Operator: Greetings, and welcome to the American Renal Associates Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] And as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Victoria Labriola, Vice President, General Counsel and Secretary Thank you. You may begin.

Victoria Labriola: Thank you, operator. Good morning, everyone and welcome to our second quarter 2020 earnings conference call and webcast. We thank you for joining us and hope you're continuing to remain healthy and safe during these challenging times. I am Victoria Labriola, Vice President, General Counsel and Secretary for ARA. Joining for today's presentation are Joe Carlucci, our Chairman and CEO; Dr. Don Williamson, our Chief Operating Officer; who will be providing the clinical and operational updates and Mark Herbers, our Interim Chief Financial Officer who will be providing the financial review. I want to remind everyone that we may make certain remarks today that constitute forward-looking statements within the meaning of the federal securities laws. The company's actual results may differ materially from such statements, due to a number of risks and uncertainties, including those described in our most recent SEC filings. Any forward-looking statements made on this call are effective only as of today and the company undertakes no obligation to revise or update any forward-looking statement for any reason. On today's call, we will refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available as is important information concerning the use of non-GAAP measures generally in the earnings press release and our current Investor Relations presentation deck, both of which are available within the Investor Relations section of our website at americanrenal.com. I also want to remind you that our adjusted EBITDA less NCI calculation do not include the cost of certain legal and other matters, including costs related to certain litigation and the SEC investigation. With that, I'm pleased to turn the call over to Joe Carlucci.

