Hello everyone and welcome to the MultiPlan Corporation Fourth Quarter 2023 Earnings Conference Call. My name is Bruno and I’ll be operating your call today. [Operator Instructions] I would now hand over to our host, Shawna Gasik, AVP of Investor Relations. Shawna, please go ahead.

The call is being webcast and can be accessed through the Investor Relations section of our website at www.multiplan.com. During our call, we will refer to the supplemental slide deck that is available on the Investor Relations portion of our website, along with the fourth quarter 2023 earnings press release issued earlier this morning. Before we begin, just a couple of reminders. Our remarks and responses to questions today may include forward-looking statements. These forward-looking statements represent management’s beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description on our annual report on Form 10-K and other documents we filed with the SEC. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of MultiPlan’s underlying operating results. An explanation of these non-GAAP measures and reconciliations to the most comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck. With that, I would now like to turn the call over to our Chief Executive Officer, Dale White. Dale?

Thank you, Shawna. Good morning everyone and welcome. On the call with me today is our CFO Jim Head and our incoming CEO, Travis Dalton. As we close out 2023, I am really encouraged by the progress we have made in transforming our business. We began the year with a new growth plan in hand and a clear sense of what we needed to accomplish. Throughout the course of the year, we executed and advanced each of the initiatives under that plan. out-of-network: And we partnered with Echo Health to offer a healthcare payment service which enhances the competitive position of our product suite in the TPA and direct-to-employer channels, and which will add value to each of our service lines as part of a bundled service. We expect to see further benefits from these investments in 2024 and beyond as our growth accelerates. Moreover, these initiatives are just the first in a long pipeline of new products we expect to launch over the next few years as we turn into a product centric organization which aims to amplify and sustain our long-term growth and diversify our revenues. In addition to executing on our growth plan, we continue to put our business on stronger footing by reducing our risk and improving our financial position. The visibility and stability of our revenues increased following the contract renewals with our larger customers at the beginning of the year. The volume environment normalized throughout the year. Our business began growing again in the second half and we delivered on our revenue and adjusted EBITDA expectations for the year. We have continued to be active with our capital allocation and made meaningful strides towards reducing our debt in 2023 by repurchasing or repaying $222 million in face value of our debt, much of which…

And we partnered with Echo Health to offer a healthcare payment service which enhances the competitive position of our product suite in the TPA and direct-to-employer channels, and which will add value to each of our service lines as part of a bundled service. We expect to see further benefits from these investments in 2024 and beyond as our growth accelerates. Moreover, these initiatives are just the first in a long pipeline of new products we expect to launch over the next few years as we turn into a product centric organization which aims to amplify and sustain our long-term growth and diversify our revenues. In addition to executing on our growth plan, we continue to put our business on stronger footing by reducing our risk and improving our financial position. The visibility and stability of our revenues increased following the contract renewals with our larger customers at the beginning of the year. The volume environment normalized throughout the year. Our business began growing again in the second half and we delivered on our revenue and adjusted EBITDA expectations for the year. We have continued to be active with our capital allocation and made meaningful strides towards reducing our debt in 2023 by repurchasing or repaying $222 million in face value of our debt, much of which was at a discount, including $25 million of our 6% convertible PIK notes in the fourth quarter. In total, we have repurchased or repaid $362 million at face value of debt over the last five quarters. Reducing debt remains among our highest priorities and we expect to strengthen our balance sheet and optimize our capital structure as we grow revenues and free cash flow over the next several years. So we made a lot of progress in 2023 and we did all of…

Next is our objective to deepen the value proposition of all of our core service lines. The initiatives listed on Slide 12 are over and above the work we do every day to improve the performance of our products. Within our analytics based services, our focus in 2024 is to fully launch the NSA portal and rules based processing enhancements that I mentioned earlier. And we also have growing interest from our customers with fully insured business and services that aid in meeting State Surprise Bill requirements. And it's not shown here, but we are also monitoring the regulatory rulemaking involving QPA administration and advanced explanation of benefits, which subject to timing, could very well lead to additional product development in 2024. In addition to NSA services, we are introducing a new reference based pricing option that considers meeting rates in the market, capitalizing on the capabilities we've developed for NSA compliance. We are introducing more comprehensive claim editing which features service level tiers for first pass, subsequent pass and post-payment needs, and we will drive adoption of our new B2B payment service through product bundling sales and marketing. Our final objective is to enhance and expand the Data & Decision Science Service line we introduced in mid-2023. Efforts are underway across all of the products in this line, but our highest priorities are clinical risk models and plan optics. Our risk models are unique in their interpretability, which means we not only score risk, but we provide the dominant factors that comprise the score so our customers can take more immediate action. In 2024, we are introducing additional models focused on high cost claimants to better inform stop loss coverages and on the senior population to add value for Medicare Advantage plans. We are also advancing the product roadmap…

