Emergency Medical Services Corporation Q1 2009 Earnings Call Transcript

May. 5.09 | About: Emergency Medical (EMS)

Emergency Medical Services Corporation (NYSE:EMS)

Q1 2009 Earnings Call

May 05, 2009 11:00 am ET

Executives

Deborah Hileman – Vice President, Investor Relations

William A. Sanger – Chairman and Chief Executive Officer

Randy Owen – Chief Financial Officer

Analysts

Art Henderson – Jefferies and Company

[Sudep Singh] – Deutsche Bank

David Bachman – Longbow Research

Kevin Campbell – Avondale Partners

Shelley Gnall – Goldman Sachs

Andreas Dirnagl – Stephens Inc.

Operator

Good day ladies and gentlemen, and welcome to the first quarter 2009 Emergency Medical Services Corporation earnings conference call. My name is Candice, and I will be your coordinator for today. (Operator Instructions). I would now like to turn the presentation over to your host, Ms. Deborah Hileman, Vice President of Investor Relations.

Deborah Hileman

I’d like to welcome everyone to EMSC’s quarterly earnings conference call and introduce our presenters, Mr. William A. Sanger, Chairman and Chief Executive Officer, and Randy Owen, Chief Financial Officer.

Before we begin, I would like to read our Safe Harbor statement. Certain statements and information herein may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include but are not limited to statements relating to our objectives, plans and strategies, and all statements, other than statements of historical facts that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date of this conference call, and EMSC undertakes no duty to update or revise any such statements.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in EMSC’s filings with the SEC from time to time, including in the section entitled ‘Risk Factors’ in the company’s most recent annual report on Form 10-K and subsequent periodic reports.

Among the factors that could cause future results to differ materially from those provided in this conference call are the impact on our revenue of changes in transport volume, mix of insured and uninsured patients, and third-party reimbursement rates and methods, the adequacy of our insurance coverage and insurance reserves, potential penalties or changes to our operations if we fail to comply with extensive and complex government regulation of our industry, both as it exists now and as it may change in the future, our ability to recruit and retain qualified physicians and other healthcare professionals, and enforce our non-compete agreements with our physicians, the loss of one or more members of our senior management team, the outcome of government investigations of certain of our business practices, our ability to generate cash flow to service our debt obligations and fund the cost of capital expenditures to maintain and upgrade our vehicle fleet and medical equipment, and the loss of existing contracts and the accuracy of our assessment of costs under new contracts.

I will now turn the call over to our Chairman and CEO, Bill Sanger.

William Sanger

Thank you, Deb, and good morning to all. Q1 of 2009 was another successful quarter for EMSC. In the face of a difficult economy, we produced revenue growth of 8.3%, adjusted EBITDA growth of 20.5%, and EPS growth of 41.4%. During the quarter, we generated free cash flow of $47.4 million, further strengthening our balance sheet and cash on hand. The quarter was highlighted by contract wins and improvements in our overall operations.

At AMR in addition to benefiting from lower fuel costs, we implemented enhanced deployment strategies including the use of new technology. We also saw an improvement in our employee retention which further reduced compensation costs. At EMCare, we improved physician retention and implemented enhanced patient management strategies resulting in higher contract retention. We were also able to reduce physician compensation costs through the implementation of new scheduling strategies and scheduling technologies.

On the AMR contract front, we recently announced that we entered into a national medical transportation agreement with SunBridge Healthcare Corporation. SunBridge operates more than 200 long-term and post acute care centers in 25 states, and today, we are announcing a signing of a managed transportation agreement with HealthSpring to mange the transportation needs for the Medical Advantage plan members in 6 states. This contract is expected to generate approximately $4 million in annualized net revenue. During Q1, we also started 2 new 911 contracts and 31 new inter-facility agreements with expected combined annualized revenues of approximately $9 million.

At EmCare, you may recall that 2008 was a banner year in contract growth. As such, our first quarter of 2009 revenue benefited from the increase in contracts signed during the year. 2009 is also off to a good start with 7 net new contracts signed in Q1. Moreover, our sales pipeline continues to be robust as demand for our services remains strong.

In addition, we believe our recent expansion into the final teleradiology and anesthesia markets will further enhance our organic and new sales opportunities as we’re seeing these service lines become a very large portion of our sales pipeline. This quarter, we ended into an agreement with a regional provider for hospital-based physician services, and that’s Christus Health. In addition to expanding our ED presence with Christus, we added anesthesiology and hospitalist service lines.

