Q2 2021 Tabula Rasa HealthCare Inc Earnings Call

August 6, 2021

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Pardon me. This is the operator today's conference is scheduled to begin shortly please continue to standby. Thank you for your patience.

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Good day, and thank you for standing by and welcome to the second quarter 2021, Tabula Rasa Healthcare, Inc. Earnings Conference call. Please be advised that today's conference is being recorded at this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer.

To ask a question during that session you will need to press star 1 on your telephone if you require any further assistance. Please press star zero. It is my pleasure to hand, the conference over to Kevin Dale. Please go ahead.

Thank you and good morning.

I'm, Kevin Dill corporate counsel for Tabula Rasa healthcare.

The company intends to avail itself of the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Certain statements made during this call will be forward looking statements within the meaning of that law.

These forward looking statements are subject to risks uncertainties and other factors that could cause tabula rasa healthcare's actual results to differ materially from those expressed or implied by the forward looking statements.

These risks and uncertainties include the developing nature of the market for technology enabled healthcare products and services and potential changes to laws and regulations that may impact our clients.

For additional information on the risks facing tabula Rasa healthcare.

Please refer to our filings with the SEC, including the risk factors section of our 10-K filed on February 26.2021.

A recording of this call is accessible through a link on the Investor Relations page of our website and it will be available for 90 days.

I will turn the call over to Dr. Calvin Knowlton, CEO, chairman and founder of Tabula Rasa healthcare.

Thank you our greetings and thank you all for joining our call today I.

I would like to start with some perspective on our company as we approach the 5 year anniversary of our IPO in October.

And our first year as a public company in 2016, we generated $94 million in revenue.

Largely derived from a relatively small but growing pace market.

5 years later, we are.

We're on track to increase revenue by more than 3.5 times.

Since our IPO, even with the COVID-19 headwinds that slowed our growth.

The tiara HD CAGR over these 5 years is 29%.

This occurred through a combination of strong organic growth supplemented by strategic acquisitions.

These tail winds broadened our offerings and footprint in our core pace market, which as we discussed during our first quarter earnings call is garnering a great deal of attention from state and federal lawmakers to increase funding and access.

This attention also exponentially increases our total addressable market.

By serving health plans and community pharmacies through our <unk> segment.

The continued strong recovery in pace.

Our care adventure healthcare segment.

Led our second quarter revenue and profitability to be at the high end of our guidance range.

As we enter the remaining months of 2021, we are encouraged by the improving trends in our care mentioned healthcare segment with patient enrollment returning to pre pandemic levels in recent months and all of our key metrics moving in a positive direction.

Within Coeur mentioned, our year over year organic growth improved to 13% during the second quarter versus 6% during the first quarter of 2021.

Turning to our <unk> segment.

Our number 1 objective is re accelerating revenue growth and we are making progress on this front and expect to return to positive year over year growth in both the third and fourth quarter of 2021.

This improvement along with the strong recovery in pace is driving our return to double digit organic growth in the second half of 2021 as highlighted on slide 3.

In early July we announced the hiring of Kelly Kodak to lead our integrated <unk> business.

This Kodak has a wide range of C level experience in the payer Pbms pharmacy and pharma World Most recently at United Healthcare Group.

Making her an ideal candidate to lead our <unk> segment.

We are excited about the positive impact she has had already and we will have in the coming quarters and years as he settles into her new role at <unk>, We will make sure that investors have an opportunity to engage with her in the near future.

The integration of our unique simultaneous multi drug interaction science across all our <unk> solution is leading to important new wins across a diverse base of clients, Kevin Boesen will expand on this later, but in short our sales team is delivering bookings with exponential.

Growth in our Med wise payer segment segment as compared to a year ago.

I'm now going to turn it over to Oyesola who's going to talk about a number of industry developments, including the important role that pharmacists are playing in the broader healthcare ecosystem, which will benefit our HC and our <unk> segment, specifically for years to come.

