Nutex Health Inc
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
NUTX$180.56-6.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001558370-24-007414
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001479681-24-000007
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 106 current paragraphs.
52 unchanged; 25 reworded; 12 added; 6 removed; 5 previous and 17 current paragraphs rearranged.
Tables are not compared: 21 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
The TMA on January 1, 2023 filed a lawsuit (“TMA IV”) challenging two items related to the NSA and its implementation: (1) increases in the administrative fees payable in the IDR process from $50 to $350, a 600% increase, and (2) one requirement included in the batching rules for IDR. On August 3, 2023, the U.S. District Court agreed with the TMA and vacated the offending portions of the batching rule that only permitted batching for items with the same service code, allowing for the batching of similar items as allowed by the NSA. Additionally, the fee increase guidance that increased the administrative fees from $50 to $350 was vacated, with the administrative fee of $50 in effect moving forward.
Current report
After the NSA became effective January 1, 2022, our average payment by insurers of adjudicated patient claims by date of service for emergency services had declined by approximately 26% at the end of 2022. At the end of 2023, that overall decline was reduced to 19% from January 1, 2022, thereby showing an incremental improvement of 7% from the
Current report
On July 1, 2024, we engaged with a third-party IDR vendor to further support all of our out of network claims and determine which claims would be beneficial to arbitrate. The IDR arbitration process can take up to four to six months to receive payments. Based on the available data we have analyzed from the third and fourth quarters of 2023, providers have submitted higher offers and have prevailed 80% of the time through IDR. As we work with the third-party IDR vendor, we will have more data on the actual collections and reimbursement from IDR by the end of 2024.
Current report
2024 Reverse Stock Splits
Current report
1:10 Reverse stock split. In addition, the Company’s Board of Directors determined to effect a reverse stock split of the common stock at a 1-for-10 ratio (the “1:10 Reverse Stock Split”) effective as of 11:59 pm Eastern time on July 2, 2024. The Company’s stockholders, at the annual meeting on June 17, 2024, had approved a reverse stock split within a range of 1:2 and 1:16 to be effected within one year of approval at the discretion of the Board. This 1:10 Reverse Stock Split is in addition to the Company’s previous 1:15 Reverse Stock Split as discussed above. The Company’s common stock began trading on The Nasdaq Stock Market on a post-1:10 Reverse Stock Split basis under the Company’s existing trading symbol “NUTX” at the open of the market on July 3, 2024. The 1:10 Reverse Stock Split was also implemented for the purpose of regaining compliance with the minimum bid price requirement for continued listing of the Company’s common stock on The Nasdaq Capital Market.
Current report
Unless otherwise indicated, all authorized, issued, and outstanding stock and per share amounts contained in the accompanying condensed consolidated financial statements have been adjusted to reflect the 2024 Reverse Stock Splits for all prior periods presented. Proportionate adjustments for the 2024 Reverse Stock Splits were made to the exercise prices and number of shares issuable under the Company’s equity incentive plans, and the number of shares underlying outstanding equity awards, as applicable.
Current report
On July 24, 2024, the Company received written notice (the “Compliance Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) informing the Company that it has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Stock Market maintain a minimum bid price of $1.00 per share. Nasdaq notified the Company in the Compliance Notice that, from July 3, 2024 to July 23, 2024, the closing bid price of the Company’s common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with Nasdaq Listing Rule 5550(a)(2) and that the matter was now closed.
Current report
of $3.2 million. These impairments are related to the sale of Procare and the expected sale of Clinigence Health. Additionally, the increase in corporate and other costs are due to increases in payroll offset by decreases in professional services and stock-based compensation expenses.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
*Hospital Division.*Our revenue for the six months ended June 30, 2024 totaled $127.6 million as compared to $100.9 million for the same period of 2023, an increase of $26.7 million or 26.5%. This increase was attributed to an increase in visits, an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 9.7% related to mature hospitals, which are hospitals that were opened by December 31, 2021.
