Ladies and gentlemen, thank you for standing by, and welcome to the MEDNAX fourth quarter earnings call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Charles Lynch. Please go ahead.

Thank you, operator. Certain statements and information during this conference call may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions and assessment made by MEDNAX's management in light of their experience and their perception of historical trends, current conditions, expected future development and other factors they believe to be appropriate. Any forward-looking statements made during this call are made as of today, and MEDNAX undertakes no duty to update or revise any such statement whether as a result of new information, future events or otherwise. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the company's most recent annual report on Form 10-K and its quarterly reports on Form 10-Q, including the sections entitled Risk Factors. With that, I'll turn the call over to Roger Medel.

Thank you, Charlie. Good morning, and thanks for joining our call today to discuss our 2013 fourth quarter results. This morning, we reported results from operations for the fourth quarter, which marked a strong end of a successful year that positions us very well for 2014 as we continue our long-term growth strategy. Our revenue for the fourth quarter increased by more than 20%, with growth attributable to contributions from recently-acquired practices of 13% and same-year results showing strong growth of over 7%. In addition to same-unit revenue growth from parity, we saw moderate increases in commercial pricing, a positive payor mix comparison and volume growth across most of our specialty. Overall, we ended the year with strong internal driver for growth and an increase in contribution from parity revenue, which Vivian will talk about in detail. During the fourth quarter, 3 practices joined MEDNAX, 2 in our Pediatrix Medical Group division and 1 in our American Anesthesiology division. In early October Dayton Newborn Care Specialists, based in Ohio, joined our Pediatrix Medical Group division. The physicians at this practice provide services at several area hospitals, including the Dayton Children’s Hospital. And this December, we announced the acquisition of Neonatology Center of Winchester, a neonatal physician group practice in Winchester, Virginia. Finally, in late December, Summit Anesthesia Associates, a group practice consisting of 37 anesthesiologists and 8 anesthetists that is based in Summit, New Jersey joined our American Anesthesiology division and it's our second New Jersey-based anesthesiology practice. In 2013, a total of 11 practices joined MEDNAX, 6, as part of American Anesthesiology, and 5, as part of Pediatrix Medical Group. Also, since the end of 2013, we added the first Maryland-based anesthesia practice to our American Anesthesiology division. Physicians Anesthesia Associates is a group practice consisting of 31 anesthesiologists…

Thanks, Roger. Good morning, and thanks for joining our call. As we highlighted in our press release this morning, our results for the fourth quarter 2013 reflect consistent and strong revenue and earnings growth. Net patient service revenue for the 3 months ended December 31, 2013, increased by 20.4% to $567 million from $471 million for the comparable prior year period. Our profit after practice expense for the 2013 fourth quarter was $190 million, up 17.8% year-over-year. Profit after expense margin decreased by 75 basis points, which can be primarily attributed to the variability in margins due to the mix of practices acquired since October 2012, driven by the impact from anesthesia acquisitions. We continue to generate operating efficiencies with our general and administrative expenses. These grew by only 10.7% year-over-year, significantly lower than revenue, and G&A as a percent of revenue declined by 90 basis points versus last year to 9.8%. Overall, we generated operating income of $124 million for the 2013 fourth quarter, an increase of 20.3%. Our operating income margin of 21.8% was essentially the same as the prior year period. Our effective tax rate was 36% for the 2013 fourth quarter, up slightly from 35.5% in the prior year period, and our effective tax rate for the full year was 37.4%, down 50 basis points from the prior year. Finally, our 2013 fourth quarter net income of $79 million was up 19.5% year-over-year and resulted in diluted earnings per share of $0.78, which increased by 18.2% as compared to the prior year period. For the quarter, weighted average of diluted shares were $101.1 million, an increase of 868,000 shares year-over-year. Weighted average shares include the impact from the two-to-one stock split authorized by our Board in December. Turning to a more top line detail. Our revenue…

Thanks, Vivian. As I mentioned earlier, 2013 was a very positive year for MEDNAX, ending on a strong note related to same-unit growth, payor mix, our financial strength and our acquisition pipeline and I am equally optimistic for 2014. With that, let's turn the call over for questions. Operator?