Sheila.

Thanks Carol.

We talked about all the exciting developments impacting pace and our care I mentioned healthcare segment.

After a few brief comments at this time I will focus on our med wise healthcare division and important trends that we believe will provide a strong catalyst for sustained long term growth.

With regard to pace. In addition to the pace prospect at potential record funding for home and community based services as part of the reconciliation package expected. This fall we have seen encouraging efforts at the state level to expand pace, most notably bills in Florida and California.

In Florida funding for pace has increased significantly which should more than double the number of participants in the state in the coming years with the vast majority of this expansion this year and in 2022.

In California Assembly Bill $5.40.

Will require the state to include information about pace and medical enrollment forms along with an outreach program to people who may be eligible for pace.

By 2030 and estimated 1 in for Californians, there'll be 60 or older and expanding access to pace is a priority.

Other states, including Maryland, and Missouri are exploring expansion of pace on the states and states like Kentucky, and Illinois are adding pace as Medicaid benefit and options that are frail elderly population to live independently in the community.

Turning to Med wise, there is continued momentum to advance the role of the pharmacist starting with provider status legislation at both the federal and state level.

Which allows pharmacists to be paid for delivering a range of clinical services.

At the federal level on April 22nd 2021, the pharmacy and medically underserved areas and have been act was introduced by a bipartisan group of Congress.

This act, but enables seniors to access pharmacist provider services under Medicare part B and be reimbursed under part B, if provided in medically underserved areas or populations or warehouse.

Health professional shortages exist, which is where nearly 60% of independent community pharmacists practice.

Shifting to the individual state level the state of Iowa for example passed legislation recognizing pharmacists as providers under Medicaid effective July 1 of 2021.

An important catalyst for this was a 3 year value based pharmacy pilot at Walmart Blue Cross Blue Shield.

<unk> involving 74 pharmacies launched in 2017.

It is now a permanent program after demonstrating successful outcome.

Yeah.

Emergency Department and Hospitalizations for example, and total cost of care savings of 5% over a 12 month period for patients with chronic conditions, such as heart disease diabetes depression in asthma.

Similarly, the state of Ohio. Another example, past provider status legislation in 2019.

In 2020 care score a multistate managed care plan launched the pharmacist provider status pilot to reimburse pharmacists preclinical services.

For Medicaid beneficiaries identified as high risk.

Within 6 months dramatic improvements in asthma control and blood glucose levels and sued resulting from pharmacists engagement.

A number of our prescribed wellness client pharmacies in Iowa, and Ohio are participating in these exciting pharmacy program and characteristics planning to scale. The program to 200 pharmacies as well as expanded into other states, including Kentucky, Indiana and Georgia.

This is the new model of chronic care as managed care beneficiaries can get better care from a pharmacist as part of an interdisciplinary team while their health plans enhanced our quality ratings.

And there are some real examples of plans and provider groups, who have already integrated the primary in chronic care pharmacists, such as Troy Medicare a TRA client Medicare advantage plan in North Carolina paying pharmacists between 30 and $50 per member per month for care management services Kaiser.

Permanente, which utilizes more than 1500 employed clinical pharmacists as part of their integrated care model and go to her house, what's embedded pharmacist managing vulnerable high risk patients and the community.

Also since 2013.15 states have passed bill recognizing pharmacists as providers, we're establishing for a provider parity laws that allow pharmacists to be reimbursed under their scope of practice by commercial and government health plans.

Thus far in 2021.213 bills related to pharmacists expanded scope of practice have been introduced in 43 States 32 of them in 18 States have passed the legislature and signed into law, while 16 bills in 10 states awaits the governor's signature.

All of this activity sets the stage for continued pharmacist scope of practice expansion.

Furthering the adoption of <unk> science and free area.

Levering and billing for enhanced comprehensive MTM services directly or through collaborative practice agreements.