This recent agreement as well as other regional and national agreements entered in 2008 further demonstrates the value of EMSC’s broad scale and scope of services. Since entering into these national agreements, we’ve signed over $85 million of annualized new revenues. We are confident in our ability to enter into additional multi-service arrangements with other leading hospital systems as well as free-standing hospitals.

In closing, last quarter, we discussed our renewed commitment to operational efficiency in the current economic environment. Our results of Q1 of ’09 not only reflects continued revenue growth, but also our ability to manage cost and deliver strong results for our clients and to our stockholders.

Lastly, I’d like to take this opportunity to recognize the extraordinary efforts of our employees and our local leadership teams. Their continued commitment to the delivery of high-quality patient care in an efficient and effective manner has been and will continue to be fundamental to our success.

I’d like to now turn the call over to our CFO, Randy Owen.

Randy Owen

As I discuss our performance, I will be referring to certain non-GAAP measures such as adjusted EBITDA and free cash flow, which are not considered measures of financial performance under Generally Accepted Accounting Principles. Therefore I direct you to the reconciliations included in our earnings release and on our website. Unless otherwise noted, all comparisons refer to the first quarter ended March 31st, 2008.

EMSC’s consolidated net revenue for the first quarter 2009 was $613 million, an increase of 8.3%. AMR net revenue was $336.4 million, a 3.1% increase. Our revenue for transport increased 4.3% from the net impact of rate and reimbursement increases and 2.6% from growth in our managed transportation business and other standby revenue over the prior year that don’t have associated transports.

Weighted transports were down 3.8% while ambulance transports were down 3.3% or 25,000. The change was primarily due to a decrease in ambulance transport volume in existing markets of 2.9%. This includes an estimated 2.5% impact from one less business day and a mild flu season in the first quarter of 2009.

EmCare’s net revenue was $276.6 million, an increase of 15.5%, which includes a 12.7% increase from the addition of 86 net new contracts since December 31, 2007, including 45 anesthesiology contracts from our acquisition of clinical partners, which contributed $2 million in management fee revenue in the quarter. Revenue increased 3.3% at our same-store contracts as a result of growth in net revenue per weighted encounter of 3.9% offset by decreases in weighted patient encounters of 0.6%. This decrease in patient encounters includes an estimated 1% impact of one less business day and a mild flu season in the first quarter of ’09.

Due to growth in our radiology business, we started weighting radiology encounters 4 to 1 compared to ED visits for both Q1 ’09 and Q1 ’08 due to differences in reimbursement rates for these services.

EMSC’s adjusted EBITDA for the first quarter was $65.2 million, an increase of 20.5%, and adjusted EBITDA margins improved by 110 basis points to 10.7%. The improvement was from the net impact of increased volume from net new contracts and acquisitions, higher revenues per encounter, and improvements in expenses as percent of net revenue. Adjusted EBITDA in Q1 included $721,000 acquisition expenses under new accounting rules effected January 1, 2009, which previously would have been capitalized.

AMR’s adjusted EBITDA for the first quarter of ’09 was $33.9 million, an increase of 19.3%, and adjusted EBITDA margins improved 140 basis points to 10.1%. The increase in adjusted EBITDA is attributable primarily to the net impact of higher revenue, improvement compensation management driven by improvements in the cost of deployment and reduction in overtime costs, lower fuel rates of $3 million year over year, offset by an increase in operating expenses related to revenue growth in our managed transportation business.

During the quarter, we recorded a $600,000 insurance charge for unfavorable prior period development, compared to a $1.9 million favorable adjustment last year for net headwind year over year of $2.5 million, and while not impacting the results for the quarter, AMR has entered into a series of forward purchase contracts which fix the price of a portion of its diesel fuel usage from April 1, 2009, through June 30, 2010.

EmCare generated adjusted EBITDA of $31.7 million, an increase of 21.7%, and adjusted EBITDA margins improved 50 basis points to 11.4%. This improvement was primarily driven by revenue increases from contract growth and a reduction of compensation and benefit expenses as a percent of net revenue due to improvements in our scheduling processes and systems.