Thank you Dale, and hello to everyone on the call. Let me start by saying how excited I am to be joining MultiPlan. As I considered the opportunity to lead this company, I reached three conclusions that persuaded me that this was exactly the company where I can make a difference and where I wanted to be. First, MultiPlan has great customers, a world class team, solutions that add value and an important mission to bend the cost curve in healthcare. I can get behind that. Second, we have industry leading technology and data assets that will enable us to significantly expand and accelerate revenue growth by launching new products and services that are natural extensions of the baseline products we provide to our existing customers and which will prepare us to further expand innovative products in new vertical markets. Finally, it's clear to me that we have a strategy and the opportunity to position the company for accelerating growth by leveraging these considerable assets. It's my intention to build upon these successes. I'm confident that my experience scaling complex healthcare and technology environments while leveraging products and data to drive top line growth will be a strong asset as we seek to fortify and expand from our core, look at new markets and pursue data and decision science solutions that add value to our customers and the members that they serve. So for me, joining MultiPlan is about my commitment to this important mission. It's about my passion for improving the quality, cost and access to healthcare in our nation and it's about leading a great team as we seek to achieve maximum impact. In the coming quarters, you will hear more from me about how we plan to increase clarity of purpose, enhance alignment of our resources and…

Travis, thank you. We are thrilled that you are on board. I want to remind everyone that I will still be around. I will remain active as Executive Chair of the company and I'm glad to have additional time and capacity to devote to supporting and deepening our key customer relationships and leveraging those relationships to help Travis drive our transformation forward. With that, I'd like to turn the call over to Jim to take you through the financial results. Jim?

Thanks Dale and good morning everyone. Before I begin, let me join Dale in welcoming Travis to the MultiPlan team and share with you how excited the senior leadership team is to partner with Travis for the next chapter in our transformation. This being Dale's last earnings call, I want to thank him for his vision and leadership and wish him well in his new role at the company. Today, I'll walk through the financial results for the fourth quarter and full year 2023, then I'll turn to our outlook for 2024 and I'll close with a review of our balance sheet and our plans for capital allocation. As shown on Page 5 of the supplemental deck, fourth quarter revenue was $244.1 million, an increase of 0.5% over Q3, and in line with our Q4 guidance. Compared to the prior year's fourth quarter revenue increased 1.3% despite a difficult comparison given the impact of contract renewals with our larger customers, which were not yet in our run rate in Q4 2022. For the full year 2023, total revenues were $961.5 million, within the narrowed range of guidance provided on our Q3 earnings call, and down 10.9% from the prior year. Turning to revenues by service line as shown on Page 6 of the supplemental deck, relative to Q3 2023, network based revenues declined 8.1% or $4.6 million, driven largely by our complementary network business, which had some customer adjustments, which I will discuss in a moment.

Excluding a $3.8 million contribution to revenues from BST, which is reported in our analytics based revenues fourth quarter consolidated revenues were $240.3 million, up slightly from the prior quarter. For full year 2023, network based revenues declined 8.9%, analytics based revenues declined 12.3%, and Payment and Revenue Integrity revenues declined 6.9%. These year-over-year declines are largely attributed to the impact of the contract renewals with larger customers in the beginning of 2023 and also due to a sharp decline in COVID-related claim savings, which had spiked during the first half of 2022 and dropped off significantly in the first half of 2023. Excluding a $9.5 million contribution to revenues from nearly eight months of owning BST, full year 2023 revenues were $952.0 million, down 11.8%. The fourth quarter was characterized by a further normalization of volumes with broad based strength across categories. As shown on Page 7 of the supplemental deck, total fourth quarter billed charges increased 2% sequentially to $43.4 billion, and identified potential savings increased 2.3% sequentially to $5.9 billion. In our core commercial health plan segment, billed charges were up 5% sequentially to $19.4 billion and identified potential savings increased 2.2% sequentially to $5.6 billion. This sequential growth in volumes was broad based across both physician and facilities claims, and factoring in our typical claims lag was relatively consistent with the trends in the third and fourth quarters that were reported by some of the publicly traded payers and hospital operators. Also, we have seen strong NSA volumes through our platform in Q4, exclusive of the downstream IDR volumes, which also increased significantly in the second half of the year. The strength of our volumes was offset by a decline in revenues as a percentage of our identified savings or revenue yield. As shown on Page…

Jim, thanks. To our employees, let me echo Jim's note of thanks for your tremendous efforts this year and for every one of the 20-plus years I have been with the company. Today has been my honor and privilege to work with you, to deliver on our important mission, and I'm enormously proud of what we have built together. Let me also say how important it was for me that our next CEO be as passionate about healthcare affordability as MultiPlan has always been. Travis brings innovation, experience and energy that will drive our mission even further and I couldn't be more excited for what the future brings under his leadership. I am confident that MultiPlan is in a great position and in capable hands. And now, I'll turn the call back to Bruno. Bruno, please open the call for any questions. Thank you.