Along with the implementation of Medicaid medication risk reduction model as evidenced by new Jersey's recently passed legislation, which recognizes the medication expertise of the pharmacist to drive outcomes and impacts the total cost of care.

In summary, these collective efforts to empower pharmacist to practice at the top of their license and improve outcomes for patients are key factors in our optimism for strong future growth within our med wife's healthcare segment.

Kevin Thank.

Thank you Ursula.

Second quarter was highlighted by a return to the field after more than a year of almost exclusively web based sales due to the COVID-19 pandemic as an example, this summer our team has been on site at more than 10 pace centers across the country numerous chain pharmacies, several health plans and a number of live industry conferences.

We have also continued to expand the sales team with experienced sales professionals, who have successfully leveraged relationships to shorten the sales cycle. We have increased the size of the sales by 64% since the start of the year.

In addition to our core pace community pharmacy, and payer markets. We now have dedicated team members selling med wise technology and services directly to the self insured employer market healthcare providers and pharma, we will continue to increase the size of the sales team through the end of 2021.

In addition to the renewed organic growth in Pes, we highlighted earlier <unk> healthcare second quarter bookings were up 26% compared to the first quarter of 2021, we continue to have strong success with our cross selling efforts and contracting with new pace programs from multiple service lines.

As we stated in our press release, we have a strong pace implementation backlog for the remainder of 2021 and 2022.

To address bookings I would like to talk about our year to date progress as of July 31, since we had a couple of material contract signing slipped from Q2 into early July.

Specifically I would like to highlight our med wise payer segment, which has generated bookings that are more than double what we realized during the same period last year.

For additional context, our Q3 bookings have already surpassed Q1, 2020, which was the highest booking quarter in company history, and the last pre pandemic quarter we.

We are confident the second half and full year 2021 bookings will show healthy growth versus 2020.

Our unique ability to combine traditional medication therapy management with our med why science and enhanced MTM model has accelerated our wins across a wide spectrum of clients and ultimately our future growth rate.

He wins included.

Multi year contract renewal for MTM services, with our largest payer customer.

Continued expansion of current MTM programs with Humana and Wellcare.

Our new 2022, MTM win with 1 of the nation's largest Medicare advantage payers.

Our new contract to deliver our enhanced MTM model for employees of a regional Blue Cross Blue Shield plan.

And new enhanced MTM type programs without risking concierge provider groups.

Additionally, we recently signed a multi year agreement through our prescribe wellness business unit, enabling our network of community pharmacies to have access to several software tools and engage and support patients enrolling in Medicare.

This agreement will support patient loyalty and allow our network of pharmacies to continue to enhance clinical services through the use of our software.

Lastly, I wanted to talk about sales progress towards our 2021 revenue target recall 1 of the key components, we highlighted as part of our original 2021 guidance back in February was new 2021 bookings that would convert into 2021 revenue.

This in year revenue represented 7 percentage points of growth.

Which equated to more than $21 million.

At the end of July we have attained 60% of this target which is already above the in year revenue. We generated during all of 2020, we expect to close the remainder of this GAAP and more by the end of the third quarter.

Brian.

Thanks, Kevin.

Pleased to report another quarter, showing continued improvement and solid execution by our team members.

Q2, total revenue of $82.3 million was at the high end of our guidance range and represented 7% growth versus a year ago, and 7% growth on a sequential basis versus Q1.

Non-GAAP adjusted EBITDA of $6 million represented a 7.2% margin bandwidth right at the midpoint of our guidance range.

Turning to Q3 guidance, we expect to show continued sequential growth across both the Kerr mentioned in med wide segments with the midpoint of our revenue range, representing 7% sequential growth versus Q2, and 25% year over year growth.

Note that this will be the last quarter of inorganic growth contribution from Personna codes, we anniversaried the acquisition in early October 2021.