Current report
Corporate and other costs. Corporate and other costs in the six months ended June 30, 2024 was $26.0 million as compared to $19.3 million for the same period of 2023, an increase of 34.5%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to impairment of assets of $3.5 million and impairment of goodwill of $3.2 million. These impairments are related to the sale of Procare and the expected sale of Clinigence Health.
Current report
Nonoperating items
Removed paragraphs (6)
Previous report
Our experience is similar to that of other healthcare providers. In February 2023, the Emergency Department Physician Management Association reported survey results of its membership. The survey found that in more than 90% of claims surveyed, insurance companies followed the final rules implemented under the NSA for QPA disclosure and that the average claim payment declined 32% per ER Visit post-NSA.
Previous report
On October 19, 2022, and in addition to amicus briefs by several other national medical associations, the American Society of Anesthesiologists, the American College of Emergency Physicians, and the American College of Radiology, professional associations representing an aggregate of approximately 136,000 physicians, filed an Amicus brief supporting the TMA Motion.
Previous report
Reverse Stock Split.
Previous report
The Company held its annual meeting of stockholders on June 29, 2023, where the Company’s stockholders approved a reverse stock split at a ratio within a range of 1-for-2 and 1-for-15 and granted the Company’s Board of Directors the discretion to determine the timing and ratio of the split within such range. This approval is valid through June 29, 2024.
Previous report
On April 1, 2024, the Company’s Board of Directors determined to effect the reverse stock split of the common stock at a 1-for-15 ratio (the “Reverse Stock Split”) and approved the filing of a Certificate of Amendment (the “Certificate of Amendment”) to the Second Amended and Restated Certificate of Incorporation of the Company to effect the Reverse Stock Split.
Previous report
On April 9, 2024, the Company filed the Certificate of Amendment with the Delaware Secretary of State to effect the Reverse Split, effective at 11:59 p.m. Eastern Time on April 9, 2024 (the “Effective Time”). At the Effective Time, every 15 shares of issued and outstanding common stock automatically combined into one issued share of common stock, with no change in par value. No fractional shares were issued as a result of the Amendment. All stockholders entitled to receive fractional shares as a result of the Reverse Split received one whole share for their fractional share interest. The Reverse Split did not modify any voting rights or other terms of the common stock. The Company’s common stock began trading on a Reverse Stock Split-adjusted basis on The Nasdaq Capital Market at the open of the
Reworded paragraphs (25)
Previous wording
The population health management division includes our management services organizations and a healthcare information technology company providing a cloud-based platform for healthcare organizations. In addition, AHISP, IPA, a physician-affiliated entity that is not owned by us—is consolidatedas a VIE of our wholly-owned subsidiary AHPbecause we are the primary beneficiary of their operations under AHP’s management services contracts with them.
Current wording
The population health management division includes our management services organizations. In addition, AHISP, IPA, a physician-affiliated entity that is not owned by us—is consolidatedas a VIE of our wholly-owned subsidiary AHPbecause we are the primary beneficiary of their operations under AHP’s management services contracts with them.
Previous wording
On February 6, 2023, the U.S. District Court ruled in favor of the TMA by granting its motion for summary judgment against the HHS and stating that the revised IDR process in the final rule "continues to place a thumb on the scale" in favor of insurers and conflicts with the statutory provisions of the NSA, is unlawful and must be set aside. The Courts decision vacated all of the revised regulations challenged by the TMA, including HHS’ rule that arbiters must primarily consider the QPA in the IDR process. The court stated that the final rules wrongly require arbitrators to presume the correctness of the QPA and then impose a heightened burden on the remaining statutory factors to overcome that presumption. In addition, the TMA on January 1, 2023, also in the U.S. Eastern District, filed a lawsuit seeking declaratory and injunctive relief to invalidate a recent 600% percent increase in the administrative fees payable in the IDR process.
