Q4 2023 Lucid Diagnostics Inc Earnings Call
Participants
Dennis McGrath; CFO; Lucid Diagnostics Inc.
Lishan Aklog; CEO; Lucid Diagnostics Inc.
Kyle Mikson; Analyst; Canaccord Genuity Securities LLC
Joseph Conway; Analyst; Needham & Company
Anthony Vendetti; Analyst; Maxim Group LLC
Ed Woo; Analyst; Ascendiant Capital Markets LLC
Presentation
Operator
Good morning, and welcome to the listed Diagnostics Fourth Quarter and Full Year 2020 Business Update conference call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. If at anytime during this call you require assistance, please press star zero for the operator. Please note, this event is being recorded. I'd now like to turn the conference over to Dennis, the crack diagnostics, Chief Financial Officer. Please go ahead.
Dennis McGrath
Thank you, Luis, and good morning, everyone. Thank you for participating in today's fourth quarter and year full year 2023 lose the diagnostics business update call. The press release announcing our business update for the Company and financial results for the fourth quarter and year ending December 31st, 2023 is available on our listed website. Please take a moment and read the disclaimer about forward-looking statements in the press release business update, the press release and this conference call include forward-looking statements, and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer in our filings with the US Securities and Exchange Commission for a list and description of these and other important risk factors and uncertainties that may affect future operations, the Part one Item 1A entitled risk factors and lose its most recent annual report on Form 10 K filed with the SEC and subsequent updates filed and quarterly reports on Form 10 Q and any subsequent filings on and Form eight K as required by law. Lucent disclaims any intention or obligation to publicly update or revise any forward looking statements to reflect changes in expectations or in events, conditions or circumstances on which the expectations may be based or they may affect the likelihood that actual results to differ from those contained in the forward looking statements. Like to turn at all the call over to Dr. Lisa backlog or Chairman and CEO, Bill Lucia diagnostics, we showed.
Lishan Aklog
Thank you, Dennis, and good afternoon, everyone. Thank you for joining our quarterly update call today. Before proceeding a couple of things. First, I'd like to apologize. I have a bit of a scratchy throat on filling under the weather. So sorry about that. And I'd also like to thank our long-term shareholders for your ongoing support and commitment to complete. Our team is singularly focused on driving the Lucid enterprise towards its massive commercial potential and to enhance our long-term shareholder value. So I'm very pleased with the excellent process progress listen in later on multiple fronts. During the fourth quarter and the start of this year, including strengthening our balance sheet with about $18 million financing from long-standing fundamental shareholders. We saw solid revenue growth on stable test volume, improving allowances and stable out-of-network pricing.
Our CYFT. program of health care events is thriving. Our now robust clinical validity and clinical utility evidence base are poised to drive positive medical coverage. And one, I believe, is it line of sight to Medicare coverage at. I'm also particularly excited about our accelerated or a contract to the negative initiatives. So just let me just have to offer a few highlights and then I'll deal a quick overview of the Company.
For those of you who are new on the commercial execution side, fourth-quarter revenues were just a hair over $1 million that's up 33% quarterly and 829% annually. Esoguard test volume was 2200 tests. I'll talk a bit more about those trends on labor. Our high volume helped further few IoT testing events continue to grow and gain traction, and we're fully booked right now through July. We have acted in the current testing programs now at over a dozen strategic accounts, which include health systems, academic, my academic centers and other related entities, and we have engagements with several dozen more.
Our revenue cycle management process continues to deliver solid results for out-of-network payments. About 50% of adjudicated claims are now coming back have allowed with stable payments averaging about $1800.
Next slide, some key strategic accomplishments. As I mentioned, the strengthening our balance sheet with $18.1 million preferred stock financing. We've had a significant expansion of our clinical validity or CV. and our clinical utility or CU. data to support broad EsoGuard medical policy coverage, including engaging reengaging with multi-view x-ray for our Medicare, the Medicare side, we're still talking about a little bit later. So maybe we are now three clinical studies that document excellent esoteric sensitivity and negative predictive value. We have three clinical utility studies that document near using that data. We're now starting to hold meetings. We've had a meeting now over the last I'm just a couple of months with medical directors of major commercial payers to now for the first time, formally request positive medical policy determination for esogaurd. Similar to those efforts, we held a Blue Cross Blue Shield Association of America webinar that was intended by dozens of medical directors to advocate for esoteric coverage .
And then finally, we'll talk we'll talk a bit more about this later on. We've launched our direct contracting program, which is regarding now offered as a benefit and just as a means to drive contractor contractually guaranteed revenues. So just a few interest lies for those of you who are newer to update you on our company overall Broussard as a commercial space, cancer prevention, medical diagnostics company, we're focused on early precancer detection to prevent esophageal cancer desk depth in targeted at risk patients.
Next slide, CIE. Sagard esophageal DNA test is the first and only commercially available test that's capable of serving as a widespread screening tool to prevent these tests through the early detection of esophageal precancer flight. So that we have, as I mentioned, we have really solid clinical validity data that documents e-cigarettes performance. This is a bit of a summary slide here, Visa cards in blue and comparing it to sort of the standards that we see that for a performance with other tests, particularly in the call rental space with Cologuard and the new blood Guardant cancer sensitivity remains extremely high, asked us precancer sensitivity in early precancer sensitivity in those two numbers I'll note, are really unprecedented to so to have a 90% precancer sensitivity.