Joe Carlucci: Thank you, Vicky, and good morning, everyone. When we last spoke, our country was still in the early stages of trying to grapple with an unprecedented health crises, a crises with significant impact on our daily lives, our economy and the safety and well-being of all Americans. While some areas of the country are attempting to reopen with the hope that the worst has passed, other regions of the United States are just starting to experience higher rates of transmission of COVID-19 causing continued disruption to our nation. Despite the ongoing impact of this health crises, our business continuity plans together with other measures we implemented some of which I highlighted last quarter, have enabled us to remain fully operational across our entire network of clinics. We continue to treat our patients including COVID-19 positive patients safely in the outpatient setting with relatively minor impacts to our staff and other resources. The safety of our patients, our staff and physician partners will always be our top priority and will continue to adjust our operations as necessary to ensure that we meet this primary goal as the pandemic evolves. I want to reinforce how proud I am of our clinic staff, our staff at the corporate office and our physician partners for their extraordinary efforts to keep our patients and each other safe and for their dedication and professionalism that has allowed the company to operate seamlessly and on an uninterrupted basis. We're seeing the positive impacts of our collective efforts and we're thrilled to report that many of our COVID positive patients have recovered from the virus and are once again able to resume their normal treatment schedules. Now moving on to the results of the second quarter, at a high level we made significant and notable progress during the quarter to improve our collections performance. We're also pleased with the disciplined and thoughtful expense management during the second quarter. Adjusted for COVID-related expenses, Q2 cost per treatment were consistent with our internal expectations. Our second quarter treatment growth remained solid and we also continued to make strong progress in growing our home therapies at a faster rate than overall treatment volumes. Last quarter, we shared with you that we would be devoting additional resources and directing our focus to the revenue cycle and collections process in order to improve our performance from the first quarter of 2020. Our Q1 rate per treatment lagged our internal expectations due in part to the aging of government accounts receivables, primarily associated with secondary payers. I'm pleased to share with you that those efforts were well directed and successful, resulting in a meaningful improvement in rate per treatment this quarter. Our second quarter revenue per treatment reflects an increase of 4.8% over Q1 due to both that our current period collections and our ability to realize portions of aged receivables. During the second quarter, our cash collections increased 4.4% year-over-year as compared to relatively flat year-over-year performance during the first three months of 2020. We believe the momentum we've experienced in the second quarter should continue through the second half of this year, especially given our commitment to these focused efforts. The important takeaway here is that we've implemented effective enhancements to our revenue cycle and collections processes, which we believe will be sustained as we move forward. On the expense side, COVID-19 impacted our reported results in several ways including higher labor costs due to hazard pay programs and differential pay and/or lost productivity due to the COVID-only shifts. We also experience high cost for certain supplies and protective equipment to support the field and handle the operational and other challenges caused by the pandemic. Most of these costs were reimbursed through the Cares Act and Mark will review these shortly. Adjusted for these COVID-related costs, our second quarter 2020 expenses were well-managed. We expand we experienced improvements in ancillary costs to the lower calcimimetics expenses and lower usage of ESAs while maintaining high quality patient outcomes and we also benefited from our corporate expense initiatives. Although our second quarter volume performance was consistent with our internal expectations factoring in the impact of COVID, we did experience some volume losses due to missed treatments associated with COVID-positive patients. We're incredibly proud of our clinic staff and physician partners for their tireless work to make sure as many as possible of our COVID-positive patients were able to receive their life-sustaining dialysis treatments in our outpatient facilities and settled in the hospital setting. We're also thankful as I noted earlier that many of these patients have now recovered. COVID-related volume disruptions did however impact our treatment volume growth negatively by approximately 1.0% on a year-over-year basis. The combined second quarter impact of COVID totaled approximately $10.2 million of which approximately $9.8 million was offset by use of the Cares Act grant money in accordance with the terms and conditions. The amounts recognized on our P&L during the second quarter from grant money represent 37% of the $27 million in total Cares Act grant money we received from the government during April of 2020 and any grant funds remaining will be returned as may be required at the end of the public health emergency. As we look to the future the operational measures we've been student instituted to manage the impact and effects of COVID will remain in place to keep our patients, staff and physician partners safe. During the second quarter, we operated COVID-positive shifts in less than one third of our clinics and an even fewer clinics in the last weeks of the quarter, although we have seen an increase in the number of infected patients since quarter end. We expect that may continue to rise as various regions of the country experience higher transmission rates. In order to meet the areas need to treat such patients, we'll remain flexible and continue to swiftly adapt to operate COVID-positive shifts. In terms of how COVID could impact the ESRD incidents in the growth trajectory of the patient population it's too early to tell. Given the long-term effects of the virus are not yet established it is unknown at this time if COVID could have a meaningful impact on the progression of disease among CJD patients or if it could alter the availability of organs for transplantation. We continue to believe the demand characteristics for dialysis services will remain steady and we'll continue to work closely with our physician partners to make sure we're well positioned to care for the chronically old patients. In addition, we do believe one medium term effect of the COVID crisis could be increased patient demand for home-based therapies. For those that are appropriate candidates and so I am thankful that our organization previously dedicated and developed additional resources to support this modality and has poised to support any future potential growth in home therapies in the future. Finally, as we know 2021 will bring changes to the ESRD provider and patient communities. First CMS issued proposed rules last month related to the inclusion of calcimimetics in the payment bundle. Consistent with our internal policies and past initiatives, our position partners in consultation with their patients will continue to make decisions that are in the best interest of the patient regardless of how such treatments and associated medications or therapies are built. We look forward to the continued discussions within the industry and with CMS surrounding the proposed changes in finalization of the proposed rules. Second, ESRD patients will have the opportunity to enroll in Medicare advantage plans. Having more options and access to additional benefits should allow our current and future patients to choose this coverage to experience improved coordination of Care. Let me close by saying that I'm truly pleased with the progress we made during the second quarter. Our investments and directed focus to the collections process led to better revenue per treatment as compared to Q1 and we expect this momentum and improved performance to continue during the second half of 2020. We delivered solid treatment volume growth, we managed expenses well and we strengthen our balance sheet by reducing leverage. We're also appreciative of the government relief that allowed us to offset higher expenses and lost revenue due to COVID and we are very pleased to be able to reaffirm our 2020 outlook for adjusted EBITDA less NCI in the range of $87 million to $95 million. With that, I'm pleased to turn the call over to Dr. Don Williamson our Chief Operating Officer to provide a clinical update. Don?

