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Q1 2025 Acadia Healthcare Company Inc Earnings Call

Brian Farley; Executive Vice President, General Counsel; Acadia Healthcare Company Inc Christopher Hunter; Chief Executive Officer, Director; Acadia Healthcare Company Inc Heather Dixon; Chief Financial Officer; Acadia Healthcare Company Inc AJ Rice; Analyst; UBS Brian Tanquilut; Analyst; Jefferies Whit Mayo; Analyst; Leerink Partners Andrew Mok; Analyst; Barclays Sarah James; Analyst; Cantor Fitzgerald Joanna Gajuk; Analyst; Bank of America Operator Good day and welcome to Acadia Healthcare's first quarter of 2025 earnings call. (Operator Instructions) Also, please be aware that today's call is being recorded.I would now like to turn the call over to Brian Farley, General Counsel. Please go ahead. Brian Farley Thank you and good morning. Yesterday, after the market closed, we issued a press release announcing our first quarter 2025 financial results. This press release can be found in the investor relations section of the website. Here with me today to discuss the results are Chris Hunter, Chief Executive Officer, and Heather Dixon, Chief Financial the extent any non-GAAP financial measure is discussed in today's call, you will find in the press release that is posted on our website, a reconciliation of that measure to the most directly comparable financial measure calculated according to conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1,995, including statements among others regarding Acadia's expected quarterly and annual financial performance for 2025 and statements may be affected by the important factors, among others, set forth in Acadia's filings with the Securities and Exchange Commission. And in the company's first quarter news release, and consequently actual operations and results may differ materially from the results discussed in the forward-looking this time, I would like to turn the conference call over to Chris. Christopher Hunter Thank you, Brian, and good morning everyone. Thank you for being with us for Acadia's first quarter 2025 conference call. We are pleased with our start to 2025 with both first quarter revenue and EBITDA landing in line with our expectations, while we made continued progress against our strategic growth quarter revenue of $770.5 million came in just above the midpoint of our outlook range of $765 million to $775 million while adjusted EBITDA of $134.2 million was near the high end of our outlook range of $130 million to $135 million. We also reaffirmed our previously issued full year financial guidance ranges for both revenue and adjusted EBITDA, which Heather will provide further detail on later in the to volumes, same facility patient days grew 2.2% in the first quarter, which included an unfavourable leap year impact of roughly 110 basis points over the first quarter of 2024. The strong relationships we've built with our referral sources and our 21 joint venture partners continue to be an important part of our strategy for continues to be the preferred partner for leading health systems with both local and national brand recognition across the country to better serve patients by bridging the gap between physical and behavioral healthcare. Along those lines, I'd like to provide a progress update on our strategic the first quarter, we added 378 new beds comprised of 90 beds to existing facilities and 288 beds from two new facilities that were opened in the quarter, which includes a joint venture hospital in partnership with Henry Ford Health in West Bloomfield, Michigan, and a de novo facility in North Port, addition, Acadia added seven new comprehensive treatment centers in the first quarter, extending the company's market reach to 170 CTCs across 33 states. For the full year 2025, we expect to add between 800 and 1,000 total forward, we have a solid pipeline of potential opportunities in attractive markets and expect to add between 600 and 800 beds annually over 2026 to 2028. Before I turn the call over to Heather, I would like to spend a few minutes discussing the numerous efforts this company continues undertaking to support our quality initiatives and share a few thoughts on the policy Acadia, our commitment to quality and safety is a foundational element of our strategy. Our facilities are licensed, accredited, and regularly inspected to uphold high regulatory and quality standards, including rigorous requirements for employee training and patient employ a multi-layered approach to patient protection that often exceeds industry and regulatory standards. These measures, such as 24/7 patient monitoring systems, mandatory de-escalation training, and regular safety rounds are designed to meet the specific needs of the patients and staff at each Acadia ability to use data has continued to advance significantly. Our hospital CEOs and leadership teams also use a variety of sophisticated cloud-based systems with deep data capabilities to monitor care quality. Further, our integrated quality dashboard now provides real-time visibility into over 50 distinct safety patient experience and regulatory compliance related key performance the corporate level, our team supports