InnovAge Holding Corp. (INNV) Earnings Call Transcript & Summary

All right. Good afternoon, everyone. I'm Jamie Perse, the health care provider analyst at Goldman Sachs. We're wrapping up day 2 here of our 42nd Annual Healthcare Conference. And next up, we have InnovAge. We've got with us the Chief Executive Officer, Maureen Hewitt; CFO, Barb Gutierrez; and Chief Medical Officer, Melissa Welch. Thank you all for joining us today.

Thank you. It's a pleasure to be here.

Well, you guys are newer to the public market, so I thought we could start with some introductory questions and just introduce you to some of the newer investors to the story. First, maybe we can start with PACE and just give investors a brief intro to what PACE is, the alternative options that patients might have versus PACE and where you're getting most of your patients from versus those alternatives today.

Sure. I'll kick that off, Jamie. And thank you again for having us here today. So PACE is the program of all-inclusive care for the elderly. So this is a 100% globally capitated program that only serves frail seniors, which means you must be nursing home eligible to come into this program. But it is a relationship between Medicare, Medicaid and ourselves as the provider that come together. Our PACE participants tend to be an average age of about 75 years old on average, approximately. And they're generally in the last 3 to 4 years of life. So this is definitely a nursing home patient who typically has, again, about 9 chronic conditions and will require assistance with at least 3 activities in daily living. So this is a high-acuity patient. This is your grandma and grandpa during probably the most sensitive time in their life and journey. Most of our patients prior to enrolling into PACE you'll see will be coming from the community setting typically, and they avoid -- the reason why they'll come to PACE is really to avoid institutionalization. So when you think about PACE, think about it as an alternative to institutional care or nursing home placement.

Okay. So PACE is, relative to some of the targets you've laid out and what we know about the dual-eligible population, it's a pretty small fraction in terms of penetration. So maybe you could talk about that. What have been some of the barriers to this program becoming more pervasive? And the goals that have been laid out by -- nationally for PACE are basically for a high-teens enrollment growth. Maybe if you can also just touch on why is now the right time to start seeing accelerated PACE enrollments.

Yes. I mean, I'll start off with I want to just mention that PACE has been -- has really shown its athletic ability particularly during a pandemic. As you can imagine, most of the folks we serve seniors, if they were in a nursing facility, would have had a much more challenging time. And what Melissa Welch and her team did is basically keeping people safe, letting them live life on their own terms in their own homes really for as long as possible. So that's really, really the key to it. And I think on the growth side, Barb, I think now is the time. And I say this, and I'll have Barb jump in here as well, is that PACE, there are 2.2 million PACE eligibles in the United States, as you probably are aware. And the program was born out of the nonprofit rollout of the community. And what you're seeing now is, 5 years ago, when we converted this organization from a nonprofit to a for-profit, we also changed federal law, which allowed for-profits to exist in PACE. So prior to that, you didn't see for-profit PACE. So it's still pretty new for being now out in the market over the last 5 years of having access to capital markets having access. So today, including us, there are 6 for-profit providers of PACE. So awareness has been the big factor, I believe, as well. And I think what's happened with the pandemic with what we're doing at InnovAge, creating the awareness, showing frail seniors as an alternative to institutional care, I think, is spiking some of its popularity. I think there are a couple of legislative activities on the forefront as well. We have Senator Bob Casey from Pennsylvania with the PACE Plus Act. Should that move forward, I think you're going to see some additional funding for support of expansion for PACE. You're probably aware of the American Rescue Plan and the American Jobs Plan, again, either citing the onetime 10% additional FMAP for states to get into PACE. And when we've been talking to some new states, they're excited about that opportunity to get a little additional funding in order to bring PACE to their state. And then indirectly really, on some of this, it's allowing potentially for some additional higher rates for Medicaid and for PACE as well indirectly. So as the states are receiving more additional funding, that could result in some additional payment as well for PACE providers because we're cited, we're actually stated. And we are part of the home and community-based line item, so that's very important. On the enrollment part, Barb, do you want to talk a little bit about that?