Don Williamson: Thank you, Joe. It is my pleasure to join everyone today to provide the second quarter 2020 clinical update. I'm going to focus my comments on our continued progress in home therapies and I will also share some statistics with respect to what we experienced due to COVID over the quarter. First, I am pleased to report that our normalized home therapy treatment growth during the second quarter was approximately 14%. We have now produced double-digit home therapy treatment growth for four consecutive quarters. Our home treatment mix normalized for COVID-related missed treatments during the second quarter of 2020 reached 11.1% up 110 basis points year-over-year and up from 10.8% in the first quarter. We remained pleased with the additional focus within our entire organization on growing home therapies. We are seeing the biggest gains in our peers Nails dialysis program. While we have historically included PD and HHD training rooms in our clinics, we are placing additional emphasis on our expansion plans of these spaces to further increase our PD and HHD opportunities in many of our markets. Finally as Joe mentioned, we believe the COVID-19 pandemic could ultimately speed the adoption of home modalities for certain of our patients. We know from observing our own patient data that a much smaller percentage of our home therapy patients were COVID positive as compared to our in-center patient population.\ Next, I thought I would share some information with respect to our experience managing through COVID. As of June 30, approximately 4% of our patients had tested positive and a majority of these patients have recovered. Missed treatments due to COVID resulted in an estimated negative 1% impact to our year-over-year treatment growth during the second quarter. Looking forward, we believe the impact of COVID on our treatment volume growth could be similar or slightly higher during the second half of 2020. The number of ARA COVID patients hospitalized peaked in mid to late April and has since declined, but May again increase as we've moved further into the second half of 2020. Our ability to operationalize dedicated COVID-only treatment shifts ramped up significantly at the start of the second quarter and reached the peak of clinics operating COVID shifts in late May. Since that time, the number of clinics needing to operate COVID shifts has remained below that peak, but we have seen some increase in the number following quarter end. In terms of our staff at quarter end, less than 3% tested positive and we continue to carry out testing regimens for staff on a more frequent basis than is available in the general population. We believe these statistics bear out that our COVID response team responsible for carrying out our business continuity plans adapted well to a dynamic operating environment with the common goal of keeping patients and staff healthy and safe. Additionally, I am pleased to report that ARA's patient hospital days are down 22% from the first quarter and 13% from the second quarter of 2019 to 8.9 days, which is well below the national average. Finally, with CMS latest release of the preliminary five-star rating, I am excited to report the number of ARA clinics with a five-star rating increased by 10% from last year. That concludes my remarks for the clinical section. So let me now turn it over to Mark Herbers our Interim Chief Financial Officer.

