Updated Guidance and Supplemental Payments
Q: How has updated guidance accounted for supplemental payments and second half expectations?
A: Steve Filton explained that the revised guidance includes the first half's outperformance and ongoing supplemental payment programs but excludes any potential benefits from Tennessee or Washington D.C. ( " , " ). He stated that about half of the guidance raise is due to supplemental payments, increasing expected Medicaid supplemental payments from about $810 million to the low to mid-$900 million range for the year ( " , " ).

Medicaid Supplemental Payments Impact
Q: What is the expected financial impact of new Medicaid supplemental programs in Tennessee and Washington D.C.?
A: The potential annual benefit from the Tennessee program is estimated between $42 million and $56 million, and from Washington D.C., between $80 million and $90 million ( " ). These programs are pending CMS approval and could be retroactive, with Tennessee possibly retroactive to July 2024 and D.C. to October 2024 ( " ).

Behavioral Volume Performance
Q: How have behavioral volumes performed and what's the outlook?
A: Behavioral patient days increased by 1.4% in Q2, below expectations. Challenges include labor vacancies, Medicaid disenrollments affecting adolescent volumes, and specific facility issues. Steve Filton expressed confidence in reaching the 3% patient day growth target by year-end, believing underlying demand remains strong ( " , " , " ).

Margins and Cost Management
Q: What steps are being taken to improve margins and return to pre-COVID levels?
A: Marc Miller highlighted plans to incrementally improve margins by addressing volume issues and better expense management. Progress has been made over the past 12 months, and continuing this trajectory is expected to achieve desired margins in the near future ( " ).

Acute Pricing and Payer Mix
Q: What's affecting acute care pricing and payer mix?
A: Adjusted admission growth was 3.4% in Q2, with surgical volumes flattening due to difficult comparisons to last year. Steve Filton noted a return to pre-pandemic patterns and expects same-store revenue growth of 5% to 6%, evenly split between price and volume, excluding supplemental payments ( " ).

Impact of Medicaid Redeterminations
Q: How are Medicaid redeterminations affecting the business?
A: Medicaid redeterminations have led to increased commercial exchange patients on the acute side, rising from 4% to 5% of adjusted admissions, slightly benefiting revenue. In behavioral facilities, particularly in Southern states, disenrollments have negatively impacted volumes, especially among adolescents, due to delays in reenrollment and higher copays and deductibles ( " , " ).

Labor Dynamics and Staffing
Q: How are labor challenges being addressed to meet volume demands?
A: Turnover rates have improved to the low to mid-20% in acute care, returning to pre-pandemic levels ( " ). Efforts focus on reducing turnover through mentorship programs and career development to retain staff. Net hires have been positive for 18 to 24 months, aiming to meet the 3% volume growth target in behavioral facilities by year-end ( " , " ).

Two-Midnight Rule Impact
Q: Is the Two-Midnight Rule change affecting the business?
A: Steve Filton stated they have been unable to identify any significant impact from the Two-Midnight Rule change on metrics like denials or patient status changes, differing from some peers' observations ( " ).

Share Repurchase Program
Q: What is the plan for the share repurchase program?
A: The company intends to spend around $500 million to $600 million of free cash flow on share repurchases this year, with the recent authorization supporting this plan ( " ).

Health Plan Business Performance
Q: How is the health plan business performing, and is it core to UHS?
A: The health plan operates at breakeven but provides narrow networks and aligns with Medicare physicians, funneling patients to UHS facilities. It remains a strategic part of UHS's operations in acute care markets ( " ).