Sure. So I think, Jamie, to also answer your question relative like why now, we really believe this is an inflection point for PACE. Like being public and just the emphasis on value-based care programs is really an opportunity for PACE. And we believe now is the time for PACE to grow, and we're very excited about growing not best for ourselves but really for the PACE as an industry and to bring that care to more seniors. I think we've talked in the past about our three-pronged growth strategy that really will enable us to grow, and that's really comprised of our organic growth, our de novos and our acquisitions. And I know that you probably have some more detailed questions about that later on. But we really feel like this model has the ability to grow. It's a replicable, scalable model, and now is the time for PACE.

Okay. That's great. Yes, I'll get into some of those growth drivers in just a moment. Sticking high level at some of these legislative items, Maureen, I mean, how would you frame up which of these are most important to you or the biggest potential catalyst? And I've gotten this question myself. I haven't been able to answer it very well, but maybe you can put probabilities to this, I mean, just in your experience dealing with these with PACE legislation. I mean, how would you describe the probabilities of any one of these catalysts coming to fruition?

Yes. I mean, I don't think we all know the complete outcome at this point. I think states are inquiring about and looking for guidance as to how they use the funding and so forth, and they're still in the process of doing that. I think it's an exciting time. And in my 14 years of being here with the organization, this is the first time I've actually seen this much really positive legislation out there. And there's some state legislation as well, Jamie, that's out there. California has had some legislation to make sure PACE is an option, allowing for some flexibility for people in PACE, that the continuing of what we were given in flexibility during the pandemic is going to continue. So California has done a really nice job of putting forth information out there about PACE and encouraging it as well. In Michigan, there's a piece of legislation allowing for another competitor or allow for expansion into Wayne County, Michigan, which is Detroit, for expansion of PACE services as well. So these are some -- I think, some important things. And then not to mention Florida, and as you know, we're expanding to Florida in both Tampa and the Orlando market, which allowed for the expansion of PACE. So these are -- I'm seeing it at the federal. We're seeing it at the state. We're seeing some pretty exciting things. How it all quantifies, we don't know all the -- all of the numbers, and well, it's going to be this much if the rate was this yet. We don't have that information yet. But I think it's fairly exciting that we're actually seeing it. And as I said in my career, and I know Melissa has been in PACE as well, it's really the first time we've seen such enthusiasm around the program.

Okay. That's all very fair. Let's go to the value proposition here. I'll start with the patient side, and I think that will bring us to the payer side and what you're really offering both of them. And Melissa, maybe you can chime in here just on the value proposition to patients. What are some of the key clinical benefits you bring to patients, metrics you track on a clinical basis and improvement versus baseline? And then we'll get into what some of that means for payers after.

Yes, sure. Thank you, Jamie. So the value of PACE, I'm a trained internist, and I practiced for 15 years before I transitioned into the more administrative side of the house. And one of the things that patients value is seamless care, dedicated team of people who care about them, their family, their lives and how they live their lives. And PACE is one of those programs that allows you, as a primary care trained internist, to provide that for what we call our participants. We not only become their provider of service, but we really become allies in their care journey at a really critical point in their lives, supporting not only their needs but also their caregiver needs. PACE is modeled so that there are 11 members of an interdisciplinary team who wrap themselves really around all the care needs of a participant, whether that's outpatient care, whether that's a meal that they need because we cover social determinants of health. Transportation to their appointments, we take care of that. If they get acutely ill and they have to go into the hospital, we're managing not only their in-hospital care in coordination with the in-hospital providers but already thinking about what are their needs as they transition back out of the hospital and back into the home. If they become so debilitated or so complexly ill that they require a skilled nursing facility, we don't disenroll them from PACE. We continue to follow them in that skilled nursing facility and care for all of their needs there. So it really is a seamless coordinated care across the entire continuum of health care services and really addressing social determinants of health as well as general health care. From a metric standpoint, this is obviously a very complex population. So average age is 75, last 3 years of life, 9 chronic condition, average risk score is about 2.5. And over the course of the time that we care for them, our focus is really on keeping them at home, living safely in the community. So we keep our utilization metrics very low, managing bed days very closely, managing their -- reducing the avoidable emergency room use, ensuring that we have -- everyone have advanced directives and plans for end-of-life care, so that we don't incur some of the high costs you can see in many other MA plans, for example, at people at the end of life. We also cover all of their drug needs. So we cover Part A, Part B, Part B and D drugs within the PACE walls. And so we don't have to have participants worrying about out-of-pocket costs for medications that they need to stay healthy. So a lot of different services, a lot of longevity in our program when you look at us compared to other duals plans and favorability not only for the participants but also for the payer side in terms of savings to Medicare and Medicaid business.