Insurance expense in the quarter was $1.6 million higher than the prior year. As it relates to prior period development, we recorded an unfavorable adjustment of $100,000 in the quarter, compared to a favorable $900,000 in Q1 ’08 for a net headwind year over year of $1 million. EMSC’s net income for the quarter was $24.1 million, or $0.56 per diluted share, compared to $17 million or $0.40 per diluted share for a 41.4% increase. Improvement was primarily due to adjusted EBITDA increase of $11.1 million, lower depreciation and amortization, and offset by higher income tax expense.

Our free cash flow was $47.4 million during the first quarter, compared to a cash outflow of $2.5 million in the same period last year. Cash flow provided by operating activities was $41.9 million in Q1 of ’09 compared to cash used in operating activities of $2.8 million during the same period last year. The increase in operating cash flow relates primarily to an increase in net income, further reductions in days sales outstanding or DSO, and changes in insurance accruals.

During the first quarter of ’09, DSO decreased 5 days at AMR and 3 days at EmCare. EMSC in total has decreased DSO from 85 days at December 31, 2007, down to 70 days at March 31, 2009.

Net cash provided by investing activities was $5.5 million for the quarter, compared to net cash used in investing activities of $13 million in the first quarter of ’08. There was no cash used for acquisitions during the first quarter of ’09 compared to $13.3 million in the first quarter of ’08.

Net capital expenditures were $7.2 million during the quarter, compared to $2.5 million for the same period last year. Cash flows provided by change in insurance collateral increased $11.2 million, related primarily to timing differences in insurance funding.

Net cash provided by financing activities was $600,000 for the quarter, compared to $3 million last year, and at March 31, 2009, there were no amounts outstanding under our revolving credit facility.

William A. Sanger

Operator, we’d now like to open the call to questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Art Henderson of Jefferies and Company.

Art Henderson – Jefferies and Company

Bill, I know you guys didn’t talk about your guidance. Are you still reaffirming it where we are right now?

William A. Sanger

Art, clearly we’re early in the year, and we don’t have a pattern or habit of increasing or changing guidance this early in the year.

Art Henderson – Jefferies and Company

Just stepping real quick over to the hospital contract wins, during the quarter, Randy, could you tell us how many new department wins you had?

Randy Owen

The net 7 that Bill talked about consisted of 24 new contracts offset by 17 contracts that we exited in the quarter.

Art Henderson – Jefferies and Company

Where are you seeing the most activity with those new contract wins? Is it in the radiology services side or is it continuing to be in the ER side? Bill, any thoughts there as to where the opportunities are?

William A. Sanger

Clearly, ER is dominating the contract wins, but we’re starting to see wins in teleradiology as well as the anesthesia side.

Art Henderson – Jefferies and Company

Your cash balance now is close to $200 million this quarter. What are your intentions for deployment of that? Is it ongoing strategic acquisitions or something on debt repayment? What are your priorities there for that?

William A. Sanger

Clearly, Art, our priorities are looking at opportunistic acquisitions. We continue to believe there are good targets out there. As time passes, if we don’t find the right target, we will look at paying down debt.

Art Henderson – Jefferies and Company

In your senior notes, is there a prepayment penalty on that? I know that that interest is kind of steep, but your leverage ratio is really very low. When can you start dealing with that senior note?

Randy Owen

On the senior debt, we can make additional payments. We had done an interest rate swap last year that goes through December ’09 on $200 million of the balance, so right now, that’s close to what our balance is. Obviously on our senior sub notes, you can do that starting in 2010 at 105.

Operator

Your next question comes from the line of [Sudep Singh] of Deutsche Bank.

Sudep Singh

My first question has to do with something that you mentioned in your prepared remarks that it appears that retention amongst physicians seems to be better, and I was just wondering maybe if you could give us a number as to what that looks like in terms of turnover or how does that actually compare to historical trend?

William A. Sanger

For physician retention, we’re in the mid 90s. It’s about a 3-4% increase to what we’ve historically seen in terms of our retention rate.

Sudep Singh

My second question has to do with FIN141. As you do acquisitions in the future, you’re going to have to expense certain acquisition-related expenses upfront, and maybe if you could just talk about how we should be thinking about that in the future when you do announce an acquisition? Where does that hit in your P&L, and how should we be thinking about that?

Randy Owen

For the most part, those will hit as a part of operating expenses, especially if you use outside parties from a legal or finance standpoint. Those typically go into operating expenses, so that’s where you’ll see them. What we’ll do as we did here, as we mentioned the $720,000 that we had in this quarter, we’ll highlight as a part of these calls going forward when we have those kind of expenses, so you can see what those are.