If again, you can know, compared to other tests in this space is unprecedented. There is no other no other molecular diagnostic tests that can that can claim that and most notably our early precancer numbers also holding in that 90% range. Again, no other tests and molecular tests can detect it early precancer with any sensitivity, much less of that 90% level. That results in an overall negative predictive value of 99%. So just a 1% false negative rate and an estimated positive predictive value of 30%, which increases the yield on the basket these between two and three fold.
At Slide 2, slices Foundation, the backbone of our Fisher is documenting the performance of the study, a clinical validity, again at the performance of the assay here. I won't go through each detail here, but you can see that we have Phase three studies. Them pays the original Case Western paper, the better net study and Cleveland VA one has published to our preprint and come and soon we have a manuscript completed for the first study, which has now come down heading towards a posting on prepayments, initial publication.
Next slide. Similarly, on the clinical utility side, we had an alpha three studies that are published in peer review literature and form. But again, the foundation of our engagements with Sprint payers for payers and will set us up in the near term with them kind of care.
Next slide . The market opportunity here is really fantastic. It's massive. There are absolutely 30 million patients who are at risk are recommended for cancer testing by existing guidelines, which now include not endoscopic biomarker testing, such as Visa card Medicare payment established at $1,938. As I noted, our ad network payments are matching at matching that quite closely at about $1800. So the pricing is holding and that resulted in approximately $60 billion are true total addressable market opportunity. Our gross margins is 90% at our current volumes. So at our current levels of efficiency.
Fixed line and our commercial strategy is multi-prong, some patients who our goal is to provide patient access and wherever we can. So we have our own physical Lucid test centers. I buy back bone of major pathway for patient access is dome satellite. Lucid test centers were our practitioners go to physicians off. This is on schedule and test patients in their offices. And we also have and physician practices and particularly the GI practices among specialists who performed the esoteric testing using their own staff that accounts for about 30% of our total volume in Florida. We have a multiple Lucid test centers and that can go to the physician practices part in the parking lot, Patrick Kent and offer testing on the spot. And as we'll talk about a little bit more, we have our own check your food to HealthFair events, which have been focused initially over the past year. We've reached our one-year anniversary at these HealthFair type events and are expanding into other areas as well.
So this slide shows our data progress over the last couple of approximately four years with regard to revenue and testing volume growth. So you can see revenue as they've been growing nicely since our transition in the late second quarter to our new revenue cycle management providers in the late second quarter of 2023, the test volume growth has stabilized, and we think this is likely going to be approximately where things stabilize at some of the 2,300 to 2,500 range. I will note and remind you that we have not added any salespeople since the fourth quarter of 2022. So that growth from about 1,000 tested this 2400 plus or minus level has been with the same salesforce innovate into earlier. We've had increases in productivity. However, we have no plans at this point to expand our sales force until we continue to see some progress on the reimbursement side.
So that's our expectation of the fourth quarter. We had three weeks that or where we were able to distinguish during two holidays and one week for our national sales meeting. And so we feel pretty comfortable that these volumes hold and we'll show that potentially modest growth of it's coming over the coming quarters. I did indicate an estimated number for the quarter. Investors about the close.
Next slide. So a little bit deeper dive on our commercial execution as the checking for you to visit HealthFair type precancer detection events remain a significant contributor to our activity. You can see on the right there that were different than had been heavily focused on firefighters since we've had our first event now at just over a year ago in San Antonio, we've had steady growth. We had some very strong pipeline and we're fully booked through July right now. A rate limiting factor is the number of them a critical personnel. We have to run these events and we have a really great demand from from entities, particularly the factories were expanding our testing beyond just holding HealthFair events at Fire & firehouse is now targeted at conferences. We actually had an event at the National Conference for today, Tom firefighter, cheese and tested several dozen firefighters achieved on the spot during the conference and at other other, the other types of symposium we're increasing. The efficiency of these events have the capacity by utilizing our script, our telehealth partner. So we no longer have to identify a local physician champion to get one of these off the ground. We can just jump in and get started with our telehealth partner and really that perhaps most importantly, the last bullet here, I would now as we launch these events, we're now initiating contracting discussions in parallel with planning for the initial on a macro event.
And we've not we found that the leaders are strongly motivated to engage on, for example, with the unions, there's very much early and excluding the firefighter side on strong motivation to offer testing and to show that they're providing something that value and they're focused on cancer prevention and finish amongst their brothers and sisters. And that's been really encouraging and promising with regard to our ability to engage on contracts moving forward.
As I mentioned last quarter, we've been pushing harder now with our commercial team on strategic accounts. Are these include i s health systems, a large income, multi-location group practices, academic medical centers. And now we have over a dozen such strategic accounts, including big academic medical centers that are testing the improved offer esoteric testing. And these are typically in the context of a of a structure of overall programs for esophageal cancer awareness for girls and so forth. And we have several dozen that remain in the pipeline.
On the next slide. The next that big big area for us right now is direct contracting. As we mentioned last call, we are getting just getting started with us. We hired a VP of employer markets and we actually are now expanding that team has let me just give a few more details on that next slide of what what this is excellent. So we're talking about direct contracting we're talking about offering is regarded as a covered benefit to drive contractually guaranteed revenue. So this is different than the traditional path attritional past being a physician prescribes the test.
