Paul Kusserow - President and CEO Dale E. Redman - Interim CFO Ronald LaBorde - Vice Chairman David Castille - Managing Director, Treasury/Finance Scott G. Ginn - SVP of Accounting and Controller.

Cairn Clark - Piper Jaffray Brian Tanquilut - Jefferies Toby Wann - Obsidian Research Group Darren Lehrich - Deutsche Bank Ralph Giacobbe - Credit Suisse.

Good morning. My name is Kirk, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. Mr.

David Castille, you may begin your conference..

Thank you, Kirk. Good morning, and welcome to the Amedisys investor conference call to discuss the results of the fourth quarter ended December 31, 2014. A copy of our press release is accessible on the Investor Relations page on our Web site.

Speaking on today's call from Amedisys will be Paul Kusserow, President and CEO; Ronnie LaBorde, Vice Chairman; and Dale Redman, Interim CFO. Also with us is Scott Ginn, Senior Vice President and Controller.

Before we get started with our call, I would like to remind everyone that any statements made on this conference call today or in our press releases that express a belief, estimation, projection, expectation, anticipation, intent or similar expressions, as well as those that are not limited to historical facts, are considered forward-looking statements and are protected under the Safe Harbor of the Private Securities Litigation Reform Act.

These forward-looking statements are based on information available to Amedisys today, and the company assumes no obligation to update these statements as circumstances change.

These forward-looking statements may involve a number of risks and uncertainties, which may cause the company's results or actual outcomes to differ materially from such statements. These risks and uncertainties include factors detailed in our SEC filings, including our forms 10-K, 10-Q and 8-K.

The company disclaims any obligation to update information provided during this call other than as required under applicable securities laws. Our company Web site address is amedisys.com.

We use our Web site as a channel of distribution for important information, including press releases, analyst presentations and financial information regarding the company.

We may use our Web site to expedite public access for time-critical information regarding the company in advance or in lieu of distributing a press release or a filing with the SEC disclosing the same information.

In addition, as required by SEC Regulation G, a reconciliation of any non-GAAP measures mentioned during our call today to the most comparable GAAP measures will be available on our Web site on the Investor Relations page under the tab Financial Reports, Non-GAAP. Thank you, and now I'll turn the call over to Paul Kusserow..

Thank you, David. Welcome to the Amedisys fourth quarter conference call. This morning, I’m pleased to announce we reported fourth quarter revenue of 301 million, adjusted EBITDA of 23 million and earnings per share of $0.27. For the full year, we reported revenue of 1.2 billion, EBITDA of 74 million and earnings of $0.73 per share.

As many of you know, this is my first conference call as CEO of Amedisys. Most recently, I served as Vice Chairman of Alignment Healthcare and also as Chief Strategy, Innovations and Corporate Development Officer at Humana with prior stops at Tenet Healthcare, the Advisory Board in McKinsey.

Throughout my career, I’ve spent quite a bit of time focused on how to provide efficient and effective clinical care to the Medicare and Medicare Advantage population. It has become clear to me over the years that home health and hospice are essential to serve our most complex and fragile patients.

Not only in terms of providing effective quality care at lower costs, but also because of the patients’ overwhelming preference to remain at home. That’s why I’m here. In the early part of 2014, I was asked by the Amedisys Board to lead a consulting effort to perform a strategic review of the company.

I can definitely say that Amedisys was in a much different place at the time. The company was losing money and had recently announced the large settlement with the Department of Justice putting a strain on the balance sheet. My main concern now was that these events would result in real deterioration and damage in employee morale.

What a difference a year makes. 2014 has seen a remarkable turnaround for Amedisys. Operations have stabilized thanks to the great work of Ronnie LaBorde, Dale Redman, our field and corporate leadership and the entire Amedisys team.

Difficult decisions were made to close or consolidate underperforming care centers, cut costs and refocused internally on core operations. Looking back, these decisions have paid off tremendously.

