MSP Recovery (MSPR) 14 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to the MSP Recovery Second Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to MSP Recovery’s General Counsel, Alexandra Plasencia. ahead. go Please

am Welcome I call. General of Counsel Good our Alexandra second Recovery. to conference quarter MSP morning. Plasencia, XXXX earnings

Before of or results a that which we future and are or note actual during within the Securities begin, presentation, the material Litigation statements this Act meaning predictions statements of in state Private intentions, manner. could management's made Company differ forward-looking beliefs, the expectations, the please Reform

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helps and which of and Medicare recovery payers with this known those difficult at as Medicaid, In have payments our Frank payments patients, the Advantage and United providers believe healthcare the lead the well are as earnings, recovery ecosystem. this in solutions started welcome come including payers, Recovery’s Recovery. of Today, sustain solutions makes to in valued fraud morning, law Ruiz, while that technology XX% XXXX the This significant payers. the preventing dollars and and MSP. unique Medicare, on primary for correct All higher I that key waste, second XXX real-time for as and programs to discuss we care an dollars one some process, regard, injury problem for healthcare created healthcare, By space, properly will associated healthcare sustainability will the where all support MSP this and million disrupt other a result everyone. the today's in financial time programs color at We and CEO the unique We business payments of to claims improper I flaws the In John call. which occur save I are payers of and further efficiency issues combined, is confront the same years supported payers issue, by America. understanding be providers, improper the as and for Billions for that people including turn opportunities, to responsible the replicate. in were providers daily quarter in where business time, data the that truly will Medicaid Medicare a Quesada expenses, reimbursement you of provide ultimately this provider solutions. MSP the billions uncovering June innovative has and Founder government the the over such a of Good MSP H. Irrevocably overview asset. better as those it earnings better by rights identify government care are the Medicare time, in many parties addressing $XX.X Medicaid at data-driven system providing instances Medicare, patients identified, and will States Over pay major and liable. three designed ensuring Medicaid lives, with a XXXX recovery in market. we own ecosystems. to responsible no identified parties. paid and the patients, solution, XXXX, by very that pillars. evolved which healthcare MSP commercial programs. and a a of improper incorrectly at of our U.S. by XX, In less in for providing to when was payer that relied were identified rights upon improperly risk. and collections long-term disruptor commercial patient, mission was I a billion continues for on parties paying XXXX, has where of for assigned MSP's with better represents decreasing

further legal proprietary consists Further, June the works detection lastly, in paid our that of will recovery the engineers strategies a own its designed self-contained the we created world. total and our strengthened algorithms together Palantir, patients, for and billion LifeWallet, over that only ecosystem Medicare laws systems. winning as throughout amount of $XXX.X be the this bolster our can LifeWallet XX, since payer owned ecosystem payers. was the with of to in of and strengthen self-contained closely which X,XXX by have working $X.XXX XXXX, with was association are business. in next-generation providers precedent our team build have creation starting legal serve shown intellectual property, trillion As utilized whose claims to secondary with We innovative amounts. entire our recovery and And

our of paid our potentially quarter value some grow. second LifeWallet and our you highlights recovery regarding through platform. efforts, efforts recovery of continues to walk to recoverable Now I'd our like claims On MSP’s

June we have paid XX, value claims. of recoverable of billion As in $XX.X potentially

enable focused deploying required strategies on new to primary to we in will that the During the litigation. accident-related engaging focused make truly on recoveries. quarter, is payments prior second effort This payers

we unique rights. our asset, interest the continue in Additionally, see very claim to investor

of secure As alliances firm, as significantly evidenced with which Bryson Recovery strategic by Group, formed committed significant efforts, agreement with to will Rivero Phillips Mestre and to Prudent MSP to our law law our Milberg is well resources both which firm Milberg considered up as recovery litigators the nationally related recoveries. recognized has To of bring Grossman million recovery has $XXX invest efforts. to litigation our bolster firm action billion its more They Rivero torts for class federal mass for for have preeminent and known clients. a recovered corporate handling Rivero bet-the-house their to considered cases. in a creator is Mestre be large than for at the dispute Mestre, by $XX Recently, Craig prevailed $XXX where who billion is represented many clients. they trial successfully Wright, Bitcoin. Dr.