Current wording
Legal challenges to HHS Final Rule. The final rule was the subject of legal challenges. The Texas Medical Association (TMA) in September of 2022 filed motions for summary judgment in the U.S. Eastern District of Texas, Tyler Division, seeking to invalidate the IDR related provisions of the final rule, arguing that the QPA does not represent the fair value of the services rendered by the physicians and providers and that the final rule illegally favors the QPA over the fair value of the provider services in contravention of the statutory language of the NSA. On February 6, 2023, the U.S. District Court ruled in favor of the TMA by granting its motion for summary judgment against the HHS and stating that the revised IDR process in the final rule "continues to place a thumb on the scale" in favor of insurers and conflicts with the statutory provisions of the NSA, is unlawful and must be set aside. The Courts decision vacated all of the revised regulations challenged by the TMA, including HHS’ rule that arbiters must primarily consider the QPA in the IDR process.
Previous wording
On August 24, 2023, the U.S. District Court in the Eastern District of Texas in TMA III ruled to vacate several aspects of the regulations mandating the methodology for the QPA calculation. In particular, the court prohibited the inclusion of “ghost rates” as part of the QPA calculation and QPA calculations that are not based on the same or similar specialty. This is the 4th time the federal court has ruled in favor of the Texas Medical Association effective nationwide. In its FAQs dated October 6, 2023, the Department of Labor states that the Department of Justice intends to appeal the court’s ruling.
Current wording
The TMA on November 30, 2022 filed a lawsuit (“TMA III”) challenging how insurers are establishing the QPA under the final rules, alleging that the final rules allow insurers to include what is referred to in the healthcare industry as “ghost rates,” which are rates included in contracts with providers who do not actually provide the specified service and as a result are lower than rates a provider would have incentive to meaningfully negotiate, thus artificially lowering the QPA. On August 24, 2023, the U.S. District Court in the Eastern District of Texas in TMA III ruled to vacate several aspects of the regulations mandating the methodology for the QPA calculation. In particular, the court prohibited the inclusion of “ghost rates” as part of the QPA calculation and QPA calculations that are not based on the same or similar specialty. This is the fourth time the federal court has ruled in favor of the TMA effective nationwide. In its FAQs dated October 6, 2023, the Department of Labor states that the Department of Justice intends to appeal the court’s ruling. As of the date of this filing, the appeal process is still ongoing and a hearing date has not been set.
Previous wording
While we are working within the established processes for IDR, we have had varying successes at achieving collections at or higher than the established QPA. We have undertaken several strategic actions designed to improve our collections results. These include:
Current wording
Nutex and NSA. While we are working within the established processes for IDR, we have had varying successes at achieving collections at or higher than the established QPA. We have undertaken several strategic actions designed to improve our collections results. These include:
Previous wording
After the NSA became effective January 1, 2022, our average payment by insurers of patient claims for emergency services had declined by approximately 30%, including 37% reduction for physician services, at the end of 2022. In 2023, we experienced a 5% improvement from 2022 in emergency services but a 10% reduction for physician services, for an overall impact of 3% increase combined in 2023. In our experience, insurers often initially pay amounts lower than the QPA without regard for other information relevant to the claim. This requires us to make appeals using the IDR process. We submitted 90,000 cases for IDR open negotiation in 2023 and 28,000 cases for IDR open negotiation in 2022, most in the fourth quarter. The IDR process, subsequent appeals and insurance payor delays require extensive administrative time and delays in collections. While we are working within the established processes for IDR, we have had varying successes at achieving collections at or higher than the established QPA.
Current wording
end of 2022 to the end of 2023. In our experience, insurers often initially pay amounts lower than the QPA without regard for other information relevant to the claim. This requires us to make appeals using the IDR process. As of June 2024, we submitted 16,600 cases for IDR open negotiation whereas in 2023, we submitted 90,000 cases for IDR open negotiation. In the first half of 2024, there were delays in payor processing due to outages caused by the 2024 Change Healthcare ransomware attack. As the outages have been resolved, we expect IDR filings to increase in the third quarter of 2024. We anticipate approximately 60-70% of our claims to be submitted through the IDR process by year end. The IDR process, subsequent appeals and insurance payor delays require extensive administrative time and delays in collections. While we are working within the established processes for IDR, we have had varying successes at achieving collections at or higher than the established QPA.