[Operator Instructions] Our first question comes from the line of Ryan Daniels, William Blair. Ryan Daniels - William Blair & Company L.L.C., Research Division: Roger, I want to start with -- one for you, just in regards to your commentary around the lengthening of the M&A transaction life cycle. Twofold question. One, can you talk a little bit of how much this is extending it? And then number 2, I just want to get a little bit more color when you talk about the hospital due diligence. Is that you -- diligence setting the relationship with the group in the hospital? Or is it deeper looking at their long-term strategy and entering to ACOs and how could that impact, kind of how physicians are paid? Just a little more color there to help us understand what's changed.

Sure, Ryan. Well, we have always gone to the hospital before closing an acquisition and just let them know out of courtesy what we were planning on doing and making sure the hospital is okay with our proceeding with the potential acquisition. I'm saying that some other -- haven't particularly done that in the past. We assigned that over the last year or so because of the Affordable Care Act, because of the interest that some hospitals have in maybe putting together their own ACOs. They are much more interested in having that conversation with us. We are interested in determining what their contract with the -- physicians is like, what their expectations for the future are. And it just takes longer to set up the meeting. It takes some follow-up meeting. It takes some negotiations. Sometimes there are things in the contracts that we think we want to renegotiate before we move forward. Sometimes there are things that the hospital thinks that they want to renegotiate before moving forward. And so, because we've been doing this for such a long time and we've been so successful counting with the hospital as being our partner, as well as the physicians that are doing this. We continue to think that the best move is to get total agreement with the hospital before closing on any acquisition. And clearly, that has added a significant amount of time as we go through those different issues and each hospital has different issues depending upon their community, their physicians, their market and those kinds of things. So that is definitely the bulk of what is making these -- timing of these transactions difficult. Ryan Daniels - William Blair & Company L.L.C., Research Division: Okay. And then for my follow-up, I guess, just continuing with that train of thought. I'm wondering if all your track record with data and outcomes and measurement kind of showing the improved quality is becoming, therefore, an increasing competitive advantage with you as hospitals look more at the partnership as we approach these shared savings models. Is that something you're seeing yet that kind of differentiating you in the market from a certain standpoint?

Ryan, it's Vivian. So I do think that, that's -- as you know, that's been good for us in the past. And yes, recently, and Karl is here and I'm going to let him talk a little bit about a recent acquisitions that we had that really are down in the negotiations with the hospitals. They were wanting us to come to terms with some quality metrics. Karl, can expand on that a little bit for Ryan?

Yes, it's getting more and more calm than they are hostile, didn't [ph] know if they want to go in front or at the end are putting sublevel performance metrics in the hospital contract, looking towards efficiency metrics, managing the OR process, as well as quality metrics that are important for them. And we always push beyond that they just get measures and the like. And I think that's real helpful to the hospitals, but they want to get their arms around who their partners are going to be, if they try and figure out what's going on in the new world of healthcare with HDO and probably insurance products. So there's a fair amount of work and that we're going to be a partner with them in looking at these bundled payment projects they're working on a [indiscernible] That's really where the discussion spendings are at. One, how are you going to make these more efficient? How are you going to make sure that my quality improved? And what metrics are you going to put in place on that. How did you do that? And then, it's around -- how are you going to be my partner in bundled payment that was going to take care of in looking to go forward in the changing world of how people are paid -- housing for the population [indiscernible].

We'll go to the line of Kevin Fischbeck with Bank of America.

You mentioned, I guess, in the past several quarters, if we can get some positive data points from different source that's saying that the birth rate is starting to improve and you guys have been saying for a while, you haven't really been seeing it. The volumes, the trend starts to seem to be improving from recent quarters and the mix has been improving in the last couple of quarters. Do you think that we're starting to see a rebound? Or is there anything that you would point to either way about the -- whether this is a change in trend or...

