CareMax, Inc. (NASDAQ:CMAX) Q4 2022 Earnings Call Transcript

Jailendra Singh: Thank you, and thanks for the color. One quick clarification question. I guess you talked about around as I mentioned that 1/3 of the around 387,000 Medicare fee-for-service lives, you will convert into partial risk cap and agreements with some upside for 2023. Just curious, like what portion of lives actually converted? Was it in line with expectation? Are there any variances there?

Carlos de Solo: Yeah, so we’re still converting I mean, that’s part of our plan for 2023, 2024 and beyond. And actually, I think on Monday, when we do our Investor Day presentation, we’re going to walk everybody in detail to how we’re going to convert this membership and kind of that glide path to moving the members into value-based care arrangements. So, I think a lot more information to come there. But so far, everything has been kind of in line with the expectations, and we look forward to really explaining how we’re going to move that membership. And as I mentioned, what we’ll also be giving 2026 guidance on the entire business in the Stewart acquisition.

Jailendra Singh: Okay. And a quick follow-up on Andrews question around MSO. As we think about the pipeline for future owned physicians with your affiliated physicians under the MSO model, and again, you might convert this on Monday. I’ve talked about this on Monday, but what is the opportunity to convert those physicians over to the own model? How are these acquisitions typically structured? How do you evaluate them? Like there’s some time you wait? I’m just curious, like if you can spend some time on the strategy there?

Carlos de Solo: So, all that happens boots on the ground. And what I can tell you is that we’re very encouraged by what we’re hearing from a lot of those physicians on the ground and all of the various different markets in Florida, Massachusetts, Texas, really embracing value-based care. So, I think the initial reception has been very positive. And our team and our business development team work on the ground, specifically identifying all of those independent practices that we are working with, and identifies the right positions, the right fit and the right panel size. So, we expect there to be a lot of interest in being able to tuck-in or aqua hire opportunities into our future de novo clinics or new de novo clinics.

Jailendra Singh: Kind of a last quick one. Just going back to the goodwill impairment of $70 million. Can you provide a little bit more color? Like what exactly it relates to?

Kevin Wirges: As I’m sure you’ve heard from a lot of folks over the last few weeks, the biggest component when you estimate that goodwill impairment really is the stock price. And so, as the stock price fluctuates, and especially how it ended, December 31st, has a major impact on that calculation. And so that’s probably the number one driver of that goodwill impairment.

Operator: And we will take our next question from Jessica Tassan with Piper Sandler. Your line is open.

Jessica Tassan: Hi, thank you for taking my questions. So roughly 19,500 full risk MA adds over the course of the year. Can you just help us understand the cadence of those adds? And then how many of those are coming from, like recruitment at CareMax de novo centers versus conversion of some of the Steward of value-based care live?