this work with weekly, monthly, and quarterly operational and quality performance reviews. We believe the supportive multidisciplinary relationship between the field and the corporate teams ensures we find and eliminate sources of operational and clinical variation and helps us translate behavioral science to practice with health is complex, but it is clear the need has never been greater for high quality behavioral health care, given the severe mental health crisis that our nation faces. Our strategy at Acadia remains centered on high quality care and clinical health outcomes, and we will continue to prioritize our quality initiatives and expand them when to labor, we believe our differentiated quality initiatives are having a positive impact on our ability to recruit and retain our staff. These efforts are directly connected to our emphasis on employee engagement and talent acquisition, ensuring we have appropriately staffed facilities with trained employees which have improved underlying labor trends for our is further reinforced by our premium pay, which declined on both a sequential and year over year basis in the first quarter. We are extremely proud of the commitment of Acadia's nearly 26,000 employees that have chosen to join our mission to provide compassionate care that improves the lives of patients and their I would like to briefly touch on the policy landscape. First, let me say that we believe government policy has an important role to play in continuing to strengthen the behavioral healthcare system, and we remain highly engaged on the policy front so that we can continue advocating strongly on behalf of patients in the situation in Washington is fluid, we believe that the essential care we provide to underserved and vulnerable patient populations will continue to be recognized and supported. To cite one example, supplemental payment programs have been a key enabling force behind not only our ability to serve high acuity behavioural health patients, but also patients in many other essential parts of the healthcare system, including rural hospitals, children's hospitals, and nursing this in mind, we expect these programs to remain an important funding mechanism for Medicaid populations. We remain focused on providing programs and facilities that provide these patients with the best possible care. And we'll provide updates to the investment community as we receive clarity on any potential policy related impacts to our that, I would now like to turn the call over to Heather to discuss our financial results for the quarter. Heather Dixon Thanks, Chris, and good morning everyone. Our first quarter financial performance for both revenue and adjusted EBITDA fell within our guidance ranges, with adjusted EBITDA performing at the high end of the range. We reported $770.5 million in revenue for the quarter, representing a slight increase over the first quarter of last we had expected Medicaid supplemental payments to be down $10 million to $15 million year over year in Q1, and these came in near the midpoint of that range. Main facility revenue grew 2.1% compared with the first quarter of 2024, driven by patient day growth of 2.2%. As Chris mentioned, both same facility revenue and patient day growth included an unfavorable impact of approximately 110 basis points from the leap won the same facility revenue per patient day growth was roughly flat on a year on year basis, primarily due to the timing of supplemental EBITDA for the first quarter of 2025 was $134.2 million reflecting an adjusted EBITDA margin of 17.4%. As reflected in our prior guidance, these quarterly results included an approximate $5 million year on year EBITDA impact due to the decision to close the facility in the first quarter as a part of our ongoing portfolio management included in our results were startup losses related to new facilities, which were higher on both a year over year basis and a sequential basis, reflecting a step up in the number of newly constructed facilities. On the same facility basis, adjusted EBITDA was $191.6 million and adjusted EBITDA margin was 25.2% in the first quarter of this same facility results continued to be affected by a small group of underperforming facilities that you will recall started to have a material impact on our results near the end of the third quarter of 2024. To date, these facilities have performed in line with our expectations, while we continue to work diligently to improve performance at these facilities, we acknowledge that it will take time, and our 2025 guidance continues to reflect no material improvement at these underperforming facilities as we move throughout the continue to maintain a strong financial position, providing us the ability to make the right strategic investments to enhance our operations and support our growth strategy. As of March 31, 2025, we had $91.2 million in cash and cash equivalents, and approximately $900 million under our $1 billion revolving credit facility, with a net leverage ratio of approximately 3.2 company repurchased approximately 1.6 million shares during the first quarter for a total of $47.3 million. Moving on to our outlook for 2025, as noted in our