Thank you all for joining us today for Option Care Health's Third Quarter 2020 Earnings Conference Call. I will now pass the call to Mike Shapiro, our Chief Financial Officer. Please proceed, Mike.

Thank you and good morning, and thanks for joining us for the Option Care Health's third quarter earnings call. I'm joined this morning by John Rademacher, Chief Executive Officer. Before we begin, please note that during this call, we will make certain forward-looking statements that reflect our current views related to our future financial performance, future events and industry and market conditions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our comments. We encourage you to review the information in the reports we file with the SEC regarding the specific risks and uncertainties. You should also review the section entitled Forward-Looking Statements in this morning's press release. During the call, we will use non-GAAP financial measures when talking about the company's performance and financial condition. You can find additional information on these non-GAAP measures in this morning's press release posted on the Investor Relations portion of our website. With that, I'll turn the call over to John.

Thanks, Mike, and good morning, everyone. We are very pleased with our progress in the third quarter, both in terms of our financial results, as well as our efforts to lay the foundation for sustained growth. Mike will review the results in more detail. But I'm very proud of the team's execution in the quarter in which we delivered double-digit revenue growth, our highest EBITDA margin on record and expanded our cash on the balance sheet by over $20 million. A year ago on our third quarter earnings call, which was our first call at Option Care Health, we outlined a strategy to drive sustained profitable growth by integrating two industry leaders and establishing a truly unique platform to deliver infusion therapy in the alternate setting. At that time, we established four key objectives for the business. Realize over $60 million in net cost synergies, deliver organic revenue growth in the mid to high single digits, deliver EBITDA growth of two to three times revenue growth through operating leverage, and improve the claim to cash conversion to drive over $50 million in operating cash flow. As we sit here today, we have clearly executed on that strategy. And I am extremely proud of how the Option Care Health Team has performed in an extremely challenging environment. One of our first priorities as the new enterprise was to re-engineer our commercial organization and deploy resources for maximum effectiveness. While it was admittedly disruptive at first, it is clear that our sales team of more than 550 is operating much more effectively in identifying and capturing new patient referrals. In the third quarter, new patient referrals increased to pre-COVID levels for both acute and chronic therapy portfolios. And in fact, for many therapies, we are generating solid revenue growth over the prior year. As the marketplace continues to react to the COVID-19 crisis, and the home and alternate sites outside of the hospital are becoming the site of choice. We saw very strong results in our chronic therapy lines that focused on specialty drugs. In the third quarter, we saw a broad improvement in most markets with scheduled procedures and physician visits beginning to accelerate off the second quarter low watermarks. And given our integrated technology between our commercial and operational teams, our success rates in terms of efficiently converting new patient referrals to revenue has continued to improve. While overall we have been encouraging referral trends, recoveries vary by market, and the overall trend we saw in the third quarter is far from universal. We are also closely monitoring the recent spikes in COVID-19 cases and hospitalizations that have re-emerged in many cities and states. The team continues to shine through adversity and the dedication of the over 5,000 team members at Option Care Health continues to focus on the patients and family members on the receiving end of every dose. Our resilient, interconnected and technology-enabled network of care management centers has provided a strong backbone that has allowed us to adapt to the dynamic environment that we are operating in and maintain the dependable consistency our referral sources are counting on. We continue to make progress on integration efforts. And while some technology harmonization efforts will continue into the first half of 2021, we will effectively be complete on integrating the two organizations by the end of this year. And the more efficient platform we have created is beginning to unlock operational leverage. Our EBITDA margin has expanded 200 basis points from the third quarter of the prior year through our spending and operational