Good day and thank you for standing by. Welcome to the Option Care Health Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker Mike Shapiro. Please go ahead. Mike Shapiro, please go ahead.

Good morning. Please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today's press release as well as in our Form 10-K filed with the SEC regarding the specific risks and uncertainties. We do not undertake any duty to update any forward-looking statements except as required by law. During the call, we will use non-GAAP financial measures when talking about the company's performance and financial condition. You can find additional information on these non-GAAP measures in this morning's press release posted on the Investor Relations portion of our website. With that, I'll turn the call over to John Rademacher, Chief Executive Officer.

Thanks Mike and good morning everyone. The quarter results reflect our continued strong execution in a very challenging operator environment. Overall, we are quite pleased with the progress we made in the third quarter, while delivering solid growth in revenue and earnings. Growing EBITDA earnings by nearly 10% year-over-year during a period of significantly disruption, demonstrates the strength of our team and the resilience of the platform. The team responded to dynamic market conditions including repositioning by some market participants, a significant natural disaster, and escalating inflationary pressure to help ensure we are providing real solutions to our referral partners and setting the standard for patient care across the industry. In the third quarter, revenue growth of more 14% is a result of mid-single-digit growth in key acute therapies and mid-teens growth in the chronic portfolio. We continue to focus on streamlining the onboarding process with referral sources and we have made progress across a number of key therapeutic areas. Our collaborations with health systems across the country enable us to accelerate growth in the quarter for key acute therapies given favorable market dynamics and the Option Care Health team responded to acute opportunities in specific markets to ensure our referrals sources to rely on us for efficient transactions of care. Although this cost streams on our operations at market level in the near-term, we believe the strength and resilience of our technology-enabled national network was a significant asset. Our ability to dynamically shift workload to utilize our capacity and respond to the needs of hospital partners in the local markets, help to reaffirm our position as partner of choice. I would also like to recognize the incredible work of our team in Florida and across our enterprise as they supported our patients and referral sources in the path of…

Thanks John. Revenue growth in the quarter of 14.5% was well balanced as John mentioned, as we saw solid mid-single-digit growth in the acute portfolio and continued mid-teens growth in the chronic portfolio. Our quarterly net revenue exceeded $1 billion for the first time as a team has driven double-digit revenue growth on a sustained basis. Gross margin of 21.4% declined 140 basis points year over year, as a result of continued mixed impact towards chronic therapies and unprecedented cost pressures that continue to affect our margins. I'd previously estimated quarterly inflationary impact of $10 million to $12 million and in fact, we continue to see emerging cost pressures across a number of categories. While that range was an estimate, we are currently seeing inflationary impact about $10 million to $12 million a quarter, impacting primarily our gross margin, but also to a lesser extent in SG&A. With respect to spending, SG&A grew a little over 5% and declined as a percent of revenue to 13.9% despite the inflationary pressures I just discussed. We remain vigilant on cost management and efforts to drive additional efficiencies, which is enabled to a great extent by our investments in technology. This has also enabled a more proactive staffing strategy given the labor market backdrop and has resulted in a more efficient labor model in many markets and functions. Adjusted EBITDA of $85.6 million grew 9.8% over the prior year and adjusted EBITDA margins came in at 8.4%. Again, at a high level the cost pressures we absorbed in the quarter impacted EBITDA margins by over a full point. Despite the near-term challenges, our conviction around the scalability of the platform and ability to expand adjusted EBITDA margins over time remains intact. As all you know, our mantra is that revenue only counts if…

Certainly. [Operator Instructions] Our first question will come from Matt Larew of William Blair. Matt, your line is open.

Hey, good morning. Mike, I just want to start on the inflation comments just to get a sense for where you might be seeing things a bit worse than expected. Maybe that's across the board. But if they're kicking the pockets of a challenge or areas are getting better, and then how to maybe think about the duration of the -- and perhaps how we should think about them as we roll into 2023?