press release, we are reaffirming our full year guidance ranges for revenue, adjusted EBITDA, and adjusted earnings per a reminder, our 2025 guidance includes the following considerations. For 2025, we expect to add between 800 and 1,000 total beds. As I just mentioned, we expected that a small subset of underperforming facilities would result in an approximate $20 million year over year headwind to our 2025 adjusted I mentioned, to date, these facilities have performed in line with our expectations and negatively impacted our same facility patient day growth by approximately 90 basis points in the first quarter. We expect to begin to comp over this headwind to volumes in the fourth quarter of continue to expect Medicaid supplemental payments to be flat to up $15 million in 2025 on a net basis, inclusive of the new Tennessee program once approved. We continue to expect $50 million to $55 million in startup losses for full year 2025, of which we anticipate approximately $15 million in the second we move to Q&A, I would like to offer some additional color on our bed additions and growth plans. Since last quarter, some of you have asked us questions about our long-term EBITDA growth guidance. So we want to take a moment to clarify some of the assumptions that are contemplated in that guidance previously announced the expected revenue growth of 7% to 9% and EBITDA growth of 8% to 10% over 2026 to 2028 is underpinned by annual bed editions of 600 to 800 beds beginning in 2026, as well as the roughly 1,600 to 1800 beds being added over 2024 and we want to highlight that most of these bed editions come in the form of brand new facilities, which on average typically ramp to run rate occupancy and even up margins within a five-year period. As a result, we expect to recognize incremental EBITDA for a majority of this cohort beyond 2028, as these beds continue to ramp to mature occupancy and margin in mind our three year outlook also contemplates the inherent uncertainty that always exists with regards to construction timing, licensing timing, and time to ramp, and we will remain cognizant of this uncertainty as we continue to execute on the largest expansion of bed capacity in our company's history over the next several our three year outlook assumes that the occupancy and EBITDA ramp for new hospitals will trend towards a five year ramp period, which is at the upper end of our historical ramp model and leaves a significant amount of inherent earnings power beyond with regards to payer rates, we included an element of conservatism in our assumptions as it relates to revenue per patient day and rate growth, given some of the uncertainty surrounding the policy and macro see embedded upside in these projections if the next few years updates from government and commercial payers more closely resembles that of the last few years versus what is currently contemplated in our three year space of new behavioural health hospitals we are currently building will provide a multi-year runway for growth, not only as occupancy ramps over the next few years, but also as we're able to add expansion beds to these facilities over we decrease the accelerated pace of bed additions in 2026 to a rate of [6800] per year, we expect startup losses to ease in the back half of 2026, helping to fuel strong and self-sustaining pre-cash flow generation as we exit this bed growth is still well above the historical pace prior to 2024, which will contribute meaningfully to our performance in the outer years, including in 2028 and that, we're ready to open the call for questions. Operator (Operator Instructions) AJ Rice, UBS. AJ Rice Hi everybody, just maybe first, there are a lot of moving parts in this year's numbers. I know you got the supplemental timing on different supplemental payment programs. You got the pacing of startup losses on the bed additions and then the annualizing of the Q4, challenges from last year start to make the cops easier later in the you just give us some perspective on how you see the progression? of EBITDA from here, maybe a little bit of more color on how to think about the seasonality of the business this year given some of those dynamics. Heather Dixon Yeah, sure. Hi, AJ, good morning. Thanks for the question. So, I'll just kind of walk through a little bit of the phasing, if we think about Q1 versus the rest of the year, you're right, there are several moving parts and we had talked about a few things that will specifically impact. One a little bit more predominantly. And if you factor those in or normalize them, then you can see the normal cadence that we would first thing I would say is, nothing's changed since, we talked last time and where we set our guidance and all of the multiple factors we went through. And I think the most obvious piece is that from a timing perspective, the Tennessee DPP is clearly going to be the biggest swing factor, thinking about the cadence throughout the balance of the year, AJ, as we look at it, depending on which quarter that will be recorded in.I mean, beyond that, there's just, a couple of other things that I would, would talk about that would really lead to the improved performance as we move throughout