Yes. Let's go into that piece a little deeper. In the IPO process, you cited that, I'll call it, high single-digit, low double-digit savings to the payers depending on who the payer is. Can you talk about that a little bit more? I mean, just what are some of the drivers? How sustainable that's been over time? Any reason why that would change going forward?

Yes. We've been very good, and Barb, Maureen, please do jump in, at maintaining very favorable utilization metrics for our population. Since I've been here in the last 2 years and even more, we've had very consistent numbers. In terms of savings, based on some studies done out of Dartmouth, our program, if you compare us, fee-for-service Medicare saves around 8% for the Medicare side. And when you look at Medicaid based on work done by NPA, PACE saves about 13% in terms of us versus a comparable dual population. And on average, our participants live about 1.5 years longer. And we see that borne out in our metrics year-over-year. We have high participant satisfaction, 86% to 89%. And we reduced their inpatient hospitalization and readmission rates significantly, and those numbers have been sustainable over time.

Okay. Great. Let's get into the growth algorithm for the business. Barb, I imagine we'll lean on you here a little bit for these questions. You talked about kind of the 3 categories of growth: your current centers, of which you have 18; the de novo pipeline, you're building some new centers; and also M&A. Let's start with the current centers. Just talk about the capacity you have today. How should we be thinking about the organic growth of existing centers?

Sure. Yes. We have significant capacity in our existing centers both from market capacity. There's a significant amount of PACE eligibles in the markets in which we serve, and we have market capacity as well as physical capacity in our centers. So with our existing centers, we could more than double our census. Our existing centers could give us a census of 14,500 with just our existing centers. We design our centers for the long term. We design them for growth, so that we're not maxing out in a couple of years. So our organic growth is a very significant piece of our growth strategy. And we think over the long term, our existing centers will contribute more than half of that top line growth that we've talked about at a high level.

And you guys have mentioned this already today, but just this awareness factor, I assume that's part of what's driving the growth at existing centers. And you mentioned the IPO might be a catalyst for awareness. Is there anything more empirical you can point to in terms of awareness of PACE and whether that's new referrals or just more patients coming to you in some way? Anything to kind of signal that, that's actually bearing out?

Yes. I think some of our referrals, Jamie, are -- it's interesting, during the pandemic, we saw so much more of an increase in the digital channel of getting participants in the door and getting them enrolled. And we also saw their community organizations like Meals on Wheels sending referrals our way as well. Look, the top referral channels for us are -- is the digital as well as our own participants who have their friends and other folks that they're referring to the program. And we have boots on the ground. We've got business developers in each of these communities talking to people in the community and educating them about PACE. And that, of course, has been very successful as well.

Okay. Let's go to the de novo piece, and there's a lot to talk about here. Maybe first, just remind us what the sort of near-term de novo opportunities are and what these add in terms of that capacity number that you cited, Barb.