And we submit a claim to the insurance policy and work through work with the insurers to get that coverage and payment to combat this essentially a bypass that and we go directly to entities that with whom look at we can engage with whom we can contract to offer testing as a covered benefit typically within help eliminate wellness benefit program and our team that's now back to expand as engaged with this on multiple fronts. So there's a whole network of benefit brokers that work with third party administrators to offer a benefit packages to employers across countries. And and and we have now deep engagement with these entities to offer either guarded within the benefit packages that these brokers and ultimately the third-party administrators are both providing to to employers to offer. You said there are certain entities asset with them. We can actually go directly those entities. These again involve employers, entities, other civil activities such as unions who can offer our test as a service directly for their employees or members come really separate from the benefit of the benefit processed.
And we're active in that we had previously announced. We've had our first our first contract they're testing is and has proceeded at these type of these testing events at rates similar to the executive suite to commence work on our teams shows that that sites for the employers and offers testings on-site and Ram subgroups of employees at our members who are candidates for testing. And then there are other partners that we're working with. We had previously announced that we are engaged with the nine 11 fund that has a large number of patients in the greater New York area who are on track receive treatment for conditions that are related to their exposure driven on 11. That process. I think there was an arm's length navigate a clinical issue back a couple of months ago, but that in the process is now back in full swing.
We've formally engaged with one of their clinical centers of excellence, Mount Sinai and I and we look forward to starting to engage and test patients within the core covered by the funds. And there are a variety of other entities, for example, like residential communities in various parts of that, particularly in the Sunbelt aware that that had a concierge medicine practices that again offer specialized testing asset benefit for the residents, their community. And we're engaged in several of those right now report to consummating contract term. The way what we offer with this direct contracting are really three flavors from down. one is a direct ongoing contract. So we would basically charge per patient tested under the umbrella of one of these contracts. The second model is out, particularly when it's as a consequence in the context of a benefit plan and offer use regard as a covered benefit. It's a charge for a lifetime benefit per member. That segments are tested.
And then we also are in discussions and several examples of just service agreements where we charge for a full or half a screening event. And that's up to a certain they can handle up to a certain number of patients and the other day. And those schedules accordingly. So that's a direct contracting initiatives, big deal. We're pushing hard on this, and we really do expect there to speak to be a meaningful contributor to them to test volume as well as revenue in the coming quarters.
Next slide. So just an update on the entire process by which we submit claims payments received payments on those claims and generally pursue in network coverage. On the revenue cycle management side, again, this represents out and payment for out-of-network claims. And we've submitted now since we made our transition to products or new revenue cycle management provider in June, about $20 million in growth. Pro forma revenue with the claims submitted represent that we're now quite stable at about 80% are getting adjudicated. And of those that are adjudicated an increasing percentage. Now a bit over 50% are being allowed. So does that the claim is allowed and the average allowed payment is $1800. And we can actually go and collect that either from the payer from the payers are ultimately for the patients who are also working very hard with products on the appeals process. We are just starting to yield some wins. We're winning about 25% of our appeals. And there's an entire process, Best Buy, which were that were strengthening and optimizing. And that includes, for example, leveraging provider.
So in certain examples will get a dozen or so providers and physicians and the local area to submit to the local payer as part of it appeals to indicate the A.M. This is medically necessary and important for them to cover. And we're also working out for the first time on a prior authorization programs. It's about 18% of the denials are for lack of a prioritization. So we're incorporating a streamlined way for physicians to seek a prior authorization. For the big question, of course, is our medical policy coverage of munis. one thing for us to be correct thing and the revenue that we're generating now is on our network, but ultimately to take advantage of the full potential here, we need to recover in network coverage at both from commercial payers and Medicare. So in the last month or two, as I hinted earlier, we've held meetings with medical directors of the major commercial payers names. You would recognize to formally request for the first time positive medical policy determinations for EsoGuard based on now the data that we have now the result of those will be varied and low, but at least initially a discussion either account before like if we're fortunate will get coverage if we don't get immediate coverage of our secondary goal is to get engaged in pilot programs to collect clinical utility data within that particular payer. And we have some really good prospects on that.
We're really excited just last week that we participated in Blue Cross Blue Shield Association of America webinar or dozens of medical directors were in attendance and our end fleet advisor and have our Medical Advisory Board, Dr. Mexican team, who is the lead author of the American College of Gastroenterology guidelines. Really, I gave an excellent presentation making a very strong argument based on guidelines that EsoGuard should be covered by the plants, and some of that was a very positive engagement. On the Medicare side, we are targeting reengagement with the multi X program, which is the entity that finalizes local coverage determinations.
We are able to operate within the construct of a local, a final and effective local coverage determination that foundational for the category of testaments penciled in effect. And we now believe we've collected sufficient clinical validity and clinical utility data to make that reengagement. The timing of that of our are leading a pre-submission meeting with them as a trigger on the publication of one of the key focus of what do you studies that better net study and that we expect to happen any day now and which point we will ask for a meeting and then based on that meeting, proceed to a technical assessments submission.
So based on what's now a very concrete time line and based on the home lesion and what we believe is sufficient data to convert the foundational CDM. two and a coverage determination for Medicare, we really do believe that we now have a line of sight to Medicare coverage. And then one final area that's been a area of strong focused. There is no biomarker legislation in over a dozen states where by manned by state the statue, there is a there's a mandatory code metaphor, commercial coverage for certain biomarker tests, and that gives us the opportunity.
Next slide, please. Tom. Next slide. So that gives us the opportunity to operate in these states. These are the 16 states with with biomarker legislation, including two that are limited to cancer. We believe we and we're getting we're starting to get feedback that we are covered under the states under under this legislation in certain states. And we're in we continue to push hard on that to get it guarantees, mandatory commercial coverage and where these are aware of this legislation occurs. And by by achieving this, we're able to actually work on targeting our resources, whether they be our commercial team or other other activities in those states. And that's something we're looking for to yielding results in the next couple of quarters. So with that, I'll hand the reins over to Dennis to provide an update on our financial . Sure. Tom St. Dennis takeover.
