Nutex Health (NUTX) Q2 FY26 earnings call: guidance and Q&A

What is the new go-forward rate for arbitration costs after the IDR ruling and Halo MD renegotiation, and is the Q2 revenue per visit a steady-state run rate?

Arbitration-specific costs are expected to decrease from mid-20s percentage to high teens/low 20s. The Q2 revenue per visit is considered a fair run rate, consistent with the cumulative average since the IDR process began, with potential for slight increases due to more inpatient care.

“So normally, it was a range of in that mid 24% to 25%, 26 percentage in the past. Now currently, as we move forward, you should expect that to be just that specific piece probably down more into the high teens to low 20s comparatively.”

asked by Anderson Shack · answered by Unknown Executive

Given the higher end of the historic range for openings and self-financing, should we expect an increase from the 3-5 hospitals per year target?

Management reaffirms the target of 3 to 5 new hospitals per year, but will continue to evaluate new locations and reevaluate this range based on internal discussions and financial performance.

“No, we're still basically focusing on 3 to 5 hospitals per year. That has not changed yet at this point. Obviously, we will continue to evaluate new locations.”

asked by Anderson Shack · answered by Thomas Vo

Have the recent court cases led to any change in insurer behavior regarding collection rates or QPA (Qualified Payment Amount)?

So far, insurer payment behavior remains largely steady-state. While more submissions are going in-contract, rates are slowly creeping up but are not yet at desired levels. QPA remains relatively low, leading to a submission rate of roughly 60% through the IDR process.

“So far, it's pretty much steady state from an insurance company payment. We are seeing more submissions go in contract with health insurance company. The rates are slowly creeping up, but it's still nowhere near where we should be.”

asked by Benjamin Haynor · answered by Thomas Vo

With the lower $15 CMS fee and new Halo MD terms, will Nutex challenge previously marginal claims through IDR?

The lower fee helps all providers and lowers the barrier to entry. While there might be a few more marginal claims that Nutex now takes through the process, it's not expected to be a material change for the company, though it might be for other providers.

“There are a few that might that we might now take through the process that risk-wise we might not have before. But I think generally, we'll keep a similar cadence and then just watch for opportunities in those situations where, yes, maybe we'll go in on some that we haven't in the past.”

asked by Benjamin Haynor · answered by Jon Bates

Is Nutex proactively pursuing in-network agreements with payers, or waiting for them to come to the table, given the slow progress?

Nutex is always looking to go in-network and evaluates every contract. However, rates are still not where they need to be. The company emphasizes that its business model allows it to operate successfully out-of-network, leveraging the IDR process for fair rates, and notes that even in-network hospitals face disputes.

“So the answer is we are always looking to go in at work with an insurance company always. And so we're still continuing to evaluate any contracts that comes in. And like I mentioned earlier, the rates have come up a little bit over the past quarter or so, but still nowhere near where we need to be.”

asked by Thomas McGovern · answered by Thomas Vo

What drove the success in patient volume and acuity growth, and how should revenue per patient trend with service line additions and increased inpatient visits?

Growth was driven by increased investment in internal processes, business development, AI, and leveraging the IPA network. The focus is on increasing inpatient volume, which pays better than ER visits. With added service lines like colonoscopies and the ability to care for sicker patients, revenue per patient is expected to increase over time.

“And so if we continue to execute this, theoretically, the revenue per patient should increase because we would have more inpatient visits in the future. And then on top of that, as Wes mentioned, we are also starting to do more procedures.”

asked by Thomas McGovern · answered by Thomas Vo

What drove the renegotiation of the Halo MD contract, and under what circumstances would Nutex use its optionality for in-house or third-party arbitration for newer facilities?

The renegotiation was driven by the evolution of the IDR process since the original contract in early 2024, with more data and system setups now available. It was a 'win-win' partnership decision. The optionality provides flexibility to pivot if conditions change, allowing Nutex to use other vendors or in-house services for select facilities, though it's not expected to be a material change to the current cadence.

“And so it was just a normal time to renegotiate the contract based on what we know now versus what we knew Mac in beginning of 2024.”

asked by Thomas McGovern · answered by Thomas Vo

Can you ballpark the percentage of claims handled in negotiation vs. IDR, and has the percentage of in-network revenue changed?

Nutex continually seeks in-network negotiations, and while there's been slight improvement in negotiated settlements, it's not material. The percentage of revenue from in-network patients has seen a slight increase but is not material. The company maintains its ability to operate effectively out-of-network.

“Yes, it's definitely not material for sure. Yes. But 1 of the things that I wanted to reiterate and 1 of the things that I'd like to sort of like clarify for all the investors is that, yes, we are out of network. However, with our business model, we can stay out of network and still do well.”

asked by William Sutherland · answered by Thomas Vo

What is the seasonality for hospital activity levels and patient visits?

Typically, the second and third quarters have the lowest patient visits, while the fourth and first quarters are the highest due to the 'order season' and flu season.

“Typically, the second and third quarter are the lowest and the fourth quarter and the first quarter is the highest because of the order season and the flu season.”

asked by William Sutherland · answered by Thomas Vo