Yes, sure. So in the near term, as we disclosed in our last earnings call, we have 5 de novos underway, and we have 3 of them that we believe will be opening in the first part of calendar year '23. And so we have talked about the fact that a couple of them are in Florida. We think that gives us the capacity for some near-term census of about 1,300 participants in Louisville, Kentucky up to 1,800 over the course of those centers. So those are the 3 that we're talking about in the near term. And then in addition to that, we have 2 more in the pipeline that will be right on the heels of those as well. And these...

And how do you -- go ahead. Go ahead.

Sorry, I was just going to add, and these de novo centers are of our mid- to larger-sized centers. So in terms of capacity, definitely, the capacity for them will be upwards of 1,000 to 1,500 participants.

Okay. And I guess, at a high level, I mean, how do you make the decision to open a de novo? We can compare it to M&A, but also, just if you're looking at a particular market, what are the key factors that drive you to say, yes, this is a good market, we should be in it, we need more capacity if it's an existing market that you're in? I mean, just walk us through some of the steps in the decision-making process that leads you to moving ahead with the de novo side.

Sure. Go ahead, Maureen. Do you want to go ahead?

I'll go over the one piece, which is basically when we look at a state, we're going to look at the demographics. We're going to do an analysis of how many PACE eligibles are in that city and community that we're looking to expand. We're going to look at rates. If there's existing Medicaid rates for PACE, we're going to look at that. We're going to look at the political review of that state as well. We're also going to look at what are some of the strategic initiatives of that state Medicaid department as well. So those are just some of the few points that we would look at when we're building a de novo. And of course, real estate falls into that as well and finding a building and so forth and finding the appropriate place to place it. Barb?

Yes, I think you covered all the drivers there, Maureen. So those are really all the drivers that we look at. We study the markets very carefully and put our projections together from there with all of those drivers.

Yes. You mentioned the Medicaid rates, that being one of the determinants as you look at new states. I assume that applies on the M&A side as well, so you can leave that in here. But what do you look for in terms of the rate environment for these new states? And maybe if you could comment on the plans that you have currently to expand, maybe if we do it from a capacity standpoint, how does that change the mix versus your capacity today? So the added capacity, is it coming on at higher rates or lower rates versus your existing capacity is basically the question.

I'll give it a stab, Maureen, then you can jump in. It really -- we have a range of rates, really. So the states all determine their rates based on their individual costs and the comparable cost for the population, their state budgets, et cetera. So we've got quite a range of rates. And I guess I can't -- we can't say that these de novos fall within that range. Certainly, the rates are one factor but not the sole factor when we look at which states we're going into. So the strategy of it is also a very big factor. But I think the rates in these states all fall off in the range of our existing centers.

Okay. That's helpful. And you mentioned this with respect to existing centers. You said you expect more than half of your growth to come from existing centers. If you were to put numbers to the de novo piece, I mean, what percent or however you want to size it should come from de novos over the next 3 to 5 years?

Yes. So more than half, as I said, of that growth, that top line growth will come from the organic growth. Somewhere between 25% and 30% of the growth will come from de novos. We have a very strong de novo strategy and have been very successful in the past with de novos. And then the balance would come from acquisitions as we do some tuck-in acquisitions along the way as well.

Okay. Good segue to M&A. Just remind us the strategy around M&A, the key criteria you look for with assets. I assume all those same things apply related to legislation in the state, the rate environment. But what else do you look for, for the particular centers and assets that you're acquiring?

Sure. I mean, first of all, on the acquisition side, I think it's important to mention that those take a little longer. Most of the acquisition, the potential acquisitions are owned by nonprofit organizations, and their governance takes a little longer from a process standpoint. But certainly, we're going to look at new states that we're not in. We're going to look at tuck-ins and states where we can expand. And the numbers as far as scalability are important to us as we look at acquisitions as well. And we also think about relationships. We think about what are some important relationships we can have if we acquire a PACE program in that area or whether we joint venture with a program as well because it's important that we all work together really for the greater good of serving these frail seniors.