Thanks Matt and good morning. Great to hear from you. Yes, look, as we've mentioned, repeatedly over the course, the last couple of quarters, it is a multifaceted battle on the inflationary front. I think we've been candid that some of the larger categories are around, obviously, the clinical labor across our nursing and pharmacy organizations, as we've tried to articulate. Crude oil has a multifaceted impact on our operations, both from shipping and logistics on therapies, leaving our compounding pharmacies as well as the thousands of miles that we're driving and reimbursing our clinical teams for on a daily basis to the medical plastics and supplies that we're procuring. So, I don't think there's any one category that has disproportionately deteriorated. We've seen building utilities, electrical and natural gas, they're up double-digits now versus Q4 of last year, as well as a lot of broad business services, whether it's facility management, maintaining our fleet of more than 40,000, infusion pumps, et cetera. So, I would say there's nothing, where there's been an epiphany, it's just pardon the analogy, it's death by thousand cuts. In terms of where we see this heading, frankly -- and again, obviously, we're not in a position to provide any thoughts on next year at this point. But as John mentioned, and I wholeheartedly agree, we don't see these costs subsiding anytime soon, we don't see them as transitory. And, frankly, that's our rally cry internally to become more efficient to drive more productivity.

Okay, got it helpful. And then the topline obviously, was strong again, and that a little bit bucked the trend from other providers in the space where maybe there's been lower referral volumes or low lower hospital volumes cited. So, maybe just give us a sense of if you're sensing some share, taking that maybe benefiting from competitors, leaving the market in some acute markets, just maybe help us to understand the topline strength a little bit better?

Yes, Matt, it's John, good morning. Look, I think overall, we feel like we're really well-positioned to be that partner of choice for those health systems and especially in some of those markets where there was disruption and a little bit of shift in the competitive dynamics. I think as we went through the quarter, we found a better rhythm on that. Needless to say, there's -- there were some capacity constraints as we're building up our ability to take on additional patients. We always try to operate pretty efficiently and effectively. And that's part of the operational and business acumen of our team is adjusting around that and using the capacity where we could. So, look, we saw, I'd say better referral volumes in some of those markets and I think we're able to convert that over which added to the strength. But as I said, in my prepared remarks, it did put some strain on the system, as we are adjusting to some of that market dynamic, and I think also contributed to some of the cost structure just because we had to move things around as part of the workload balancing that we can do across our network based on the technology. So, all-in-all pleased about it, we think there is some share shift, that was -- that we recognize in the third quarter and the focus of the team is always from a commercial standpoint, is around reach and frequency and make certain that we have those relationships to help support our health system and our prescriber partners, as they're looking for transitioning patients on the service. And I think we executed well, even though there were some strains that were caused by some of the some of the workload that got shifted because of market dynamics.

All right. Thank you.

Thanks Matt.

Thanks Matt.

Our next question will come from Lisa Gill of JPMorgan. One moment Lisa.

Good morning. Okay, great. Thanks very much. Good morning. I just want to go back. You made a comment around three areas, you said repositioning the hurricane and inflationary pressures. You've talked about the inflationary pressures. Is there a way to quantify the impact from the hurricane in the quarter whether it's to revenue or operating profit?

Yes, Lisa, I don't think there is -- certainly there was disruption during the period, you know, I do -- again, just want to call out the great work of our team. A lot of that what happens is we have to prepare in advance, we have to make certain that our patients have medicines and supplies, that will get them through the emergency. Many of them moved away from the coast. And so we really scrambled to make certain that we were well-positioned and that we were able to serve our patients through that. The long-lasting impacts in Southwest Florida, as we've all seen in videos and on the television, it's going to have some modest impact around just the care delivery model within that area. But I'd say in general, it's too hard for us to really quantify. I don't know, Mike, if you've got any additional color that you'd like to add?

Yes, John. Hey, Lisa, the only thing I would say is look that, Ian hit later in the third quarter, but as John mentioned, we're maniacal about making sure we know where our patients are, do they have the supplies and the therapies. And so there was some inefficiency and some spike later in September, I'd say in the third and fourth week, as we tried to compound ahead, we have compounding pharmacies in Fort Myers and Tampa, and we wanted to make sure that we were shifting production. I think that speaks to the resiliency of our model. But there was some disruption in referrals and in costs, which were always going to put patient care above everything else.

