Welcome to the HCA Healthcare Second Quarter 2020 Conference Call. Today's call is being recorded. After the speakers’ remarks, there will be a question-and-answer session [Operator Instructions]. At this time, for opening remarks and instructions, I would like to turn the call over to Vice President of Investor Relations, Mr. Mark Kimbrough. Please go ahead, sir.

Thank you, Ian. And good morning and welcome to everyone on today's call and our webcast. With me this morning is our CEO, Sam Hazen and CFO, Bill Rutherford, as well Dr. Jon Perlin, our Chief Medical Officer. Sam and Bill will provide comments on the company's second quarter results and then we'll open up for questions. Before I turn the call over to Sam, let me remind everyone that should today's call contain any forward-looking statements that are based on management's current expectations, numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. More information on forward-looking statements and these factors are listed in today's press release and our various SEC filings. On this morning's call, we may reference measures such as adjusted EBITDA and net income attributable to HCA Healthcare, Inc., excluding losses or gains on sales of facilities, which are non-GAAP financial measures. A table providing supplemental information on adjusted EBITDA and reconciling to net income attributable to HCA Healthcare, Inc. to adjusted EBITDA is included in today's second quarter earnings release. This morning's call is being recorded and a replay of the call will be available later today. I will now turn the call over to Sam.

Good morning. And thank you for joining today’s call. The second quarter was a remarkable 91 days for the company, possibly the most remarkable I've experienced in my 37 years with the organization. It started with a level of uncertainty and uneasiness that was very high as the pandemic began, the middle part was filled with example, after example of people inside our company, stepping up and delivering for each other and delivering for our patients. All the while strengthening our culture of taking care of others in the right way, whenever we are needed. And finally, it ended with the prowess of our teams on display, showing their abilities to manage relationships with their employees, respond to the needs of their physicians, deliver on operational adjustments that were necessary, given the circumstances and build clinical capabilities that not only give us more confidence in responding effectively to the ongoing challenges and resurgence of this pandemic, but provide us capabilities to improve our services and create even more value in the future. I've never been more proud to work with this company that I am now. As a shareholder, I hope you are equally as proud to be associated with HCA Healthcare. From day one, we addressed the pandemic with two clear objectives. The first was to protect our people that is keep them safe and keep them employed, giving them the assurances they needed both at work and at home. The second was to protect the company and that is protecting its financial positions, so we can continue to serve our communities for years to come. Both of these objectives endure today and directed by the guiding principles we laid out at the beginning of the pandemic, they allow us to provide the care patients deserve. Thus far, we…

Thank you, Sam, and good morning, everyone. Let me provide some additional information on the quarter. As we expected, the second quarter saw progressive improvement each month of the quarter as we evolved from the initial response phase early in the quarter, and then enter the reboot phase during the second half of the quarter. We saw an improvement from the middle of April, which was our low volume point throughout the quarter in most every volume statistic. Our same facility admissions declined 12.8% in the quarter compared to the prior year period, and the monthly progression as Sam mentioned in his comments on admissions occurred with most of our key volume indicators. Same facility inpatient surgeries declined 15.7% in the quarter, with April declining about 38%, May was down 12% and June was up 3% over the prior year. Same facility hospital-based outpatient surgeries were down about 27% in the quarter, with April down about 65%, May down about 19% in June was up 4% from the prior year. Our outpatient surgeries in our ambulatory surgery centers were down about 40% in the quarter with April down 85% May down 32% and June was up 1% over the prior year. Our teams did an incredible job of managing our cost structure during this period of significant volume and revenue fluctuation during the quarter. We began adjusting most of our discretionary and variable expenses in late March and April, when the volume declines were most pronounced. We were able to sustain many of the expense improvements throughout the quarter as the volumes began to improve in May and June. As reflected in our financial statements, our reported revenues declined about $1.5 billion, or 12.2% in the quarter from the prior year period. Our salaries and benefits supplies and other operating…

Okay, well thank you, Bill. We will now start the question and answer session. Ian, would you please give instructions to those who would like to get into the queue.