I'd like to specifically note that we expect med wise revenue to begin to show healthy year over year growth this quarter compared to declines in the first half of the year. This is a result of new contract implementations as well as a more balanced delivery of MTM intervention throughout 2021.

As noted in our press release, our guidance for the full year of 2021 remains unchanged with our revenue range, representing growth of 13% to 20% and organic growth.

Growth estimated to be in the range of 9% to 16%.

The larger than normal revenue and non-GAAP adjusted EBITDA ranges for both the third quarter and full year.

Are the reflection of a high level of ongoing sales activity concentrated in our <unk> segment, including a number of large contracts that have a wide range of possible outcomes.

As highlighted on slide 10.

We had significant improvement in our cash flow from operations and free cash flow during Q2 and expect further improvement in both Q3 and Q4.

We expect free cash flow for 2021 to be in the range of negative $10 million as we continue to invest in R&D and sales and marketing.

With that I'll turn it back over to Cal for closing comments.

To close we are.

We're pleased with our first half performance and look forward to closing out the remainder months.

2021 on a strong note.

Operator, please open the call for Q&A.

Yeah.

Thank you and as a reminder to ask a question simply press star 1 on your telephone to withdraw your question press the pound or hash key please standby, while we compile the Q&A roster.

First question comes from Sean Dodge with RBC capital markets.

Okay.

Good morning, and congratulations on the.

Good momentum in the quarter.

Maybe starting on the med wide bookings, Kevin I think you said those were up.

Double so far year to date, but I think there are a number of instances, where you have 1 bid, but not yet at a point, where you can put those into bookings. So maybe if you could just put some numbers around.

That and then anything you can share on timelines today.

Something like <unk>.

It'll help have a lifting as we get into the back half of the year.

Yes, Sean Thanks for the question I appreciate that and you are correct. The way, we do bookings as well if we win a business we won't count that as a booking until actual contracts are signed so we do have a number of large wins in flight.

We expect to close by the end of the third quarter.

That's driving that in year <unk>.

Sales revenue that I referenced.

Okay and then.

On.

Turning to page it looks like the pipeline for implementation there continued to expand can you wrap some numbers around.

What these new centers can begin to contribute in the way of incremental revenue in 2022 and into 2023, I guess anything you can share on like the mix in terms of how many of those include medication fulfillment or anything else. They can help frame what.

The average revenue profile to these new implementation looks like.

John I'll take that.

I think most notably.

The implementations that we had during the second quarter were heavily concentrated around the pharmacy services.

So we do.

Expect that theyre going to have a pretty meaningful impact on 2022 revenue and then see that ramping going forward.

So about a third of the 46.

Debt, we quoted in the earnings release and on the call our pharmacy related.

Obviously that carries the.

Highest revenue opportunity for us.

Okay.

That's very helpful. Thanks again.

Our next question comes from Ryan Daniels with William Blair.

Hey, guys. Thanks for taking the questions just a quick 1 on the delayed contracts that appear to have been signed by the end of July does that delay that ink to green process, meaning the timing that you think youll be able to recognize revenue from those or was it merely the contract signing that got delayed.

Sure.

Now Ryan Thanks for the question merely just the contract signing think summer vacations for folks that haven't been on the road for 2 years.

Net delayed at signature a week.

Okay, Great and then can you talk a little bit more about your new remote patient monitoring solution I'm just curious maybe what the pricing is on that if you've seen demand in the market.

Kind of pushed you to reach out and develop a partnership there and just any thoughts around that and the potential opportunity.

Yes sure Ryan Thanks for the question, it's Eric So that's really an add on service that we have seen interest up try and avoid hospitalization for peace participants in particular should they have COVID-19 symptoms or are discharged from the hospital with COVID-19 symptoms as a way to reduce the number of staff that.

Need to be available to those participants.

The revenue that we have not protected anything as far as I know, we do have we did have a pilot and we have a number of large programs interested in such as you can imagine it's a major issue.

To try and get ahead of.

So.

Typical charged.