Previous wording
Effective January 1, 2024, in consultation with the Departments of Labor and Health and Human Services, the Internal Revenue Service (IRS) announced the annual increase that health plans must apply to the calculation of the QPA for insurance reimbursements to account for inflation from 2023 to 2024 (Notice 2024-1). Under the No Surprises Act, QPAs are calculated based on median contracted rates for the same or similar service as they existed in 2019. Treasury Regulations direct the IRS to anchor the annual inflationary update in the Consumer Price Index for All Urban Consumers (CPI-U). In Notice 2024-1, the IRS directs health plans to update QPAs in 2024 by an increase of 5.4% over 2023 QPAs. Alternatively, to update 2023 rates, health plans may return to the original 2019 calculation and apply a cumulative update factor to account for the IRS inflationary updates from 2019 to 2024. Under that approach, the cumulative update that must be applied to 2019 base year rates is 20.9%.
Current wording
*Other NSA Developments.*Effective January 1, 2024, in consultation with the Departments of Labor and HHS, the Internal Revenue Service (IRS) announced the annual increase that health plans must apply to the calculation of the QPA for insurance reimbursements to account for inflation from 2023 to 2024 (Notice 2024-1). Under the No Surprises Act, QPAs are calculated based on median contracted rates for the same or similar service as they existed in 2019. Treasury Regulations direct the IRS to anchor the annual inflationary update in the Consumer Price Index for All Urban Consumers (CPI-U). In Notice 2024-1, the IRS directs health plans to update QPAs in 2024 by an increase of 5.4% over 2023 QPAs. Alternatively, to update 2023 rates, health plans may return to the original 2019 calculation and apply a cumulative update factor to account for the IRS inflationary updates from 2019 to 2024. Under that approach, the cumulative update that must be applied to 2019 base year rates is 20.9%.
Previous wording
markets on April 10, 2024. The Reverse Stock Split was implemented for the purpose of regaining compliance with the minimum bid price requirement for continued listing of the Company’s common stock on the Nasdaq Capital Market.
Current wording
1:15 Reverse stock split. The Company’s Board of Directors determined to effect a reverse stock split of the common stock at a 1-for-15 ratio (the “1:15 Reverse Stock Split”) effective as of 11:59 pm Eastern time on April 9, 2024. The stockholders of the Company at its annual meeting on June 29, 2023 had approved a reverse stock split within a range of 1:2 and 1:15 to be effected within one year of approval at the discretion of the Board. The Company’s common stock began trading on The Nasdaq Capital Market on a post-1:15 Reverse Stock Split basis under the Company’s existing trading symbol “NUTX” at the open of the market on April 10, 2024. The 1:15 Reverse Stock Split was implemented for the purpose of regaining compliance with the minimum bid price requirement for continued listing of the Company’s common stock on The Nasdaq Capital Market.
Previous wording
As a result of the Reverse Stock Split, the number of shares of common stock outstanding was reduced from 745,426,858 shares to 49,719,375 shares inclusive of whole shares issued for fractional shares, and the number of authorized shares of common stock remains 950 million shares.
Current wording
As a result of both the 1:15 Reverse Stock Split, and 1:10 Reverse Stock Split (collectively, the “2024 Reverse Stock Splits”) the number of shares of common stock outstanding was reduced to 4,987,268 shares, inclusive of whole shares issued for fractional shares, and the number of authorized shares of common stock remains 950,000,000 shares.
Previous wording
Net loss attributable to Nutex Health Inc. decreased to $0.4 million, or a loss of $0.01 per share, for the three months ended March 31, 2024 from a net loss attributable to Nutex Health Inc. of $5.1 million, or a loss of $0.12 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue due to:
Current wording
Net loss attributable to Nutex Health Inc. decreased to $0.4 million, or a loss of $0.07 per share, for the three months ended June 30, 2024 from a net loss attributable to Nutex Health Inc. of $3.5 million, or a loss of $0.79 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue due to:
Previous wording
Adjusted EBITDA for the three months ended March 31, 2024 increased to $4.6 million from $2.4 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.
Current wording
Adjusted EBITDA for the three months ended June 30, 2024 increased to $12.0 million from $4.0 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.