discipline. The scalability of our network is the key tenet of our growth strategy going forward, and the third quarter underscores our ability to leverage the network efficiently. Shifting to the pandemic situation by no means are we out of the woods, despite our improving top-line results. Like all healthcare enterprises, we continue to focus on the safety and well-being of our team members and the patients that we serve. We continue to aggressively manage our supply chain for critical personal protective equipment, vital drugs, and medical supplies. Our technology backbone has enabled us to operate and manage our workforce and inventory effectively across our network and we continue to enhance our technology ecosystem through new software releases, and further deployments to enhance our Telehealth, E-visits and virtual capabilities. And with these tools, we continue to collaborate with health systems and physicians to identify patients who could benefit from receiving their infusion services safely and effectively in their home for one of our dedicated infusion suites. We know that patients who have underlying health conditions or are immune-compromised have the highest risk of severe impacts from the coronavirus. So our ability to partner closely and then demonstrate our ability to safely serve these patients has only strengthened our position. I'm confident we have solidified many referral source relationships over the past several months as a reliable and trusted service provider. Going into the fourth quarter, we would anticipate continued momentum in our sales effectiveness. Although we have seen some markets retract, and hospital and physician practices begin to postpone procedures given the recent flare-up. Also, we continue to actively monitor supply chain dynamics as product and supply disruptions continue to emerge in certain therapy classes and medical supplies. Finally, as I've shared in the past, care and pharma manufacturing collaborations are critical components of our growth strategy. And we are uniquely positioned as the only national independent provider with a technology-enabled clinical advantage. We've announced a number of new payer collaborations this year, and we continue to make tremendous progress. Today I'm very pleased to note that we have recently entered into new multi-year relationships with both Centene and Cigna. We are excited, as both of these agreements allow for deeper collaboration with these health plans to actively manage their members who require high-quality infusion services at an appropriate cost. We pride ourselves on our ability to collaborate with both local and national health plans to deliver real value to them in their population. And while our efforts on the payer front continue, I'm extremely proud of the team and the progress that we've made in 2020. We remain the only provider that is in network with all major health plans and that is a key competitive strength for us going forward. We have also highlighted the strength of our platform to provide manufacturers with clinical support and channel access for new product introductions. In the third quarter, we also announced a key collaboration with NS Pharma to help commercialize the recently approved therapy for the treatment of muscular dystrophy. Neuromuscular therapy is an area of clinical focus for us, and we are thrilled to be selected as a key partner in their limited distribution network based on our clinical expertise. Our business development team continues to actively collaborate with biopharma manufacturers to identify opportunities to utilize our clinical expertise and care management platform in support of the commercialization goals. As we sit here today, in the first half of the fourth quarter, I'm very encouraged and proud of the Option Care Health team both for their resilience and persistence in relentlessly pursuing our shared mission, but also for the tremendous progress we've made in our first full year as a new enterprise. We will have completed our merger-related integration activities, established or deepened our new payer collaborations, launched multiple new therapies, and dramatically improved the financial profile of the company. With the strength of our execution, and continued progress against our goals, we announced this morning that we are raising our 2020 full year EBITDA guidance and given the positive momentum, I've never been more confident in the Option Care Health team or our potential going forward. In short, the team has executed the strategy we outlined a year ago exceptionally well. Adapted and responded to a very dynamic and challenging environment and never lost focus on the most important thing we do, provide extraordinary care that changes lives. With that, I will turn the call over to Mike to review the financial results in a bit more detail. Mike?