Dennis McGrath
Thank lesion. The summary financial results for the fourth quarter. In the year, we reported our press releases on a few key highlights from the quarter. I'd encourage you to consider those remarks in the context of the full disclosures covered in our annual report on Form 10 K, which was filed with the SEC last night is available on our website. So I'm on Slide 18. Here you see the balance sheet. Cash at year end was $18.9 million. We supplemented that balance with the financing we completed just two weeks ago and the amount of $18.1 million from the average quarterly burn rate for last year. There was $8.2 million per quarter. As you can see in the statement of cash flows in our 10 K, third and fourth quarter was $6.7 million from operations of $3.4 million from paydown of inter-company debt. We disclosed in the 10 K that our ability to fund operations beyond one year from today is largely dependent upon our revenues ramp over the next five quarters, which is highly dependent on how the reimbursement landscape for both government and private health insurers as well as successful efforts for direct contracting with self-insured employers shapes increases in payment realization of submitting claims and lower corporate finance activities.
Beyond that, there is nothing substantively remarkable about the remainder of the December 31st balance sheet. However, subsequent to year end, in addition to the incremental $18 million of cash infusion, Lucid settled approximately $4.7 million in debt have made by the issuance of approximately $3.3 million shares of common stock shares outstanding, including unbilled it restricted stock awards as of today is $48.2 million shares, which includes 242,000 shares issued subsequent to year end in connection with conversion notices received from the convertible debt holder. The gap shares outstanding of $2.3 million are reflected on this slide as well was on the face of the balance sheet and 10 K gap shares do not reflect unvested restricted stock awards.
With regards to the P&L on Slide 19, it compares this year's fourth quarter to last year's fourth quarter and similarly for the yearly totals on certain key items for us to review the information that comments later, the cautionary disclosure at the bottom of the slide about supplemental information, particularly non-GAAP Inc. Automation revenue of $1.04 million for the quarter, say 33% sequential increase over the third quarter and is in line with what was previously previewed. The amount reflects actual cash collections for the quarter, plus a small amount of invoice used to guide tests delivered to the Veterans Administration plus at about $26,000 in initial building of billings under the direct contract with the and serum Auto Group, the revenue increase reflects about out nine fold increase over the prior year quarter at about a six fold annual increase over the prior year. Test volume at 2200 tests for the quarter represent just over $5 million in submitted claims for the fourth quarter at our 24 99 standard p ricing for the test for the first quarter of 2020 for revenue is tracking to be on par with the fourth quarter.
Revenue recognition is a key key determinate of the probability of collection. And therefore, due to the fact that we are in the early stages of the reimbursement process means revenue recognition for submitting claims submitted to traditional government or private health insurance will be recognized when the claim is actually collected versus when the patient report invoiced and submitted for reimbursement. As you'll see in our 10 K this call variable consideration in the jargon of gaps ASC. six oh six revenue recognition guidelines. And presently, there is insufficient predictive data to reflect revenue when that test report is delivered to the referring physician.
Billable mounts contracted directly with employers and our fixed and determinable, they will be recognized as revenue when they contracted services delivered. Generally. That means when the report is delivered to the referring physician. Our non-GAAP loss for the quarter of $9.9 million reflects about $600,000 sequential increase compared to the third quarter at about $700,000 decrease year over year. The increase in the fourth quarter was related to three specific one-time events, some clinical research costs of about $300,000, mostly related to the events leading up to the published clinical utility studies, $300,000 in sales and marketing in some G&A expenses of about $250,000 of these amounts were offset by the quarterly increase in revenue from the next slide.
Slide 20 is a graphic illustration of our operating expenses for the periods reflected total non-GAAP OpEx was $10.9 million for the fourth quarter 2023 and is fairly flat year over year. An increase from the third quarter reflects the clinical research, the one-time tax expense and net sales expense they just mentioned. The cost of revenue primarily consists of EC. check devices, lab supplies and six lab facility costs to variable cost for each test is approximately $200 are effectively at 10% to 11% marginal cost of sales for changes in test volume quarter to quarter.
The non-GAAP net loss per share has been relatively flat for each of the last four quarters, plus or minus a penny between each of the four quarters of 2023. GAAP EPS basis, non-cash charges accounted for approximately $0.03 per share in the fourth quarter. A little bit more about reimbursement of detail. So since the new revenue cycle management products took over in the June, we should have given you some details, there were 7800 claims representing approximately $20 million in pro forma revenue have been submitted for reimbursement either to govern in order to traditional health insurers, but 82% have been adjudicated. 18% are still pending out of the 82% that have been adjudicated. About 46% resulted in an allowable amount. That's basically what the insurance company says we should be entitled to be paid with an average of $1,828 per test.
Now out of that amount still has to be reviewed with the patient, what's their out of pocket, what's their deductible, which could lower that affect the amount that the insurance companies are holding to the general pricing line in all out of network $1828, that should be viewed very positively. In terms the benchmark Medicare 1938, those denied about 51% required one to three things, either additional information that was up 7% of those dials for deemed not medically necessary, which is a bit puzzling, considering that patients are meeting the guidelines that was 26% for those dials for require prior authorization. At 18% of those denials, about 29% were deemed to be non-covered.
So with that, operator, let's open it up for questions.