Thanks. Good morning. I wanted to ask about decremental margins and what you're seeing in COVID effective phase to go into late-June and into July. So, appreciate all the color. The decremental margins were incredibly strong this quarter. I think they're only down about 30% -- near about 30%. Just curious if that's something that you think is sustainable going forward. And then can you give us some color on what's happening in Florida and Texas in late June into July as in terms of volumes and payer mix? We've seen significant pick up in the COVID cases there. Thanks.

Hey, good morning, Justin. So, let me start with that and I'll pass Sam to add in. So, as we mentioned, I think the acuity of the patients that returned were a higher than they were pre-pandemic. As we saw some of our higher acuity patients in cardiology, neurosciences and orthopedics returned. And the lower acuity patients were maybe the ones that will take a little bit longer to return. In addition, we had favorable kind of ICU and NICU days. There was a high that contributed to the acuity. And so, I do think that the margin generations of those higher acuity patients as they return were higher than normal and what they were pre-pandemic. As we mentioned throughout our prepared remarks, we're very pleased with the response of our operating teams and the efforts we are able to make around discretionary costs and managing the variable cost. And we're very pleased with how we finished the quarter on that. Sam, do you want to give any comments on going forward?

Well, let me speak to Texas and Florida. Those are the two states where we have seen COVID-19 resurgence at its greatest level. We have other components of our company where we are seeing COVID volumes, but they're not to the level that we had seen in Texas and are seeing in Florida. In Texas which was a little bit ahead of Florida, if you will, with respect to the resurgence. I think the company has done an incredible job at responding to the needs of our communities, as have our competitors. And I think it's a testament to the healthcare system in the country, and its ability to respond to these challenges from one place to the other. What we've seen in Texas is that our volume for COVID patients have peaked and actually started to decline. Whereas in Florida, we've seen a flattening out in a very modest growth rate over the last week. And we hope Florida is maybe a week behind what's going on inside of Texas. In total, our activity levels are up slightly in July as compared to June with respect to overall in patient census. Clearly with our decision to restrict elective care to manage our response to the community, we have seen a slowdown in surgical activities. But we anticipate recovering that at some point in the future as we get better visibility into the COVID cases in the different communities. Our teams have done an incredible job as I mentioned in my comments. Our physicians have supported our teams incredibly well. And then our corporate and other teams have made capabilities available to our institutions, allowing us to respond very appropriately. So, I'm really pleased with our outcomes. And we do believe that we're going to have to manage through COVID again. It's not something that's going to go away necessarily. But our ability to scale up, scale down, scale up, I think is now been proven. We've gained greater confidence in our ability to run our business, and at the same time respond to surges. And so, the execution and the agility that our facilities and our teams have showed over this period of time helps us in developing learnings that we will be able to advance as we go forward on into this year.

Your next question comes from line of Gary Taylor of JPMorgan. Your line is open.

Hi, thank you. Really impressive expense management in the quarter. It's really commendable. I guess I just want to follow up a little bit and understand what you're saying. I think I understand that too. So, if we look at this improving trajectory of revenue and volume through the quarter. And we get to July, you're saying inpatient census is up but I guess COVID is fueling some of that. And surgical volume is down. Is that really, I mean, just really happening sort of in Texas and Florida and not in the hotspots? Is there diversity of that experience even in those states? And then when we look at the rest of the portfolio that perhaps isn't being as hit by the resurgence as much. Are you still generally seeing an improving trajectory out of June into July? So, I guess we're trying to get at is there any sort of pent-up demand that's now diminishing or is it really just the virus that's causing some of the surgical activity to slowdown in some of those hotspots?