Surely, thank you. [Operator Instructions] Our first question comes from Joshua Raskin from Nephron Research. Joshua, you may proceed with your question.

Hi, thanks, good morning. So the chart on the 2024 revenue bridge was very helpful. It looks like your core out-of-network processing is still the biggest growth driver, call it, $15 million or $30 million -- $15 million to $30 million of growth. Can you tell us what the out-of-network segment impact was in 2023 in terms of how much of a detractor that was and then were any other buckets net negative in 2023?

Well, I think in 2023, Josh, if you kind of go back to what we did a year ago, one of the biggest overarching headwinds was the contract renewals, that was about a 9% headwind if memory serves. And that washed across all of our products, which are essentially in the core and then payment integrity for the most part. So the compare is a little bit different. I think what you might say is in our core out-of-network business against the core base, it's about closer to 200 basis points to 400 basis points of growth, which is a little bit below our ambition we put out at Investor Day, but pretty consistent. And so we've got a clean compare this year. I would kind of look at it that way, Josh. And then what we've got is a series of layers of some of the new growth drivers like HST and Data and Decision Science that are going to add to that.

Okay. All right. I think I got that. And then I know you mentioned a little bit of this on the call, but the current period appears you're seeing some pressure on utilization more so in the senior market, maybe more MA than fee-for-service. But are you seeing more demand on the Medicare side for cost containment products or some of your newly acquired products that were focused a little bit more on that market, are those resonating better at this point?

Yes, Josh, it's Dale. Yes, look, obviously, there -- you've seen all the changes that are happening within Medicare Advantage from CMS and the pressure around price and risk is heightening. So we feel our Data and Decision Sciences line of business is tailored to meet that need and that demand. So we're doing a lot -- we've done a lot of work in 2023, and we'll continue to do that work in 2024 around tailoring our risk models for the senior population. And we're excited about that opportunity as we move forward throughout 2024.

Okay. And then just last one from me, Dale. You mentioned curated networks as a potential future opportunity. And I'm curious, if you could just give us some examples or maybe a little bit more of what that means. Is that geographically based? Is that sort of segment based? Is that a specific type of customer or chronic disease? I'm just curious what curated networks look like?

Yes. I think that -- it's a great question. The curated network concept is focused on bringing the best providers to the table from a cost and quality perspective and managing the utilization through that provider. It's not necessarily based by clinical specialty, Josh. It's more based on looking at that instead of having a large all-inclusive network, it's really zeroing in on those providers who can deliver on cost and on quality and provide the best clinical outcomes for employers and the best cost outcomes for employers. That's our plan. It is geographic specific, meaning we're going to target certain markets as opposed to doing something nationally, but we're going to zero in on those markets where we believe there is opportunity and demand and interest for a network like that.

Okay, perfect. Thank you.

[Operator Instructions] Our next question comes from Luismario Higuera from Citigroup. Luis, your line is now open.

Hey, this is Luis on for Daniel Grosslight. I just had a question on your corpus guide. You mentioned back in your Investor Day that you're making about like 4% to 5% medical cost inflation annually. How does this year's guide compared to and how should we think about that?

I think we have been longer -- I think we think about the longer term as kind of 4% to 5%. I think near-term we're not even expecting that inside our guide. And one of the reasons why it just lags, there's a big set of renewals coming up throughout the healthcare ecosystem over the course of the next year where things have started to tick upwards, but we haven't seen the full effect of that. So, I would say we're conservative on healthcare inflation. We're also conservative on utilization. I would just comment on the utilization front. And pretty consistently, we saw an uptick in the first half and continued normalization throughout the year kind of to a new level. We did not bake in our guidance any material upswing in utilization. And I think that's consistent with what we're seeing from the hospitals, et cetera, which is some good year-over-year compares, but I'm not sure from a labor perspective, from a capacity perspective, they have room for another dramatic uptick. So I think we're being pretty conservative on both of those components.

We currently have no further questions and that concludes today's call. Ladies and gentlemen, thank you for joining. You may now disconnect your lines. Thank you.

Thank you.