Mark Herbers: Thank you Dr. Williamson and good morning, everyone. I plan to cover three topics this morning. First, I will provide some additional details regarding our second quarter financial and operating trends. Second, I will review our balance sheet position and cash flow performance for the quarter as well as our current liquidity position. And third, I'll review our 2020 outlook. First let me cover the second quarter trends. In the second quarter of 2020, our adjusted EBITDA less NCI increased by $12.9 million from the first quarter of 2020. Specifically, second quarter 2020 adjusted EBITDA was $39.8 million and adjusted EBITDA less NCI was $25.8 million as compared to $37.6 million and $24.3 million respectively in the second quarter of 2019. These improvements are largely due to the progress we've been making in our collections and revenue cycle. Our volume performance remained solid in the second quarter, normalized for clinic sales and COVID-related miss treatments, total treatment growth and non-acquired growth during the second quarter was 3.6%. Second quarter treatment volumes were consistent with our expectations and reflect approximately a 1% negative impact to the year-over-year treatment growth as a result of missed treatments due to COVID-19. Our second quarter revenue was $205.1 million down 3.8% from the second quarter of 2019. Our second quarter 2020 revenue per treatment was $327 up $15 from the $312 we recorded in the first quarter. Second quarter 2020 revenue per treatment was $20 lower year-over-year as compared to $347 in the second quarter of 2019. The year-over-year comparison was a result of lower contributions from calcimimetics and a favorable one time resolution of certain commercial claims in the second quarter of 2019 offset by treatment growth and the temporary suspension of two months of sequestration that was effective as of May 1. We are very pleased with the improve collections performance during the second quarter and we believe the momentum in that area should continue due to higher productivity and focus. Our commercial treatment mix is up slightly year-over-year and sequentially at approximately 13%. Our in network treatment mix is stable and is trending as we expected this year in the mid-80% range. We believe our contracting position with major payers give us visibility into our commercial book of business as well as a key Medicare advantage payers into 2021. Turning to the expense side, second quarter 2020 patient care cost per treatment were $234 representing a $15 per treatment improvement year-over-year. We experienced consistent labor productivity and normal wage increases during the second quarter, excluding COVID-related costs. We continue to experience improvements in our ancillary costs including ESAs and calcimimetics. Second quarter COVID-related patient care costs were approximately $8.2 million virtually all of which were offset with Cares Act grant funds. Of the $8.2 million, approximately $1.3 million related to expenses incurred in the first quarter. The additional expense was primarily attributable to higher personnel costs due to hazard pay overtime and additional staffing expense associated with managing COVID and higher support supply costs including PPE and infection control materials. The accounting treatment for these nonrecurring COVID-related expenses involves the use of the grant funds to net against expenses that were attributable to coronavirus and met the criteria set forth in the HHS terms and conditions. Moving over to general and administrative expense, second quarter 2020 adjusted G&A expense per treatment was $32 a $5 per treatment improvement year-over-year. We implemented certain corporate expense savings initiatives during 2019 and implemented additional savings initiatives during the second quarter of 2020, which may produce increased G&A savings during the second half of 2020. We estimate second quarter COVID-related G&A expenses were approximately $0.4 million virtually all of which were offset with Cares Act grant funds. The aforementioned adjusted G&A expense per treatment figures exclude certain nonrecurring items that are described in the supplemental business metrics schedule in our press release. Certain legal and other matters expense was $800,000 during the second quarter of 2020 as compared to $8.4 million in the second quarter prior year and down from $2.3 million during the first quarter of 2020. We continue to expect these costs primarily related to the restatement of certain prior year financials and other legal matters should decline going forward. I should also note that in early July, we appointed Ernst & Young as our new independent auditor for our fiscal year 2020 audit. We received a total of approximately $27 million of Cares Act grant funds in April 2020 and during the second quarter we utilized approximately $9.8 million of these funds. The remainder of the funds are accounted on the balance sheet and we plan to utilize these funds return them as appropriate in accordance with the terms and conditions in future periods during 2020. I will now move on to a review of our balance sheet and cash flow. At June 30, 2020, we had consolidated cash of $148.7 million and consolidated debt of $585.1 million net of unamortized discounts and fees. The consolidated cash of $148.7 million includes $65.1 million of CMS advance funds, $16.8 million of Cares Act grant funds and $2.6 million of deferred employment taxes. During the second quarter of 2020, we repaid $27 million of debt under our $100 million revolving credit facility resulting in $73 million of borrowings and $27 million of undrawn capacity under our revolving credit facility as of June 30, 2020. During the second quarter of 2020, we received approximately $83 million of advanced payments on future Medicare revenue under the accelerated and advanced payment program approximately $27 million of Cares Act grant funds of which $9.8 million was utilized on the P&L during the quarter and approximately $2.6 million related to the Cares Act provision that permits payment deferral of the employer portion of Social Security payroll taxes. As a reminder the advanced payments and the payroll tax deferral will need to be repaid in future periods. Adjusted for our pro rata ownership of clinic cash and a pro rata portion of the clinic level debt that we guarantee, our adjusted owned net debt was $445.8 million at June 30, 2020, representing a $73.6 million sequential improvement from the first quarter of 2020 due to the April mentioned government relief programs, improved cash collections and margin performance and additional debt reduction. It is important to note that the Medicare advanced money, Cares Act grant funds and the bulk of the payroll tax deferral money were received at the clinic level. So our adjusted owned net debt calculation reflects our owned portion of the cash related to these government relief items. As of June 30, 2020, we are in compliance with the consolidated net leverage ratio covenant in our credit agreement. For the second quarter of 2020, cash provided by operating activities was $137.3 million, excluding approximately $83 million of advance payments on future Medicare revenue, $16.8 million of available Cares Act grant funds and approximately $3 million related to the Cares Act provision to deferred employer social security payroll tax. Cash provided by operating activities was $34.7 million as compared to $17.7 million during the second quarter of 2019. Adjusted cash provided by operating activities less distributions to NCI and the government relief outlined above was $22.5 million. Second quarter 2020 capital expenditures totaled $7.1 million as compared to $5.7 million during the prior year quarter. During the second quarter, we opened four de novo clinics. We're pleased with the progress we've made in strengthening our balance sheet and expect additional deleveraging measures during the second half of 2020 as a result of planned divestitures. Let me conclude by reiterating our outlook for 2020 adjusted EBITDA less NCI to be in the range of $87 million to $95 million. The framework for our outlook continues to be underpinned by our expectation for revenue per treatment to continue to demonstrate improvement as the year progresses due to momentum with our collections performance and for COVID-related expenses and lost revenues to be largely offset by Cares Act grant funds. From a volume perspective, while we are not providing detailed guidance for treatment volume growth for calendar year 2020, we are noting that asset sales completed on August 1 include four clinics that contributed approximately $50,000 in annualized treatment. As such, the impact of these divestitures to how do you model treatment volume growth could be in the 1.5 to 2.0 range during the second half of 2020. These divestitures contributed approximately $16 million and $1.5 million to the trailing 12 month revenue and adjusted EBITDA respectively. With that, let me turn it back to Joe for closing remarks.

