX. There's necessarily going to be some inflationary pressure on that. Clinicians move up within the practice. There is greater seniority and the like, somewhat offset by physician turnover on retirement and the like, but does have an upper track and I would call that comfortably in the low single digits. The other component is variable consent compensation. And for pediatric for Menex as a whole today, and we can follow-up in somewhat greater specifics. But that level of compensation expense in that line is significantly above $100,000,000 And it moves and is tied to practice level financial results. So that's where you see us call out pretty consistently in the Q4 as we saw revenue constraints and declines that they were buffered quite a bit by the variable compensation expense. And here in the Q1, when we did see some return to growth and a specific call out is the provider relief funds that we receive for compensation expenses. So there is a layer of variability in there, and we've been trying to call that out. Okay. And last question for me. I believe you guys are blessing 2nd quarter consensus with a lot of moving parts here. Thanks so much. Yes. On a preliminary basis, without being specific, it just so happens that we're so I don't think I'm going to be in a position to comment on the top line right now. Yes. I think more than anything, what we're trying to do is to be as transparent as we can be. And we just don't want things to run ahead of themselves without analytical basis for it. So we look at we have a better than expected quarter and the natural tendency would be for people to say, well, not just the how why don't we annualize that and look at what you get. And we just don't see the analytical underpinning for that. As we started into the second quarter, we see that we think we'd be right around that low to mid-50s number, which happens to be, as Charlie said, where consensus is falling out. And again, I would still say that it's way too early to think that we're out of the woods. And I'm not saying that to be cute, I'm saying that because it's way too early to say we're out of the woods. So I think that projecting anything meaningfully above 2 20 ish area, to us, we don't see the underpinning for it. I can't rule it out, but we don't see it. So I don't want to get people ahead of themselves from the results of 1 quarter in a volatile period. And speakers, we have no one else queuing up at this time. You may proceed. Great. Well, thank you everybody for your support tuning in this morning. We will keep you posted and stay safe. Ladies and gentlemen, that will conclude your conference call for today. Thank you for your participation and for using AT and T event teleconferencing. You may now disconnect.