<unk> would be in the $200 range, we get a small percent of that is really acting as a reseller.

Of the product and we have a very strong relationship with tice, who is offering the product to the paint market.

And thats per month.

Okay, Perfect and then maybe just 1 last 1.

Kelly you started out by talking about the.

Progression of the company since the IPO and you now have a variety of different offerings like <unk>.

Risk adjustment services, you do the medication adherence and E R.

Our EBITDA avoidance you have the remote patient monitoring et cetera is this also potentially opening up the opportunity to do business.

With more at risk groups, I think even talked a little bit about that some of the concierge medicine and maybe the MAA at risk providers, but it seems like you're offering now is really more robust from maybe more of a partnership type model for those NDA. So I'm curious how much.

Developing and your thoughts on the sales pipeline. Thanks.

Youre absolutely right. In fact, we do have a couple of Acos..1 just started a couple of others who are in line. So.

Our entire <unk>.

Platform is focused debt people that are at financial risk.

And companies are at financial risk So youre.

Absolutely right on we've got a strong plan for <unk>.

Spanning beyond where we are right now.

Kevin maybe you want to just touch on how we've been able to deepen some of our relationships with existing customers that are at risk with some of the other services that we have yes.

Yes, I think that's a key point in driving some of our success is how the data that we have that shows our science.

Ultimately reduces hospitalizations emergency room visits the other tools that you've talked about help enable them at risk providers health plans to maximize their reimbursement on that while they're improving patient care and so the through in all of the services that we're offering is that science. So.

It's allowing us to expand MTM services, it's allowing us to expand.

Star related services in unique ways, because not only are we.

Driving metrics were really.

Impacting total cost of care and.

To your point you see that in pesos in Medicare advantage provider to these at risk provider groups that are now carrying similar risk.

Yeah.

Does that answer that question.

Alright. Our next question is from Stephanie Davis with SBB Leerink.

Thank you for taking my question guys.

Stephanie.

I heard a lot of MGM Wynn call. It out in the prepared comments, that's how I wanted to touch on the outlook.

On program any views on a potential expansion and then maybe that risk action creates a near term conversion opportunity for MTN when that soaks up for Oh go forward solution.

Yes, I think yes.

We've had really good.

Insight from that.

Paper, we put out with all of the people that signed with us.

<unk>.

Yes.

Actually has.

Been responded to within 2 days. So we have a meeting with the person in charge of leading charge at CMS.

Next couple of weeks.

So we've got a real good response here, but anyway, what we're look what we're trying to do is get them to expand and expand the program.

And actually to focus the program more on.

Selfishly more on the types of things that we're doing with the science because we've got great results.

And so now we're at the top of CMS and we have besides what happened in New Jersey. Medicaid also in addition to the CMS up besides that we now have about 6 other states that are.

Yeah.

Copying.

To speak.

What we've done in New Jersey, and we have another 6 we were told that are in the process. So we'll see how that takes on that that will all.

Improve our ability to as the air force and the group's debt.

Our universities certifies the pharmacist so.

We think we've got a big opportunity to take the MTM to extended embedded in Medicare and also to take it into all these other states with Medicaid and there's you know.

$40.50 million people on Medicaid.

Yeah.

It's a good opportunity.

Stephanie on you have to size I will now continue I was just going to add to that just a little bit that day.

Back to your sort of preface the question of the contract wins that large payer contract renewal that we had as well as the 2022 win with a large national payer are directly related to our ability to add the science into the traditional MTM program. So it's certainly driving results outside of <unk>.

Tim.

So if you guys had to talk about the.

It kind of risk profile on <unk>.

Program It sounds like.

Feel very confident and extension.

If on the.

Inc House takeaway correctly.

Well.

We can answer that better on a couple of weeks when we meet with us.

I don't want them.

I don't know.

I don't know what goes through your ahead I mean, we met with them 3 months ago.