Well, like you, we're hopeful that, that's what it means. Certainly, it's encouraging to see that for the last couple of quarters that -- of the direction in which things are going. I'm not ready there, call, it a trend yet, but it's very helpful and it's very encouraging to see that, that is absolutely the direction in which we're going.

And I assume that the broad-based numbers that's not...

Yes.

Yes.

Okay. And then, my second question has 27 parts to it. Parity, I just wanted to understand, I think in the past, you would talk about it ramping up more potentially into Q1, but it sounds like, maybe a little bit more in Q4 versus the new thoughts. I don't know if that was just kind of pulling forward the Q4 -- Q1 number would look like. And the 31 of the 34 states, does that include Texas and California? Or are those 2 states coming online for Q1? And then finally, as far as parity goes, any progress in trying to get that extended past 2014, either with conversations Congress or at the state level?

Okay. Kevin, so let me see if I remember the three-pronged question here. But for the first one, I mean, as you know, we have been talking all along that there is still a lot of variability with the timing of these payments. And so in the fourth quarter, because we have seen some payors more than states, payors consistently paying, we were able to get to a methodology that we were comfortable with. So accruing a piece of that. So that's really what happened in the fourth quarter. And so we still think and that's why I was very pointed to make that remark in the script, on the prepared comments that I do think that there's still variability with the payment streams. But again, as soon as we see some consistency with the payor, then we try to accrue for it. So it is a mix of current payments and some of that are still from the rest of the year. As far as states, yes, we have seen some movement as we go through with our government relation folks. We do see some movement in some states that have wanted to -- rumblings that they want to extend it, Nevada, Maryland, I think it's one. And I think there might be one other one that I'm forgetting. But no, there is no Texas money in any of the parity that we've recorded. Texas is saying that they are going to pay maybe in April or May. And California, we did see a little bit of it but we can't really apply it because we don't know what it relates to. And so pretty much those -- we still believe that Texas will pay because that's basically what they've said. But so far, nothing yet. Now, remember with Texas, I do want to make sure everybody understands that Texas is a large state for MD, but it's not really one where the payment differential is that high between Medicaid and Medicare because they did have that adjustment 3 or 4 years ago.

And then an outlook post 2014 for continuing these payments?

Yes, so there's like, I said, a few states that have started to talk about that. Nevada is one, Maryland is one and I think there might be another one but there's nothing on the books yet for that. I mean, they still have to figure out how they're going to be paying for that because then that's going to be on their ticket.

But that is, Ryan the focus of our government relations, efforts this year is to, to focus on the states and start talking about the need for them to extend the parity.

The next question comes from Kevin Ellich with Piper Jaffray.

Roger, we all understand the lengthening process of getting the deals closed because of the hospitals, but I was just wondering if there's anything else qualitatively that you can provide to us to give us a sense of how big the pipeline is? And just trying to help us understand the growth potential and opportunities for the company in 2014 and even over the next few years?

Kevin, well, everybody around the table is cringing because they were very worried about how I'm going to answer that question. Our pipeline is, as I said on the call, is very full. We have some larger deals in the pipeline. Most of the deals are medium-sized. There's a couple of small ones. We think -- when we talked last time, when we talked about there being a number of deals in the pipeline, we have more deals now and close more and analyze, than when we talked to last time. So without making my general counsel, Flynch. We were very happy not only with the amount of deals that are in the pipeline but with the quality of those deals with the hospitals. This hospital that we just announced in -- this last week in Baltimore, these people have been here since 1965. I mean, there's just a huge amount of confidence in the hospital, in that relationship, in that contract and the opportunities there, the partnership created between the physicians and the hospitals. And that kind of quality doesn't translate when we talk about the number of deals in the pipeline. But that's what I'm talking about the fact that these are groups that are well-established in good communities that have excellent relationships with their hospitals and we're just very excited about what the possibilities are here.

Great. I appreciate that color. And then just thinking about your -- you guys still have that shelf filing out there. And given this lengthening process in anesthesia, have you given further consideration on adding maybe another leg of growth, a third specialty, and maybe that would help you win even more business with the hospitals?