Thanks, John. Clearly, we continue to generate strong financial results and establish a solid foundation for the future. The third quarter is also the last quarter in which I must remind all of you that the reported growth reflects legacy Option Care results up through the merger date, August 6, 2019 and the combined results for the merged enterprise thereafter. Going forward, our growth profile will be much more transparent. I'll try to provide comparable growth where possible based on our estimated combined prior year results, and the impact of harmonized accounting policies. Revenue in the quarter of over $781 million represents a comparable infusion revenue growth of approximately 13% driven by mid-teens chronic therapy growth, which offset relatively flat acute revenue. Reported revenue growth also benefited from a meaningful improvement in revenue deductions for bad debt, which declined more than 4 percentage points year over year to the mid-2s. Our chronic portfolio continues to benefit from the transfer of patients from hospitals, HOPD and other sites of care to the home or one of our infusion suites. Acute referrals and revenue did improve modestly over the second quarter in most markets, as acute activity in hospitals did sequentially improve. Clearly we're pleased with the overall revenue results for the quarter. Gross profit of $174 million represented 22.3% of net revenue in the quarter. Despite considerably faster growth in our chronic portfolio which represented a little over two-thirds of our revenue in Q3, our gross margin is holding tight as our operations team continues to drive efficiencies to mitigate the net impact. And spending $123 million is down slightly from Q2 spending levels and represented 15.7% of revenue. And note that it includes approximately $4.5 million of integration-related expenses, which is detailed in the reconciliation of adjusted EBITDA in this morning's press release. We expect sustained spending leverage to continue as integration-related expenses decline, and we leverage the established infrastructure. Adjusted EBITDA of $59.2 million represented 7.6% of net revenue, and it reaffirms our conviction in the ability to expand profit margins over time. Despite our chronic portfolio growing at a faster pace as expected, we continue to demonstrate our ability to expand EBITDA margins, and we would expect that trend to continue. Our mantra regarding earnings has always been that it only counts if it shows up in the bank accounts. Regarding cash flow results, we continue to drive meaningful cash from operations and further enhance our capital structure. Free cash flow, which we define as net change in cash balances was $22 million, despite the return of $11.7 million in the quarter to HHS related to the CARES Act grants. Year to date, we've generated over $70 million in free cash flow, and ended Q3 with $140 million in cash balances. Additionally, as we've disclosed, we increased our revolver capacity in the quarter to $175 million, with $165 million available after letters of credit. So we exited Q3 with over $300 million in total available liquidity. Regarding our leverage profile, we committed a year ago to a consistent de-leveraging trend through both earnings growth and cash flow generation. We emerged at the time in the merger with a net debt to EBITDA ratio of 6.2 times and we exited Q3 at 5.0 times. Based on the guidance I'll review in a minute, we expect to be below five times at the end of the year. And while we're not in a position to provide 2021 guidance at this time, we would expect to improve our leverage profile considerably next year, and ultimately expect to be below four times in short order. Finally, given the strength of our results and momentum, we are increasing our outlook for the year and expect to generate between $62 million and $66 million in EBITDA in the fourth quarter or between $216 million and $220 million for the full year. We also expect to continue generating strong cash, and expect to finish the year with more than $150 million in cash balances, or at least an additional $10 million in free cash flow in Q4. With that, we will open up the call for Q&A. Operator?

And our first question comes from Brooks O'Neil of Lake Street Capital. Your line is now open.

Good morning John and Mike, congratulations on a terrific first full year as Option Care Health.

Thanks.

I have a couple of questions. While I know investors and I are curious about your outlook for 2021. Maybe we should start with the outlook for Q4. I know my comment is a little bit about it. But could you comment in particular on whether you think you could continue organic revenue growth in the double-digit range and look like gross margin was essentially flat here in 3Q and I'm curious what your outlook for gross margin in Q4 might be as well?

Yes, good morning, Brooks, it's John. And thanks for the call. I'll start out and then I'm sure Mike will want to add some color as well. You know, I think we're really excited about the progress that we made in Q3. Just to remind you, though, last year was an interesting comparable, we were going through a significant amount of change with the reset of our commercial team in Q3 last year, if you remember, and that was a big part of our integration effort. We wanted to get that behind as quickly as possible and reset the team so that we had better reach and frequency in the marketplace. So, we looked at Q3 as being a softer comparable than most other quarters because of that disruption. That being said, look, we're monitoring closely the situation as we continue to see flare-ups across the country with COVID-19 and spikes in local communities. We do believe that the healthcare system is much better equipped today to handle both COVID and non-COVID related care, much better than we were in March, when this all unfolded. And so we're cautiously optimistic that we're going to continue to drive our team to be in a position to capture the referrals that are available to work closely with the providers to identify patients that can come into service with us, and to continue to focus around both the acute and chronic patients that can come on service. And I think we'll see that momentum continue. But I do want to say that there is a little bit of caution in both of our voices, just with the uncertainty of the recent flare-ups, and the increase in hospitalizations that we're seeing. Mike?