in with have our others recovery discussions, settled. efforts We settlement cases that already progress in made have several significant

data Colonia data to with for entered onto Also, As growth. pertains to load their ecosystem. it patient to and Mexican LifeWallet, all Health agreed agreement Cano international we Centers the LifeWallet company have Medical La into SeguriTech, LifeWallet position an a

system the a indicative since and as known technology, identified $XX.X Form XXXX. which initiative the Polygon reduce amounts just working in as I it the $X.X working with We the and in When the few assignors, fraud tokenized the terms XXX be patient stands, significant to our believe year moment very the signifying in also have XXX billion paid paid on of payer success was number billion with Tokenology of significantly as on invoicing we a we embedded of I in achieved had starting been network, there. growth, we will prospects XXXX over had with take to with healthcare the portfolio. first Today, have MSP. was positive made healthcare abuse industry amounts our combined million growth, since technologies LifeWallet’s that we over initiative of are in which we which with up $XXX a assignors biometric a on – potentially recoverable. is should over actually we that started, as biometric highlight XXXX have finalize want as agreements to been

with a of the $X.X June new primary billion required deployed depicted over stated has paid of In will have in MSP MSP we of insurance identified ordinary XXXX, engaged in were accident-related litigation by payers that previously, outside auto course XX This payments letters. carriers. have matching the treatments make and demand to enable over business. purview data strategy, As the in process, we by this assignors. our Through

by payment federal demands, that $X.X amounts XXXX, auto As MSP to we the for admitted billion than in who underlying were announced totaling the more government commenced claim primary build for accidents. in of individual insurers payers CMS they June the sending

over Co-Founder Quesada, Now and guidance. to of Legal and I'll Frank it Chief recent to our XXXX MSP discuss provide accomplishments hand Officer

morning. Frank Recovery. guidance Quesada, MSP Recovery. Good our developed legal here The Legal of was Officer efforts oversee that is Chief our combination. of employed and in Co-Founder as strategy I is MSP the at This business recovery part XXXX

$XX.X relates would claims as by of billion we by paid XXXX, the Today, recoverable value We billion. surpassed have as guidance X.Xx. of $XX.X claims. XXXX, XXXX June potentially of stands, approximately to paid As have we we value it our end XX, recoverable of it estimated of the potential

recoverable of cases. Our total on completion achieving is revenue guidance settlements data matching gross in the dependent our and

speed information is exercises feel litigation a with with can a number XXXX, process for aggregate revenue. will cornerstone and of some conjunction to projected majority identified as estimate is and we approximately progress MSP's phases is MSP being consulted our attributable to previously the in a This the our payers resort owed. immediate claims. statisticians through to has exchanged to recoveries need XX% can the Recovery achieve given in the the in believe volume the MSP claims the platform, increased detail if develop which towards extension matching robust payer. to the process, amounts matching discussions meaningful reached recovery market. to settlement efficiency in brought sum there has primary that model currently is future primary auto recovery techniques data it settlement liability that with All avoid Due hit a have in-house to conversations comfortable settlement MSP without which we a risks, of claims or and This model, identify of uses forward of data current a has efforts. in need analysis. data is While MSP to unknown claim-by-claim primary exercises Recovery matching matching with the past recoveries also to settlements there We real-time eliminating payers made are administrator. developing third-party of being of Recovery a of for the allows data and ability push we both MSP a sampling which lump team a claims. for allow in final

yet multiple paid amount. that achieved X.Xx Although the to at publicize has multiple amounts this we Recovery we past, projected into In have a recover recovery settlements in the past settlement excess MSP time, in we XXXX. entered exceed agreements the have that to for of

Ocean agreed pay schedule D than by services and example, A fee-for-service more rate For Harbor Part Medicare Medicare X.Xx, a to Part emergency for Medicare claims.

to We assertion agreement between to difference with applicable Horace claims amount agreed into defenses. of it which in match the solution believe to and paid Mann pain Xx Xx. MSP has that entered claims also of the to so upon subject the can are according agreed the to call certain a I rates, Thank has settlement the in commercial over address generally We explain would you. now turn of case he to commercial how like John, problem a forward. going to that between developed rates back pay