Yes, we talked about it. We haven't explored it seriously. We do hear that some hospitals are requiring or requesting, a better word, that some of their hospital-based physicians provide different types of services. We think that eventually that might happen. We haven't come across -- I mean, we've had conversations where hospitals say, "would it be easier if you were running my ER?" or whatever, but we haven't had any serious conversations about doing that. We think that might happen. I'm not saying it's not going to happen but it's not front and center on our radar screen right now.

Got it. And speaking of the shelf filing, have you used much equity in deals yet? Since you...

We have not used any equity on deals that we have closed.

Next we'll go to the line of Ralph Giacobbe with Credit Suisse. Ralph Giacobbe - Crédit Suisse AG, Research Division: I guess, first, just to clarify, is the -- I just want to make sure the process of sort of completing the deals is getting longer? Or are there examples where either you or the hospital is sort of walking away?

There are no examples where we or the hospitals have walked away. Ralph Giacobbe - Crédit Suisse AG, Research Division: Okay. All right. Great. And I just want to go to the margin side. I know the margin showed a little bit of a bump up. Parity, I think, helped that and otherwise margin would have been down. I know you've done a lot of deals. So I'm just wondering if you expect that to sort of stabilize. Or maybe if you can help us at all think about the trend and maybe same-unit margin kind of x the parity benefit?

Yes so, Ralph, it's Vivian. So, yes, what I've said to you guys before is just, generally speaking, directionally, we're not going to give a specific number. But generally speaking, same-unit, being north of 3% is something that we would need for margin expansion again. So parity, you're correct, it helps. But obviously, with the G&A, the more deals we bring in there, the more we have as it relates to operating efficiencies there. So it's a combination of that. But remember that parity was also shared with our physicians and so we did have also an increase in the bonus accrual and in spite of that, we still had some positive expansion there. So it does need to be north of 3% and it fluctuates depending on if that's coming from volume or if it's coming from pricing, et cetera.

And let me clarify, Ralph, that there are practices that we have walked away from, mostly related to valuation and other issues. So it's not that we haven't walked away from practices. Ralph Giacobbe - Crédit Suisse AG, Research Division: Okay. Got it. And then, just my last one. In terms of the managed care book, can you give us a sense of what percentage is out-of-network versus in-network and maybe what your collection rate is, on out-of-pocket?

We don't like being out of network. We don't think that, that serves any purposes. We know that, that is a strategy that some -- others utilize, but we don't think that, that serves the patients. It doesn't serve the hospital and it doesn't serve the physicians. So our goal is always to be in-network and I don't know what the percentage is of...

It's the very low. I mean most -- we used that as a last resort. But it's not to say that there aren't any, but it's not a large percentage at all. And as it relates to patient responsibility as you know we have -- that's a low percentage for us, certainly on the neonatology side. Most of that is considered emergency care. And on anesthesia, there is some of that, but right now, it's a pretty stable low percentage in the 2% overall for the company.

Our next question is from Robert Mains with Stifel. Robert M. Mains - Stifel, Nicolaus & Co., Inc., Research Division: Two questions, Roger. If I'm kind of piecing things together. The pipeline's larger, but there's also more competition for deals. Can I surmise that the universe of practices out there looking to collaborate has grown as well?

Dramatically. Robert M. Mains - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then I think that -- and you attribute that to the same factors you're -- you've been talking about in the past, in terms of sort how the marketplace is evolving?

I think the marketplace, I think the Affordable Care Act, I think the fact that there are more buyers now interested in this sector, yes. I think that they're seeing their friends are getting involved with some other companies. And I think that there's -- we just got back from the American side of that anesthesiologist's meeting last week, and there's huge amount of interest from a number of groups that, in the past, weren't even interested in talking. Robert M. Mains - Stifel, Nicolaus & Co., Inc., Research Division: And then from your perspective, pricing isn't changing in terms of what you -- the types of returns that you require?