All right, thanks, Gary. Well, we have not restricted elective procedures or surgeries in markets where we don't have a need to respond to COVID. So obviously, in Texas it started out, in Houston in the Valley and those were the first markets where we implemented our elective procedure decisions. Then as it expanded to San Antonio, we replicated that in that market so it’s sequenced based upon the circumstances and it will unsequence if you will, based upon the circumstances. So, in Dallas, for example which is not as significantly impacted by COVID, we've started to relax some of our procedure, requirements and restrictions in order to deal with the circumstances in those communities. So, we're going to see some natural ebb and flow in Florida similarly and then if we were to see it somewhere else, we would use those experiences that we learned in Texas, in Miami as an example to manage the situation. And this is what we're required to do with respect to our responsibilities as community infrastructure. We take it seriously and we think we've been able to prove to ourselves and prove to the community that we can respond effectively to the needs of our patients whatever COVID does surface at a level that’s much greater than what we were seeing in April and May. And we had some of this activity in June in some markets where we had COVID surge going on. It wasn’t as hot profile as what it was in Texas and Florida. Again, we were managing through that within our portfolio similarly in learning from that Gary and putting those learnings into our experiences now. And I'm confident that we will continue to learn and gain greater capabilities in managing the volume requirements in the ups and downs of this particular pandemic.

Your next question comes from a line of A.J. Rice of Credit Suisse. Your line is open.

Hi, everybody. Yes, great job on the crazy quarter. Maybe just ask about the backlog or the pent-up demand, I don't know whether there’s any way that you're able to assess maybe through your doctor practices what that looks like, is that something that's going to go through the rest of the year? Could that spill over into next year? And there's been discussion about rebuilding a new pipeline not just working through the backlog; can you talk about your sense of people doing the primary care and to build the case backlog for surgeries in orthopedics and all that stuff? And then if I could just slip one other in, Bill mentioned the CapEx decline, can you comment on what, where you're pulling back on CapEx and should we assume that you’ll have to do more next year as a result of pulling back this year or these things that will permanently go away? Thanks.

Okay, A.J. it’s Sam. Thank you for the question. What I'll give you some observations. It's really difficult for us to pinpoint precisely what's going on in these circumstances. But we believe that approximately 40% to 50% of the deferred cases during the six to seven week period where most of our company was restricted on what we can do have been recaptured. And by recaptured, I mean either done or scheduled. So, the other 40% to 50% that hasn't been recaptured, we don't have visibility into the timing of that yet. Our positions continue to build back their practices just as we're building back our business in a way that should hopefully recapture some of that gap that I just mentioned, but we don't have great visibility into that as of yet. What I will tell you also is that, our ambulatory surgery centers were slower in their ramp up because they were at a complete stop versus our hospitals, which were continuing to run during the pandemic period. And so, they have ramped a little bit slower as Bill alluded to in his comment. What we saw within our surgery was procedures, orthopedic, spine, general surgery recovered quicker and stronger. We also saw a slower recovery in our GI procedures and certain diagnostic categories, which started to ramp significantly at the end of June, which gives us a belief that downstream those diagnostic patients and encounters will ultimately require some level of therapy, whether it's surgery or something else. So, we have some insights into it. We believe we'll need through the third quarter, probably through the fourth quarter to have a better sense of what the full recapture was of the cases that were in fact deferred. In cardiology, components of our cardiology business recovered really well, mainly electrophysiology and the procedures in that particular category. So, we had a mixed bag of events in the second quarter. And there are some indications of decent recovery in certain service lines, still more to come in others, and we will continue to monitor and try to gain insights from within our physician practices, whether they're affiliated or employed and within the different markets that we think are more advanced in their recovery period than others. And let that inform some of our observations further as we go into this next quarter.

Yes, AJ, this is Bill. We think it was prudent at the time to reduce our capital spending, as we talked about last quarter and updated on this quarter, most of those projects were either deferral or slowing down some activity that was in the pipeline, as well as some deferral of our IT capital. We don't believe any of those decisions have compromised the strategic or growth initiative for us at this point, actually during the quarter, we turned on a couple of projects that we felt there was compelling opportunities out there. As far as next year, we'll have to see what the marketplace and the environment is. I don't think just because we deferred these, that we'll have to substantially increase over what we ordinarily would have planned, but we'll continue to evaluate that as we go through these different cycles.