And when you think about your targets here and the companies you've been in conversation with, are these generally lower-performing assets that InnovAge can bring value to because of your experience in this market? Are they high performing and they're quick contributors to growth and margin? Or how would you kind of categorize what you're looking at?

Sure. So most of them are small, and Barb can jump into this, too. So you're looking at an asset that's got 100 or a couple of hundred generally participants to that center. As far as margins are concerned or how they perform financially, they're all a little different. They're about 10 good-sized PACE programs today across the United States that have 1,000-plus participants, and those tend to run a little better when you think about their financial performance. And when you look at some of the smaller ones, sometimes it's a turnaround situation. And I think what we bring to that is an experienced team not just on the clinical side but on the operational side and, of course, on the marketing engine side of our business to really help booster them and help them get to the next level.

Yes. And just -- sorry.

And then -- go ahead.

Yes. And just to add on to that to answer another part of your question there, and that is what Maureen's comment about sales and marketing, one of the things that we really do bring to the table with these acquisitions is our very well-defined sales and marketing engine. And the historical acquisitions that have come under the InnovAge leadership have all grown significantly under our leadership. So even those small programs that Maureen is mentioning, one of the things we really do bring to the table is that ability to grow them and thus become more profitable.

Okay. Last question on this topic, and I realize there's probably limited things you can say, but how should we be thinking about timing for acquisitions and how much capital you might be able to put to work over the next couple of years?

Barb?

Yes. So in terms of our growth strategy, again, the acquisitions, we are targeting about one a year and primarily from the standpoint that a lot of these are the nonprofits that take a little bit longer, and sometimes the time line is a little undetermined how long they would actually close on them. So we're currently targeting approximately one a year. Depending on the size, in terms of the capital, really will depend on the size of the program. If it's a smaller one on the 200 end or a larger one on the 1,000 participants.

And I'm actually going to ask one more follow-up here, and then I'll move on. But just what are the key steps that you have to go through approval processes at the state level, at the federal level? I'm just trying to think about bottlenecks that might slow this down or, I guess, areas where you can bring your expertise into the process and accelerate the M&A pipeline.

Well, there is a process, and sometimes those processes are different in every state. And so if you're acquiring a nonprofit organization, there are steps you have to take in order to do that and converting that organization, which we've done, and we found that most states are very receptive to that. Whether you're building it or whether you're buying it, there are just steps that you have to go through. And there are state rules around that and a process that they set forth particularly on the de novo side and when you can apply and when you get your attestation and then the information having to go to CMS. This is a highly regulated environment that we live in with PACE because of who we care for, rightly so. And so there's just the process that you have to go through. The good news on this is that we're already an existing PACE provider, so we're experienced at doing it. So we often can shave a little time off from that perspective. And we've been very good at executing on the de novo front as well as on the acquisition front. It might take a little longer on the acquisition front, but we have been very -- handled that execution very well.

Okay. And just kind of putting all that together, you said more than half coming from your existing capacity at current centers, 25%, I think, to 30% coming from de novos and then the balance from M&A. When you think about those components and putting it all together, I mean, is sort of a 20-ish percent long-term growth profile achievable with those buckets? Or just how would you frame the longer-term growth profile of the company?

Yes. Sure. So we have said that our targets are in the 20% to 25% range in terms of that long-term growth. So that's the correct range.

Okay. Okay. Great. Let's move to margins for a moment. And you've got center-level margins today. In that kind of 20% to 25% range, that's also your kind of long-term target. So I guess what am I missing here? Are you operating all your centers at long-term sort of mature margins? Is there opportunity within your portfolio even at just some of the centers to bring them up to average? I guess I'm asking for more here. Why not higher center-level margin targets?