Well, with that -- I'd like to tell you that, but you know what competition does. The reality is that it always affects pricing particularly those practices that you really want, that are special and that you want to go after. So I can't, I can't say that it has not affected the pricing. Robert M. Mains - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Fair enough. And then just, 1 numbers question for Vivian. Could you give us an idea where you see tax rate shaking out through the 4 quarters of next year?

Yes, remember -- remember that our tax rate does vary quarter-to-quarter because we have some of those discrete items. But for the year 2014, we should see it in the same range, give or take, 30 or 40 basis points. So anywhere between 37.4 and 37.8, we should be in that tax rate for the whole year.

Our next question comes from Gary Taylor with Citigroup.

A couple of questions. I want to make sure that I didn't miss something. Vivian, when you talked about the $17 million in Medicaid parity payment booked in revenue for the fourth quarter, and you said, some of that was accrued. Did you break out how much of that was cash versus accrued?

Yes, $6.5 million was accrued, Gary.

Okay. And then, that kind of takes me to DSO, which has actually been coming down all year, including the fourth quarter, even with this accrual. So where are you seeing the better revenue cycle perform, even though you got a little bit of Medicaid accrual?

Yes, well, government does pay pretty good, other than these things related to parity because they have to get them into their system. But overall, we've seen it for all of our lines because we do break that out. So on the neonatology side, they've continued to improve, but anesthesia has improved as well. And so, as that gets bigger, that does have a bigger impact on our overall DSO. So overall, we've seen an improvement in our DSO and on our contract revenue piece, et cetera. All of that has improved office space. So when I look at the schedule with the details, it's just an overall improvement for the company.

Okay. And then, first quarter Medicaid parity, you said $0.03. I guess, that implies roughly $10 million of revenue, was that...

Yes, $11 million, Gary. You're pretty close.

$11 million. Okay. I'm sorry if I missed that. Last question, so commercial mix was up year-over-year now for 2 quarters in a row. I think it's the first time in 5 quarters you've had -- I'm sorry, 5 years, where you've had 2 straight quarters where the commercial mix has been up. First, I just wanted to understand, if when you disclosed that, if that's a same-practice basis. And then also, is that being more driven by Pediatrix or American Anesthesia?

Well, I mean, it's an overall number that we put out there. But overall, we did have a favorable mix for the year, not for the quarter. So I agree with you on that. We did have a favorable mix back in '11. In '12, we had over 100 basis points. And again, it's -- We're just very encouraged but it's basically an overall mix shift but obviously, pretty much more driven by neonate, it's the pediatric side of the house.

So it's more -- but when you talk about -- I think you said 20 basis points this quarter, that's the total revenue metric? That's not a same practice or same revenue metric?

Yes, that's pretty much same-unit.

We'll go to the line of Darren Lehrich with Deutsche Bank.

I wanted to just ask a couple more things as it relates to how you're interacting with hospitals as you go through the due diligence of the deals. First, I guess, just when you get through that process, is -- are you finding that the contract length is longer than what you've typically seen in the past? In other words, you get to know each other better. Is there any result where you end up with just a longer, more durable contract?

There have been instances where we've renegotiated the length of the contract as part of our negotiations with the hospitals. But most of these contracts have, or all of them probably have like 90-day termination clauses in them. I mean, you've got some time to remedy issues and whatever. But at the end of the day, your -- none of these contracts are ever really, per se, long-term contracts.

Okay. And then, just -- as it relates to subsidy, I know anesthesia practices have some level of that. I'm just wondering how that discussion factors in here? And whether you're seeing any change in how hospitals are thinking about subsidy, anything to note along those lines?

Yes, I mean, that definitely is a topic of conversation, particularly when there are large subsidies involved with the anesthesiology practices. Our neonatology practices, as you know, not really come with typically with a lot of subsidies. But the anesthesiologists, they're spread out to so many different areas of the hospital that it's not unusual for hospitals to pay subsidy. It is a conversation that we have and there have been times when we have been able to help the hospital out with subsidies. It's a clear area of focus that these hospitals are having when they already know what their Medicare cuts are going to be like. And so that's an easy area for them to focus on. And it is part of an ongoing conversations with the hospitals, yes.