the year. I mean, first, Q1 had the highest level of startup costs and the lowest contribution from the new beds just because of the timing of when we added them. So that alone implies a steeper ramp as we work our way through the year, and then, as we assumed in our guidance, supplemental payments were down, year over year in had said those would be down to $10 million to $15 million and we landed sort of right in the middle of that for Q1. But we expect that those supplemental payments will actually be flat to up $15 million on a net basis for the full year. So that's a pretty big swing between Q1 and the balance of the year and as I mentioned, obviously Tennessee is the largest piece of if I think about the other swing factors from a volume perspective. We will have a growing contribution from the new beds as we move throughout the year, and then we're also going to comp over a headwind that we started to see from some of those underperforming facilities as we move into the fourth quarter of the year. So that's another piece as you think about comping last year's fourth just one more thing to point out is rates again, the timing of the supplemental payments and Medicaid mix shifts in the specialty business. We're impacting Q1 and those should start to moderate as we head into Q2 and then, further on throughout the year, and that means that low single digit rate growth for the full year, really, moves throughout the year and there where we expect it to be for the full year versus where it was for Q1, where it was slightly I think that covers the highlights, the big points again, I pointed out a lot of different moving parts with the full year guide for EBITDA on the year-end call, but I think those are the highlights and hopefully that helps. AJ Rice Yeah, that's very helpful. Maybe just my follow up question is, I know you've got a cautious view on rates this year, but, technically what you are actually seeing in your Medicaid rate updates I assume a lot of states updated January 1 and you'll have some more update July 1. And then you probably also got your Medicare rate update which we pretty much know, but if there's any variants there for you specifically and then any comment on commercial and what you're seeing there. Christopher Hunter Hey, this is Chris. I'll go ahead and take that one. I would just say overall that we continue to have very good discussions with our payer partners and you know we remain very optimistic that they're going to continue to recognize our focus on providing high quality care. I wouldn't call anything out with respect to Medicaid versus commercial or outlook, as Heather has discussed, always assumed a low single digit, same facility revenue per day growth, and historically we've talked about that in kind of a low to mid single digit range. We decided just given the noise on the policy front. That it was prudent to just incorporate a more conservative approach in our thinking about rates just given the broader environment, but there's nothing specific on the horizon that we see as concerning and I would say underlying rate growth has been relatively stable and in line with our expectation as we've, gotten into the year. AJ Rice Okay, thanks a lot. Operator Brian Tanquilut, Jefferies. Brian Tanquilut Hey, good morning, guys. Chris, maybe take a step back as I think about, obviously 2% same sort of volume performance in the quarter, despite some of the heads you're facing with the units that are dealing with the headlines. How are you thinking about what the broader demand environment looks like right now? I mean, obviously you're one of our data points and you're peer that's public, but outside of that, if you can share with us what the demand environment looks like for behavioral health today. Christopher Hunter Yeah, I would say, Brian, thanks for the question that you know our expectation is that it just continues to be consistent with what we're with what we're seeing. I mean, I think particularly given our strategy of focusing on the higher acuity patients, when you look across our various lines of business, whether it's on the acute front, CTC specialty RTC, we just continue to see, increasing demand, and I think, we've done a very good job of pointing out our commitment to have obviously invested heavily in being able to quantify outcomes and we've shared that with our peer partners and I think all of that has led to a consistent demand environment. I mean, Heather anything that that you would want to add? Heather Dixon No, I think that's right. I think, the demand environment remains and we are doing our part to meet that demand, and we're working hard to look at new facilities and bed additions where those are necessary, so nothing to add there. Brian Tanquilut Appreciate that and maybe Heather, thank you for all the color on the five year ramp to maturity. So just curious as you think about the cohort of beds added in '24 and '25, maybe even into the '26, has your view on the path to break even changed, or is it still the same you're kind of laying out that five year you kind of like ramp up to kind of mature levels of margins and occupancy. Heather Dixon Yeah, thank, thanks