RE: VA Payment Terms

Tim,
Attached is a memo we drafted to send to our current Home Care employees.  Wanted to send for your visibility/feedback and to start to formulate a transition plan.  Assuming we can sign the contract by tomorrow, I am thinking about having an in person meeting with the staff in the Madison area on Monday morning to let them know.  When do you think employees would need to transition over to you for orientation etc for have private patients transfer 5/1?

Justin Munzel
President
Commonheart

N16W23217 Stone Ridge Drive, Suite 350
Waukesha, WI 53188
o: 920-328-1029
f: 920-261-4840
e: jmunzel@Commonheart.us<mailto:jmunzel@Commonheart.us>
www.commonheart.com<http://www.commonheart.com/>

"Grounded in faith, we promote the health and well-being of each individual we serve"
[Commonheart]

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From: Timothy Thomas <tt@thekey.com>
Sent: Thursday, April 17, 2025 9:41 AM
To: Justin Munzel <JMunzel@Commonheart.us>
Cc: Danielle James <danielle.james@thekey.com>; Steve Koyanagi <skoyanagi@thekey.com>
Subject: Re: VA Payment Terms

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Great, 15 days is helpful.

Thanks

On Thu, Apr 17, 2025 at 10:38 AM Justin Munzel <JMunzel@commonheart.us<mailto:JMunzel@commonheart.us>> wrote:
It will be tough to turn around a payment request consistently in 10 days after month end as they will have to post all receipts and then submit to AP for processing.  They typically run payments each Friday and I could see it being the second payment run of the month.  So, I think 15 days would be achievable if we can do that.

Justin Munzel
President
Commonheart

N16W23217 Stone Ridge Drive, Suite 350
Waukesha, WI 53188
o: 920-328-1029
f: 920-261-4840
e: jmunzel@Commonheart.us<mailto:jmunzel@Commonheart.us>
www.commonheart.com<https://linkprotect.cudasvc.com/url?a=http%3a%2f%2fwww.commonheart.com%2f&c=E,1,CnW_BRTCqK_9G21qXLlX9LTJ1cmKWFxkNE8HUr559Cc7E3koyECFxjBITCWoOqkhIjQvLCdISjR6okgbNWxfT0IDn503IqbvKcEErfFumwRLn7x7JbhO9A,,&typo=1>

"Grounded in faith, we promote the health and well-being of each individual we serve"
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From: Timothy Thomas <tt@thekey.com<mailto:tt@thekey.com>>
Sent: Thursday, April 17, 2025 9:07 AM
To: Justin Munzel <JMunzel@Commonheart.us>
Cc: Danielle James <danielle.james@thekey.com<mailto:danielle.james@thekey.com>>; Steve Koyanagi <skoyanagi@thekey.com<mailto:skoyanagi@thekey.com>>
Subject: Re: VA Payment Terms

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Hi Justin,

Thanks for pushing the date to March 31, 2026; everything else looks good in the agreement.

As for the terms, that puts us at roughly N60 which is a real stretch. Could I propose N10 upon your receipt of the VA funds?

Best,
Tim

On Wed, Apr 16, 2025 at 5:36 PM Justin Munzel <JMunzel@commonheart.us<mailto:JMunzel@commonheart.us>> wrote:
Tim,
Here is the Income statement for March.  Again, the impact of the VA rate cut for us took us from what would have been an approximately $2000 net income for the month to the $13k loss.  This is the third month since the cut so YTD about a $45k negative impact so could have had a profit of around $25k.

For payment terms what I was thinking was to remit 95% of monthly VA collections within 30 days of receipt.  Typically we have been seeing around 30 DSO as a turnaround time for the VA payment to come in.  So as an example, If we started May 1, we would bill in the first week of June and receive payment from the VA around the beginning of July.  We would then turn around and remit 95% of the payment to you within the month of July.

Regarding the updated agreement per our Attorney:

Attached is the agreement with The Key, updated pursuant to our earlier conversation.  Changes are:

  1.  Section 1 – Transition date will be the earlier of TheKey obtaining an agreement with Optum, or March 31, 2026;
  2.  Section 10 – Closing Date (date employees move to The Key) changed to May 1, 2025;
  3.  Section 11(a) – Added that Key does not indemnify us if the claim is primarily caused by Commonheart.  This mirrors their indemnification of Commonheart.

The parties can still sign the agreement this week, if desired.

Key should confirm their notice info in Section 12(e) and the person/title who will sign on page 7.

Justin Munzel
President
Commonheart

N16W23217 Stone Ridge Drive, Suite 350
Waukesha, WI 53188
o: 920-328-1029
f: 920-261-4840
e: jmunzel@Commonheart.us<mailto:jmunzel@Commonheart.us>
www.commonheart.com<https://linkprotect.cudasvc.com/url?a=http%3a%2f%2fwww.commonheart.com%2f&c=E,1,I1uy9XLw6SRM0buORfl5grlSP6iZeaFwZLzDDvL58k8zRwHu4AH2waFdTAB8c6qOfwDkYywrbHQF7XRDLB1YgVEqhy2H1RdSx4vTFbGkQOVVn6oc&typo=1>

"Grounded in faith, we promote the health and well-being of each individual we serve"
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From: Timothy Thomas <tt@thekey.com<mailto:tt@thekey.com>>
Sent: Wednesday, April 16, 2025 12:59 PM
To: Justin Munzel <JMunzel@Commonheart.us>
Subject: VA Payment Terms

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Hi Justin,

One thing I forgot to bring up on the call earlier. What would be Commonhearts payment terms to us on the VA business. Also how would you need our invoice formatted? Could you provide me with a sample?

As I mentioned, our system is set up to bill weekly which I presume doesn't work for your / VA. We'll need to make a manual adjustment.

Thanks!
Tim

Tim Thomas
Head of Midwest & Canada Divisions | TheKey
Mobile: 514.591.9387

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Justin Munzel
President
Commonheart

1045 Hill St.
Watertown, WI 53098
p: 920-261-0400
f: 920-261-4840
e: JMunzel@Commonheart.us
"Grounded in faith, we promote the health and well-being of each individual we serve"
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