Previous wording
*Hospital Division.*Our revenue for the three months ended March 31, 2024 totaled $60.0 million as compared to $49.3 million for the same period of 2023, an increase of $10.7 million or 21.7%. This increase was attributed to an increase in visits, an increase in revenue per visit and an increase in collections. Of this revenue increase, 6.7% related to mature hospitals, which are hospitals that were opened by December 31, 2021.
Current wording
*Hospital Division.*Our revenue for the three months ended June 30, 2024 totaled $67.6 million as compared to $51.6 million for the same period of 2023, an increase of $16.0 million or 31.0%. This increase was attributed to an increase in visits, an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 13.2% related to mature hospitals, which are hospitals that were opened by December 31, 2021.
Previous wording
The Company recorded approximately $0.7 million of net revenue for cash collections during the three months ended March 31, 2024 for services that were previously provided. The Company had previously reserved for this amount as uncollectible.
Current wording
The Company recorded approximately $1.3 million of net revenue for cash collections during the three months ended June 30, 2024 for services that were previously provided. The Company had previously reserved for this amount as uncollectible.
Previous wording
*Population Health Management Division.*Our total revenue for the three months ended March 31, 2024 was $7.4 million as compared with $7.0 million for the same period of 2023. The increase was due to higher capitation revenue earned.
Current wording
*Population Health Management Division.*Our total revenue for the three months ended June 30, 2024 was $8.5 million as compared with $7.3 million for the same period of 2023. The increase was due to higher capitation revenue earned.
Previous wording
The population health management division had $0.3 million of operating loss for the three months ended March 31, 2024 as compared with $0.1 million of operating income for the same period of 2023. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Current wording
The population health management division had $0.2 million of operating loss for the three months ended June 30, 2024 as compared with $0.5 million of operating income for the same period of 2023. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Previous wording
As of March 31, 2024, two Real Estate Entities continue to be consolidated in our financial statements. We expect that hospitals we open in the future may be leased from new Real Estate Entities which may be owned in whole or part by related parties. Third-party lenders to these entities may require that we provide a guarantee or become co-borrowers
Current wording
As of June 30, 2024, two Real Estate Entities continue to be consolidated in our financial statements. We expect that hospitals we open in the future may be leased from new Real Estate Entities which may be owned in whole or part by related parties. Third-party lenders to these entities may require that we provide a guarantee or become co-borrowers under mortgage indebtedness and financings for such facilities. In such instances, we may be required to consolidate these new Real Estate Entities in our financial statements as VIEs.
Previous wording
Corporate and other costs. Corporate and other costs in the three months ended March 31, 2024 totaled $8.7 million as compared to $9.3 million for the same period of 2023. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees.
Current wording
Corporate and other costs. Corporate and other costs in the three months ended June 30, 2024 totaled $17.3 million as compared to $10.0 million for the same period of 2023, an increase of 72.5%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to impairment of assets of $3.5 million and impairment of goodwill
Previous wording
Interest expense. Interest expense was $4.4 million in the three months ended March 31, 2024 as compared with $3.1 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense and interest expense associated with the Unsecured Convertible Term Debt.
Current wording
Interest expense. Interest expense was $5.1 million in the three months ended June 30, 2024 as compared with $4.8 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense, the opening of new facilities in 2023 and interest expense associated with the Unsecured Convertible Term Debt.
Previous wording
Gain on warrant liability. Gain on warrant liability was $2.6 million in the three months ended March 31, 2024 is the remeasurement of the warrant liability required at each reporting period and is influenced by changes in our common stock market price.
Current wording
Gain on warrant liability. Gain on warrant liability was $3.1 million in the three months ended June 30, 2024 is the remeasurement of the warrant liability required at each reporting period and is influenced by changes in our common stock market price.
Previous wording
Our effective tax rate for the three months ended March 31, 2024 was approximately 14.2%. The primary difference from the federal statutory rate of 21% is related to state taxes, income of noncontrolling interests in flow-through entities and permanent differences for non-deductible expenses.