Since being named CEO a little over two months ago, I’ve taken the opportunity to visit extensively with Amedisys team members both in the field and here at corporate. I’ve spent most of the last month on the road visiting and listening to all of our regional leaders and their teams.

I’ve visited 12 states, 21 care centers and have met with over 700 employees. To-date, what I have seen is an increasingly confident group of people, passionate and committed to delivering superior home health and hospice care.

My job along with the rest of the management team is to provide our people with the tools and support to deliver care effectively and distinctively. Our team members are excited and looking forward to our next steps, a stark contrast to what I’ve saw only a year before.

It also appears that healthcare payors and providers including CMS are increasingly recognizing the value of providing care in the home.

With the recent goal announced by CMS to transition towards outcome-based payment versus the traditional fee-for-service model, I truly believe that Amedisys is uniquely positioned to capitalize on these big, longer term opportunities all while maintaining very healthy operations under today’s reimbursement models.

Much of the hard work and the low-hanging fruit of our turnaround has been harvested. We will generate future incremental value by focusing on more efficient care delivery, new business line growth, margin preservation and return on human capital. The last two months have been very educational.

We are still in early stages of forming our strategic vision by my travels around the company have been very encouraging. Team members from all over the country have identified large pockets of untapped value. Over the next few months, we will be refining our plan and stress testing these ideas to extract that value.

We will provide updates as our thinking solidifies. In the near term, we will be focusing on top line growth and continuing to improve the efficiencies of core operations. We will also be looking to capitalize on tuck-in M&A opportunities that help us to capture and solidify market share and are accretive to earnings.

I’m confident at this time next year our conversation will be about continuing to streamline and grow our core operational performance past the industry standard, as well as reviewing our various strategies for new growth.

Finally, I would like to thank all of the Amedisys team for the great work you’re doing on a daily basis, delivering care at home to those who need it most. Also, thank you for welcoming me as your new CEO. I’m truly excited about all the opportunities that lie in front of us.

With that, I’ll turn the call over to Ronnie LaBorde for an operational update..

Thank you, Paul. I would like to take this opportunity, as we report 2014 results, to reflect on the tremendous progress made during this last year.

Beginning in the second quarter, the combination of closing financially underperforming care centers, reducing G&A expenses and an entire organization that engaged and committed to the turnaround all resulted in improved quarterly results.

These results have been sustained throughout the year and we remained focused on the commitments we made to investors early in 2014. First of all, we continue to focus on clinical excellence as we believe the ability to achieve consistent, superior clinical quality will ultimately drive referral volume from physicians, hospitals and payors.

CMS has recently taken an important step in this direction by introducing a five-star quality rating system for home health that will be available publicly on Home Health Compare beginning in July. We are closely monitoring these developments and have done some preliminary work to identify the rating for each of our care centers.

While some of the specifics of the rating will be tweaked, we have no doubt that these star ratings will be an important metric that can drive future volumes. Second, our goal to achieve consistent and sustainable organic growth, we have seen some progress.

In home health, we saw positive same store Medicare growth for the second straight quarter with a 2% same-store increase in admissions and recertifications. In addition, non-Medicare revenue continues strong growth with a 26% same-store increase in the fourth quarter.

In particular, we are seeing large contracted payors driving this increase in non-Medicare revenue. Same-store hospice admissions were up 2% and ADC was down 3% in the quarter. As you may recall, Jim Robinson assumed operational leadership of hospice effective October 1, so the fourth quarter was the first one under our new structure.

We are confident we will see a return to sustained admission and ADC growth. While it is early, core metrics are improving. Third, we will focus on efficiencies in our operations. Our home health gross margin was 42.1% in the quarter representing a year-over-year improvement of 270 basis points from 39.4%.

Hospice gross margin was 46.4%, a slight decrease of 10 basis points from 46.5% last year. G&A expenses are also a continued focus. For the quarter, we reduced consolidated G&A expenses by $13 million from the same period last year. Finally, Dale will comment on capital expenditures both in 2014 and expected during 2015.