Great. And then just a quick follow-up, you talked about Rochester Home Infusion, you talked about low double-digit EBITDA multiple that you pay for it, but can you help us to maybe understand what types of services this business provides? Is there any way to break down between acute and chronic? Is there new functionality you're going to get? Any other incremental details that you think would be important for us to understand around that acquisition?

Yes, we're really excited about it. As we've mentioned from an M&A perspective, we're going to be very thoughtful, as we look at other infusion assets to make sure that strategically they fit as well as economically it's, it's sustained. It's not just looking at folks that we're competing against within a metropolitan area. Rochester is quite unique, they have a very strong presence in Rochester, Minnesota. As you know, there's one or two notable health systems in that area, where they really focused on -- in that area, as well as they're casting a pretty broad shadow across the Upper Midwest, Wisconsin, Minnesota, Iowa, combining their health system centric relationship management with our infrastructure, technology and procurement. We see that as an exceptional way for us to extend our operational footprint with what we see is a very strategically well-positioned operator within admittedly relatively finite geographic area. But it's -- they have relationships in that area, which are highly complementary to our commercial efforts.

Yes, the only other thing I'd add to that Lisa is look, when you when you have that depth of a relationship, and certainly with some of the health care providers in that marketplace, they -- there is a traveling aspects of many of their patients. And the ability for us to service with our national network as they're discharged back home to their local communities, the Option Care Health network just fits really well within that service model as well. The mix of business, I think, is in alignment with our standard book between acute and chronic. But it was really the depth of the relationship and the presence that they had in the market that I think was really intriguing, as well as, I think a really strong cultural fit putting the patient is the center of everything that they do and developing those deep relationships with the referral sources in their community.

Great. Thanks for the comments, and congratulations on another solid quarter.

Thanks Lisa.

Thank you.

And our next question will come from David MacDonald of Truist. Your line is open, David.

Yes. Good morning, guys. Couple questions. You guys mentioned 23% of the nursing visits being through the ambulatory infusion suite, can you give us a percent a sense of what is that percentage amongst new patients that are coming on? And then can you also talk about just the importance of that setting as new products come to market. I mean, I'm thinking about potentially, eventually something around the Alzheimer's area. If something on the reimbursement side, we'll work out, just how you guys think about the importance of that, and how leverageable that is with payers and manufacturers as new products come to market?

Hey, good morning, Dave. It's Mike. I'll take the easy one, then I'll let John answer your second question. Look, we're really energized about, our expanded footprint. We're opening these -- we opened an additional four in the quarter, as John mentioned, we're on track to, open 25 new centers. We talked earlier in the year about our nursing visits being around 20% to 21% in the center. In the third quarter, we saw some traction on that front. Admittedly, that's skewed more towards our patients who are more ambulatory, typically we penetrate the chronic conditions to a greater extent. And as you can imagine, part of it is, is we engage with patients upfront, ensuring that we have convenient and aesthetically pleasing facilities that are convenient to them and their lifestyles is key. Obviously, we can have those conversations more and more as we're opening more of these centers. So, the short answer is, we're seeing considerably more traction, especially with some of our newer chronic patients that are coming on to service. Again, especially if we can offer them an alternative that's convenient. As we mentioned, our patient satisfaction is as high if not higher in our centers, as opposed to the home. So, really excited, but we were seeing traction and we would expect that to continue going forward.