Question and Answer Session
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your telephone keypad. You will hear from that you're handling based. Should you wish to decline from the polling process, please press the star Gavan, please lift the handset before pressing any keys. one moment, please, for your first question. Your first question comes from the line of Kyle and makes sense. And chemical ag, your line is open.
Kyle Mikson
We currently tiles. Hey, guys. Thanks for the question and congrats on the year in the quarter. I'm just looking at the at the volume and the Yum. I guess, like the revenue, so evolving and decrease quarter over quarter a little bit, maybe 15%, if you can kind of maintain these quarterly levels are pretty around 2400 or so claims. I guess that makes some sense given the sales force situation. But beyond the head of a fee that increase like over 50%, that's great. So how should we think about maybe Vale M. and ASP. hum dynamics to metrics going forward, given you're now kind of heading like a nice kind of stable rate of for both of those? I feel again also kind of progressing nicely, maybe on under upper trajectory, especially on the ASP side.
Lishan Aklog
So let me start with the volume, and then I'll hand it over to Dennis. I think you I think you summarized it well, Kyle, that so we've kind of picking on our productivity of our existing sales force. Again, that doesn't mean that we wanted to touch slight growth, but test volume growth is going to be driven more by other assets, other aspects as opposed to our sales force that's calling directly on our position. So that will be driven by these check. You're free to testing events, which are more efficient, as you might imagine in terms of the and the person power that's required to run an event that can generate some 100 or more and more Tesla's without as much activity on the sales side and importantly on the direct contracting side, right?
So those could yield a significant significant test volume growth without depending on the productivity in the U.S. and the size of our sales force. So I think I think you're right. I think we at the current size of our baseline activity, traditional sales and marketing activity, I think these numbers and we expect them to hold them. But we will obviously hope to see growth from there. The other on the other pathways, as Benno mentioned, tau? I'll let Dennis talk a bit more about.
Dennis McGrath
Yes. So on the collection realization, the trajectory and take you through the first quarter, to the extent it's dependent upon the government and private health insurance that is tied to our sales force. Debt levels should stay relatively flat with acceleration in the second half oh six. Is that the volume picks up with a direct contracting. And again, that is not as limited as Lisa just pointed out, by the amount of time and selling opportunity of our sales force, there is a multiplying effect with direct contracting and the fact that payment is guaranteed as part of that contract, not dependent upon deal independent third party insurance companies that from your which is not as predictable, that will increase realization as we move forward. Phil yields, you just look at two data points, some second quarter and the fourth quarter where volumes were about the same in terms of test volume. The increase in realization is significantly higher from those two periods. That's a reflection of the improvements with our Revenue Cycle manager and the appeals process is just starting to take groups. And in those examples where with the appeal I have been submitted, we are being successful with them. That will also help with the realization. Still we see as a general statement on the third party insurance collections were revenues depending upon actual cash collections. Timing is an issue there in terms of how quickly from a submitted claims, we actually get cash that's less predictable for us, kind of maintaining that is of your fairly flat as the direct contracting picks up to the realization will obviously go up because of payments guaranteed. And we can recognize revenue when we deliver the reports or deliver the service that's been contracted for, which will help speed the revenue ramp. We see all of them converging in the second half having greater momentum. So hopefully that gives you enough color on that particularly tough.
Kyle Mikson
Yes, that was fantastic, guys. Thanks so much for that. And then just on the on check, if YouTube events on C&I, clearly those are going pretty well. Originally saw the same view that as like a risk on creating some lumpiness with the volume and so forth. Maybe looking at there is against the concentration there. I mean, you have got two to three-month backlog and it's pretty nice visibility. Then you're extending it is fair that definitely not like just for lack of better word like artificial or like inflated volume at this point. How does that evolve over time? How could that funnel into like deeper penetration among them? The clinician base over time.
Lishan Aklog
Yes. So debt. And so that's a great, great insight, Thailand, definitely. Yes. I think in the early stages, when we had our first event that there were sort of 400 patients who were tested over two weekends representing over that 20% of our offerings, that it was more of our volume for that quarter. Certainly, there was an opportunity to be lumpy. That's just not true anymore. So we're doing dozens of events, some smaller, that's larger events and everything in between and right now, we're limited on the demand is high. And we're really limited by our our clinical team that we have a certain number of some of the clinicians, nurse practitioners, nurses and other device administrators. And we are sort of the efficiencies to which we're utilizing an inefficient way, but getting them around to these events does limit. We have a sort of cap on how many we can do in a given month. So high, it's correct that for you for this for you to perceive this is just, you know, another source of organic volume growth and the ability to grow that volume is going to.
I guess what I would say is the way our willingness to invest in more clinicians to drive more events will be directly related to our success at converting these events from we go. Do, you know, kind of the 100, 200 firefighters and submit for their insurance policy. And we're sort of at the mercy of the claims process there as we convert from that process, which has been how we've been focused in the early stages over the last year to, as I mentioned now, we are at the same time sort of typical scenario as we engage with the fire department many now with another soliciting us because there's good visibility at the conferences and so forth. And we talk at the same time as we are arranging our first event, we talk about engaging in a contract and particularly since most of these units are self-insured and those dialogues are going really well.
The the leaders, in particular, the union leaders are motivated to offer a service to their to their personnel. There is focused on cancer prevention and that particularly in the third quarter group. And so as we start seeing fairly similar in so many, many ways counted as we start seeing increases in realization from realization of revenue from these events than will be justified in, um, and investing in more personnel to drive our capacity to do these events.