Sudep Singh

Do you structure earn-outs in most of your acquisitions today or how do you think about earn-outs for your deals?

William A. Sanger

It’s a mix. Some, we clearly have some earn-out opportunities depending on obviously the seller, where they are and where they think the business is going, but honestly, we’ve done some that are just straight up transactions and some that have an earn-out component. Given a transaction, we would look at it based on that transaction whether or not we felt like it made sense to do an earn-out.

Operator

Your next question comes from the line of David Bachman of Longbow Research.

David Bachman – Longbow Research

I understand you don’t want to provide a lot of color on specific agreements and how individual contracts are rolling on, but just at a higher level, can you update us on what are the impacts on maybe the timing of how new contracts would roll on under the national agreement and how we would think about the opportunity there? Obviously, we have a sense of the overall number of EDs represented there, but any update as you look over the next couple of years?

William A. Sanger

David, that’s a difficult question. We project a certain number of contracts that we are going to be successful at winning every year, and sometimes those contracts are opportunistic. Other times, they’re targeted based on cross-selling. I will tell you that we were successful over the last year of demonstrating our ability to sell $85 million of new business under the national contracts, and we’re confident that we can continue to be effective under those national contracts as well as freestanding hospitals for multiple service lines. It’s about 39 contracts that make up that $85 million, so we’ve had good contract sales since we’ve entered into those contracts.

David Bachman – Longbow Research

Perhaps an update on physician reimbursement? I know there are a lot of things that are in play right now moving forward. I know that there was a bill floated to perhaps raise rates of pay to emergency room physicians or physicians under EMPALA, and I just kind of wonder how you’re looking at the political risk, up or down, in terms of physician reimbursement tin the next year.

William A. Sanger

It’s really difficult to say. Just yesterday, Senator Bachus talked about the fact that it’s unlikely that there’s going to be permanent fix this year, but highly there’ll be some type of temporary fix. Historically as you may know David, Congress has looked at temporary fixes as it relates to physician issue. We anticipate that they’ll do a temporary fix again this year. When I say this year, I mean going to 2010. We don’t anticipate any major increases or any major decreases.

David Bachman – Longbow Research

Switching over to AMR, any update there on RFP activity that you’re seeing or any other changing dynamics that we should be thinking about?

William A. Sanger

We have seen the market a bit more active as it relates to interest of cities in outsourcing 911. We are hopeful that discussion of activity results in greater opportunities for us the remainder of this year.

Operator

Your next question comes from the line of Kevin Campbell – Avondale Partners.

Kevin Campbell – Avondale Partners

I was hoping you guys could talk a little bit more on the AMR side about the enhanced deployment strategies and the new technologies and maybe give a little more color as to what they are and how they’re improving utilization and how far along we are in the process of rolling those out.

William A. Sanger

We essentially hired an expert in the area of deployment that has been working with our operations over the last several months. In addition, we purchased new technology aimed at utilization of ambulances and utilization improvements. We’re in the very early stages of this, but we’ve already seen very positive results on our deployment activity.

Kevin Campbell – Avondale Partners

I think you had done it in a couple of test markets. Can you maybe comment on the improvements you’re seen there and how that’s affected your margins or give some sort of financial color as to the impact that’s had in those markets.

William A. Sanger

I don’t want to give any forward-looking statements. I will tell you that our early tests in two markets have been successful, and we anticipate rolling that into other markets.

Kevin Campbell – Avondale Partners

I missed also some of the details. I think you said you had two new 911 contracts. Is that correct, and if so, what were the revenues associated with those?

William A. Sanger

We had two new 911 and about 31 inter-facility. I’d have to get back to you on the breakdown of the difference between inter-facility and the two 911. I think the total was about $9 million, and I think it was maybe between $2 to 3 million on the 911. There were a couple of smaller ones that were started in this quarter.

Kevin Campbell – Avondale Partners

Could you also comment on the fuel hedges that you put in place here? Is that something you guys have done to any great deal before, and what percentage of your fuel would you say has hedged right now and at what price?

Randy Owen

Kevin, what we have done is, we have entered into these contracts that I mentioned. At this point, we have hedged up to about 40% of our spend, again, really between sort of this period starting in April through next June at really forward prices that range anywhere from around $2.60 a gallon to close to $3 a gallon, so depending on obviously how far out you go, but if that is what you are looking for, those are the high-level numbers.