We currently have 15 home health care centers using our AMS3 system. We are continuing to make improvements to the system and will evaluate the results of these changes over the next few months.

The results of this evaluation and combination with the training and preparation required for the implementation of ICD10 effective October 1 will influence the pace of our implementation going forward. We have not been immune to the impact of severe winter weather around the country in the first few months of 2015.

During this quarter, we have had 210 home health and hospice care centers experience total or partial closure due to the weather. Prior to the last two weeks in February, we received strong organic admission growth trends in the upper-single digits in home health and mid-single digits in hospice.

In closing, to all of our dedicated employees, I want to take this opportunity again to also thank you for a job well done. Because of your efforts, Amedisys is in a great position as we begin 2015. Now, I’ll turn the call over to Dale Redman for a financial update..

Thank you, Ronnie. For the quarter, revenue was $301 million and earnings were $0.28 per share on a GAAP basis and $0.27 on an adjusted basis. For the year, we generated $1.2 billion in revenue and earned $0.40 per share on a GAAP basis from continuing operations.

There were numerous adjustments detailed in our press release, the majority of which related to our restructuring efforts in the first half of the year. Adjusting for these items, we earned $0.73 per share. EBITDA for the quarter was 23 million with a margin of 7.6% compared to 7 million or 2.2% for the fourth quarter of 2013.

In our segment results, we will be focusing on year-over-year comparisons. In home health, revenue was 240 million, same-store Medicare admissions and recertifications were 2% and revenue per episode was up $10. Same-store non-Medicare revenue was up 26% while admissions were up 22%.

Home health gross margin of 42.1%, an improvement from 39.4%; cost per visit was $86, down $4. Most of this decrease was due to a shift in clinicians from salary to pay-per-visit at the beginning of the year. In hospice, revenue was 61 million. Same-store ADC fell 3% and admissions were up 2%.

Revenue per day was up 1% roughly in line with the rate increase from Medicare effective in the fourth quarter. Hospice gross margin was 46.4% and flat relative to last year. We saw an increase in cost of service per day driven mainly by increased pharmacy costs. Consolidated G&A expenses decreased $13 million year-over-year on an adjusted basis.

A majority of these savings were achieved through restructuring of our portfolio and other G&A initiatives announced earlier in the year. Total capital expenditures came in at $12 million for 2014 significantly below our expectations at the beginning of the year. We ended the quarter with $8 million in cash on the balance sheet.

Cash flow from operations for the quarter was $41 million, excluding the second DOJ payment of 36 million. This compares to 8 million at the same period last year. For the year, cash flow from operations excluding the DOJ settlement and related fees was 90 million compared to 102 million in 2013.

It’s important to note that 2014 cash flow includes negative cash flow from operations in the first quarter followed by three strong quarters of cash generation. Additionally, 2013 benefited from a $42 million reduction in accounts receivable causing DSO to fall 10 days. At the end of 2014, DSO was down again to 29.4 days.

This is an all-time low for our company and down three days since the beginning of the year. Outstandings under our revolving credit facility end of the quarter were $15 million.

While we drew on the revolver in order to make our second DOJ payment, we were able to reduce our debt balance by 33 million during the quarter and 79 million during the course of 2014. Our total leverage ratio is 1.5x, down from a high of 3.2x at the end of the first quarter.

Our operational and working capital improvements have driven significant free cash flow resulting in a stronger balance sheet and additional flexibility to operate our business. While we’re not providing guidance at this time, we are optimistic about the core operations’ run rate in 2015.

However, the first quarter run rate will be impacted by a number of factors. As Ronnie mentioned, there are going to be some turbulence from the weather impacts across the country. We have an estimated $2 million increase in federal taxes that will hit the first quarter.

Merit raises that we gave in December of 2014 will impact the first quarter by about $1.6 million. And two less hospice days of revenue in the first quarter will have an impact of $1 million and some typical seasonality. With all that being said, we are optimistic about the rest of the year. That concludes our prepared remarks.