Yes, David, and it's part of just the overarching strategy, to your point, we really look at this as being a platform that allows us to expand our ability to serve biopharma, as well as patients more broadly in the marketplace. And we're always looking for ways to expand the product portfolio, whether it's through some of the limited distribution drugs that we have access to, and certainly in the conversations that we have as being a channel partner, for biopharma as they're looking to introduce new products or -- to focus around additional work and marketing on existing products. So, this platform really allows that. As Mike said, the expansion has been one in which we're going deep in markets, so that we have that convenience factor. For many of the patients and especially those with chronic conditions that are out doing activities of daily living, they're going to work, they're out in their communities, and to have a very convenient and efficient place to move -- to receive their care, we think is, is extremely important. We also -- look, there are some interesting new products that are on the horizon, whether it's for Alzheimer's or other disease states, and the infrastructure that we're building, and the facilities that we're operating, will really position us well, to be able to take on some of that patient cohort, if it gets approved, if there is a path to payment, if, there's a lot of ifs on that on that journey. Dave. But we feel like the investments that we're making will continue to make us well-positioned as a partner of choice for those biopharma manufacturers, and for those prescribers, who are looking for a solution to help support their patient base.

Okay, and guys, just two other quick questions. I don't know if you want to get into this level of detail, but just on the acute side. Can you give us a sense in terms of just the impact of some of the competitor moving markets? If you think about kind of a mid-single-digit growth? I mean, was this enough that it contributed a point or two? Or is it more around the edges? And would you expect to kind of continue to see opportunities to pick up share in some of these markets? As you know, potentially some competitors exit?

Yes, well, I mean, I would characterize it as on the margin benefit. Look, I mean, we've been clear that our strategy is to focus on the breadth of both acute and chronic portfolios. We see that as a winning strategy for us going forward. But we've also been very clear that the acute business is not easy. It's, it's, to be as responsive as our health system partners expect us to be, hundreds if not thousands of times a day to turn that it takes investment. And as we've been very open, we've been investing over the course of several years to make sure we have that resilient and dependable platform. And so, look, there's no metropolitan area where it's just us and one or two others. Every market is competitive and we feel -- it's a challenging environment out there from the inflation from a labor availability perspective. And we're not really tracking our performance relative to one or two others. But I think we feel really good about our dependability with across the market. But again, it's -- every market is competitive and I think going forward, that gives us wind in our sails. But I would characterize it how you did, which is like, it was a solid quarter, it was mid-single-digits. And we've been open that we see this as a low single-digit portfolio over the medium term. So, really encouraged by the near-term execution.

And then just guys, one last question just on TouchPoint. Can you talk about the potential benefit in terms of just data capture, and what that -- how that may be helpful, not only for you guys, but in terms of kind of relationships with your payers and sharing that with the payers?

Yes, Dave, look, we're really excited about the progress and the fact that we've, we've gotten to this point in our development plan and, and roadmap that we had laid out. Look, we have always focused around data. As an organization when you think about what we're capturing on the patients that we have the privilege to serve, it is of really important value, as we see it. The TouchPoint tool is just going to enable that even more. And as part of our overall digital strategy of digitizing the care plan and every interaction that we have, and then being able to, put that into structured data that we can utilize, to interrogate and to identify opportunities for us to improve clinical protocols for us to make certain that we're driving superior clinical outcomes, and then be able to share it with partners, whether in biopharma with the identified data set or with prescribers, or with payers as we move that forward. And so this allows us to have a much greater opportunity to collect data on a longitudinal basis, it allows us to have a much more direct and intimate relationship with the patient base. It allows us to have secure two-way communication between our clinicians and our patients that we're serving through that process. So, we're really excited about it. Look, it's early stage. But when you think about capturing social determinants of health, you think about all of the other components, that we have a privileged insight, given the fact that we have a depth of relationship, whether in the home or one of our infusion suite, given the amount of time that we spend with the patient. We are really excited about this next phase and the potential that this platform will bring for us to enhance the already rich data set that we're collecting today.

Okay. Thanks very much, guys.

Thanks Dave.

And our next question will come from Kieran Ryan of Deutsche Bank. And Kieran your line is open.

This is Kieran on for Pito. How's it going?

Hey Kieran

First, I just wanted to get your thoughts on the implied 4Q revenues, on a sequential basis, it seems a little white versus kind of what you've done over the last couple years as far as the step up from 3Q to 4Q. So, I was wondering if you could kind of just talk about what would drive revenues to be flattish sequentially.