Kevin Campbell – Avondale Partners

You talked about the number of contracts you exited as 17. Was there anything about those contracts that was similar? It seems like a high number, although maybe it is not relative to history, but I am looking for some color on maybe those contracts and, why you exited so many of them. Was there anything particular going on there?

Randy Owen

Kevin, not really. First quarter of last year, we had a net of 6 adds and we exited 15 last year, so we have had a lot of activity obviously in terms of new business and some of those as well as normal churn in some of those contracts. Most of those are for financial reasons, that for some reason or other, something changed at that facility and we were not able to work out something that made sense, both from a hospital standpoint and from our standpoint in terms of maintaining that relationship, so as we’ve talked before, in many cases, we are all able to do that, but there are times clearly where we are not able to do that and the majority of those are for financial reasons.

Kevin Campbell – Avondale Partners

How many contracts do you have in total?

Randy Owen

475 approximately, I think.

Operator

Our final question will come from the line of Shelley Gnall of Goldman Sachs.

Shelley Gnall – Goldman Sachs

A couple of questions on AMR as well. The 911 contracts that were won during this quarter – how does the size of those contracts compare to a typical win in the first quarter?

Randy Owen

They are smaller, Shelley. These happened to be smaller 911 contracts than what we may have in terms of a normal community size contract, so I would characterize them on the small side.

Shelley Gnall – Goldman Sachs

But it sounds like there is a decent amount of RFP activity out there still for the 911 contracts?

Randy Owen

Yes, there is. As Bill indicated, we have seen a real pick-up interest in the dialogue with communities around those. I think what we have talked about before is that does tend to be on the AMR side a longer process in terms of getting ultimately to an RFP or to a contract win, so while we are seeing a lot of increased activity, we do anticipate that it may take some time before those would come to fruition.

Shelley Gnall – Goldman Sachs

On the pricing, it looks like we saw similar AMR pricing to what we saw last quarter. I think you had talked a little bit about some coding and documentation initiatives in AMR. Is that right? Can you talk a little bit more about what you are doing there and also could we get what the run rate pricing would be, if it weren’t for the upside? In other words, what’s pricing in AMR going to look like when we get to the fourth quarter when this anniversaries?

Randy Owen

Shelley, a couple of things on the pricing. One, we did have some reimbursement increases effected January of this year, both from a government and non-government standpoint. We have seen again where we had some fee increases in certain markets where we have been able to do that, so that I that’s probably a bigger part of the change in this quarter, so I think we would anticipate we would see that continue. We’ve continued over the last couple of years, as we’ve not only reduced our DSO, continued to refine our process and improve our billing and collection processes that we also believe contribute to that, but I can’t give you an exact number of the breakup between those initiatives and what might come through with the effect of rate increases.

Shelley Gnall – Goldman Sachs

So, it’s not as big as clearly I am thinking it is.

Randy Owen

No, I think in this quarter it is more related to increases in our revenues from changes in reimbursement.

Shelley Gnall – Goldman Sachs

Switching over to EmCare for your emergency department business, could you talk a little bit about any change in patient mix that you’re seeing in the emergency department and how is that impacting the revenue per case?

Randy Owen

Shelley, as we have talked before, we’ve really not seeing a real change in mix on either side, either in the emergency room or on the AMR side. Actually our self-pay for example in Q1 at EmCare was slightly higher, it was slightly lower at AMR, so on a blended basis, we are still just over 21% self-pay volume, and we were actually all of last year at about 21.5%, so on a combined basis, we are actually down slightly in self-pay, but overall even with the other payer groups, we have not seen any material change in any of the payer classes.

Shelley Gnall – Goldman Sachs

You had talked a little bit about wage pressure abatement, and I apologize if I missed it, but was there also head count reduction in the quarter that benefited the salaries expense?

Randy Owen

Nothing unusual, Shelley. We always may have something if we change our market or do something, but there is nothing unusual in the quarter.

Shelley Gnall – Goldman Sachs

Now, this one might be a bit of a stretch. Swine flu - are you sensing any decrease in emergency department traffic because maybe there is less travel at least from a broader set of transportation aspect? Could this end up reducing emergency department traffic ultimately and do you think this could have any impact on your business?

William A. Sanger

I don’t believe it will have an impact on reducing business. We are early on into this flu season and swine flu issue, and folks, generally speaking, as flu creeps into the consumer society, the tendency to visit ERs more often.

Operator

Your next question comes from the line of Andreas Dirnagl of Stephens Inc.