Okay, that makes sense.

So anything I'd add is clearly with the guidance we're providing for Q4, we're signaling and expecting that we'll see a constructive Q4 compared to the momentum exiting the third quarter. And again, as it relates to gross margin, we've been very open that, given the two verticals that we operate in with our acute and chronic therapies, with chronic which we expect to consistently grow at a faster pace that will have some downward margin rate pressure. But again, hats off to the operations team who's driving cost efficiencies. And the other thing I mentioned in my prepared remarks that helps our gross margin is we've seen over a full point of reduction in our bad debt reductions from gross revenue. And that's really a result of our patient registration and our revenue cycle teams. You know, really driving superior collection performance. So that's helped us up to this point. We're not in a position obviously to provide specific gross margin guidance, but rest assured we're fighting for every basis point.

Great. And then I'll just ask one more. Obviously you guys are doing a terrific job with de-leveraging and strengthening the balance sheet. I think I recall the hedge on the second lien notes comes off during November, can you just give us any feel for what you're thinking about in terms of interest expense, maybe for Q4 or thinking out into 2021?

Yes, Brooks; the swap, as we disclosed in our filings, we had two swaps on the first lien and the second lien, the second lien swap does expire actually later this week. Our initial guidance for the year was we would be at around $105 million to $110 million of run-rate interest expense, when you look at the meaningful pay down in the second lien in early August, as well as the expiration of that swap, we will exit this year with a cash interest rate of around $90 million. So we've taken $15 million to $20 million of cash interest out through those two actions. And we'll obviously provide more granular thoughts on our next call regarding 2021.

Great, thank you very much and again, congratulations.

Our next question coming from the line of Matthew Larew with William Blair. Your line is now open.

Hi, good morning. It was clearly a strong quarter, congratulations to everyone. You mentioned the category possibly taking share in home care as patients transition out of hospitals, and it seems like Option Care itself is also gaining share. Could you provide some insight on why you are seeing this share gain right now? John, you mentioned the sales force and the integration of your tech platform, as well as some new payer contracts and the advantages of scale. Can you help clarify the difference between the broader home infusion category gaining share versus Option Care's own growth?

Yes, Matt. Good morning. Thanks for the question. Look, I think what you just mentioned are the keys. First and foremost, we knew what was going to take, it was going to be disruptive and take a bit of time to get the Salesforce realigned and pushing in the right places and hats off to the team, we've done a lot of training, we've refocused the call points, we've done a lot around the reach and frequency to make certain that we are in the right places, working with the right providers in order to capture that share. And so a lot of it has to do with the execution of that team. The second thing we mentioned that I mentioned in my comments is, look, the technology platform really allows our selling resources and our operations team, especially those in patient registration, to work much better together. We have continued to see improvements in the amount of conversions of referrals to start, right? A referral is important, but it doesn't really generate revenue until we create a start out of it. And so the teams that continue to focus on that, we continue to refine and upgrade the technology with new releases. And we continue to get better with that. And that also is something that we feel really good about. The last thing that you mentioned is, we continue to cultivate and develop deep relationships with the payer communities. And we believe that those collaborations are important to serve their members and to make certain that we are well positioned to be a national provider that can cover 96% of the US population and have access to the most plans from a health plan standpoint. And so across all of those dimensions, we continue to execute our strategy. And we believe that continues to put us in a really strong position in order to capture that. One last thing I'll mention is, you know, we have invested a lot in the technology platform to allow us to do things in a virtual environment. We are trying to be, touchless wherever we can, using digital documentation and other tools that we have at our disposal to be able to help to capture those patients that are transitioning out of the hospital without necessarily having to show up at the hospital. And so, the work of the team and the use of that platform to do virtual teach, virtual visits, e-discharges, all of that is paying benefits to us as an organization.