Joe Carlucci: Thank you, Mark. In closing I want to thank once again our entire team for their contributions and their unwavering dedication to providing excellent patient care. I'm incredibly humbled by how much sacrifice, compassion and poise our staff has demonstrated during these challenging times. I hope everyone participating on the call stays healthy and safe. And with that, operator can you please open up the Q&A session?

Operator: [Operator instructions] Thank you. Our first question comes from the line of Andrew Mok with Barclays. Please proceed with your question.

Andrew Mok: Joe in your prepared remarks, you noted that normalized treatment growth of 3.6% booked in line with expectation. Is that a change in tone or expectations around normalized volume growth from your previous expectations of 4.5% to 5%, which was embedded in the initial 2020 outlook?

Joe Carlucci: Thanks for the question. We've been really focused on improving our balance sheet as we've indicated in the past. So although it's a little bit down from previous periods, we feel pretty good about where we were with 3.6% normalized growth.

Andrew Mok: Got it, but was that in line with the heading into the year or is that in line with the quarter heading into the quarter? Were there any sort of change in normalized growth for the year?

Joe Carlucci: The 3.6% is normalized for approximately 1% loss due to COVID and also normalized for the sale of a couple of clinics in the last year.

Andrew Mok: Got it, okay. And then compared to the 3.6% normalized growth you reported 2.1% total non-acquired growth so there is 150 basis point delta of which 100 basis points you noted as related to COVID-related missed treatment. Are you able to break those missed treatments down between continuing and dedication [ph] to help us understand how much of the volume pressure is likely to persist in the back half of the year?

Joe Carlucci: Don, do you want to take that one?

Don Williamson: Yes, we really at this point have - we'll stick with the 1% as a total of those three buckets between patient loss, hospitalizations and missed treatment.

Andrew Mok: Got it, okay so.

Don Williamson: It's difficult. I'm sorry to interrupt, it’s difficult to sort of project what the pandemic will do in the second half of the year. But, so we've not broken that down further, Andrew.

Andrew Mok: Got it, okay. On the sequential RPT improvement, can you walk us through some of the action items you took in the quarter to improve your revenue collections and it would be helpful to understand which payor group was impacted the most from improved collection when we think about your revenue mix?

Don Williamson: Yes, so we were up $15 quarter-over-quarter. And I'll turn it over to Mark Herbers to help you and get more information on that. Mark?

Mark Herbers: Sure. The performance of - in increased revenue cycle operations from cash collection was really across all of our payor groups. We were able to recover previously reserve balances that had aged and that accounts for about $7 of that $15 sequential difference. The sequestration that started May 1 was another $2 of that $15. We had a negative impact of the calcimimetics of about $3 and I'm drawing a blank for the balances. But those were the more significant changes for the $15 tailwind.

Joe Carlucci: It was also - yes let me just add to that [there was four patients that was a $4 about $2] a patient.

Andrew Mok: Sure, thank you Joe.

Joe Carlucci: Yes and then increased of about $12 and improved collection.

Mark Herbers: And I believe, Andrew the bulk of that was in the Medicare section.

Andrew Mok: Got it that's helpful. And then moving on to commercial treatment mix I know it's reported in whole numbers. So there's some rounding issues, but commercial treatment mix actually ticked up from 12% to 13% in the quarter any dynamics you would highlight as driving the treatment should mix up sequentially.

