The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Justin Bowers - Deutsche Bank - Analyst
: So in IRF, you had very strong results and a nice sequential increase in occupancy. Is that -- like how should we be thinking about occupancy for
the rest of the year with the new capacity coming online?
Question: Justin Bowers - Deutsche Bank - Analyst
: And then on LTAC, you mentioned that two-thirds of the miss was related to regulatory and some of the outlier stuff. Was that versus like your
internal expectations? Or consensus? Just trying to get a sense of what the magnitude there was and maybe you can quantify for us.
Question: Justin Bowers - Deutsche Bank - Analyst
: Understood. Go ahead.
Question: Benjamin Hendrix - RBC Capital Markets - Analyst
: Congrats on the IRF performance. But just going back to LTAC, just wondering if you could provide any update or if you're having any changing
thoughts on mitigation strategies with regard to high-cost outlier in the transmittal rule, kind of anything you can do to kind of head off those
headwinds operationally?
And then second, just based on your flu commentary and guidance, is there a reason to expect maybe an easing of that year-over-year headwind
as we kind of get into some of the lower acuity quarters?
Question: Benjamin Hendrix - RBC Capital Markets - Analyst
: Okay. And then anything that you can do just strategically? Or is there -- is it just something you have to ride out? Or is there anything maybe from
a legislation perspective, any conversations in Washington that could help kind of cure this or get traction with revised regulations?
Question: William Sutherland - The Benchmark Company, LLC - Analyst
: What do startup costs look like this year and then versus last year, that would be helpful.
Question: William Sutherland - The Benchmark Company, LLC - Analyst
: Okay. And nothing special in the quarter though. Okay.
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MAY 02, 2025 / 1:00PM, SEM.N - Q1 2025 Select Medical Holdings Corp Earnings Call
Question: William Sutherland - The Benchmark Company, LLC - Analyst
: And then on -- I'm a little confused on the impact high-cost outlier and transmittal rule in the sense that in terms of how it's impacting guidance.
So you had this big impact, particularly in the first two months of the quarter.
Then I think, Bob, you said that March was -- you were finishing up the year in March was -- I mean, the quarter with March even a little ahead of
plan. So is this guidance change just reflect really the first two months of the year, particularly for LTAC?
Question: William Sutherland - The Benchmark Company, LLC - Analyst
: So that's --
Question: William Sutherland - The Benchmark Company, LLC - Analyst
: Right. No, I get it. Okay. And then lastly, in outpatient rehab, update us, if you can, on some of the initiatives you got in place to improve the margins
of the business?
Question: William Sutherland - The Benchmark Company, LLC - Analyst
: Okay. So you've got these progressive -- these steady improvements kind of baked into your expectations then in the guide.
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MAY 02, 2025 / 1:00PM, SEM.N - Q1 2025 Select Medical Holdings Corp Earnings Call
Question: Ann Hynes - Mizuho Securities USA LLC - Analyst
: Maybe we can shift to IRF. Obviously, that was a shining star in the quarter. I mean is there any plans to actually -- I know you're accelerating growth
a lot. Is there any plans to even accelerate it more to further diversify your business away from LTAC given the regulatory challenges? And I guess,
like internally, how much capacity can the organization support for that growth?
Question: Ann Hynes - Mizuho Securities USA LLC - Analyst
: Okay. Great. And my second question would just be just on the CMS front. Obviously, for the industry, the outlier and the transmittal rule is a
pressure point. What type of advocacy do you have with CMS just to help the industry to try to offset some of these pressures?
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