Operator, please open the call for questions..

Thank you. [Operator Instructions]. Your first question comes from the line of Kevin Ellich from Piper Jaffray. Your line is open..

Hi. This is Cairn Clark on for Kevin. I’m wondering if you can give us any details regarding any involvement in Medicare’s BPCI initiatives. So, which model you’re participating in the convener or using, if you can quantify potential or how much you could add this year or next? Thanks..

Good morning. Thanks for the question. Two things. I would say on the Model 3 throughout 2014, we were a convener under a Model 3 program. And we basically had two sites where we had activity, worked with that throughout the year and terminated that as of 12/31. So going into '15, we are not participating in the Model 3 program going forward.

So there will be – there’s some financial impact that we’ve seen in '14, but it will really be relatively small, we think, just from administrative costs and then the ultimate reconciliation of those claims cost. So, again, that is terminated at 12/31 of '14 and will not go forward in the Model 3 bundles.

We are participating in a Model 2 bundle that we have one relationship where we’re not the convener. Obviously, it’s Model 2 but we are a participant and we have some good relationship going forward and that one works very well for us..

Great. Thanks..

Sure..

Your next question comes from the line of Brian Tanquilut from Jefferies. Your line is open..

Good morning, guys.

Ronnie, just to follow-up to that first question, so do you mind sharing with us just your experiences or conclusions from participating in Model 3 and why you exited the program?.

Sure, Brian. Good morning. Thanks for the question. Obviously, it’s very early stage from a CMS perspective and certainly from a provider perspective of how do you dip your toe in the water and begin to take on risk and participate in different reimbursement alternatives.

And after we got into this and really made some good progress I think operationally, it allowed us to have better visibility into the risk profile.

And if we looked at a bundled payment, which we had operated under our 90-day period of care and had responsibility there, we just – going forward we thought that the risk profile was not well suited for continued involvement.

And inside of the bundle I would say basically one-third of the cost was home health and two-thirds of the cost was other providers. And what we worked to do was intervene and try to reduce the occurrence of the additional chain of cost when patients were readmitted. And while we’ve made some progress, we just weren’t moving that needle far enough.

We had some positive clinical care redesign. We worked hard but it was more of a financial risk profile that we decided not to go forward with..

Got it, thank you. And then, Dale, I know you’re not providing guidance, but if you don’t mind just maybe helping us through how you think about your ability to sustain organic growth. You talked about Q1. Early Q1 was strong.

But as you think about the rest of the year, how do we think about your ability to drive organic growth in hospice and home health? And also how much more can we lop off on the expense side, so sort of just – to help us model and figure out the different moving parts?.

Well, there’s several parts to that question. Let me take the first part. What we’re really telling you is that while we are optimistic about the core operations run rate in 2015, there are some things that are essentially nonrecurring or they are unique to the first quarter.

It’s going to impact the run rate as you look at it coming into 2015 and we mentioned those. It’s weather, it’s favorable taxes, it’s merit raises, it’s hospice having two less days in the quarter, and those typical seasonality that comes out of the fourth quarter into the first quarter related to lupus and things like that.

So that’s one part of the equation and that is we are optimistic about 2015, but the first quarter is probably not going to be the run rate for the rest of the year. Now from an organic growth standpoint, maybe Ronnie, you want to address that issue or Paul..

Sure. I think we’re feeling quite good about the year in terms of what we’ve seen initially in the first couple of months minus the weather. So we feel that the core operations are performing very well. It’s just we’re seeing some traditional lumpiness that we normally see in the first quarter.

When we went back and looked at this, we said, okay, we think things are going to trend very well, but I think we were a little concerned about the straight division that was being done out there by the analyst community..

Got it. And then last question for me. Hospice was still obviously negative. So I know you’ve put in some new leadership in there.

How do you think the improvement in that segment will progress over the course of the year, over the next 18 months?.