Okay, fair enough. And then I think the kind of longer-term growth algorithm we talked about was growing at least in line with market growth of 5% to 7% in 2x to 3x in terms of earnings growth. I appreciate that the comp in the third quarter was easier, but obviously the chronic portfolio now I think that's two-thirds of the book versus 60% before, is there reason to think that kind of that long-term growth algorithm you had outlined, perhaps actually can be more attractive in a post-COVID world?

Yes, Matt, it's Mike. So obviously, as we emerged, we tried to lay out what we thought were very realistic growth profiles. And again, you know, as we generally characterize this industry, which is really a portfolio of virtually dozens of different infused therapies. One of the benefits of our model is the balance; we have an extremely balanced revenue base across a variety of therapies, some which in our acute portfolio are admittedly growing in the low single digits, and balanced with a rapidly growing portfolio of chronic therapies. And so, the way we've generally characterized the revenue potential, I think, remains intact. We've characterized that broad portfolio as a 5% to 7% baseline proposition and as John alluded, I think our confidence here sitting a year later with a very well-performing and cohesive commercial go to market strategy. I think is giving us more confidence that that will be growing at a faster pace. And again, it's not just the existing chronic therapies. But as John also mentioned, we're introducing a couple of new therapies a year. And so that gives us confidence, especially with that chronic portfolio. So a short winded answer to your question is yes, I think that growth profile remains intact, with probably a little more confidence.

Okay, thank you.

Our next question coming from the line of David MacDonald with Truist Securities. Your line is now open.

Hey, good morning, guys. A couple of quick questions first, Mike, can you talk a little bit about working capital? I mean, if you look at the cash flows, they've obviously been very strong. What in terms of working capital has maybe gone a little bit better? Where are their continued opportunities? And then if we look at the growth of the chronic business relative to acute, just looking at the bad debt characteristics of that product portfolio, is there an opportunity to kind of further drive that bad debt number down?

Yes, we've been very active in managing our working capital, obviously looking at what we refer to as our cash gap. Our days of inventory, and our DSO offset by our days payable. Overall, we feel we're in a very strong position, it really starts with the collectability, which as I mentioned, has driven down our provision for bad debts. You know, we've improved the not only the balance of AR, if you look at our disclosures, we've taken tens of millions of dollars out of our AR balances over a horizon where that top line has grown meaningfully. And that's really a testament to our patient registration in our billing teams, who are converting that revenue to cash significantly faster, which has afforded us to manage and reduce our overall working capital balance, as you'll also see with inventory. They also afford us the ability to make some strategic investments in PPE and medical supplies in what we think could be some challenged supply markets going forward. And so we've been making some strategic elections on our working capital and investments where we think it's prudent. Overall, I think working capital, you know, you asked the teams out in the field, they're just getting started, and they think there's continued efficiency, and we would agree with that. So overall, I think working capital will be relatively neutral and probably grow modestly, as a fraction of revenues going forward. You know, with the bad debt. You're absolutely right, as we think about the different therapies. One of the benefits on the chronic therapies is these are a higher-cost regiment. Virtually all of our chronic starts are prior authorized by the payers. And so we typically see a lower bad debt profile for our chronic therapies, simply because our patient registration teams are so diligent around following up with payers who obviously want to have some involvement in the treatment regimens for those therapies. So, overall, with the mix moving forward, we would think that there is still some room to improve on our bad debt provisions as well.

I have a quick question about payers and payer contracting. John, you mentioned in your prepared remarks that there is a deeper collaboration with payers. While I understand you may not want to get into specific details about Centene or Cigna, can you share your thoughts on the broader conversations? We're hearing that payers are increasingly discussing value-based care. When considering contracting, is there a possibility over time to shift towards a model where better outcomes could lead to participation opportunities? Alternatively, are you noticing payers narrowing networks? Any general insights on the conversations you are having with payers would be appreciated.

