Question-and-Answer Session
Operator
Thank you. (Operator instructions) Your first question comes from the line of Richard Close with Jefferies.
Richard Close – Jefferies
Hi. Couple questions here. Bill, maybe if you could comment a little bit on the scope expansions. I think you said New York, New Jersey, Nevada, and – was it North Carolina?
Bill Lucia
Pennsylvania.
Richard Close – Jefferies
Oh, Pennsylvania. Okay, sorry. Now when we think about scope expansions and obviously I guess that helped contribute the 17% in your growth in your government business. Where do you guys stand when you look at all your state clients? How do you view your penetration within those existing states?
Bill Lucia
Richard, this is the kind of difficult modeling topic that we always talk about and that our – and I’ll give you the range of examples. So in New Jersey, at any given time, we may be performing 32 unique different projects ranging from third party liability through different types of program integrity, whereas in California, we may be performing three unique types of projects. And it’s very difficult to kind of answer the question of what’s our level of penetration across the entire market. It’s a little easier for us to get to the percentage of expenditures that we recover in a specific state and then internally model up from there to give our accounts reps target.
Bob Holster
I will add though that the target seems to be increasing. When we look at acute care expenditures across the Medicaid program and include the premiums for managed care, which are directed primarily at acute care services. Approximately 200 billion of the 364 billion projected FY 2009 Medicaid spend is on the acute care services component. We presently recover for our clients about 1% of their acute care spending in aggregate, which suggests that we have quite a ways to go even to get to 1% of current acute care spending levels, given that only about two-thirds of our revenues now are related directly to those acute care spending levels.
Richard Close – Jefferies
Okay. Even in states like New Jersey you still have room to go in your opinion.
Bill Lucia
Most definitely. And New Jersey is one of the clients that is very – that we have a very collaborative relationship where we are always presenting new projects that are based on the results of our data mining claims. And that’s where a lot of our growth comes from year-to-year.
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