I think we've provided a range, Kieran, that we think is reasonable and prudent, obviously, recognizing some of the challenges. I think the implications of our guidance would still imply a Q3 to Q4 step-up, which you historically see in this business. Again, I think this year with solid performance in the third quarter, I don't think there's any underlying message we're trying to say around a deceleration of the business. So, I think our expectation is we'll continue to see, productive topline traction going into the third quarter -- or into the fourth quarter if anything, it might look a little more modest, given some of the performance in the third quarter.

Okay. Okay, got it. And then so I guess if you're seeing revenues, flat, maybe slightly up, then. you talked about a few of these inflation and other cost pressures. It sounds like they're not necessarily supposed to get worse from 3Q to 4Q. But since the revenue growth isn't huge, can you talk about what would be driving the 50 bps of margin expansion from 3Q to 4Q? Then is, is there anything like rolling off there sequentially or?

There's no, there's no real items in Q3, in terms of comparability, as you, as you imply, we're obviously based on our implied ranges, we are anticipating a modest EBITDA margin expansion from Q3 to Q4. And I think it just really comes back to the fact that look with some additional revenue, and given our focus on productivity and cost containment, again, I don't think that we're expecting the inflationary pressures to subside. I would, -- I correlate that to our focus on just continuing to drive productivity and, profitability going into the fourth quarter.

Okay. Thank you so much.

Thanks, Kieran.

And our next question will come from Joanna Gajuk of Bank of America. Your line is open. Joanna, your line is open.

Yes. Hi. Good morning. Hi, how are you? So -- just a little bit of pause, I wasn't quite sure if it's me, I couldn't hear my name. Okay, so great. So thanks for taking the question. So I guess a couple items here. So just first, like, following up on the commentary around staffing and labor? So are you seeing any improvement there? I mean, sounds like you're talking about kind of lumping everything together as an inflationary pressures, a little bit higher than what you were expecting before. But can we talk about labor in particular? So any easing or anything, acceleration and difficulties there. And I guess, in particular, any problems in getting a staff in place to take the patients on? Because I guess, so far, you have not mentioned that. So just want to hear a commentary a lot? Thank you.

Yes, Joanna, it's John. Look, it's a tough market out there, for labor across all of the different, job categories that we have, as part of our team. I would say that, the pressures remain there, I think the team has done a really good job in recruiting, we continue to see really strong, results in -- in our recruiting efforts, through that process, the areas that are a little bit more constrained is certainly in the nursing and the pharmacy technician, area. And we've got a lot of work underway to make certain that -- time to fill is in an adequate range as we go through that. To your question, look, we liked the model that we operate, especially in the nursing that gives us some flexibility, with our full time, part time and per diem structure and utilizing our nursing network with the infinity and spin acquisitions that we did. So, we are able to flex really well, to meet the demand in the marketplace. Given some of the market disruption, there were some near term challenges that we felt just because, look, we don't run heavy. As an organization, we operate pretty efficiently around our staffing models and making certain that we're matching capacity to where demand was, when there was some market disruption. The ability for us to ramp up takes a bit of time, especially in the operations perspective, when you bring in people and you've got to onboard them, train them to your policies and procedures, and make certain that they are certified, to be able to operate within our environment. So, there's a little bit of lag there. And so, I think the team has done a fantastic job of responding to that and I don't see anything that is over the midterm, an overall concern other than just look, their wages and labor pressures, we think are going to be persistent. And we're doing everything we can to focus around making certain that we have the right team members in place, but also focused around productivity and efficiency of the resources that we have.

Great, thank you. And I guess the other follow-up, you also mentioned you're getting traction with your payers, right. So any way to kind of same for us any acceleration in the in the -- in your pricing going forward?