Joe Carlucci: Yes, it's up about 30 basis points and we did around down to 12% previously and up to 13% in this quarter. But what we've seen patients that were furloughed and not laid off and those patients that were laid off chose COBRA to continue their commercial coverage. And we also did see in the death rate, unfortunately occurred with all the patients that generally have government programs. But we feel pretty clear about where we are, yes.

Andrew Mok: So it sounds like the early indications are that the patient's willingness to maintain some form of commercial coverage is pretty high in the form of COBRA so far?

Joe Carlucci: Yes, I think that they like the commercial coverage.

Andrew Mok: Got it that's helpful. And then on the cost side, just I'll finish up here on the cost side. Can you give us a sense of where you had success managing costs in the quarter and maybe differentiate between some of the planned cost reduction initiatives versus real time cost flexing or cost savings realized as a result of the pandemic.

Joe Carlucci: Mark, do you want to take a crack at that one.

Mark Herbers: Sure. As we indicated - as I indicated in my comments, we have continued to experience improvements across the board for managing productivity. We had normal wage increases for the quarter. We had improved our lower usage of ESAs calcimimetics was in line. We had in the second quarter, a reduction in our health benefit costs. Again it's reflecting the closing of so many businesses, and operations and physician offices. So our healthcare claims significantly declined in the second quarter. So we were able to recognize that impact in Q2. And of course, we also had less PTO taken so that increased our liability slightly. But we - the impact of our expense program - expense management program, from last year and continues into this year. And we've added a couple of additional initiatives in the second quarter that will pan out for the rest of the year.

Andrew Mok: Great, thanks - for all the color, guys.

Joe Carlucci: Sure. Thanks, Andrew.

Operator: Our next question comes from the line of Philip Chickering with Deutsche Bank. Please proceed with your question.

Pito Chickering: Hey, good morning guys thanks for taking my questions here. A couple of years overview and a few modeling questions, the first one is Medicare Advantage obviously those rules came out early June. Just curious how would you think about Medicare Advantage pricing going forward and do you think that your Medicare Advantage mix could accelerate under the new ruling consumers?

Joe Carlucci: No thanks, Pito that's a good question. As you know in 2019 we ended the year about 20%. It was up moderately over 2019 and in the quarter Medicare Advantage was up 21% and with the new rule in 2021. We expect that will continue to increase into 2021, but we think it will be moderate. And we think that patients may choose to retain their Medicare fee-for-service plans. But through the coordination of care and Medicare Advantage, there are some areas where we think the patients our ESRD patients will benefit. And it's, as you know up to the patients and what's best for - themselves and their families going forward.

Pito Chickering: But from a pricing perspective, because any plans can now - it's easier for them to say that they have a large enough group of clinics that there is some concerns in the investor community that there could be some Medicare Advantage pricing pressure for 2021 and 2022. Is that a risk in your conversations with their May plans?

Joe Carlucci: Well, we were not pleased with CMS decision to - not allow dialysis patients essentially to, with network adequacy to acquire the plans to develop their adequacy and just threw out of station. So we've looked at all of our locations and we feel that we cover individual geographic markets pretty well for time and distance. So, we would hope right that dialysis patients would have the same rights as other patients to - through network adequacy. So we don't know if it's necessarily a risk. It will have to unfold in 2021, but we think that Medicare Advantage benefits might be attractive to ESRD patients.

Pito Chickering: Okay. And moving onto calcimimetics can you just refresh us some of the revenue per treatment was in 2Q and also the cost per treatment was in 2Q and also what percent of your patients are seeing IV versus oral?

Joe Carlucci: Yes, I don't think Pito - we've disclosed that in the past. At the end of the day at American Renal to patients, the physicians that take care of the patients will write the prescriptions for whatever medication is necessary and we know that obviously calcimimetics will go into the bundle. We certainly will be prepared for that next year and we'll have discussions with our physician partners. But the other ones that write the prescriptions at American Renal follow their lead as to what's best for the patients.

Pito Chickering: Okay. And then back to - questions on commercial for second - sorry go ahead?

Joe Carlucci: Yes I'm sorry Pito. Don, do you want to add on?

