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CEO Jeff Shaner declined to speculate on specific legislation, reiterating that Aveanna's core value of being a cost-saver for the healthcare system positions it as an opportunity, not a risk. CFO Matt Buckhalter guided to 3-5% PDS revenue growth, noting Q4's rate was inflated by a one-time item. Shaner added an internal goal to grow preferred payer contracts from 22 to 30 in 2025, which will continue to drive favorable rate and volume mix.

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CFO Heather Dixon confirmed that cost-saving measures are factored into the 2025 guidance, which is reflected in the full-year $20 million headwind from underperforming facilities being less severe on a run-rate basis than the Q4 2024 impact. Regarding the buyback, CEO Chris Hunter affirmed the intent to use the authorization. CFO Heather Dixon added that the company expects to delever naturally with EBITDA growth and would be comfortable using leverage for repurchases, given the business's strong future cash flow potential.

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CEO Christopher Hunter declined to comment on specific cases but confirmed that all material litigation is disclosed in SEC filings. He noted that the company has retained Kirkland & Ellis as outside counsel for the broader investigations but is limited in what can be discussed publicly about ongoing matters.

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CFO Lynette Walbom projected a 7% same-store revenue increase for the portfolio. President and COO John Gochnour added that home health and hospice could exceed this, while also detailing that about 15% of total revenue has Medicaid exposure, which he believes is relatively safe from cuts. CEO Brent Guerisoli confirmed the earnings ramp would be similar to past years but potentially more aggressive in the back half due to recent large acquisitions. Lynette Walbom projected mid-to-high $40 million in operating cash flow with CapEx levels similar to 2024 in absolute dollars.

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CEO Brent Guerisoli addressed M&A, stating that growth is opportunistic and driven by leadership availability and market strength, with recent senior living deals reflecting that segment's robust performance. President and COO John Gochnour explained the home care revenue increase was due to revenue reallocation for clarity, growth in provider services, and the inclusion of the Hartford management fee. Regarding margins, Mr. Gochnour expressed confidence that their local-leader operating model can offset rate pressures through efficiency, strong clinical outcomes, and better managed care rates.

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Executive Robert Freeman explained that the low end of the EBITDA range incorporates more conservatism around the Inflation Reduction Act's impact on Part D. Other variables include utilization trends and cohort maturation. For membership, he noted that while ex-California markets will grow faster percentage-wise, California is expected to contribute over 50% of net member growth. Freeman confirmed that the care model is replicating well, with ex-California admissions per 1,000 at 144, which is better than the consolidated enterprise.

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CEO Marty Bonick described the M&A pipeline as building and suggested that funding pressures on academic institutions from legislative changes could be a tailwind for JV partnerships. CFO Alfred Lumsdaine provided a broad estimate for 2025 operating cash flow in the 'upper $400 million range' and noted that CapEx would likely be back-half loaded, though less skewed than in 2024.

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CEO Marty Bonick stated that Ardent is approximately 85% contracted for 2025, securing mid-single-digit rate increases, though slightly moderated from prior years. CFO Alfred Lumsdaine added that while the environment is more 'contentious' and denial activity remains high, it has not accelerated sequentially.

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Executive Steve Filton stated that supplemental payments are split relatively evenly between segments and expects a similar split in 2025. He attributed the insurance revenue growth to subscriber gains in both its Medicare Advantage and commercial plans. Regarding litigation, he directed investors to the 10-K, noting that while no specific reserves exist for two large appealed cases, they are factored into the overall actuarial calculations for liability reserves.

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Executive Steve Filton estimated the supplemental payments were split relatively evenly between the two segments and did not expect the split to change significantly in 2025. On legal matters, he referred to the 10-K for details on specific cases and clarified that overall reserves are determined by a third-party actuary's comprehensive analysis, not specific case-by-case accruals for matters on appeal.