for the question. I, our view has not changed. Let me just walk through a little bit of how we're thinking about it and specifically how we thought about it, whenever we thought about the long term. Guide, the three year guide that put out.I mean, first of all, you mentioned the three to five year grant period that we've experienced historically, that is, that's our average. Now keep in mind there's multiple factors that impact how those rampant we've seen some really good success in recent facilities. As they've been ramping, one of the factors that impacts it pretty significantly is whether it's a bed addition to an existing facility or whether it's a newly constructed those take much longer to ramp. In our longer term guide, we have assumed a higher mix of new facilities constructed and new beds from construction than what has historically over the last few years been contemplated and what's actually played out. And so that shifts a bit towards the higher end between the three to five range, those obviously will be the higher end of that range versus so that's part of it. And you know what that means actually is that there's incremental EBITDA that's beyond 2028 because those beds, you just mentioned the years that are ramping, all of those would continue to be ramping and really hitting their stride in what we've modelled out post a couple of other things that I would think about, there's always uncertainty with construction timing, and that's not just construction, licensing timing, how long does it take to ramp, all of those different things, and we're just very cognizant of all of that uncertainty. So as we're executing and continuing to execute on what's clearly the largest expansion that the company's been in that position for the past several years and we're going to continue. We're just very cognizant of that. We want to make sure that we factor that uncertainty and appropriately into the guide. If I think about how far our outlook goes, we think about four years from now effectively will be when that outlook, when those things are actually happening, and that means that even our included in the end sort of the longer tail of that '28. We haven't even started construction on those beds yet, so we feel like it's more prudent to just assume the higher end of the ramp range between that three to five years just because it's further out into the future. And so, I talked about on the prior call that that that's some conservatism that's built hopefully that helps you understand a little bit of what we're thinking about with conservatism whenever I say that. I mean, again, what that points to is that you know the occupants in the EBITDA ramp for those hospitals, there will be certainly incremental amounts of inherent earnings that are again showing up beyond 2028 that all that said, we are still experiencing strong performance. I just mentioned that we had, some in our recent cohorts, 2023 cohorts specifically that we're watching because of where it is now and sort of the ramp. And we're seeing some really good outcome and results, but we just thought it was more prudent for the reasons I just want to assume sort of the higher end of that ramp back to your a long winded answer to your question, but back to your original point, our view hasn't shifted. We've just factored in some conservatism and hopefully that helps to understand why and how we factored it in. Brian Tanquilut No, very helpful. Thank you. Operator Whit Mayo, Leerink Partners. Whit Mayo Hey, thanks. Anything when you just look at the first quarter and your performance, was there anything better or worse in the quarter versus your original expectations? Just wondering if there was any favourability on any of the key assumptions or expense items thanks. Heather Dixon Yeah, hi. Sure, let me, I'll talk about two things. I mean, the first thing I would talk about is labor. We saw, the continuation of those favourable labor trends that we have been seeing, and our base wage inflation continued to trend lower expenses both fell year over year and sequentially, so you know that's the first thing that I would point to. The second thing I would point to are startup losses, those came in a couple of million dollars better than our expectations for the first quarter, and that's just just, all the things I just marched through in regards to construction and some of the uncertainty, that's just some timing differential, and we still expect that those will continue to, be in the range of $50 to $55 for the full year, just to be clear, but they were around $16 million in Q1, and that's a little lower than what our expectations were. But that's really the, I think the only two things that I would point out from a quarterly perspective. Whit Mayo Okay, so a couple million dollars of favourability on the expense side and you were still within the range that you targeted, is that, I mean, is that the way that you're looking at the performance? I'm just trying to figure out like how you perform versus the internal plan versus the guidance that you provided. Heather Dixon Yeah, I mean, we were up towards the higher end of our guide with -- and that is very -- I, the things I