Your next question comes from line of Pito Chickering of Deutsche bank. Your line is open.

Good morning, guys. Thanks for taking my questions and excellent job in a very challenging environment to the whole team over at HCA. So, the question here is actually on the cost control side. You walked us through the revenue ramp throughout the quarter, but can you walk us through these sustainability, the cost control leverage that you put into place in April and March, and if the June positive revenues continue into July and the third quarter. How should we think about the cost controls you put in place?

Yes, Pito, this is Bill. Let me give a start to that. I think generally speaking, we can hold much of the cost controls that we put in place, as we said, most of those were around adjusting some of our discretionary spending, as well as some of the variable cost, like as Sam mentioned in his comments. We do know this recent COVID surge, we have to make sure we have the appropriate labor to serve that surge that may result in some increase use of either contract or premium labor. But I think as a whole, our teams have done a nice job. We continue to have opportunities to continue to look at other discretionary spending that we have. So, I think we've got a little bit of a track record of being able to manage to the environment, managed to the revenue that we have. We're very pleased with the results and we'll just going to have to see how the volume returns. And what are the variable costs that we're going to need to support that. But we feel for the most part, we can hold much of the expense adjustments that we made during the quarter.

Your next question comes from the line of Matthew Gillmor of Baird. Your line is open.

Hey, thanks for the question. I was hoping I could get an update on the competitive landscape and maybe the potential for some M&A in the future. I know the industry is obviously working very collaboratively right now. But are you seeing any health systems that will be attractive partners for HCA struggling at all? And do you think you'll have more shots on goal from an M&A standpoint as you look out over the next one or two years?

Thank you, Matt. This is Sam, Matt. I don't know that we have any insights yet -- market insights into competitor issues or opportunities that might exist. I think everybody is scrambling in many markets to deal with COVID-19 and discharge their responsibilities appropriately. And the likelihood of any strategic decisions being made during this particular period in time I think is probably not that high. We will continue to explore. We have a very robust pipeline for outpatient facility development and/ or acquisitions that we're very excited about. And they're complementing of our existing networks. And we'll continue to look for adjacency -- with adjacencies within that platform, as it relates to new market opportunities, and so forth, I would just have to be, I think aware and open to those but very conservative and appropriate and how we think about them. And capital allocation, as Bill just alluded to in our planning. I don't know though, at this point in time that we're going to see anything in the short run. I think it's going to take systems a while to get through this period and then start to determine what their appropriate steps are. But as we've done in the past, we have been opportunistic, with respect to certain acquisitions. And we will continue to maintain that philosophy and appropriately move forward.

Your next question comes from line of Whit Mayo of UBS. Your line is open.

Hey, thanks. Good morning. Maybe it's too early to tell. But any color around payer mix, and then any help on any internally developed framework to think about what the impact could be on HCA going forward? I mean I know you've had a lot of time to address this. And just wanted to get an updated view because my sense is that you're probably not seeing any meaningful change. And, I guess call it your core payer mix now. And maybe just an update on your self-pay and balance after reserve. Just where those are?

Yes, this is Bill. As we mentioned in the payer mix, we did see some favorable in the payer mix as our commercial declines were a little less than or Medicare declines which makes sense that that the Medicare population may take a little bit longer time to return to a healthcare facility. Our uninsured volumes remained consistent with our overall volumes that we haven't seen any material kind of differential with our self-pay volume. Going forward, that's obviously an area that we're paying attention to. We're doing a lot of study market by market to track various factors, whether that be unemployment or coverage. I think it is too early to be able to predict how that may unfold. But clearly some of those factors will contribute to some of the uncertainty as we face the future. And factor into some of our decision. But we haven't seen a play out right now. But as we go forward, it's an area that we continue to monitor. And we have some data that we're trying to track to give us some insight as we go into our 2021 planning cycle.

Your next question comes from line of Steven Valiquette of Barclays. Your line is open.