Kyle Mikson
Okay. That was great color there. On. Maybe just finally, I'm wondering what's the time lines for the clinical validity studies, particularly maybe there'd be a study, like I know on the pending publication, everything. But I mean, just like the the relevant to that a field that's kind of important and that gives us a good proof point. And then with on the one, I want to be one or two, I guess, one on ones like kind of close to being known as everything with one or two is a little bit further out. I have no further back to what's the what's sort of just like all these important, what time line and win two out of attract some color.
Lishan Aklog
I guess what I'm talking about the time lines relative to our on the quality side of the original SEM paper, there's the Internet study which has released data. It's on prepayments, gone through multiple cycles of review at a leading journal, and we really expect that to be clear for peer review publication very, very shortly. We're just kind of waiting on what we think is the last round of and responses to your previous comments. As soon as that is on published and online, then we will request a meeting with multi-stack. So that's what we will. We believe that that is sort of a linchpin gating item for the publication of that of that clinical validity study. You mentioned the VA study as being a really important a complement to that. We should be kind of person on prepreg that's been submitted. We're not going to wait for that for being for peer review. I expect that there's a good chance that when we have our meeting, it will either be inferior review and certainly for any technical and by the time we get around to doing it and technical assessment submission would be peer reviewed. The key thing I think you were hinting at with VA study. It's our is our first study in a screening population.
So the original SDN paper as well as the have been in this study were both case-control studies. And you always want to be able to show that you can replicate your performance in the actual intended use population in a real-world situation where you're taking people off the street to prevent endoscopy before that are categorized as having at risk and recommended for screening by guidelines and showing that you can actually identify disease with a high with a high performance, high negative predictive value in really good, solid positive predictive values. So that is on preprint and has been submitted and we'll wait for that to be out of e-commerce. On the clinical utility side, certainly the remaining of the clinical studies.
The next line is the BE. one study, which is our our study in a screening population. That study the manuscript is complete. The data is I have been tabulated, I'll give a preview and that the data is nearly identical to the to the VA study. So both studies and ANAM. screening population have really nail nearly identical and otherwise excellent results. Asset that manuscript has been realized. The lead offers, Dr. Shane. And so we're just getting final sign off on that and should be posted on preprints and submitted for publication. Again, we're not going to wait for that. But the two screening population systems will be an important complement to our ARC arm discussion, remote connection with the payers in general to be easy to say we're continuing to evolve. And that's really that's not that's not a linchpin at this point of of our home. Our market access efforts. We still enrollments picked up a bit and it slowed down a little bit. We've shifted to entirely U.S. studies that U.S. centers, and we've added a few that will be just sort of additional complementary. That will be a third case. Control study on top of the U.S. team and Government segment will be supplemental, but not, but it's not sort of a linchpin of our market access strategy.
Kyle Mikson
So, you know, Sean, you want to be too, is the case controllers, that's the equity provisional.
Lishan Aklog
Yes. That's let's confirm. And so that's why it's not just be sort of the third such case-control study and will be supplementary. But it's not sort of at the heart of what we we think we have sufficient case-control CV data and now to screening population CV data to drive our market access efforts.
Kyle Mikson
All right. I'll hop off. Thanks so much time.
Operator
Your next question comes from the line of Joseph Conway, Mutanga line is open.
Joseph Conway
Good morning. Everyone. Thanks for taking our questions. Maybe just one on on operating expenses. You guys are planning to keep in volume fairly levels as well as Dean of the sales force before reimbursement comes in. But maybe you seen more traction on the scanner check if you achieve events and what have you. I guess with all of that together, is it safe to say that we should expect a modest increase maybe in operating expenses just on a run rate maybe on the last two quarters? Do you think that's maybe stabilize?
I guess there's a better way to that asset.
Lishan Aklog
Yes. So the OpEx or a on a GAAP basis for the last couple of quarters to date in the $12 million or so range. And the triggers for us are clearly oil realization of payment. And so with the multiple streams revenue streams, they will have different influences on where that OpEx goes. To the extent that policy insurance policy changes positively at a quicker rate, we will start adding additional salespeople because that means falling on physicians on the direct contracting side that typically requires less selling resources. Now we add engine to expand that, that group from one to two or in the process of expanding from ones to come because that pipeline is growing rather fast. The sales cycle, there is a little bit longer, but once it gets started the test volume, but the ability to increase test volume and therefore payment associated with that is more dependent upon the clinical side of things. And we will add resources directly related to that because that payment is guaranteed were not gasoline in terms of what we're going to get paid during that period of time. So those two streams will influence what happens in sales and marketing. I think on the marketing side, we're still a couple of cattle. What component of the X that's probably more than 25% still modest increases for that last quarter or two, the second half of the year? I think that you could start seeing some acceleration in the sales cost line? I think from a from the research and development and regulatory or clinical research standpoint, I think our level that we're presently at stays fairly flat for the next couple of quarters.
Joseph Conway
Okay, great. Super helpful. Thanks for. Thanks for that color. Maybe and then maybe one non-Medicare that the technical assessment process, I guess you guys are expecting that, you know, after submission and that starts to take anywhere from from 6 to 12 months. I don't know if that you have like more narrow timing on that. Just given your relationship in the meetings that you've already had with Medicare. But I guess just maybe some more color on that final approval day, their final reimbursement decision that you think?