Okay. And then, maybe shift gears a little bit to volume trends, and maybe just wanting to get a little more specific in what you've seen in the various lines of service you're offering. I guess, in our survey work, we definitely saw further stabilization at first, but more interestingly, a bit of a second half pick up in surgical volume. And I'm just wondering if you can maybe give us some perspective on what you're seeing? And then you did mention, I think, some pressure in maternal-fetal? Just some commentary on how you're thinking about that outlook there.

Okay. So basically, it's fluctuated throughout the year because maternal-fetal for the year is positive. And so we did see some negativity there that I mentioned in the fourth quarter. And certainly in the fourth quarter, anesthesia was positive and really pretty much like the NICU. But what's turning around and so, as you know, that's something that we had in the earlier part of the year, it was up. It was more negative, I mean, it ends up being negative for the year but primarily because of the trajectory throughout the year. So again, with some of the volume, I still think there's volatility for -- again, for anesthesia we saw a pickup. So to your point on surgical volumes, we did see a pick up on anesthesia in the fourth quarter.

And Karl, maybe a question just for you, just to round out the anesthesia question on volume. It seems like there are some key areas like cardiology and ortho where some of the surgical volumes may have kind of been washing out. Any feedback from the anesthesiologists that you guys work with, about how they're thinking about that? And maybe some commentary would be helpful.

Well, we look at the volume we had across all of our hospitals when we saw a mix of growth, both in inpatient and outpatient and all different types of procedures. So but I wouldn't say we're seeing a big movement away the cardiac procedures and the ortho. I think there are some areas in the cardiac area that we're actually seeing more movement to use anesthesia in some of the procedures that they're doing. So we haven't really seen a big change in that as we go forward. We continue to watch by specialty level, what we're seeing but we're not seeing a big movement in our practices at this point. We continue to see that there's upside in the outpatient service center areas of moving some procedures into the service center side, as we can see them before, but nothing clear that says those are dropping dramatically, that's kind of the whole hope with the Affordable Care Act. You're doing less procedures on the patients. We're also looking at the part of those bundles and how do you make sure to be part of the bundle of these procedures perhaps health care kind of a counteraction with that potential reduction.

Our next question comes from Brian Zimmerman, Goldman Sachs.

My first question is regarding acquisitions. Now you mentioned in the anesthesia practices have been a bit more competitive and the pricing is up. How should we be thinking about multiples for both anesthesia practices and NICU practices? Has that really shifted at this point?

Well, I think new practices have not shifted. We continue to pay along the lines of the historical multiples that we have paid for those practices. On the Anesthesia side, we don't typically disclose what multiples we pay for those practices because there is competition there and we'd rather not put out that for our competitors.

Okay. And then going back to margins for a second and how we're thinking about them for 2014. Obviously, you have a number of moving pieces, you have parity, some acquisitions that put pressure on margins. But how should we be thinking about 2014 margins compared to maybe 2013? And are there any areas that you have identified where there could be additional cost-cutting opportunities?

So as you know, in our business, the cost cutting opportunities is not as dramatic because of the largest expenditure is physician cost. And so we have a quality of care issue there. It's -- especially on the NICU side of the house, it's really hard to -- if volumes are down in any given NICU, we can't just remove a physician. And so just overall, I think you have to look at it state-based, there will be some slight movement downward on the gross profit line unless we have, as you know, a bigger increase on the same unit, which I've said needs to be north of that. But as you saw on the operating income line for the quarter, it was basically flat because we had a big piece of that 7.5 or so related to same unit, about half of it was related to parity. And so it depends on where that fluctuation is coming from. If it’s coming from pricing or volume. And so, I’m not trying to evade your question, but even for us even for us internally, when we look at that it does fluctuate depending on the factors that are moving within same-unit even prior to the acquisitions.