This is Paul. I think what we’re seeing, we’re – anxiously every week we look at the numbers and what we’ve been seeing I think is some very positive trends in terms of admissions and starting to see more positive trends in terms of ADC. So we’re cautiously very positive about this. Jim Robinson has taken control of this. He’s built a new team.

The team is performing. There’s been some trimming and consolidating that is just being finished up. So we feel very good about it. They’ve got a clear vision. It’s a very focused team. And so we’re monitoring it very, very closely but we like what we’re seeing thus far..

Got it. Thanks, guys..

Thank you, Brian..

Your next question comes from the line of Toby Wann from Obsidian Research Group. Your line is open..

Hi. Good morning, guys. A couple of quick things.

On the non-Medicare same-store growth, what’s really the driver behind that?.

This is Ronnie. What we’re seeing this year in the run rate is reflected in some pretty robust growth rate that you mentioned there, and that’s from some large payors and contracted relationships that we saw that change early in the year, so that’s given us some nice comps as we’ve gone through the second, third, now in fourth quarter.

All other things being equal, obviously, those rates of change won’t continue if we kind of continue at the same run rate. Obviously, year-over-year in the first quarter that will drop to probably somewhere low double digits and it will be flattish in the second all other things being equal.

It’s still an area of focus for us but to this point, there’s been a few large relationships under contract that have moved that needle..

Although I think that what’s important is when we get updates from our managed care folks, we’re asking them to aggressively still move forward and to get as many contracts as possible. And I think they’ve been getting positive contracts in terms of our contracting ability. So we have a good team there.

There still is more to do there, but I think a lot of the big stuff has come in and it’s an area we like. So, we want to be the choice for managed care. I came out of that background and we have good relationships there and we want to be the solution there, particularly as Medicare Advantage outpaces traditional Medicare growth, we want to be there..

Okay. Thanks. That’s helpful.

And then is there a component of managed Medicaid that’s also a part of that from Medicaid expansion as a result of the Affordable Care Act as well?.

No..

Okay. And then just moving on one other thing quickly. You guys mentioned that you’re kind of evaluating AMS3 and making some changes.

Maybe if you’d expand on that a little bit?.

What we’re doing is we’ve actually been working quite hard. We’ve implemented AMS3 at 15 care sites. And the schedule when I first came in and looked at the schedule, it was very, very aggressive in terms of getting it rolled out in a two-year timeframe.

We started to look at the difficulty with implementing AMS3 plus preparing for ICD10, and we can control our implementation on AMS3 and we can’t control when ICD10 is going to go. So our feeling is we want to make sure we get that right.

We also want to see – we have some fixes to do in terms of AMS3 and we also want to see what the impact has been in the 15 centers we rolled out..

Okay, that’s helpful. Thanks a lot..

Sure..

Your next question comes from the line of Darren Lehrich from Deutsche Bank. Your line is open..

Thanks. Good morning, everybody. A few things here. Just coming back to the hospice question, I wanted to just flush-out a little bit more what you’re saying about gross margins in Q4. It sounded like pharma costs were the bigger part of the issue.

I guess sequentially, you did a rate increase in Q4, so I guess I’d like to just understand a little bit more about what other factors you think might be playing into the margin performance in Q4?.

This is Dale. A couple of things I can mention. If you look at Q3 and Q4, we had an adjustment to the cap in Q3 of about $1.5 million and that had an impact on the gross margin. That’s probably not recurring, so we’re sitting at $2.8 million in cap liability at this point.

Second initiative that I think you mentioned was pharma costs and that’s primarily related to the change that CMS made almost a year ago in Part D working to adjust for those kinds of issues and working towards national contracts, et cetera, that will probably help with that issue.

So those are kind of the two pieces that you were thinking about from that standpoint [ph]..

Okay.

And then your cap position for accrual in Q4, what was that?.

I think it was minimal, because the cap liability didn’t change from Q3 to Q4. It was 2.8 million in Q3 and 2.8 million in Q4 and the accrual for the quarter is simply the change in that cap liability.