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like our you CFO who financials. Hamstra, through our I'd to introduce walk Now Calvin quarterly will

reporting financials our everyone. quarter this financials. a Good two I'd a To you, Thank company like I'll MSPR. the overview giving XXXX is morning, some start, to be as first John. under of quarter cover brief public our as highlights of

sheet of $X.X These and flows rights to and of cost, the the assets and in recovery from $XX.X and quarter. to held rights assets increases mostly also amortized. business related cash These over recovery assets are financial during consists the are The are therefore investments There to cash $XX.X a the the intangible driven of claims in party assets cash investments were fair million, the $XX.X to are cash by obtained amortized from claim balance flows prepaids to eight funds million. million Our loan instrument value. claim combination and intangible not while restricted $X.X our years at billion rights recovery or cash billion. not

For liabilities and related previous liabilities derivative the payable mark-to-market related to related to assets of liabilities outside in the of also related purchase the warrants, noted in Cantor the liability party of our filings loan, also increased noted and stock claims the filings. the to facility recovery previous

to overall, And period go increase items majority the are has the further for due lot into expenses previously. one-time interest in Our liability, with period, I'll other stock-based on during another But value in income as and fair Also, the noise law into we strategically the transaction. expense this and of expense. entered of change firms derivative in the business detail from statement non-cash a items amortization as such noted warrants of combination and slide. claims the alliances compensation, driving

and historical drive return out increased these the expenses accelerate to claims have allow the While these us will in and short-term, push anticipate we biggest recoveries our portfolio. alliances of

to Next I'd overall provide the balance sheet. like

highlight to the are side. on Some here items asset

prepaids previously, combination other as noted business asset combination. the related increases is driven the As all as to increase the These by in intangible well as acquisitions part acquisitions of of cash, business assets. increases and are the

liabilities indemnification and and Master approximately a claims obligation a related $XXX.X of million as LP offset up revenue are return related the payable is notes of Our guarantee non-recourse full assets this financing and non-current represents portfolios. the Recovery The claims and gross the parties. payable, when non-current by related on excluded payable sale loans One is of interest asset. and future from Virage obligations financing and keep is accrual to mostly on claims, consists the interest in obligations mind item is notes

This and is the the sources, John such increased previously, year-to-date the On administrative related the non-cash. statement, general additional as drivers quarter income periods. fees as expenses main our LifeWallet, development are mentioned earlier. one-time have losses previous Outside previously noted of and of and from of professional revenue items noted, within to as and

has drive healthcare also new go-forward these period-to-period. consistent portfolio, not extracting value revenue by revenue but billing streams on that our addressing the the Our been will problem management team only in from focused historical developing

help financials. flowing would This in order will business through our will the important billing we to historical feel portfolio related feel value forward. of hold we understand that While the some is one-time we are in go-forward. going shareholders anticipate through the what non-cash we non-GAAP will an the as it have significant revenue, financials to noise to MSP’s a healthcare part measure, expenses the applications assets but to that combination, a address these past be In items problem of developing highlighted is provide unique the the look order we and

the there $XX.X fair ended a XXXX, June in income liabilities and for million. the share XX, items which non-employees were million to grant Cantor facility, Within value three of to related disclosed the statement the one-time, previous of $XX.X of six to months filings changes non-cash warrants derivative and and related in was

to items claims expense $XX.X in $XX.X million the for for months and the Additionally, the and with for paid items related period kind there totaled million one-time six These the non-cash interest. months. noted amortization along three are

and net million months $X six approximately for $X approximately the was one-time these months. loss the our Excluding and for non-cash items, three million

anticipate sources current from start While quarters, the announced could in our being meaningful or we current few of included our on have Based to and operations approximately cover law provide we to billion next that fund firm-related of our needs. also revenue Cantor, agreements more operations. in prepaids we able publicly sources the to to Prudent, resources announced fund facilities with generating other several and continue potential expenses our to cash cash, funds Virage $X.X have

historical we resources for announcements the being of noted our current for all and facilities, from have MSP portfolio implemented. in In flows operations to streams agreements and today. to us Thank each additional claims are joining disclosed. still on continue these you summary, ability develop cash all through in should As execute driving sheet balance our process revenue provide strong of publicly of announced the these or

with Investor the heard. Relations Thank what much. Diaz, visit is attached Recovery. portion website encourage so MSP for We Officer Communications you Chief of of just This recording a presentation in our the Diana you to everyone

from KBW. question of Instructions] Shields [Operator question-and-answer We go will comes now the Please today begin Meyer first Our session. ahead.