Yes, Dave. Look, the conversations that we've been having with payers continues to evolve, and to change, I have to tell you that they're much more productive and in alignment with what you're hearing in the marketplace. And that is, a significant amount of interest in understanding some of the construct of what a value-based care reimbursement model could look like, opportunities for us to work closely with them around managing cohorts of their members that require the therapy set. And as we've disclosed before, most of those start out in the area of performance guarantee, and putting at risk dollars, both forward as well as punitive on that, and we think that's going to continue to evolve. We're really excited about the relationship that we announced with Cigna and Centene. We think that they're solid foundations for us to then build on. And I think that this is going to continue to evolve moving forward. And I wouldn't be surprised that the evolution would move down the path of some risk-share for performance and for making certain that we're managing effectively the outcome for the patients that we are privileged to serve.

Okay. And then, it sounds like in the chronic therapies, you guys called out the ongoing migration to home and alternative services, and just given some of the reticence we think we're going to see in terms of ongoing COVID flares, and reengaging with institutional settings. How do you guys think about your ambulatory infusion suite footprint? Is there some areas where you may put some additional dots on the map? Just how you think about that in terms of further complementing the portfolio?

Yes, Dave, as we discussed and disclosed before, we today operate over 130 infusion centers across the country. On that, we believe that this will be a big part of the growth strategy as we move forward. We continue to focus on utilization of the existing infrastructure and we're identifying opportunities to make some smart investments, where local markets need it, demand it and we have the patient volume to justify it. So you'll continue to see us move in that direction. We're thoughtful about it, as you would expect, in looking at how we want to deploy the capital, but we're pleased with the progress that we're making, where we believe there's still opportunity for further utilization of the existing infrastructure, and we're going to continue down that path to make certain that we have the right facilities in the right place to capture that demand in the marketplace.

Okay, just one last question from me. At the beginning of the pandemic, you mentioned a significant increase in new referral sources. Regarding this morning's growth, can you provide some insight into whether you are still seeing new referrals from outside sources or if most of the growth is coming from a deeper engagement with your current referral network?

Yes, it’s quite balanced, and we’re excited about the revenue performance. On a comparable basis, we’re experiencing double-digit growth, and we did see a sequential improvement in both acute and chronic therapies compared to the second quarter. The chronic side is particularly well-balanced. There are still several referral sources looking to change the method of care, and there's also pent-up demand as more people are visiting specialists for chronic conditions. While we’re aware of ongoing shifts in care sites, the uptake of our newer therapies for myasthenia gravis, MS, and other chronic inflammatory conditions is strong, indicating a good balance in where these starts are originating.

Our next question coming from the line of Kevin Fischbeck from Bank of America. Your line is now open.

Hey, this is Adam Brown on for Kevin. Just a couple of questions. So your deleveraging comments imply you're going to grow next year. But as you think about 2021, should we think about the growth off the base of the new 2020 guidance that you just gave or are there any one-time adjustments that you would adjust that as you think of the jumping-off point for 2020?

Hey Adam, it's Mike. No, the jump-off point for the guidance that we provided is a solid baseline. Again our adjusted EBITDA normalizes for some of the integration costs, as detailed in the reconciliation. So while we're in a position to provide, the reported adjusted EBITDA for this year is a solid base.

Okay, thanks. And then going back to the contracts with Centene and Cigna, is there anything additive from these new contracts? New geographies, new services covered or are these more just renewal?

Yes, it's John. The renewal with Centene remains a strong partnership for us. The contract with Cigna is somewhat new as it is a direct agreement with them. Previously, they had worked with CareCentrix as their intermediary. We are still in the early stages of our direct relationship with Cigna, and we hope it will grow and strengthen as we collaborate more closely.

Okay that's helpful. Thanks. And then maybe one more, just curious, have you administered remdesivir at any COVID patients so far? And I've seen some reports like Lilly and other manufacturers are working on COVID infusion treatments. And I'm wondering if that was the route that we're ultimately heading down? Is that an opportunity that you would be focused on or you're more focused on core volumes?