Don Williamson: No, that's exactly right. The best decision between for the patient is between the patient and the physician at a local level. And we truly believe our partnership allows the physician to make the best choice at the time. And so that's how we have done it and that's how we will continue to allow the physicians, the autonomy to choose what's right for the patient.

Joe Carlucci: And I think Pito, it's hard to give you any more color on that because we don't have number one vendor pricing solidified. Number 2, we don't know what the CMS they talked about $12 going into the bundle. We think that will come down in the fourth quarter. So we're happy to address that in future quarters with you for sure.

Pito Chickering: Okay a few questions on Andrew's question on commercial, you sort of talked about what you guys saw in terms of furloughs - layoff and COBRA and unemployment stays at these levels. Do you have any concerns for commercial pricing mix for 2021?

Joe Carlucci: Yes, what we saw that in 2008 right. Commercial mix went down as I recall, but now we're pretty - we feel pretty comfortable with what's taken place, thus far. If the pandemic continues for the rest of the year certainly, there is a risk that commercial mix might tail off. Right now, we saw a 30 basis point increase quarter-over-quarter. So we felt pretty good about that and our folks in our organization have told us that, and we look at this very closely, that most of the patients have been furloughed not laid off. So they can retain their commercial coverage and patients. I think like the commercial plans for themselves and set them for their families so it appear thus at least electing COBRA.

Pito Chickering: Okay. And then a couple of quick modeling questions on the 10-Q, you guys talked about the IPO put liabilities that grew from $10 million to $60 million end of 2Q, it looks as though you redeemed that. So can you sort of refresh us on what happened on the IPO put liabilities and how should we think about the remaining $110 million liability on the balance sheet.

Joe Carlucci: Mark Herbers do you want - Mark Herbers why don’t you take that one. Mark?

Operator: Sorry you’re on mute.

Mark Herbers: Okay, sorry I was on mute.

Joe Carlucci: Yes go ahead Mark. Yes put liabilities - it was the last one we had go ahead Mark.

Mark Herbers: Right, we resolve that at the end of the second quarter with the payout occurring just after the end of the second quarter. There are no further IPO put options available. So that was the last one. Going forward, all the other minority interest subject to put are not IPO related and are the normal put options for our operating agreements.

Pito Chickering: Okay, perfect. Super quick ones on this one due to the share count grew 6.6% sequentially 34.6 million shares. Could you walk us through what changed and how to think about share count the rest of 2020?

Mark Herbers: Would you like me to answer that Joe.

Joe Carlucci: Yes, please.

Mark Herbers: Yes, the increase is due to the exercise of some shares that were going to expire at the end of the second quarter. So we don't see any additional activity like that going forward for the balance of the year.

Pito Chickering: Okay. And then the last one?

Joe Carlucci: Yes it is Joe. So I just wanted to apologize Mark is out in Chicago. So we're having a little bit of difficulties here. We’ll try to figure it out sorry.

Pito Chickering: We are all remote these days. So it might - Mark’s I do apologize.

Joe Carlucci: Thanks.

Pito Chickering: And then last one here is in the 10-Q, you talked about refunds due to payers that grew from $20 million in 2019 and $25 million in the first quarter and $28 million in the 2Q. Can you sort of refresh us on what that means and why the number keeps going up and should that numbers for stabilize out from here? Thanks so much.

Joe Carlucci: Mark Herbers, you can take that one.

Mark Herbers: Sure. I expect it will stabilize and come down slightly as we are activating the - issuing refunds we tried to balance that with the receipt of our Medicare bad debts from our recent cost report filings so as to minimize the cash flow impact at the individual clinics.

Pito Chickering: Okay. But why was that increasing I guess, what - was that all Medicare or is that commercial?

Mark Herbers: No. It's all across the board. We have a couple of our commercial payors, we think were out of network to pay us our billed charges and we have to refund the difference, so what we owe. So they're just anomalies that take place during the year. And none of it is directly related to any of the government payors. They are timely at clearing those refunds and credit balances.

Pito Chickering: Great, thanks so much guys. Appreciate it.

Joe Carlucci: Okay, thank you, Pito.

Operator: [Operator Instructions] Our next question comes from the line of David McDonald with Truist. Please proceed with your question.

