2025 Outlook and Hurricane Impact
Q: Is the 2025 guidance accounting for hurricane impacts?
A: Management confirmed that their 2025 outlook accounts for the ongoing effects of the hurricanes, primarily in North Carolina, with the Tampa facility expected to be operational by the end of 2024. They anticipate being near or slightly above the upper end of their long-term growth range. More details will be provided in January. " , "

Pricing Assumptions for 2025
Q: What are the pricing expectations for 2025?
A: They project a cash net revenue per adjusted admission growth of 2% to 3% in 2025. Commercial payer contracting is progressing well, with mid-single-digit updates and 80% completion for 2025 contracts. " , "

Volume Trends and Payer Mix
Q: How are volume trends and payer mix expected to change?
A: Exchange enrollment growth is expected to moderate to 8% to 10% in 2025, down from over 30% this year. Medicaid volumes are anticipated to flatten as the redetermination process concludes, leading to a generally stable payer mix moving from 2024 to 2025. " , " , "

Labor and OpEx Assumptions
Q: What are the labor and OpEx expectations for next year?
A: They anticipate a stable operating environment for 2025, with wage inflation remaining in the 2.5% to 3.5% range, consistent with 2024 trends. Other cost assumptions are expected to be stable and in line with 2024. " , "

Claim Denial Activity and Two-Midnight Rule
Q: What is the impact of claim denials and the two-midnight rule?
A: Denials were not a material impact in the third quarter. Medicare Advantage admissions increased by 11%, with approximately 2% attributed to the two-midnight rule. They continue to see modest reductions in prior authorization denials but are still facing significant denials from a few large Medicare Advantage payers. "

Medicare Advantage Contracting Environment
Q: How is contracting with Medicare Advantage plans progressing?
A: They are largely contracted across major Medicare Advantage payers and have secured renewals in 2024, maintaining consistency with past agreements. They continue to work through challenges with payer partners but remain committed to being contracted. "

Capital Allocation and Leverage Strategy
Q: How are hurricanes affecting capital allocation and leverage?
A: Despite the hurricanes, they do not plan to alter their long-term capital allocation strategy. Facilities have recovered from past storms and are performing at higher levels. Leverage is at the low end of their target range, and any changes to financial policies will be announced on the first-quarter call. " , "

AI and Technology Investments
Q: What progress is being made with AI and technology investments?
A: They are early in their digital agenda but see promising results, particularly in scheduling, workforce allocation, and revenue cycle management. While not yet material, these initiatives are expected to yield incremental improvements in 2025, 2026, and beyond. "

Resiliency Program and Cost Savings
Q: How is the resiliency program contributing to savings?
A: The program is on track, contributing to a 1.5% reduction in length of stay and margin improvements in labor. These efforts are helping fund investments in technology and innovation while supporting margins. "

Outpatient Surgery Trends
Q: What is driving the decline in outpatient surgery volumes?
A: Declines are focused almost entirely on Medicaid and uninsured patients. Despite lower volumes, revenue per surgical case increased by 7% due to acuity growth and payer mix improvement, leading to higher profitability. They do not anticipate significant changes in this trend next year. "

Bad Debt Impacts from Medicaid Redetermination
Q: How is Medicaid redetermination affecting bad debt?
A: Uninsured volume growth was 7.2%, but bad debt and uninsured costs remain stable. They do not anticipate significant changes moving into next year. " , "

Valesco Update
Q: What is the status of the Valesco integration?
A: The integration is on plan and slightly ahead, though not material to the company. Long-term objectives include improving clinical outcomes, efficiency, and leveraging the group to support technology and growth agendas, turning it into a strategic asset. "

Value-Based Care and Quality Metrics
Q: What impact do quality metrics have on revenue?
A: Quality incentives in commercial contracts are incremental and not material to revenue escalators. However, improving quality outcomes is core to their operations, aiding in attracting physicians and patients. " , "

Insurance Recoveries and CapEx Changes
Q: Any updates on insurance recoveries and CapEx guidance?
A: They anticipate insurance recoveries related to the hurricanes but cannot estimate timing or amounts yet. The change in CapEx guidance is due to the timing of capital projects, with no implications on investment opportunities. "

Professional Fees and Stability
Q: Will professional fees remain stable in 2025?
A: While it's early to provide detailed guidance, they are pleased with efforts to manage professional fees, which have shown decreasing growth rates throughout 2024, contributing to a stable operating environment for next year. " , "