just walked through, I think specifically the startup losses, those were what contributed to us being at the high end of the guide, but we were, performing right in line with our internal plan. Whit Mayo Okay, I know this isn't a metric that you talk about, but when I look at the revenue per average CTC, it's been declining for several quarters now and just trying to maybe better understand why that metric would look like that. Heather Dixon I will start, and Chris, you may want to jump in, but from a revenue perspective for CTC, I mean, as there, the CTC businesses experienced just significant growth. I'm very pleased with the growth over the past few years. There was a lot that we could do to apply some muscle behind it and really, get the most out of that other thing that I would point out is if you look at the CTC business, we have found a very capital friendly way to add facilities to the lineup and those are effectively acquiring sub-scale sort of ramping CTC facilities that we can buy for, very good then we can put those in apply the Acadia methodology for running the operations and really ramp those pretty quickly. So as we add those in, and they are in similar in the ramp position, you'll see that those, we kind of pull down the average overall as we're ramping them. And in the first quarter we Op -- Christopher Hunter System and we've seen examples of that in the past where the populations Have been carved out on things like work requirements and I think what you're seeing in the bill appears to have some significant carveouts related, but we're just going to have to continue to work through it and obviously continue to lobby, with the broader NABH and broader industry groups. Whit Mayo Got it. And then I wanted to see if Heather had any comments on the cash flow from operations in the quarter. I think the legal expenses probably had an impact there, but were there any other sort of timing things to think through and when those were normalized? Heather Dixon Yeah, the only thing I would point to is, obviously, as we've talked about, we are clearly at the peak from a CapEx perspective as we are in the middle of the highest number of new beds that the company has experienced, both with the end of last year, the significant number of beds coming of those costs continue to flow through related to those in Q1. CapEx and cash is obviously cash-based it's not accrual. So even though we open the beds in Q4, the costs are still going to come through in Q1. So that's part of it. And, incrementally just to add on to that, obviously, we have added a large number of Beds already this year with Q1 we've added, almost 400 new beds already, so that's a piece of it as in mind that startup losses are also part of that and those are clearly at a peak in Q1 of what we expect for the full year as we've talked about. As we move through the year $50 million to $55 million for the year, but there was a predominance in Q1, and so that's also a piece of what you're seeing. You're correct, obviously the legal costs, those come through and that's part of what is coming through from a legal perspective and impacting cash flow. I think, those are the primary moving parts, hopefully that's helpful and and answers your question. Operator Andrew Mok, Barclays. Andrew Mok Hi, good morning. There's been a year over year decline in specialty revenue looks like for five quarters in a row now, which has contributed to the broader deceleration and same store revenue. Can you help us understand what's going on with that line specifically and when you expect to get back on track for growth? Thanks. Heather Dixon Yeah, I'll jump in. Hi Andrew. So a couple of things I would point to, first is we have closed some specialty facilities over the past several quarters, and obviously we closed one in one of this year and then there were a few others that we've closed over the past handful of quarters, and so that's part of what is contributing to was about 5% down in the first quarter and that's really mostly driven by the facility closures. Over the past, I would say a year and a half, we wound down for specialty facilities and that includes the one that I just mentioned in the fourth quarter. So that's part of other part is if you think about just from a revenue perspective, we have seen, some nice growth in the Medicaid specialty inpatient business. Obviously, that has a differential from just the year over year perspective on the overall revenue contribution for that depending on the type of treatment that those patients need, but really, I think it's mostly driven by the closures. Andrew Mok Got it. That's helpful. And as we contemplate the recognition of state supplementals, supplemental payments from Tennessee, is that mostly an acute inpatient item, it would hit that revenue line? Heather Dixon Yeah. Andrew Mok Okay, understood. Thank you. Thanks to all color. Operator Sarah James, Cantor Fitzgerald. Sarah James Hi guys, this is Gabby on for Sara. I just have a quick one. Could you elaborate if there was any weather impact on your facilities in the Southeastern states? One of your peers had seen that. And then maybe if you could just elaborate on how