And the only real significant change that’s occurred over the last year or so was the two care centers that we had that dramatically improved their operations through additional admissions and therefore reduced their cap liability in Q3 and that benefited us from about 4.3 million down to about 2.8 million and it stayed there in the fourth quarter.

So long-winded way of saying no accrual in the fourth quarter..

Got it. Okay, that’s helpful. And then obviously the non-Medicare business is something, Paul, given your background that we’d expect you to spend a little more time on.

Can you maybe just talk to the margin outlook that you have for that business and how you think you’re set up to serve those patients and the structure of the arrangements? Just so we can think about to the extent you grow that business at a differential pace going forward, what the margin profile might be?.

Sure. That’s a great question and I’m going to give you a strategic answer versus a specific answer. We’ve been studying that.

Obviously, when you see a new segment of business coming in that’s growing at the rate this is and we look at the traditional margins compared to traditional Medicare, we’ve been spending quite a bit of time understanding what the drivers would be so that we could get the margins equal to traditional Medicare.

Now we’re working through a lot of this strategy. Currently, as you know, that’s not the case but we’ve been working on a strategy, on a managed care strategy that fundamentally looks at the needs of managed care in terms of utilization and in terms of staffing mix that we think can get us competitive from a margin perspective.

So, it will mean some changes to operations. In a certain way, we’re going to have to do things a little differently in managed care but we know they’re driven largely by outcomes and costs, so we think we can participate there largely being very aggressive on utilization and then staff mix.

So that’s what our thinking is and we also are going to be looking at other lines that way. We think there’s a big play potentially in the senior living space and then we’ve got to go take another look at Medicaid considering the growth, particularly managed Medicaid..

That’s helpful. And then last thing from me. When you talk about, I guess, your plan to review the strategy and some of the goals you have going forward in M&A as part of the discussion, I think we all think about some of the acquisitions that have been done in the past.

So, Paul, can you maybe just speak to your business development team and how you as the CEO are going to approach M&A perhaps differently than the company has in the past?.

Sure. So I came out of an M&A background, obviously, at Humana running corporate development, so we did a tremendous amount of deals there. So we’ve got a very good core team here in the finance area and we’ve got a great guy in, Kris Novak who is running this process right now.

I think the key thing is we’re back looking at deals and we’re looking at really interesting deals. And what we’re going to try to do is be very conservative I think initially.

So what we want to do is, we want to make sure that there’s tuck-ins that are accretive, that are in the market, that are additive, that come under good management teams and are in home health or in hospice so that we can get these under our belt, understand how these things are working. So, I think that’s where we’re going to focus.

As we get better at this, we’ll start to look more expansively and look at some of these other deals that are out there that can take us into new geographies where we feel we need to be playing. And then the other things we need to start – I think the third bucket we’re looking at is capabilities.

I’m quite convinced there’s going to be a post acute world where we’re going to have to have more tools as we want to take on risk and bundling, which I think will come back. There will be a 2.0 version of this. So I think we’ll want to think about that as well.

But initially we’ve got our folks digging in, knocking on doors, being as proactive as possible within our own geographic market structure..

Obviously looking at our balance sheet, it’s in the right kind of shape to be back in the acquisition game. We have leverage ratio, as we mentioned, over 1.5x and that would probably come down with cash flow this year. So we’re going to be prudent about how we spend that capital.

But we’re in a great position to be a player back in that area again as we go forward..

But --.

Okay. Thanks a lot..

Yes, just let me – one add, we will have to bulk up our team and Kris knows that. He’s working too hard already..

[Operator Instructions]. Your next question comes from the line of Ralph Giacobbe from Credit Suisse. Your line is open..

Thanks. Good morning.

I hopped on a little bit late, so apologies if you already went through it, but did you sort of go through why you haven’t given guidance for '15?.

Yes. This is Paul. We haven’t because we talked a little bit about the first quarter and also I just arrived, so I’ve been here for about two and a half months. And I’m frankly not comfortable at this point. Gotten my hands around what’s going on with '15.