Great thanks. Good morning, everybody. So now generally speaking, I think most investors are have been thinking about 2Q,'20 likely being a trough for the hospital industry profitability, then sequential improvements and 3Q and 4Q. And I guess my question is if we just ignore the stimulus money and look at your strong $1.85 billion of operational EBITDA generated in 2Q just operationally. Should the investment community generally assume that operational EBITDA will continue to improve sequentially, at least in 3Q from the $1.85 billion base that we see things right now? And despite the fluid situations in Florida and Texas are the two or to make that call right now, just on the quarterly cadence?

Yes, Steven. This is Bill. Let me try. I think the reality is there are still many unknowns relative to the duration and impact this pandemic will have. One of the reasons we cannot update or guidance at this point. It's unclear the longer-term macroeconomic impact of how this might change the overall landscape including patient behavior, the economy, employment and coverage and alike. So, these are kind of somewhat unprecedented times for so it's really hard to really project on a quarter by quarter basis what we might see. What we do know is that we've demonstrated and I think as we demonstrated in this quarter, we have plans in place to respond I think to a range of scenarios that might unfold. And we have different stages of management actions based on how either volume returns or what that makes may be and alike. So, we'll continue to assess the market, let you know what we're seeing as we go through the year. But right now, we're just unable to convert that to any type of financial guidance going forward and we just have to wait to see how the market place unfolds.

Your next question comes from the line of Kevin Fischbeck of Bank of America. Your line is open.

Thanks. I guess just try to go back to the pace and timing of volumes and like you guys obviously operate in a lot different markets across the country. I don't know if you have any experience about markets that maybe got hit a little bit earlier from COVID and have since rebounded and whether the elective procedures coming back are coming back a lot quicker in those markets or if it's more balance? I guess in the past you've given some data about procedures by the different regions that you guys or divisions that you guys have maybe color there and maybe as far as June goes, how many of those 14 or kind of at or above where they were because it sounds like June rolls up but what percent those regions you're seeing about average volumes?

So, here's how we looked at the recovery, we base lined everything off of April and we looked at May and June and highlighted within our portfolio what the revenue growth was in each of those months’ vis-a-vis April. And for the most part, we had remarkably consistent performance across the divisions with the exception of a couple of spots. Those two spots were out West in California primarily and then, in Miami secondarily. And that was because of releasing the restrictions a little bit slower in parts of California than Texas and Tennessee and places like that as an example and then Miami was dealing with COVID in a totally different scenario and their restrictions were released a little bit differently. But within those two brackets, most of our divisions ramped reasonably consistent as it relates to their revenue growth over April. And so that's how we judged it, again it's very difficult for us to get very specific observations from one category to the other within procedures and so forth but looking at the revenue recovery as the better metric, we were able to see remarkable consistency across the rest of the company with respect to gains over April.

Your next question comes from the line of Frank Morgan of RBC Capital Markets. Your line is open.

Good morning. It sounds like in your comments that you really are more prepared as an enterprise for ebbs and flows and COVID volumes. And I'm just curious do you think that plays out with doctors, with physicians as well as patients in that over time if we do have another flare up in the fall of that? I mean, basically we all become more desensitized as we figure out operate in the whipsaws that we see become less noticeable in the future. And I guess related to that you did talk about on this current surge an increase in things like premium labor, contracted labor and alike. Maybe just any color you can tell us about general profitability of these COVID patients. Are they; is it actually a profitable business when you bring it in? And then last just any DC perspective, Bill made some comments about the funding you receive and yet you've got lost revenue and higher costs. Any thoughts around additional relief funding for the hospital industry? Thanks.

Yes, so Frank let me speak to the ability to respond downsize, upsize, and respond again. I think we've proven to ourselves as I mentioned an ability to manage through that operationally as a facility and as a company. Also think, government -- many state governments have learned how to respond and to dial up, dial down maybe some of their policies. I think this is my judgment only those individuals understand how to dial up, dial down their social activities in a way that is responsive to what's going on in their communities as well. So, I think all of this is creating a bit of muscle memory, if you will, with respect to COVID-19. It's our belief that we're going to have to maintain that memory, use that memory again and be able to deal with the potential flare off that might occur until we have a vaccine or a different kind of therapeutic remedy that would allow for less COVID activity in our communities. So, I think it's not just us, it's policies, it's business, it's individuals, all taking advantage of these learnings and applying them to the situations that we believe will still exist in the future until there is some vaccine. So, Bill.