The earnings call and that's when they told us debt either regulatory change where legislative change.

We would need to be.

Sometimes the consensus would need to happen. So that's why we went to consensus route.

We will see that impactful I mean, I was very encouraged that within 2 days, we've contacted so but I don't know, we will see but rather whether that does or does not happen.

We're more excited frankly about what Kevin just said, we're using the midwives to partner with all of those people who are the largest provider of freestanding MTM and the country in most of the contracts that we have are interested in.

Expanding on do something cool and helpful. So that's and then when you add the Medicaid to that it's just we've got a tremendous ramp ahead of US right now and Stephanie I think the most exciting thing right now is that we're publishing the results.

That should be coming out in October and in a peer.

Peer reviewed journal at 3 specific articles that will be available on the results of our intervention.

MTN.

We've got a very robust 3 articles on what we did what the pharmacist did.

What is it all about what are the farmers to do the second 1 what kind of intervention and number 3 was what was the specific outcomes, we added and that'll be on a specialist.

On special Journal.

Understood the opportunities either way in on Guam and.

Just want a quick 1 for Brian I don't want to lose out just thinking about the FY 'twenty 1 outlook how much of it at this point is dependent on timing of these new wins ramping up or do you feel like with this giant amount of what we just had pretty solid day rates give me your day paid.

Well, Stephanie I think you heard Kevin probably say, we're about 60% sold.

On the on the target as of the end of July So there's still work to be done through the end of the third quarter, but.

We've got a tremendous pipeline debt.

Yes.

We're able to execute.

We should be in a good position to close out the year.

Thanks, guys. Appreciate it thanks guys. Thank you.

Our next question comes from Sean Wieland with Piper Sandler.

Hi, Thanks.

Thank you good morning.

And just a follow up hi, just to follow up on Stephanie's line of questioning with MTM.

Can you help us interpret the data that the results that CMS published earlier this week on the MTM program comparing them across all regions.

Yes.

On the thing that.

CMS.

Well the reason, we met with them because they.

Homogenized, our interventions across 305000 people, which are the people we were assigned.

And received all of their a b and D data every month, but we our strategy was to risk stratify them and find out who had a risk score of 15 or higher and it came up to about 42000 people that we.

In the first few years.

And we had a tremendous we stayed in the $128 million on on those people on those folks.

In the first 3 years so.

When you took that over the 305.

It's not it doesn't hit the 2% Mark but when you look at it as it is the plan as it was.

As presented in our business plan to them, we will not be leaning over all of these people will be intervening on the ones that are at risk. So that's kind of the disconnect there.

The study was basically.

The way they their actuaries looked at it everybody was.

<unk>.

On modularized over the 3 over the total.

Denominator.

And our.

Analytics, we're really just over the people we intervened on what were the results. So that was the big the big disconnect here.

And how well is among the CMS and other participants are as that disconnect understood.

Well.

They read the papers the original.

Proposal back in 2015, and 16 that we submitted with them and they knew what it was what we were doing.

I guess somewhere along the 5 years, we've got.

<unk> come out so that's why we met with them 3 months ago and tried to say it and that's where that's when we were told well.

We have expanded or continue it.

It will have to go through a different process. So that's why we took on this process. So we will have another opportunity to explain it to the to the Chi.

A couple of weeks, so we'll see where it goes.

Okay.

And then 1 for Brian on the visibility into the back half the ramp into the back half of the year.

Can you comment on what percent visibility you have on your full year revenue is now we're halfway through the year.

Based on the bookings and even the vendor of choice.

Designations, you've got yes, yes, Sean.

I would say.

Our north of 95% at this point.

To the midpoint or higher than the low end to the midpoint.

Got it alright.

Alright, thanks, so much sanction.

Thank you. Our next question comes from David Grossman with Stifel.

Hi, David Good morning.

Good morning, sorry, I was.

From there.

So I wanted to just to follow up again with some of the commentary about the bookings the new bookings.