I feel very, very good about the core operations and the wind we have at our back in terms of the core operations. There is a little bit of lumpiness in this first quarter, as we alluded to, and I do want to get a plan put together.

Clearly, we’ll articulate this plan to you all but I do want to make sure that we get the plan right, get our employees’ heads around it, get buy in, start to do the math in terms of where we think we’re going to need to go from the plan, particularly for the new businesses, we’re starting to look at.

So I want to make sure we have an ability to do that and structure the organization properly to implement the plan well. So that’s where we are and that why we aren’t issuing guidance..

Okay, all right, fair enough.

And then do you have any timeline – would you expect to do it in the next kind of couple of quarters or this is just suspended for some period of time without a real timeline around it?.

I think as we work through 2015 and we get comfortable with the circumstances, we will take another look at that issue. But no prognostication at this point as to when we may or may not do that..

All right, fair enough. And then at this point, are the bulk of the cost savings essentially done and the story really now all predicated on driving revenue growth.

Is that the way to think about it?.

I think that’s not. I think we – as I said in my statement, I think we took advantage of a lot of the low-hanging fruit from a G&A perspective. I think there’s more there, so we’re going to go back in and we see some pockets where we can potentially create some more efficiencies. But we do have to grow and we’re putting a lot of effort into that.

There are new business lines that are very exciting, so we want to make sure we participate there. And there’s some things that I think we need to do on the people side, which I mentioned in my comments in terms of strengthening our people and our clinicians, and then our processes which we’re dealing with.

I think we can take some things out of our processes that are currently a little wasteful..

Okay. And then just wanted to understand a little bit more on the managed care side. You had sort of mentioned in the prepared remarks something about sort of going after contracts.

I just wanted to understand is that – is there a willingness and are you interested in more sort of narrow networks or preferred arrangements, I guess, going forward? And just the argument of trading off I guess – greater tradeoff of price for volume and where we stand with that..

At this point, we’re looking at everything. So I think there is – if the plans, which obviously on capitated plans, managed care plans and Medicare Advantage, some of our partners out there do like to work in narrow networks. And for those folks that do will obviously work with their designated providers. So that’s quite clear.

We understand how to do that. I think the key for us is to be as flexible as possible. Some of them aren’t there yet in terms of ultra-narrow networks, but this is an area – once again, I was at Humana for five years so I understand how that’s done. And I think we want to be prepared also – I think ACOs are going to start to emerge in a serious way.

We’re going to want to have much more conversations with ACOs who will be very narrow networked. So we’ve got some plans around it, so we understand the importance of it..

And just a last one. What is your current relationship with Humana? I think there’s been sort of preferred provider status in the past if I recall, and I think at some point there was actually exclusivity to some degree that kind of got toned down a little bit to preferred provider.

So if you could just help us understand where we’re at in terms of your Humana relationship?.

So this is Ronnie, Ralph. So we continue with Humana on a contracted relationship that has been in place. We are a provider for them. I don’t think there is – the way that is structured there is kind of local market discretion of providers, so we work under that umbrella in that structure, and has been pretty stable I think.

The restructuring of our relationship was October 1 of '12 and been relatively stable since then..

Okay.

But there are no preferred – there’s no steering right now other than on a regional basis I guess you have sort of the relationship and there’s a referral channel there?.

Yes..

Right. I think the one thing we have to do as we look towards building a managed care strategy is what can we do that differentiates ourselves from the rest of the industry, and right now I think it’s relatively undifferentiated. So I think there’s a big opportunity there for us..

Okay. Thank you very much..

We have no further questions at this time. I’ll turn the call back over to the presenters..

Great. Thank you, operator. I want to thank everyone who joined us on our call today. We appreciate your interest in our company. I want to thank our employees for what’s been an incredible year, and we look forward to updating you on our next quarterly earnings call. Thanks, again. Take care..

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