Yes. Frank, I think it's too early to talk about the profitability of COVID patients. What we do know early on is that our COVID patients that we saw did have a generally a higher acuity than our typical medical patient, just given a longer length of stay, a higher proportion in intensive care units. So, and there were some add-on payments by Medicare, as we know but too early to really convert that to profitability. Our focus is really making sure that we've got all the resources to be able to care for those patients.

Your next question comes from the line of Ralph Giacobbe of Citi. Your line is open.

Thanks. Good morning. First, just wanted to clarify, you said June inpatient admission was about 1% and July inpatient was running ahead or was that commentary just on Texas? And then more specifically on the ER volume, I know down 33%, what are some of the initiatives you're working on to get maybe people more comfortable to come in, if any, and then you've been talking for a while on access points and increasing those access points. Where are you with that and how does the backdrop sort of change or accelerate that? Thanks.

Thank you, Ralph. So, what I mentioned, this is Sam. What I mentioned on July was that our inpatient census was up over June. We haven't finished the month yet. So, it's difficult to say exactly where admissions are going to be. With respect to emergency room activity, again, we saw sequential improvement in the rate of decline in our emergency room business in the second quarter with June being down, maybe half of what it was down or third less what was the third, 15% down versus a roughly 40% down, I think it was in April. So, we saw significant improvement, if you will, from the rate of decline. What we also saw inside of our emergency room business was greater acuity. We had similar to our inpatient, a bit business, greater acuity in our ER patients who visited our facilities and that yielded revenue per ER, visit that was slightly above our expectations. So, the business that we're losing is the lower acute business, which you would expect. We saw within our freestanding emergency rooms slightly quicker ramp up than we did our hospital-based ERs. Again, some of that could be due to patient concerns with respect to COVID. We have a very aggressive campaign, both operationally from a patient safety standpoint, as well as a communication standpoint with our patients on demonstrating to them, the safe environment that they deserve when they come to one of our facilities. As it relates to developing our outpatient platform, in order to support our hospitals, we continue on that pathway. We think it's an important part of taking the care experience to the patient, creating a more efficient, and a better price point for them. And we will continue to invest in that platform. We currently have a number of our outpatient facilities that are reopening as a result of the COVID pandemic closures that took place. So, each week we opened more of what we had previously close. We're not up to a 100% reopening of our freestanding ERs in some markets or urgent care centers and other markets. On top of that will be telemedicine. We have, as I mentioned in my comments developed rather quickly, a telemedicine capability, which is critically important, we think to furthering our access strategies for our patient and creating convenience for them and efficiency for our physicians. So, we will continue to invest in that and build capabilities that support that as a wraparound platform. So, I'm very encouraged about what we have done. I'm encouraged about what we're seeing in the recovery in these outpatient activities. And as we move forward, I anticipate that we will continue to develop these wraparound capabilities that support our facility, our hospitals in a way that make it easy for our patients. And then if they need deeper care, they can get more sophisticated and deeper care inside of our hospitals.

Your next question comes from the line of John Ranson of Raymond James. Your line is open.

Hey, good morning. I'll add my congratulations. That's remarkable job in an unprecedented situation. I'm curious, as we look at July and you've got at least temporarily some inpatient capacity constraints in Texas and Florida. Have you been able to either through flexing capacity or moving things to outpatient? Have you been able to move material amount of maybe what would have been an impatient elective a year ago into a different setting? Or is it kind of looked like it did before?