Yes. Currently, the emergency use of that product is limited to hospitals only, and there is no capability for it to be administered at home or outside of the hospital. It will be utilized exclusively within the hospital setting for inpatients. As we look to the future, we continue to collaborate with pharmaceutical manufacturers wherever possible. If we can offer solutions to the healthcare system, we will seek those opportunities. However, at this time, there are no drugs or infusion therapies that can be safely and effectively administered at home or in alternative treatment settings that would benefit coronavirus patients. Therefore, our primary focus remains on ensuring that we work closely with hospitals to facilitate patient discharges and free up beds, ensuring they are prepared to manage any surges in COVID patients. We are also collaborating with physician practices to identify patients who need chronic therapy and transition them to care safely and effectively at home or in our infusion suites.

Thanks, appreciate it.

Our next question coming from Richard Close with Canaccord Genuity. Your line is open.

Great, thanks. Congratulations on the first year. Just maybe a follow-up to Dave's question. Just on the strong 13% growth there and strong referrals, any thoughts in terms of a gut feeling and whether this is the pent up demand from the last couple quarters with COVID versus the reengineering of the sales force. Obviously the comp was easier because you just started that last year, but any thoughts in and around that would be helpful.

Sure, Richard. To say the obvious, it's been an extraordinary period. And when you're looking at all of the variables that occurred in the third quarter as well as the baseline, look there's no science to this, if you ask me, I'd probably say that our true comparable normalizing for some of the floods, it's probably in the high single digits if you normalize for the comp and some of the transition benefits that we've seen.

Yes, it's John. I'll begin and then Mike can certainly provide additional insights. You can observe the trends related to the resurgence of coronavirus in specific local markets. In the third quarter, particularly in the latter half, we experienced ongoing pressures in the Midwest and some southern states, where hospitals began to retract, delaying certain procedures and patients were less likely to visit their physicians. This is where the strength of our natural network comes into play. We have a diverse portfolio and are witnessing varying impacts in different markets. We closely monitor what is happening within these markets, and there seems to be a strong correlation between spikes in coronavirus cases, positive hospitalizations, and the resulting impact on referral patterns, particularly from acute care settings.

The only thing I'll add is that we mentioned this during the second quarter calls. One of the positive aspects from our viewpoint is that due to our technology, we've been able to reach new markets and expand our presence in some areas where we haven't historically had a strong presence. For instance, in places like Peoria, Illinois and La Crosse, Wisconsin, our technology allows us to transition patients smoothly. We've also established new referral relationships, even in areas where we don't have commercial resources. Overall, despite the varying experiences across different regions, we are pleased that our referral base has significantly increased during this time, and we hope to maintain that growth.

Okay that's very helpful. And then obviously, I spend a lot of time on the virtual tech side of things. And just wondering if you can dive deeper into the technology you're utilizing, whether it's on the e-visits and training and just thoughts in terms of how much legs this has going forward in terms of maybe improving revenue or revenue growth or margin improvement for you guys going forward?

Yes Richard, look, the platform itself is a tool that we have been working to design. The interesting aspect to that we've disclosed before is, a lot of the building blocks that we put in that we utilize are best-in-class solutions. So the platform itself allows our nurses to do virtual visits to use things like video conferencing as well as support tools, in order to really enhance that patient experience and support through the process. It also allows for digital documentation to quickly and effectively capture the information that's required and then seamlessly provide that throughout the organization. So we can track a patient from the moment that we receive the referral all the way through ultimate discharge and have visibility across that entire chain. So we do believe this is going to continue to be an opportunity for us to drive efficiency as an organization. We believe it's an opportunity for us to have ability, as Mike just said, to reach into areas that might be a little bit more remote, and utilize the technology in support of those patients in those rural markets. We believe that it's an opportunity for us to continue to look and enhance that overall wrapper that we put around the patient to provide them with comprehensive care. So we're excited about the platform. We're excited about the potential that it has. We're just really scratching the surface at this point in time. Expectations are that we'll continue to capitalize on it as we move forward.