Sure. Yes. So the overall average is currently -- we talk about that overall average being around 25%. But the reality is the range in the existing centers is low 20s to plus 30%. and so several things involved in that. Some are not quite mature centers, so they're growing into a higher center-level contribution margin, to your point about the ability to bring some of those up. But there's also a number of factors that influence that, that drives that range. So things like, for example, in New Mexico, there's a gross receipts tax. Certain centers we lease versus own, the rates will influence that. So in states that have lower rates, they're just going to naturally have a lower center-level contribution margin. So there's a number of factors that really drive the variability. So that kind of answers a little bit about our current centers will grow and that those margins, some will improve, and some will stay where they currently are. The other reason for that longer-term range being what it is, is the addition of the de novos. So as we add the de novos, it's going to dilute that margin for a period of time even though our de novos on average hit a positive center-level contribution margin in 12 months. But that's a positive margin. That's not 25% in 12 months. So the addition of the de novos and, even to some extent, the acquisitions, that's going to initially dilute those margins, but they will grow over time.

Okay. So is it fair to summarize that as mature center-level margins for you are probably a little bit higher than that, but there's dilution in the portfolio from other aspects. And so you put it all together, you end up kind of in that range.

That is correct.

Okay. Let's go to something pretty topical. We got news this week from Biogen, their Alzheimer's drug was approved by FDA. You guys have, I think, a large Alzheimer's population. Maybe we could start with that. So what percent of your census today suffers from Alzheimer's?

So 35% of our population have some form of dementia, and amongst that population, 24% will have a diagnosis of Alzheimer's in various stages. As you know, the disease is a progressive disease. Most of our people do have advanced Alzheimer's. The new agent out obviously is targeting early Alzheimer's to reduce the progression. But 35% overall with dementia and 24% of that with Alzheimer's.

Okay. And so when you -- again, just looking at your population, and you mentioned some of the criteria for the drug, what percent might be good candidates for this therapy?

It's going to be hard to say. There's controversy over that drug. I know that it has conditional FDA approval. Medicare has yet to approve it. So we wouldn't even consider use unless we do see that Medicare approval. And we would largely rely on the clinical evidence, who is the target population where the drug can be a benefit. If it really is the early Alzheimer's, I suspect that only a small fraction of our population would likely even be eligible in terms of the drug impact. And when we would look at that clinical evidence on a participant by participant basis before we would make a decision about giving it and offering it to any participant.

Okay. So just sticking with this for a minute here, just walk us through -- I mean, you mentioned the approvals at the Medicare level, you would need to see that. If that comes through, what's the process at the organizational level? I mean, who's making the decision around who to offer it to and how to potentially offer that as a therapy to some proportion of your patients?

Yes, great question. So in case the decision around the care of the individual participant is really an interdisciplinary team decision. So there are 11 members of the interdisciplinary team who would have a conversation about whether this agent would be appropriate for a participant who might have early Alzheimer's. But in a larger organizational sense, given obviously the price point for this drug, the popularity, wanting to make sure that it's used appropriately, considering all those factors, we have a clinical policy guideline committee that looks at things like hep C drugs, high-cost multiple sclerosis drug, high-cost oncologic drugs and drugs like this to ensure that we vet the literature ourselves and come up with recommendations for our interdisciplinary teams on appropriate participants to consider. We would obviously want to engage the participant and the caregiver or their decision maker since this is a condition where the participant may not be able to make that decision so that they have an informed decision about what benefits the drug really can and cannot provide before we would actually prescribe it.

Okay. Okay. That's helpful. Last question on this topic is just around reimbursement. If we think about the next couple of years, obviously, it wouldn't happen overnight, but how would something like this be incorporated into risk scores and eventually reflected in the rates that you're getting presumably in Part D of your reimbursement?

Yes. So...

I'll start -- you want to start, Barb?

No, go ahead. Go ahead.

I'll start with the clinical, and then Barb can take over on the financial. So the drug itself wouldn't necessarily contribute to the risk score, but the diagnosis will contribute to the risk score, so the diagnosis of Alzheimer's along with the other diagnostic components. And then Barb can talk about how that then translates into the revenue side.