questions, I quick Two Thanks. if can.

there in in litigated? sources income. is the of, guess, of way if the quarter a I of how million being don't into income any $X.X bit terms of characterize little insight recovery can I First, getting you were more the claims those long know

H. Yes. is John Good morning. are This Ruiz. you? How

there break process, So I'll fashion. of different are this and we of a in buckets them down couple claims that

there the litigation and that insurer three that day where categories. And we type in is out. day fall into they the So are then of claim sort claims actually One are directly. ensures process in and there one are of Medicare beneficiary claims

type beneficiary, our particular claims settlement in have but been where liens have is process, lien third rights. those that claims Medicare actually those and other meaning in been own. are a with people and category, of we own have there's The they're progress, processing then a that lawyers, already in are claims claim that whereby the not extinguished, we lawyers and those And those injured

pertains primary of it actual the amount. half previously X.X of to sent claims for As at that only were build that by to where them payer they were payer the been at This subset in paid owed those has paying the were and that a responsibility acknowledged they primary paid were total, paid batch claims that amount.

So even we're upside of in we've that getting difference. already is process in what with there collected, those reported, that revenues an we the even

amount, collected. Mr. we've agreement pay is already also company claims to Xx and of requires they them also amount as is settlement As another a Xx it which primary paid the but settlements that the relates some the that established paid to the to payer other Quesada indicated, with paid,

with with settlement seeing we're in the significant a payers, bigger that's because with conversations Quesada futuristically what Mr. have progress that what explained significant said, matching path and taking. and of strategy So data we've we're of portion primary sort the in we

call other claims recovery of that is what So flow half, and probably the been we historical that for answer what have daily I half that from to then processing is question the transpires before. directly,

and instead to collect? That's assume very helpful. a percentage particular they're relationships on is of you. we law billable going there's basis other we question, partnerships should that that when of bigger Thank picture that hours? doing Okay. percentage that And a about talk with They – the they're recoveries firms, assume this the

Yes.

monetary projected these The between great we think not do XXX lot So the change. lawyers, at because all more working on respective have though even have lawyers law we numbers cases question. dynamics all firms. we've doesn't change The impact to that of now the over a MSPR collectively, I a

just So doesn't MSPR more it adding add speak, soldiers but while to we more so and anymore. more we're cost lawyers,

One court. Supreme of is that. the very feel in positive major decided by States review things Supreme States petitioned United is the insurers United One where Court the and been the that two there was decided late rejected XXXX for cases Court public we had federal the

downstream that's able collect to of law So addition that Medicare be established in cases rights land the Organizations, to of providers prosecute and and the these Advantage upon the to them.

the is the that And within a judges all issue. the that of lawsuit, just the a last bills entries, had Metropolitan, we've a significant in which put drive And defendants of we claims the which won reported lot already in that on established of MSP letters. result the of publicly we there's see court primary versus pressure that, things the and normally send demand starting be is reported lawsuits And case, we're essentially to we were the won Because we less industry, one necessary we file huge payers, also to seen, what to and more significant and are manner automatically. these is a lot another going happens established litigation sent huge in we feel move. as the to two paid doing. respond more So that where to out in the a started called to all which starting to docket which weeks, the that which are the we've the are elements is

not that. for any, of at to, claims. of look kinds done defend room these primary establish downstream payers, try many, we to Advantage if scope, and all, of Organization to So the at these bigger if lot against We've the over Medicare for themselves done rights That's courts. There's in years you had with. providers a this many and in the

now that of get this entire and a that processing structure processed, of just So slip them, of day. claims doing we're and billion these if feel the falls nationwide paves between data how look you car the believe And accidents, and the and for strongly it we there's the matching healthcare about at happens normal way every way bills X treatment.

Okay. you so Fantastic. Thank much.

welcome. You're

no Instructions] I seeing [Operator questions am session the This our participation. as for the in well queue. conference. your you question-and-answer more Thank as concludes

You may disconnect.