Excellent. Congratulations, again.

Thanks, Richard.

Next question coming from the line of Mike Petusky with Barrington Research. Your line is now open.

Hey, good morning, guys. Just a few questions. I guess I appreciate the detail on the slight change in the signal relationship. John, can you just speak to was that a relationship in which you guys feel like you were under-penetrated relative to your market share in general?

I don't know that I would describe it that way. Look, we work closely with care centric, but again, didn't have that direct relationship with Cigna. So our expectations are that we fought vigorously for every one of the Cigna members. We took them on to service, even though it was being managed through that third party. We're encouraged about what the future can hold in a direct relationship and potentially looking to expand from that. But I wouldn't want to represent that we were under-index on that on a historical basis.

Mike, the only thing I'd add is I think as you look at a number of the investments they've made, and a lot of the comments that Cigna specifically has made around their focus on post-acute, it's quite an innovative team and I think they're looking for collaborative partners in the post-acute space. I think that's what gets us excited from a relationship development perspective.

Great. I guess in some other conference calls, health care service executives have mentioned that during COVID, they had the opportunity to examine their business in ways they probably wouldn't have considered before. Are there any key insights that have emerged directly as a result of COVID and the challenges you've faced, perhaps prompting you to view the business from a different perspective?

Yes, look, I think that if you go back, and you said at least for your office-based workforce, that you'd be working remote and be able to continue to operate at the level we have and execute at the level that we did, I don't think that that was on anyone's drawing board. I think there are things that we're going to continue to take a look at around the use of remote work where appropriate. We're going to continue to take a look at the need to travel and whether we need to do it at the extent that we do. We have invested in making it certain that we can train and onboard people in a virtual environment. I think that's going to prove to be beneficial as we continue to move forward. I think the fundamentals of the business itself. Look, we need pharmacists, and pharmacy techs and our warehouse teams to show up into care management centers. We need nurses to be able to knock on the doors and go into the homes to do home infusion. A lot of the core of what we do remains, but on the edges, and on all of the support things that wrap around it, we continue to challenge ourselves to think differently and to capitalize on the technology stack that we invested in to make certain that we're as efficient and as effective as possible.

Okay, great. Just one last question. I've heard there's an election today, so I wanted to ask if there are any politicians who have been supportive of the home infusion industry or if certain parties are more sympathetic and understanding of the value you all provide. Any thoughts on the election and its implications for home infusion? Thanks.

Yes, look, I think that we're pretty neutral. Regardless of the outcome of the election today, we do believe that a couple of things just are self-evident. Number 1 is, we're on the right side of cost quality equation. We're providing a service in a site in which most patients want to receive the care and we can do it in a very efficient, safe and cost-effective manner. I think that all bodes well. I'm telling you that we've had bipartisan support when we've tried to move this forward. We believe that we've had the legislative intent to expand the offering of home infusion broadly on that. CMS is the one that at this point in time continues to interpret in a different way. We're cautiously optimistic that look, we're on the right side of this argument where we know that seniors are the most vulnerable to the severe impacts of coronavirus and we believe that we have a real solution that's available to CMS and really to all the government programs and we're going to continue to beat that drum and shout that message from the mountaintop.

Great, and hey, congratulations on this first year post-BioScrip. Great job. Thanks.

Great. Thanks, Mike.

I'm showing no further questions at this time.

Great. Well, thank you. As I hope you hear from our updates and remarks. We are very pleased with the progress we have made in the third quarter and as our first year as Option Care Health. The team has delivered on the commitments that we made, and we're just getting started. We know that we are on the right side of the transformation happening in healthcare and with our more than 5,000 Option Care team members focused on providing extraordinary care that changes lives, we expect to see continued momentum in the fourth quarter. Please take care and stay safe. Thank you for attending our call.

Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.