Current wording
Our effective tax rate for the three months ended June 30, 2024 was approximately 22.9%. The primary difference from the federal statutory rate of 21% is related to state taxes, income of noncontrolling interests in flow-through entities and permanent differences for non-deductible expenses.
Previous wording
Total patient visits increased 21.1% during the three months ended March 31, 2024 as compared with the same period of 2023 due mostly to the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 5.3% related to mature hospitals, which are hospitals opened by December 31, 2021.
Current wording
Total patient visits increased 24.6% during the six months ended June 30, 2024 as compared with the same period of 2023 due mostly to the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 9.7% related to mature hospitals, which are hospitals opened by December 31, 2021.
Previous wording
The hospital division’s operating income was $10.5 million during the three months ended March 31, 2024, compared with an operating income of $4.8 million in the same period of 2023, an increase of 119%. Our revenue and operating income for the first quarter of 2024 was positively affected by the increase in visits and revenue per visit discussed above.
Current wording
The hospital division’s operating income was $33.3 million during the six months ended June 30, 2024, compared with an operating income of $13.9 million in the same period of 2023, an increase of 139.6%. Our revenue and operating income for the second quarter of 2024 was positively affected by the increase in visits and revenue per visit discussed above.
Previous wording
As of March 31, 2024, we had $30.0 million of cash and equivalents, compared to $22.0 million of cash and equivalents at December 31, 2023.
Current wording
As of June 30, 2024, we had $40.8 million of cash and equivalents, compared to $22.0 million of cash and equivalents at December 31, 2023.
Previous wording
Significant sources and uses of cash during the first three months of 2024.
Current wording
Significant sources and uses of cash during the first six months of 2024.
Previous wording
working to supplement or replace these with larger financing commitments. These larger financing commitments are subject to market conditions and we may not be able to obtain such larger financing commitments with favorable economic terms or at all. We also believe that our existing cash, cash equivalents, and marketable securities, and available borrowing capacity, will be sufficient to meet our anticipated cash needs requirements for operations and growth objectives for at least the next twelve months. If the assumptions underlying our business plan regarding future revenue and expenses change or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or debt securities.
Current wording
We routinely enter into equipment lease agreements to procure new or replacement equipment and may also finance these purchases with term debt. We have smaller lines of credits available for working capital purposes and are presently working to supplement or replace these with larger financing commitments. These larger financing commitments are subject to market conditions and we may not be able to obtain such larger financing commitments with favorable economic terms or at all. We also believe that our existing cash, cash equivalents, and marketable securities, and available borrowing capacity, will be sufficient to meet our anticipated cash needs requirements for operations and growth objectives for at least the next twelve months. If the assumptions underlying our business plan regarding future
Previous wording
We define Adjusted EBITDA as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for stock-based compensation, any facilities closing costs, acquisition related costs and impairments. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
Current wording
We define Adjusted EBITDA as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for an allocation to noncontrolling interests, (gain)/loss on warrant liability, stock-based compensation, any facilities closing costs, acquisition related costs and impairments. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
Rearranged current paragraphs (17)
Current report — wording carried from elsewhere
Total patient visits increased 28.0% during the three months ended June 30, 2024 as compared with the same period of 2023 including the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 10.3% related to mature hospitals, which are hospitals opened by December 31, 2021.
Current report — wording carried from elsewhere
The hospital division’s operating income was $22.8 million during the three months ended June 30, 2024, compared with an operating income of $9.1 million in the same period of 2023, an increase of 150.3%. Our revenue and operating income for the second quarter of 2024 was positively affected by the increase in visits and increase in rate paid by insurers discussed above.
Current report — wording carried from elsewhere
Net loss attributable to Nutex Health Inc. decreased to $0.7 million, or a loss of $0.15 per share, for the six months ended June 30, 2024 from a net loss attributable to Nutex Health Inc. of $8.6 million, or a loss of $1.98 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue due to:
Current report — wording carried from elsewhere
Adjusted EBITDA for the six months ended June 30, 2024 increased to $16.6 million from $6.4 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.
Current report — wording carried from elsewhere
A discussion of our segment results is included below.