Sure. That's fair. And then my final question is, I know it's incredibly early, have you seen any early indications that help reform that's having an impact on your business? And then could you just confirm that your guidance doesn't include any impact from reform?

Yes, And so as we said in the past, we haven't seen anything significantly impacting it on a negative basis. Actually, as you know, parity is positive for us. On the exchange side, it's really too soon to tell. We have had a very limited experience with exchanges. And right now, frankly, that's been neutral, there hasn't been any downward pricing movement on the exchange product set we've seen but that's a little bit too soon to tell.

Our next question comes from Brooks O'Neil from Dougherty. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: I think you had initially said you hope to get to around $400 million of spend on acquisitions in 2013. I mean, were you light years away from that or did it get pretty close?

We got there within striking distance, 75%, something like that.

We were at $251 million, Brook.

If you include -- Okay. I'm including what...

Striking distance.

I'm including what we generated and what we've closed recently, which was obviously we worked within in 2013. We're getting closer. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: Yes, you said that the pipeline hadn't fallen off. I mean, so there's a good chance that this year is an even better year than what might be sort of the run rate kind of trajectory?

I'm a slow learner, but I learn fast enough to not answer that question.

We'll go to the line of Matt Weight with Feltl and Company.

Vivian, you guys recorded nearly a $30 million in parity revenue this year. If everybody had paid appropriately and on time, do you have any kind of estimate what that would have been? And then, the $6.5 million that you accrued this quarter, do you expect to collect that in the first quarter?

Yes, so Matt, so we're -- the $31.2 million, it includes our best estimate, which is the $6.5 million or so that we estimated. Should there be more coming? Yes. But again, given that some payors haven't paid necessarily, more specifically, on the Managed Medicare side, it's hard for us to predict that. And so my best estimate is basically the $31.2 million, which a lot of it was in the bank but the other piece is in accrual. And so we'll continue to keep you guys updated and I do hope that I can continue to accrue more in '14, as we get some more consistency with the payments. But that's my best estimate at the moment.

Okay. And then just a quick last one here. Mix, I know, was up year-on-year, what was it sequentially?

Sequentially, it was basically up slightly on the government side. I want to say 20 or 30 basis points. I can't remember precisely but it was up slightly.

Our next question comes from Gary Lieberman with Wells Fargo.

With your comments regarding sort of the trend on anesthesia acquisition prices, I mean, would it be reasonable to expect that you might try to accelerate sort of your acquisition pace in anticipation of multiples continuing to move higher or how are you thinking about that?

Well, we -- I don't think that, that's a factor that would make us -- I mean, it's not -- the multiples aren't going up. I don't want to give the impression that multiples are off-the-wall. I was just asked if they've gone up any at all, and I said, I couldn't say that in some practices that were desirable for us that we hadn't paid a little higher multiple than we wanted to originally but I don't think that, that's a factor that is making us want to move faster. So I would say no.

Okay. Is there -- what do you consider sort of the key gaining factor in terms of closing deals? Is it just on the business development side, going out and finding them and getting them done? Or sort of how should we think about that?

No, not at all. Like I said, I think on the business development side, getting deals done and establishing relationships and all that I think is ahead of schedule what the gating factor is are these meetings that we have with hospitals and trying to understand what their strategies are and what their thinking about for the future, what their projections are. Are they want to us about how we can help them, as Karl has stated. And sometimes so it takes 2 or 3 meetings to get agreement with the hospital. It could take a couple of months. So it's definitely, as I said in my comments, first of all, because there are more potential acquirers, groups that are thinking about being acquired are looking at all the possibilities, which is what anybody would do. So that's a long -- the process of getting to the letter of intent because you want to see what group a, b, c and d has to offer. Once that's done, then it's the meeting with the hospitals in coming to a consensus about what we're going to have in the contract and what kind of help what to give the hospital and what they can expect from us. And that's all pretty new. I mean, in the past, many of those meetings were just really an hour meeting and the hospital just agreeing to move forward. So that has changed drastically.