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CEO R. Allison confirmed that Addus is not pausing its M&A strategy due to legislative discussions and is actively pursuing deals to meet its 10% annual growth target. CFO Brian Poff outlined a normal seasonal margin progression for 2025, with Q1 as the low point and Q4 as the high point. Poff also estimated a potential for $115-$120 million in free cash flow for 2025, which, absent M&A, would be directed toward debt reduction.

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CFO Brian Poff confirmed the primary Q4 cash flow headwind will be the reversal of a $9.7 million working capital benefit from Q3, with no other unusual items expected. President and COO Brad Bickham stated that while they are having success increasing per-visit rates with home health payers, moving to episodic payments remains a goal. He added that the company has not seen any noticeable changes or increased friction in payer relationships or prior authorizations.

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George Renaudin, President of the Insurance Segment, noted that Medicaid will see modest margin improvement in 2025 but is still affected by the 'J-curve' of new state contracts. He cited Florida as a proof point of a mature state achieving target margins. CEO James Rechtin added that specialty drug spend remains elevated but stable, consistent with the company's forecasts and pricing assumptions.

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CFO Douglas Coltharp detailed approximately $30 million in headwinds explaining the margin comparison, including non-recurring insurance benefits and provider tax impacts from 2024, plus higher 2025 start-up costs. On construction, he noted costs have stabilized around $1.2 million per bed, with the prefab model offering a 25% speed-to-market advantage at a similar cost. He sees low near-term tariff risk due to using U.S. steel and typical exemptions for medical supplies.

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CFO Douglas Coltharp projected 2025 headwinds to include 3-3.5% SWB inflation and noted that $4-5 million in 2024's out-of-period provider tax benefits are unlikely to repeat. On prefabs, he stated the Houston project's construction took ~5 months versus 11-12 for conventional builds. While Houston was cost-neutral, the company targets a 15% cost saving on future projects as the process is refined.

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CEO Joe Zubretsky explained the margin target was a conscious decision to reinvest two years of excess profits into pricing to drive growth and avoid minimum MLR rebates. CFO Mark Keim added that they are purposefully targeting a 79% MCR (vs. 75% in 2024) by setting rate increases 'a couple of hundred basis points' below trend. Keim guided to ~$400 million in 2025 investment income and expects operating cash flow to normalize to a level above net income after being impacted by risk corridor payment timing in 2024.

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President and CEO Joe Zubretsky cautioned that averages can be misleading as corridor protection is state-specific. CFO Mark Keim elaborated that the company started the year with an approximate 200 basis point corridor cushion embedded in its MLR. He expects to have used about half of that during 2024, leaving roughly 100 basis points of cushion on a full-year basis. He noted that the replenishment of this corridor in 2025 depends on the new rate cycle.

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CFO Andrew Asher explained that while quarterly operating cash flow can be volatile, the multi-year average is a better indicator, typically 1.3 to 1.4 times adjusted net income. He confirmed there is no change to the plan for approximately $2 billion in share repurchases in 2025, which is already embedded in guidance, and noted that 2024's cash flow statement did not impede buyback activity.

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CEO Sarah London attributed the moderated growth outlook to the end of redetermination-driven enrollment and the reintroduction of program integrity policies like agent-of-record lock and income verification. CFO Andrew Asher confirmed that a negative retroactive rate adjustment for California was booked in the second quarter's results.

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CFO Brian Evanko explained that being an integrated carrier provides an advantage over standalone competitors, as stop-loss is only one part of a broader client relationship. He clarified that the renewal cycle is weighted toward the beginning of the year, with about two-thirds of stop-loss premiums renewing in Q1. This timing limited the ability to fully reprice for 2025, underpinning the timeline for margin recovery in 2026 and 2027.

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CFO Brian Evanko reported that inpatient costs were broadly in line with expectations, with some deceleration in surgical activity offset by the previously mentioned uptick in specialty drug utilization. Regarding the exchanges, he said 2024 was focused on margin expansion and that for 2025, Cigna's low-double-digit rate increase is on the higher end, but performance will depend on geographic mix and competitor behavior.