David McDonald: Good morning, guys. Just a couple of last ones just want to come back to commercial mix for a minute. You talked about the pandemic you expect similar or slightly higher activity in the back half of the year. Wouldn't that, all else equal, suggest that you see continued improvement actually in commercial mix as mortality skews more towards government pay and I would assume that the missed visits were also skewed towards Medicare population? Is that a fair way to think about it?

Joe Carlucci: Yes no. Thanks for the question, David. We've actually seen - and this is anecdotal, we've seen actually our vacancy rate decline a little bit from COVID. And we were up 30 basis points, we're now 85% roughly in network and we saw our commercial mix increase. My only hesitation, David, is the second half of the year with the pandemic on the incline in some parts of the country. And so, that's why we're a little bit hesitant. But I think we feel pretty comfortable with where we are with our commercial mix. In years past, we were much higher percentage out of network and we're in network now and we have got I think, good relationships with our payors.

David McDonald: Okay. A couple of other quick ones just you mentioned $7 of the $15 of revenue per treatment was recouping some previously reserved receivables. Is there still a decent chunk of receivables out there that have been previously reserved that you guys can grab or is most of the low hanging fruit then - been realized at this point?

Joe Carlucci: I would tell you David, that we're working it every day. We're happy with our increase from Q1 to Q2, and we're going to continue to focus on it. And so with that, I'll turn it over to Mark Herbers.

Mark Herbers: Yes, clearly what the low hanging fruit came in the second quarter but there is still additional work to be done.

Joe Carlucci: Okay. I think it's - just really belts and suspenders and we're - but I will also add that what processes we have in place are replicable going forward.

David McDonald: Okay. Last two from me. Can you just talk about the remaining clinics that may be sold? Can you size that in terms of what types of revenue is adjusted EBITDA minus NCI those clinics are doing currently just as we think about heading into 2021?

Joe Carlucci: Yes. Any divestitures that we make, we'll make in cooperation with our physician partners and where it makes sense. So, our goal is obviously to continue to improve our balance sheet and we'll make those decisions on one-off basis going forward. And so it will be, I think, where we do divest clinics as we did with Pennsylvania, minimal EBITDA less NCI with a decent - with a good return on our cash. So Mark, do you want to add some color to that?

Mark Herbers: No, I think you covered it pretty well.

Joe Carlucci: Okay.

David McDonald: Okay, thanks very much.

Joe Carlucci: Thanks, David.

Operator: Our next question is a follow-up from Andrew Mok with Barclays. Please proceed with your question.

Andrew Mok: Hi, thanks for letting me back in, just a quick follow-up on home dialysis. Home treatments grew 14% year-over-year and penetration ticked up from 10.8% in Q1 to 11.1% in Q2. Have you seen any evidence to-date that suggests that the pandemic has accelerated adoption of home dialysis or is this just a continuation of strong momentum into home dialysis that predated the pandemic?

Joe Carlucci: Yes Don will take that one.

Don Williamson: Yes, Andrew, that's a - it's a very good question. And as you can tell, we've had a very strong trajectory coming out of 2019 into 2020. So full year growth in 2019 was 10%, and as you said, at the end of Q2, we were at 14%. And so it's very hard to parse that, how much of that may be just COVID-related versus just a continuation. I can tell you that the number of COVID patients that we've seen in our experience in the home population has been much less than those that are in center. So you would think that there would be some wish by the patients to migrate to home, but honestly. I can't tell you how much of that growth is related to COVID versus just the continued strong trajectory we had before.

Joe Carlucci: And let me just add. I will tell you, Andrew, that our physician partners are focused on home therapies, and - as we are. And through education at the local level with our physicians, with our staff, corporate going down and from the bottom line up, we think that home therapies will continue to grow.

Andrew Mok: Great, that's helpful and then just a quick numbers question. Do you have the spot number for in-network mix at quarter end?

Joe Carlucci: In-network mix at quarter end was 85%, I believe, yes 85%.

Andrew Mok: Okay, great, thanks for the color.

Joe Carlucci: Thanks, Andrew.

Operator: We have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Joe Carlucci: Thank you, operator, and thank you everybody for your interest in American Renal and I wish you certainly the best going forward during the summer. And please stay safe. We're going to continue to focus on good quality care and make sure that our patients and our staff and our physician partners are safe. So thanks very much everybody. Take care.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.