Lishan Aklog
Yes, certainly, we're not in a position to make sort of any kind of hard prediction as to when that happens. I sort of mapped out how what the triggers are for us to request a pre-submission meeting. And then based on the results of that meeting will be ready to submit the technical assessment immediately following the decree pre-submission meeting with look multi-access. And we intend to be an in-person meeting and is so so tech seven, technically that CA processes to turnaround in the 60 to 90 days and now like FDA, but it was a bit of what happens with the FDA process, which enhances its 90 days. There's an opportunity to start that clock, right? They can stop the clock mass for more information and so forth. So that takes us a cumulative 60 to 90 days that constraint, John for a period of time, but it's very hard to say. So once that process starts just like with an FDA submission, whether you've sort of leads through that 60-day window or as a result of inquiries along the way and causes that stretches out beyond that. So really no way for us to put at this point.
Joseph Conway
Okay, great. Yes, thanks for taking our questions. Great. Thanks.
Operator
Your next question comes from the line of Anthony Vendetti from Maxim Group. Your line is open.
Anthony Vendetti
So I just wanted to I know you switch to a new revenue cycle manager. I do the mid last year and doing a much better job in terms of being able to get reimbursed. I think I think in the buyout, you've submitted approximately the commercial government Page $20 million from the vast majority is been adjudicated with half resulting nearly half and the allows amount $1800 per test, which seems very, very positive and much better than than what you were doing originally. Does that mean if we and I guess the definition of vast majorities, does that mean there's maybe $8 million maybe in in on revenues that you would expect in the pipeline, $8 million plus? Or how should we look at what's left to be adjudicated?
Dennis McGrath
Yes. So remember, data have demonstrated that. So you have your or your thesis is correct. So when you look at $20 million of submitted claims and the adjudication of 80%, 40% data in an allowable now you're talking about $8 million or $9 million of a possibility that can be diminished by what the patient share of that will be. It also should be reduced from what we have collected so far, which is nearly $2 million. There is a backlog of of amounts are waiting for collection that could be as much as $9 million. I think field looking at that in the range of five to six is probably more of a realistic view, but there's uncertainty about it. So what gets paid of that? We've got this average that the information we're getting from from clawbacks puts the allowable amount right at the [1828] in the last quarter, which is holding that I think the prior quarter was just slightly higher than that, maybe by $10 or $20 more billable you see in that range. But there's still some uncertainty about that to trying to figure out exactly what we're going to collect because of the patients contribution and the timing related to when we'll get it taken.
Lishan Aklog
I reemphasize that nobody I think the way we look at that $1800 is pricing, right? So we feel like, okay, so we're getting allowed claims about half the time and the price that they are sort of acknowledging pricing in the vicinity of Medicare, which is great. Now as this is a high deductible patient interface with a high deductible plan in January, you know, that's the patient responsibility could be a could be all of that. And so that's not necessarily what we're going to. You know, the proportion of that averaged $1800 that gets converted into revenue really highly uncertain at this point. But what we're gratified by and what we're gratified in terms of the stability of that price at the acknowledgment, that sort of that, that thing an acceptable price that's allowed price which we can, which we can build our models around.
But what we still have time to see that we still have to see where what the outcome, how much that would amount translates into payment. And it's not easy to track, right? This is stuff that's been out of Phase I study.
Anthony Vendetti
That's definitely helpful color. And then my last question is around your marketing efforts. I look at as a three-part pronged effort between the check, your food to events that you've discussed, Aamir, Lucid test centers and then your satellite offices on as we as you move as we move through 2024, you go into 2025 hub, how would you you look at as best you can forecast the break down? What's driving more patients? Yes. I think that that's great. I'll maybe tweak it a little bit just to focus on what is the patient acquisition strategy in those cases, right? So what you described is really sort of more of the cell collection location, like how well we actually do in the small collection and they're very much related. And as old as you also know from my comment here, some of this is kind of started to meld together, but the patient acquisition around our sales force calling on on physicians in various settings and getting them to order the test. That's that's still represents a. Yes, Tom, about 70% in the satellite test center model where our practitioners will show up at a physician's office on a regular scheduled basis. And do I do the testing there?
Lishan Aklog
So think about the patient acquisition and sort of how is the self-collection stuff being handled that that's that about about a third of our volume right now is in these where the patient acquisition is centered around a check your mute to prevent where we are engaged with them. A firehouse are now increasingly other types of entities where we schedule a healthier type of event and do the testing some accordingly, it's not a result of a direct sales call by our by our sales folks, right. And there the cell collection is in this in them CheckFree to and starting now the third area, which I would encourage you to think of as a step-in area that's now starting to kind of meld with the check.
Your 50 of events is the direct contracting side. So when we engage with, let's say, an employer from that through a direct contract that the patient acquisition has done that, hopefully we have the contract and there's a certain number of people who work with who are indicated for testing based on guidelines will be based strictly on guidelines and we proceed to test them in a way that's very similar to the check. If we have events, we literally show up at the at the physical employer locations and as people in our infrastructure. So the patient acquisition side, it's direct contract with direct contact and engaging with physicians that traditional sales process, looking for your food to the events through our engagement with fire departments and others, and then the broader direct contracting battling down that that makes us a slight difference of gene patent acquisition and the site and where the cell collections actually currently sort of a matrix and our actual collection.
Anthony Vendetti
Yes, no, John, that's very helpful color. Just lastly on the on the contracts with employers were commercial insurers, and is that would you still say that is that in the nascent stage? And is that something I know it takes sometimes a while because they each have their own processes, but is that something that you expect to accelerate as you move through this year and into 2025.