Yes. Look, I would characterize it as and I think we've said this before, no one's knocking on our door, saying, hey, we want to give you more money, on a reimbursement standpoint, but our market access team has, very strong relationships with our payer community across, the 800 payer relationships, we have the 1,400 contracts that we manage. There have been circumstances where we have been able to modernize some of the REITs for nursing and per diem, given, the pressures that were feeling and making certain that we can provide access to their members, and, being able to be reimbursed on a fair and, and an equitable way for the value that we're delivering. So it's a focus of the organization, I don't want to say that it is something that's carte blanche, and that we have an ability to just take that price to them or, take price to the market on that. But we have been having constructive conversations. We have been working in partnership in different areas. And there is an opportunity, I think that folks are starting to realize that in order to afford high quality care, there are, increasing costs, and there's a little bit more willingness -- to at least have those conversations and help us modernize some of the rates, that that we need to be able to continue to support their members. With that, I think we've explained, multiple times, but we get reimbursed across three dimensions, that's the drug, a clinical per diem, and a nursing rate. And, we look at those all in conjunction with each other, they're balanced in the way that we underwrite the business. And so, we always try to take a very practical and pragmatic approach, looking at the overall economics of those contracts, and finding the situations where we're, we need to take rate, and we'll have those conversations in a very formal and a disciplined way.

Just to close it off, so we don't want to staffing and pricing. And I understand you're not providing guidance for next year. Not this point. But any other consideration, we should be thinking about, as we think about the next year, when it comes to headwinds and tailwind?

Yes, look, Joanna, as you mentioned, we're just not in a position to share any thoughts, we'll obviously do that in late February, when we come back with the fourth quarter call. We're obviously assessing quite a few variables going into next year. So it's not in a position to unpack anything at this point.

Okay. I understand. And I guess just one last one, I guess in terms of the stake that the Walgreens has, I don't know whether you can share any views around, their plants around it, and kind of how you view their potential investment in the company and going forward? Thank you.

Yes, Joanna, as you can imagine, we're not in a position that's their stake, I'd refer you to John and the team over there. Obviously, we are not in a position to share anything regarding their intentions on their remaining stake.

Thank you.

One moment. And our next question will come from Jamie Perse of Goldman Sachs. Jamie, your line is open.

Hey, good morning, guys. I wanted to follow-up first, on the acute side. I think some of the facility closings and operation closings are pretty late in the quarter. I'm sure, there's a wind down period, but just any comments on whether you saw the impact of share gains and acute, across the quarter or, just any timing comments there or if there's shares gains might still be ahead of us.

Yes, Jamie. Good morning, it's Mike. Look, I'd caution to directly link the mid-single-digits solely to repositioning by others. Again, as I mentioned, every market is quite dynamic. We see repositioning every quarter. We see folks entering and consolidating. We see some folks, as we've seen around midyear where they've closed down some of the pharmacies. And so, again, there's no market where we're disproportionately benefiting because of a position, because there's multiple providers in every single market that we operate. And so look, we saw a number of moves throughout the quarter. We saw some folks making moves as early as the late second quarter. And again, not to try to be a little bit elusive, but really our focus is just on being reliable and collaborative with the health systems, whether it's new patients coming on service, or transitioning patients where they receive notice that provider is no longer willing and able to support them. So I wouldn't make it directly just to a couple of moves from other participants or try to map it out in one month or another.

Okay. Thank you. And then we've just seen utilization across healthcare a little bit subdued in the third quarter, some are calling out vacations or various challenges across healthcare. Can you comment on the seasonality you saw for chronic new patient referrals, if it was in line with historical trends, or any more seasonality that you might have seen this year?

Yes, Jamie. It’s John. Look, as you see the tea leaves [ph] as we do, look, I'll start with the acute side, hospital admissions and utilization was lower. I do think, again, that kind of speaks a little bit to your last question around our team, really focusing around reaching frequency and making certain that we are a Partner of Choice to be able to capture the demand that is in the marketplace to on that. And so I think it was subdued, as you said. I'd say from the chronic standpoint, I'd say similar trends, we saw, I guess, new patients, let's call it, naive patient coming on service with us, probably in alignment with our expectations, but I'd say it's a little bit lower than where the historical trends has had been on that. And I think everyone's trying to understand what's going on kind of across utilization across the board from the payers to the providers through that process. But I think we'll see the trend just continue as is we're not seeing significant changes in either direction, around the quantity of patients that we're seeing through the referral process.