Andreas Dirnagl – Stephens Inc.

Maybe just starting what I will call kind of health keeping issues. Randy, just to clarify—when you talked about the decrease in the number of transports, I guess down 2.9% year over year, you said 2.5% of that was one less business day and flu. It may sound silly, but I am trying to figure out with 2.5% from one business day and then an additional impact from a week of flu season or was that 2.5% for both?

Randy Owen

For both, that includes both, Andreas. The one day is probably close to about 1% and then the volumes, what we saw was the last year volumes in February really had spiked where they didn’t here, but obviously even since then, we’ve continued to see decent volumes.

Andreas Dirnagl – Stephens Inc.

In terms of, what I guess is a new metric for you, the weighted encounters on the EmCare side, can you give us the numbers for the second, third, and fourth quarter?

Randy Owen

I can’t off the top of my head, Andreas.

Andreas Dirnagl – Stephens Inc.

We can do that offline. It would obviously help.

Randy Owen

Andreas, we will think about that and try to figure out how to do something so that every one can see those metrics.

Andreas Dirnagl – Stephens Inc.

Randy, I should know this, but can you just quickly confirm? The change in insurance collateral is obviously different than a change in insurance reserves and does not run through the P&L, just the cash flow statement. Is that correct?

Randy Owen

That is correct.

Andreas Dirnagl – Stephens Inc.

So it didn’t impact the insurance cost for the quarter?

Randy Owen

No, and there is always, Andreas, as we’ve talked before timing differences between changes in the expense and the insurance accruals and when that actually comes through with changes in collateral. We have always seen that, but the collateral line would be affected by difference in money going into the restricted accounts and claims being paid out of those accounts.

Andreas Dirnagl – Stephens Inc.

A final one maybe just for Bill more on the strategic side. Bill, when it comes to the EmCare side of the business, clearly there is a great deal of growth being driven by the expansion of services that you’re providing. Can you give any characterization or color on where you think that penetration of your existing contracts with those additional services stands now and where you can take it to?

William A. Sanger

It represents a very small, probably single digit at this point in time. Clearly, we believe there is a fair amount of runway left with our existing client base primarily driven by the existing relationship with EDs. Where we can take it to is difficult to say. We would hope that the majority of existing EDs will have at least one additional services outside of ED.

Andreas Dirnagl – Stephens Inc.

So clearly you’re still in the very early stages of that penetration?

William A. Sanger

Extremely so.

Andreas Dirnagl – Stephens Inc.

On the AMR side, when it comes to emergency transport, 911 and the like and trauma transport, have you seen any shift in modality over the past couple of quarters? There’s always been a lot of news about how Medevac is having their safety issues and the crashes. Clearly there is also in some cases a desire to sort of cut it down just given economic environment. Have you seen any impact on the wheel transport business from that?

William A. Sanger

No, not really Andreas. If you look at our emergency transport, it’s been pretty constant. It really hadn’t been affected by anything in the air side.

Andreas Dirnagl – Stephens Inc.

Do you have any new thoughts as to why you seem to be so insulated from a lot of the issues that we’re seeing in terms of self-pay and ability or inability to make co-pays and the rise number of uninsured in both sides of your business?

William A. Sanger

Clearly, we’re seen the impact to a hospital of a write-off or of a self-pay patient has always been different than what it is for us in terms of dollars and the impact to the different businesses. We’ve just not seen and historically have not seen any major changes in mix, and so even in the environment whether people have COBRA or where there is unemployment, we’ve really not seen, and I think even others in our business that we’ve talked to have not seen any real changes in the mix. It’s not very specific, but I don’t have something for you other than what we’ve talked about in the past.

Operator

We have a followup question from the line of [Sudep Singh] of Deutsche bank

Sudep Singh

One of the hospitals recently reported that they’re seeing a revenue bump from EMM codes that are based on the American College of Emergency Physicians. I guess there’s a model that that group sponsors, and I assume you must use a similar model, but if not, if there’s anything different from ACEP’s model relative to how you code?

William A. Sanger

That system was referring to the facility coding. There’s coding for physician services, of which we provide that information and bill under those codes, and there are facility codes in which the hospital bills for their services, and that particular system was referring to the facility coding.

Operator

Ladies and gentlemen, this concludes the question and answer portion of today’s conference. I will turn the call back to management for closing remarks.

William A. Sanger

Thank you everyone for your support of EMSC.

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