Lishan Aklog
I think all of the heads of all of the assets in the early stages, we have hired our first person dedicated to this just in November, it seems like the London Met, but in November and you filled up the pipeline with regard to engagements with brokers, third-party administrators, entities like the nine 11 fund and the residential communities, that pipeline is filling up very fast. So to the point where we actually are going to hire second personnel, but with that, but the spike as Dennis mentioned that the cycles for these are longer than just converting individual physician account, right? And so and to some degree, they can be a little bit lumpy around around open enrollment periods twice a year, particularly those that are related to benefit packages, right, where you have to go line up a line with open enrollment. So a very busy pipeline is filling up putting more resources into it, but longer lead times that despite all that, we do we do really start. We really do expect to start seeing some of runs across the plate in the coming quarters, both in terms of test volume and revenue and contracts executed.
Anthony Vendetti
Excellent.
Thank you so much for the color. Appreciate it, and I'll hop back in the queue.
Lishan Aklog
Thanks, Anthony.
Operator
Your next question comes from the line of Mark Massaro from BTIG. Your line is open for you guys.
This is David on for Mike. Gary, thanks for taking the questions. And actually maybe just keep it to one. So what are see and we've talked about history and now appear to be needed to kind of lay the groundwork for commercial pay? And could you just reiterate your comments on the progress that you're seeing there from? I think you also called out for the first time a prior off being somewhat of a hurdle to just how you're thinking about some of the puts and takes to it.
Lishan Aklog
All right. So let me just jump in a bit on that on the positive side. And maybe then I have some additional comments. So the prior off issue was simply one. When you look at the denials and the percentage breakdown, Dennis mentioned about 50% of those are our informational or medical necessity. Those are there's a state appeals process for that, but some of that 18% are private Boston. Remember, this has nothing to do which is not directly related to our efforts. Steve and impact medical policy is what's the industry out of that process. So we figured there are there is enough have a percentage on the denial that 18% that it was worth our while to put a streamlined prior off process together. So that physicians can easily see the prior us for what is typically a non-urgent nonurgent test. So that's just simply a way to to have access to 18% of denials that are related to the lack of a prior authorization. That's different than I think what the first part of your question was, which is around the engagement with commercial payers on medical policy, which is something that's now starting to accelerate now that we have what we believe is sufficient CVNCU. data to have those conversations we just up until two or three, four months ago. We didn't really have enough data today to be legitimately involved in those conversations. So as I mentioned earlier, we've actually started directly making inquiries and requests for changes in medical policy with some of the brand-name larger payers with the hope that if it doesn't lead to an immediate change that we can engage in them and pilot programs and so forth. So I would see that as I would consider that as somewhat different than what we're doing on the on the on the payroll side, which is really a revenue cycle management process. Dennis, do you want to add anything to that?
Dennis McGrath
Yes. Just the maybe just go back through the stats in case that's what you were looking at kind of 54% of those adjudicated were denied. And I gave some color on what happened to them, the reasons for half of them and they were three buckets, right? 7% just needed additional information, 26% were deemed not medically necessary.
And the question you asked about prior art, our authorization was 18%, but that said they they would like prior authorization before reviewing the claim. So it was a smaller portion of the total, but nonetheless, it is showing up as one of the reasons for the initial data as a.
Perfect. Understood. Great, thanks.
Operator
And your next question comes from the line of Ed Woo from Ascendiant Capital. Your line is open.
Ed Woo
Yes, thank you for taking my question. On the high volume check your food two type events, and you've gone to any event more than once and do you anticipate being some of these events be annual events or what's the time period for going back to these events?
Lishan Aklog
That's a great question, Matt. And the answer is yes, we definitely have gone back, like, for example, the original San Antonio, the firefighter event that we did almost exactly a year ago. We went back and retested because you know the logistics, if you set up, let's say, three or four days, you're not going to necessarily get 100% of those who are interesting getting tested and are qualified or recommended for testing based on the risk factors that we definitely have come back, we've even had Pfizer has gone back and focused on retirees or different shifts and so forth. So that's that's we've done that. What I may just again use this opportunity to emphasize, which is that one of the aspects of this that we're starting to push a lot harder on is as we get started to talk about how we can enter into a contractual arrangement for further testing after the inaugural event to your point. And we do see that as something that could be on a regular periodic basis. Certainly some of the conversations we're having on the on that through our contracting side, our would be it would be periodic.
Ed Woo
Great. Well, thank you for answering my questions, and I wish you guys good luck. Thank you.
Lishan Aklog
Thanks.
Operator
Thank you. And there are no further questions at this time. I would like to hand it over to Dr. Vishal Shah for closing comments.
Lishan Aklog
So I thank you all for joining us today and for the great questions. I just actually have one additional comment that came from one of our investors that they asked the question of VistaCare because the apartment released and had a press release recently that indicated that it was really reviving some projects which included a secure and just wanted to confirm and remind folks that you secure, which is a esophageal ablation technology that fits very nicely within the portfolio of products used to treat the later-stage pre-cancers that we discovered with decent aren't that Lucid continues to have a fully exclusive license to commercialize data. So although it's being revised revived at department level and patents seeking financing to complete its development, including some non-dilutive financing. Lucid remains the what will be the commercial entity that commercializes it if and when we're able to get that across the finish line. And so with that, as always, we look forward to keeping you abreast of our progress via news releases and periodic calls, such as this one and the best way to keep up with our news updates and events is to sign up for e-mail alerts on the Lucid Investor Relations website and to follow us on Twitter, LinkedIn and on our website so thank you, everybody, and have a great day.
Operator
Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