trends are going on some of the underperforming facilities spoken to last quarter. Heather Dixon Yeah, I'll start, and then Chris, if you, I'm sure you want to say some things about some of the operations of the facilities from a weather perspective, nothing material for us to call out, obviously it's seasonal and every year we see some sorts of weather in different parts of the business, but nothing I would really call out and point to. Chris, do you want to, get some color on those facilities, the underperforming facilities. Christopher Hunter Sure, and thanks for the question, Sarah. As we discussed in the prepared remarks, our '25 guidance had assumed a roughly $20 million EBITDA headwind for the full year from this group of underperforming facilities that we had first called out in the in the fourth quarter, which you're asking about. And so I would say those facilities have performed overall in line with our had a negative impact on our same facility patient growth of about 90 basis points in the first quarter, and we'd expect to begin to comp over that headwind the volumes in the fourth quarter of '25. So, the underperformances tended to be correlated more with, local media coverage that's more is obviously local rather than any news at the national level. And it's just, it's difficult to put an estimate on the timing, but we continue, as we said at the outset to be prudent and taking a more conservative approach when we set guidance, and I think this is an example of that we continue to execute and, just feel very good about the path that we're on, but nothing additional that I would call it. Sarah James Okay great thank you guys. Operator Joanna Gajuk, Bank of America. Joanna Gajuk Hi, good morning. Thanks for taking questions. So I guess first follow up on the Tennessee DPP. Did I missed, I know you said that you assume, second half of this year, but did you say how much do you expect from that program? Heather Dixon Hi there. No, we did not say how much we expect from that program in particular. We have said historically since since our earnings call for Q4, we said that we expect total supplemental payments on a net basis to be flat to up $15 million for the full year inclusive of Tennessee, but we haven't called out any numbers for Tennessee specifically or or for any other states for that matter. Joanna Gajuk Okay, and I guess would you remind us, was there any other period payments last year in '24? So when we think about the numbers flat to up 15, is there something we should adjust out from last year? Heather Dixon Yeah, that's a great question, and thanks for the reminder. We did call out last year $10 million, approximately $10 million payments that that we saw predominantly in Q1, about $7 million of those were in Q1, and then the rest were in the balance of the year, but yes, we did. Joanna Gajuk All right, thank you, if I may, another follow up on different topic on this, handful of problem facilities, so I understand you saying, things for me in line there. But is there anything you continue to do there to try to improve the situation as in like, can you give us an update on these referral sources, at which that you've had and, any traction I guess you're getting you. Christopher Hunter Yeah, I would say there's a number of things that we can continue to do. I mean, obviously we have been very deliberate about meeting with our referral sources, particularly in person, and also inviting them to these facilities as well, which we do all the time, but we've tried to be even more intentional about making that happen since the fourth obviously done everything from talent reviews and taking a look at the existing staffing, making sure that we don't have key positions that are unfilled working with our talent acquisition team very closely on then obviously working with our other corporate functions, including our quality team to make sure that we have everything in place that we need to continue to provide high quality services and so we're just, we're looking at a range of things in any given isn't one step that I would call out, but just in totality, we're just very much cognizant of making sure that we're continuing to deliver high quality care. And that we have the right staffing in place and that we're continuing to focus on the right referral sources and that we're able to provide, a great patient experience, when the opportunity avails itself and we'll continue executing on that plan. Operator This concludes our question and answer session. I'd like to turn the conference back over to Chris Hunter for any closing remarks. Christopher Hunter Thank you. In closing, I just want to again thank our committed facility leaders, clinicians, and approximately 26,000 dedicated employees across the country, who've continued to work tirelessly to meet the needs of our patients in a safe and effective are together doing incredibly important work for our patients across the country and remain committed to serving them with care, compassion, and excellence. Thank you all for being with us this morning and for your interest in Acadia. Have a great day. Operator The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.