Current report — wording carried from elsewhere
The following table shows the number of patient visits during the periods:
Current report — wording carried from elsewhere
The Company recorded approximately $2.1 million of net revenue for cash collections during the six months ended June 30, 2024 for services that were previously reserved as uncollectible.
Current report — wording carried from elsewhere
*Population Health Management Division.*Our total revenue for the six months ended June 30, 2024 was $15.9 million as compared with $14.3 million for the same period of 2023. The increase was due to higher capitation revenue earned.
Current report — wording carried from elsewhere
The population health management division had $0.5 million of operating loss for the six months ended June 30, 2024 as compared with $0.6 million of operating income for the same period of 2023. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Current report — wording carried from elsewhere
*Real Estate Division.*This division reports the operations of consolidated Real Estate Entities where we provide guarantees of their indebtedness or are co-borrowers.
Current report — wording carried from elsewhere
Revenue and operating expenses of consolidated Real Estate Entities are not significant since the extent of these entities’ operations is to own facilities leased to our hospital division entities which are financed by a combination of contributed equity by related parties and third-party mortgage indebtedness. Such leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Finance lease income is recognized outside of segment operating income as other income by the Real Estate Entities. However, these amounts are largely eliminated in the consolidation of these entities into our financial statements.
Current report — wording carried from elsewhere
As of June 30, 2024, two Real Estate Entities continue to be consolidated in our financial statements. We expect that hospitals we open in the future may be leased from new Real Estate Entities which may be owned in whole or part by related parties. Third-party lenders to these entities may require that we provide a guarantee or become co-borrowers under mortgage indebtedness and financings for such facilities. In such instances, we may be required to consolidate these new Real Estate Entities in our financial statements as VIEs.
Current report — wording carried from elsewhere
Interest expense. Interest expense was $9.5 million in the six months ended June 30, 2024 as compared with $8.0 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense, the opening of new facilities and interest expense associated with the Unsecured Convertible Term Debt.
Current report — wording carried from elsewhere
Gain on warrant liability. Gain on warrant liability was $5.7 million in the six months ended June 30, 2024 is the remeasurement of the warrant liability required at each reporting period and is influenced by changes in our common stock market price.
Current report — wording carried from elsewhere
Income tax expense. Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
Current report — wording carried from elsewhere
Our effective tax rate for the three months ended June 30, 2024 was approximately 34.2%. The primary difference from the federal statutory rate of 21% is related to state taxes, income of noncontrolling interests in flow-through entities and permanent differences for non-deductible expenses.
Current report — wording carried from elsewhere
revenue and expenses change or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or debt securities.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The Texas Medical Association on November 30, 2022 filed an additional lawsuit (“TMA III”) challenging how insurers are establishing the QPA under the final rules, alleging that the final rules allow insurers to include what is referred to in the healthcare industry as “ghost rates,” which are rates included in contracts with providers who do not actually provide the specified service and as a result are lower than rates a provider would have incentive to meaningfully negotiate, thus artificially lowering the QPA. According to the Texas Medical Association, this practice stands in violation of the congressional definition of the QPA as the median of the contracted rates recognized by the plan or insurer for the same or similar item or service that is provided by a provider in the same or similar specialty in the same geographic region.
Previous report — wording carried elsewhere
The final rule was the subject of legal challenges. The Texas Medical Association (TMA) in September of 2022 filed motions for summary judgment in the U.S. Eastern District of Texas, Tyler Division, seeking to invalidate the IDR related provisions of the final rule, arguing that the QPA does not represent the fair value of the services rendered by the
Previous report — wording carried elsewhere
physicians and providers and that the final rule illegally favors the QPA over the fair value of the provider services in contravention of the statutory language of the NSA.
Previous report — wording carried elsewhere
under mortgage indebtedness and financings for such facilities. In such instances, we may be required to consolidate these new Real Estate Entities in our financial statements as VIEs.
Previous report — wording carried elsewhere
We routinely enter into equipment lease agreements to procure new or replacement equipment and may also finance these purchases with term debt. We have smaller lines of credits available for working capital purposes and are presently