Thanks, John. Well, I think, this is Sam again. What we have done with capacity management to deal with COVID is quite remarkable. We've developed technology capabilities to give us real time insights into our patient population into every bed in the facility at any point in time. Also giving us an indication of their clinical condition allowing us to think about and work with their physician to possibly place them in different settings. That has allowed us to increase the throughput in many respects, versus what we were able to do in the past. So that's an outgrowth of what happened during COVID that we think is going to create value for our patients, create better use of our assets in the future and create more value for our payer, partners in the future as well. The other thing that we've done during COVID is we have been able to what we call level load patients across our network. And by that, I mean getting patients into the right facility, even when we know we're going to have a pressure point at a particular facility because of the community issues that are going on. So, moving patients to where we had staffing or moving patients to where we had beds was another piece of capabilities. I think we advanced. We do that all the time with Hurricane, as we deal with hurricanes. But we took our hurricane learnings and applied that to COVID situations where we had stress. The area where we've seen slight acceleration of inpatient to outpatient over what we saw pre-COVID is in some of our surgical cases, mainly orthopedic total joints, where there was a natural progression of inpatient to outpatient. It's slightly higher post-COVID than it was pre- COVID. It's not significantly higher, but it is higher. And is that something that's going to continue? We believe that it will be there. We anticipated in our planning, our multiyear planning those orthopedic total joints would continue to migrate to more outpatient activity. But we're built for that. We collaborated with our physicians on making sure that we're dealing with the patient in the proper setting. We have an ambulatory surgery center platform, that if that's the best setting, they can go to that. So, we have prepared ourselves for this migration. Outside of total joints, I wouldn't submit that there's anything material that's taken place. That's been part of our overall capacity management. It needs to be clinically driven, not capacity driven. And as long as it's clinically effective for the patient, and will support that and hopefully accomplish that in a way that's productive for the capacity and at the same time appropriate for the patient.

All right. Your next question comes from line of Joshua Raskin of Nephron Research. Your line is open.

Hi, thanks and appreciate the work you did, but also taking the question here. So, mine on the CARES Act funding, you received, I think, a total of $1.4 billion plus an additional $300 million after the quarter. You recognize $822 million. And I understand the difference between the general distributions of $920 million and then the more targeted what seems like $750 million or so. So, I guess the question is do you think you're going to be able to actually recognize even that incremental $100 million or $98 million of the general distribution, or any of the targeted distributions? You just not seen that level of impact either volumes or costs?

Yes, Joshua. This is Bill. Let me try to highlight that. As you might know, the terms and conditions and general guidance for these funds continue to evolve and update. And for the most part, you have a 90 day or longer period to go through an analysis and attestation process. And we're in the middle of our analysis and validation procedures for those funds right now. So, it's really too early to talk about when and how much we might recognize in the future. We continue to monitor the guidance that comes out from various government agencies and we continue to do our analysis for the targeted funds. We have till mid to late third quarter or even July in the fourth quarter. So, we'll continue our analysis and go forward and we'll discuss really what that results when we go through future periods.

Your last question comes from the line of Scott Fidel of Stephens. Your line is open.

Hi, thanks. And thanks for fitting me in here. I've just had one other CARES question as well and just relating to the Medicare advance payments that you and the others have receive at the industry. And I know those payments are supposed to get started to get paid back in August and over the course of eight months. Obviously, still a lot of virus impact and it seems like a lot of other hospitals in the industry are facing a lot of financial pressure still. So just interested if you're hearing any or you have any line of discussions with CMS in terms of them maybe looking to delay in terms of when facilities are required to start repaying those Medicare advance funding that was paid out of 2Q.

Yes, Scott. This is Bill. I know there's been some discussion, but I don't have any insight into how those have progressed. As you probably know, it's scheduled to be repaid and offset against Medicare claims in the future beginning in August. So, we'll just have to see what that cadence goes. But I know there's been some discussion, we read about some potential altering how those funds and what the time period may be. But I don't have any insight on what ultimately may come from those discussions.

All right, Scott. Thank you for the question. Appreciate it. All right. Listen, thank you. I want to thank everybody who joined us today and participated on the call. As always, we're here to answer any of your questions. And so, take care. Have a good day and be safe. Thank you.

This concludes today's conference call. You may now disconnect.