Yes. So it could happen in a couple of ways. TBD to get the final determination from CMS, so it could happen in a couple of ways. So in certain instances, a Part D medication, which this would be -- can be covered by, sorry, Part B medication, which this is, can be covered by Part D. And there are examples of that today, and that's part of our kind of B to D reconciliation. So we currently have certain medications today that actually fall into that category. But CMS would have to specifically provide for that guidance. The other way it could be reimbursed is it is somehow built into our capitation payment. And as Melissa said, that condition has a risk adjustment, and potentially that risk adjustment could be adjusted to cover the cost of the drug. So there's a number of ways that this could be paid for, but it will be TBD, I mean, from CMS' direction.

Okay. All right. Fair enough. I know it's recent news, and you guys are probably still digesting it, but I had to kind of ask. Let's go back to other elements of cost, and we talked about the center-level margin, 25-ish percent, some centers higher but some dilution. How should we think about some of the below the line items, just the operating expenses? Long term on a mature basis, is 10% to 15% of operating expenses as a percent of sales a right proxy as we think about the long term? I mean, just any color on how we should bridge from center level margins to longer-term EBITDA?

Yes. So that definitely is the right range. We have said that our targets are in that 10% to 15% range. And that will be influenced by the level of that center-level contribution margin over time as we add new centers as well as any additional investments that we need to make on the G&A side as we grow infrastructure and that being a public company, and then reduced by any leverage that we get on those G&A costs as we grow from some of those fixed costs. So that is the range that we are targeting, a 10% to 15% range EBITDA.

Okay. Okay. Great. And then last question for me just around guidance. You've given guidance for the quarter. You're obviously on a fiscal year, so it's -- that takes us through the end of this fiscal year. Just talk about generally your framework for setting guidance on an annual basis, some of the things you're thinking about for fiscal '22, and that should hopefully bring us to a nice close.

Okay. Yes. So as you mentioned, we're closing in on the end of our fiscal year, and we are having our discussions about next year's budget and internal budget and next year's guidance. Some of the factors that drive that, we are still in discussions with the states in terms of our rates, and so that happens in this fourth quarter. So that's a key driver there, continuing to make the sales and marketing investments to grow our enrollments and then manage our costs and try to predict the new normal post COVID. So those are all the big drivers that we're contemplating right now in advance of having that guidance ready later this summer.

Okay. Great. We'll look forward to that on your next earnings call. And I want to thank all 3 of you for joining us today, Maureen, Melissa and Barb. Hope it was a productive conference for you and look forward to talking again soon.

Jamie, can I give one last update?

Of course.

Thank you. So I just want to give a brief update on the ongoing audits that our organization has going on currently. So as you know, as a health care provider, we're highly regulated. It's a highly regulated industry. And of course, our organization and employees are working hard and fully supporting the audits of our regulators. I want to just make sure that everyone hears that the CMS survey and our Sacramento center is an ongoing and part of the annual process of a new center, and they're -- that it's required to undertake 1 year after opening. So it's kind of a usual and customary survey. There is a Colorado audit from the State of Colorado that's going on currently. That's with Health Care Policy & Finance. And at this time, we don't have any additional insight to that survey at this time. And of course, in cooperation with Health Care Policy & Finance, CMS notified us last week that they will be coming in to the Colorado area, and they'll be focusing on 3 areas of the organization: service delivery requests, appeals and grievances; provisions of service; and quality assessments. And of course, in accordance with standard CMS and audit procedures, we have our initial meeting with CMS that will be scheduled later this month to discuss the objectives and expectations of the audit, but they're working together. So I just wanted to make sure that you all had that update as well.

Yes. I appreciate that. I know we're over time, so I do think we have to cut it off there, but I appreciate that update. And thank you all again for your time today, and we'll be in touch soon.

Thank you, Jamie. Take care.

Thank you.

Thank you. Bye-bye.