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CFO Mike Marks explained that HCA's purchasing organization has long-standing tariff mitigation strategies and that 70% of 2025 supplies are under firm pricing. More details are needed to estimate the impact. Regarding immigration, he stated HCA does not hire undocumented workers and is monitoring any potential impact on the broader labor supply and demand.

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CFO Mike Marks reported that HCA is largely contracted with its major Medicare Advantage payer partners and has been successful in its 2024 renewal cycle. He deferred providing any detail on the quarterly cadence of 2025 earnings until the formal guidance is issued in January.

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Executive John Rex guided to a 'relatively balanced' earnings progression between the first and second half of 2025. For the MLR, he stated the full-year midpoint is 86.5% and the quarterly pattern will be familiar: the first quarter will be below the midpoint and the fourth quarter will be above, with the slope of the trend slightly impacted by known Part D changes.

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Brian Thompson, CEO of UnitedHealthcare, clarified that the three primary cost pressures discussed (Medicaid rates, MA specialty Rx, MA inpatient coding) do not affect the commercial business. Daniel Kueter, CEO of UHC Commercial, added that 2025 pricing for both individual and group products fully respects cost trends, which continue to be driven by provider unit costs, pharmacy costs, and expanded access to behavioral health.

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Fred Burke, an executive, stated that key congressional supporters remain in place, giving him confidence in moving forward with legislative solutions for the IRA. He confirmed the higher acuity trend aligns with broader healthcare, driving more prescriptions, and attributed the branded drug spike primarily to COVID therapies like Paxlovid, not manufacturer strategies. David Morris, an executive, also confirmed the branded drug utilization was due to the COVID effect.

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CFO Suzanne Snapper outlined Q4 expectations, including the impact of the new Medicare rate, steady Medicaid rates, consistent margins, and a large settlement payment affecting cash flow. CEO Barry Port addressed insurer relations, stating that while the issue is real, Ensign's strategy of building trust based on strong clinical outcomes mitigates the impact. He viewed the increased public dialogue on the topic as healthy for the industry.

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Executive Derick Apt explained that the updated EBITDA guidance is driven by strong performance in mature and ramping facilities, not new acquisitions which have a negligible initial impact. He anticipates stronger performance in Q4 due to winter seasonality. Apt reiterated the maturation model for acquisitions, moving from low-single-digit to low-teens EBITDA margins over 36 months. He also noted that stronger-than-expected Medicaid rate increases in states like Kentucky and Colorado contributed to the guidance lift.

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Executive Derick Apt explained that the updated EBITDA guidance is driven by strong performance in mature and ramping facilities, not new acquisitions, which have a negligible initial impact. He noted that occupancy has remained strong without the typical summer seasonality and anticipates a stronger end to the year. Apt detailed the EBITDA margin progression from new (0-3%) to mature (low teens) facilities. He also highlighted that stronger-than-modeled Medicaid rate increases in states like Kentucky, Colorado, and Ohio contributed to the guidance lift.

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Executive Derick Apt clarified that while some embedded EBITDA was realized, new Q1 acquisitions contribute to the future opportunity, keeping the total potential in the $80-$100 million range. He stated that margin fluctuations are driven by M&A timing, not seasonality, and that the strong Q1 free cash flow conversion should remain steady or expand, absent any large, lumpy acquisitions.

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Executive Derick Apt clarified that while PACS is harvesting some of the embedded EBITDA, new Q1 acquisitions also contribute to the potential, keeping the $80M-$100M forward-looking range intact. He stated that margin fluctuations are driven by the pace of acquisitions, not seasonality, and that as facilities mature, both margins and free cash flow expand. He expects the strong cash flow conversion to remain steady or improve, absent lumpy M&A activity.

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