Okay. Great. And then last quick one, I can you size STELARA within the portfolio, and others lots of exclusivity coming next year for that asset. Just any color on size, and how to think about impact probably not too much in 2023, but potentially in 2024?

Yes, Jamie, it's Mike. As you know, we don't break out specific therapies. What we have said is that our largest therapy, broad therapy category, which is immunoglobulin is around 20% of our revenue, chronic inflammatory therapies is meaningful, but it's not even that big. And so look, when you unpack that further, it's across a number of indications and a number of therapies, including things like Remicade and [Indiscernible], STELARA, Inflectra, Renflexis. So I would say, as we've talked about, we pride ourselves on the broad portfolio of therapies. We have a great relationship with Janssen for STELARA, but I wouldn't characterize it as a disproportionate risk to our revenue going forward.

Okay. Thanks. Appreciate all the color.

Thanks, Jamie.

And one moment. And our next question will come from Michael Petusky of Barrington Research. Your line is open, Mike.

Good morning. I guess a couple questions real quick on some forecasters are saying heavy flu winter possible COVID spikes possibly, I'm just wondering my instinct is that's probably cuts for you guys in a positive way. Even COVID with potential site of care shifts? I mean, can you just comment if we do see heavy flu or reemergence of COVID or COVID spikes in parts of the country, how you guys think that cuts for you? Thanks.

Yes. I think the ability for us to service patients in the home or in a dedicated infusion suite, certainly had some benefits for those that are immunocompromised and don't want to be in a community setting to receive their care given influenza or other contagious diseases on that. So, look, I think we're well positioned with what we've done both in expansion of our dedicated infusion suites, as well as our ability to reach into the home. And so we think there are some positive aspects of that, again, we feel today, we felt through some of the changes in the healthcare delivery system, with the impacts of COVID through that standpoint. It's hard to quantify, but I just say, we normally see that is something that supports care in the home or in an isolated setting, as opposed to a community setting.

Got it. Thanks. And just one other federal government, there have been stories out there expanding the standard tax deduction, Social Security benefits due to inflation. And you guys have talked about some positive conversations and renegotiations with commercial payers. I'm just wondering, is there any chance that this persisting inflation possibly could result either in the near term or longer-term and maybe a more rational reimbursement structure from on the federal side -- federal government side? Thanks. Yes. You

Yes. It’s -- unfortunately, it's kind of a common answer that I give quarter-by-quarter. Look, we're doing everything we can to be working, both independently and with the national home infusion association to get Congress to act around the preserving patient access to Home Infusion Act. There's a lot of work that is happening behind the scenes with bipartisan support to get that legislative fix. There's just a lot of priorities in Washington right now. And I think there's a lot of wait and see around what happens with the midterms. So look, we're always going to continue to, I guess, sing the praises of home infusion from the highest mountain top and try to get as many people to understand the disadvantage that exists right now for Medicare beneficiaries, and given the current reimbursement structure. But it's really hard to hazard a guess and one would hope that common sense will prevail, but it's Washington, and there's just a lot of different things that are pulling on the priority from that perspective.

So just a quick follow-up. So you don't you don't feel like this sort of persisting inflation in any way to sort of move the needle any closer to some kind of rational reimbursement policy, is that fair?

I think that's fair. I mean, I think the merits of what we've been trying to do are the merits of what we've been trying to do, I don't think that the inflationary conversation does really anything to support that. There has to be a recognition of the deficit of access first, and the fact that total cost of care would be reduced for Medicare beneficiaries if they utilize home or alternate site infusion therapy, as opposed to where those patients are receiving care today. So inflation is certainly an aspect of that. But there's just a fundamental misunderstanding within CMS around the value and virtues of the home as being a place of care for infusion services.

Got you. Thank you so much.

Yes. You're welcome.

And I am showing no further questions. I would now like to turn the conference to John Rademacher for closing remarks.

Yes. Thank you for attending our third quarter call this morning and for your interest in Option Care Health. As you heard, we had a very productive third quarter and we are confident in the strategy we are executing and the strength of the platform and our team. Take care and be well.

This concludes today's conference. Thank you for participating. You may now disconnect.