We have a question from John Ransom, Raymond James.

It's Sliden [ph] in here. A couple of things. Private equity has obviously been heavily involved on the buy side of these anesthesia deals. Have you seen any of these deals yet boomerang and anybody decided to become a seller after not having men at work and if not, when or if you expect to see that?

Without getting into details, we have -- there are rumors out there that we -- that don't surprise us. The majority as you know of these PE deals are just stamp collections. They're not integrating the practices into -- and bringing value to their hospitals and to their aggregators. Their goal is to aggregate as many of these practices as they can and bring them out of the public market. That compares with our 20 years, next year, history of integrating these practices and building our national group.

How does this any different than what we saw in the 1990s with the 30-something public PPMs and a lot of them just -- at the end of the day being a financial plays.

Yes. Well, you tell me. We're seeing a lot of the same symptoms, I think, but there are lessons that have been learned. And look, some of these PE firms have stellar track records of having done exactly that. So I'm not trying to knock it. But I'm just telling you our strategy is different from theirs. We're not putting together stamp collections.

Okay. Tough [indiscernible] The other question, do you have an idea of your approximate exposure in the states that are expanding for Medicaid? And do you effect -- do you expect that to have any impact on the anesthesia side?

Our anesthesia Medicaid business is small. The percentages there are very small. So it could have some impact. But all of the station which we have practice are already -- for pregnant women and children are already at 130% of federal poverty levels, eligibility for Medicaid.

Even at Texas? I don't think Texas was.

I think the information that I have is, yes, Texas included. All of the states where we practice are at that level, yes. And I'm getting a lot of nods from around the table. So I think we are -- yes, and people from Texas are telling me, yes.

Our final question comes from Brian Tanquilut with Jefferies.

Roger, just to follow-up on John's question earlier, as you -- as the acquisition landscape's gotten more competitive, are the discussions expanding beyond just your usual strengths as a company into more of a financial decision for the doctors? Because I know when you did your last Investor Day, we talked about how you guys are differentiated and how doctors are choosing MEDNAX for a reason. But is that dynamic changing?

Well, there's no doubt that finances play a role. And the factor that these private equity firms have to offer is 2 bites at the apple, right? You will pay with some cash now and we're going to go public in x amount of time and our stock is going to be worth 5x of what's it worth today. And you'll get to cash out a second time back then. That's basically what we're competing with. I mean, they -- any other issue, they are not able to compete with us. They're not competing with us on the valuation, liquidity. If from a financial standpoint, multiples. We're not losing too many deals because of multiples. But you take a group with 100 physicians and 80% of them are 40 and they feel like they are more able to take those kinds of risks. So that's really the factor, the other stuff research, medical education, quality, that stuff. There's just not any comparison there.

And then last question, you alluded to some of the hospitals asking about ER. Is that a risk to the model whereas hospital CEOs start thinking about bundling and you are a NICU and anesthesiology provider, and at least for now, you're not willing to go into ER or hospitalist or other lines of services, that those CEOs could look somewhere else to bundle their service?

It's a risk. But I don't want to give the impression either. I mean, we do have some ER contracts, the pediatric ER contracts with hospitals that have asked us to run their pediatric emergency rooms. We have pediatric intensive care. That's also hospital-based. So there's a lot of help that we are able to provide our hospitals. We haven't had anybody come to us and say, "Hey, if you don't cover my ER, we're going to cut your contract." We do think that, that would be a nice thing to be able to offer a hospital. If they're looking to cut down their subsidy, you can say, "Well, if you let me have your emergency room or your radiology room or whatever, we can talk about reducing subsidies." So I think that's more of a strategic discussion for us going forward. But again, although that threat could happen, we have -- we're not feeling any pressure across the country at this point in time to enter into emergency room or pathology or radiology. We might do that, but it's not because of pressure that we're feeling right now.

We have no further questions. Please continue with any closing remarks.

Okay. Well, thanks very much for attending our call today. If there aren't any more questions, then we'll just look forward to speaking with you next quarter.

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