You've talked about it sounds like there's been a lot of activity.

Year to date.

Perhaps you could just give us some context for that in terms of.

Maybe dimension the potential <unk> or anything that would give us a sense of.

How meaningful those may be in terms of contributing to revenue growth I know 1 was a renewal and maybe that was an expansion of scope as well. So so any context would be helpful.

Yes, sure David I would say.

The you're right 1 of the ones that we were excited about with our core contract renewal. It does include some expansion in that it's a long standing customer that we continue to grow our services with the remainder are our new and so the revenue that we're adding sort of in year.

Is it tends to be at this point in the year about half of what overall <unk> would be for the following year. So you end up with with some good growth set up in 2022 already.

What we've said, though is we'll provide a little bit more detail around bookings by the end of the third quarter to give you some more insight so more on that to come.

Yes, just to be clear David C.

Big renewal that Kevin was just referencing and we don't include renewals in our bookings numbers. So the expansion of that will be included.

But it does not include renewals.

Got it.

The.

I guess the balance of what's left.

40%. So does that mean that we anybody to $5 billion of in your bookings that we have to deliver on the back half of the year to the mid point to just to make sure I understand the math.

That is correct.

Okay, and again is there any just remind us as any context of.

Historically.

From the end of July to December is that.

A typical achievements that the company has seen over the past I just silver.

So remember.

How to frame that number.

So that the number is supported by the pipeline that we have and with the growth that we've had recently relative to.

The number of different clients that we work with on the consolidation of debt.

On the payer and the pharmacist unit has created some opportunities to expand on existing contracts and so what we have in the pipeline to support existing contracts that relate to some core MTM services.

Some uptick in spending that we see from payers for quality improvement ratings.

It does align.

Got it.

And then just back to I know, there's already been a bunch of questions on.

Yes channel and CMS, but.

Maybe.

Kelly you can help us understand.

Was there a objective to save 2%.

On the entire population and that's where the disconnect is and you're pointing out that.

That you are being you can save 2 percentage or.

Even if that's not reconcilable.

When youre going out to the commercial markets because I assume you are.

Really trying to market, what you've been able to achieve with CMS to these commercial clients.

That it's a relevant data point to them or again are they looking across their entire population so that kind of cost savings.

Well.

Right.

The 2% was across the whole population for all of the competitors.

And.

And so when we market. It now we do we tell them exactly what the program is for example, so in New Jersey, we had $1.8 million Medicaid patients that we risk stratify.

As we were working through this with some people with the state to state who would make any sense.

And there was about 400000.

Have a risk score sufficient enough to be intervened upon.

It depends on the cohort so in a in a commercial population to your point, we see anywhere in the single digits typically because it's usually it's a younger group.

The odor or.

Sicker people, we see it in.

In the teens to 20% typically that are.

No.

The low hanging fruit for us I mean, sometimes people have.

Just have 2 drugs have a high risk most of the time they are on many many medications with many comorbidities.

Right so.

Just to be clear then when youre going into the commercial markets. It sounds like they are satisfied with.

Savings on the individual level as opposed to the population level at least based on what you've seen so far.

Well, we do as we just before we do anything we ask.

Got a few to their patient base and then we run it through the system and come back and tell them Here's here's the number of people, we have a high risk and we convert that into quality of life, but also on the dollars. So that's kind of how we that's our model of how we sell this stuff.

Got it and just 1 last thing I think in the past you talked about so some newer ways to go to market, including.

Using consultants to market to partners that may work with older populations that may be better suited for your product.

I think you also talked a little bit about bundling, Tim with your MTM customers just to provide the taste.

The savings so that they could achieve are those still pretty nascent efforts or anything to report on either of those.

Yes, I think to the second point as far as bundling the MTM science with MTM, that's what's driving.

A lot of our success.

So I think thats been a huge win for us from the consultant front, it's given us an opportunity to.

Tessa markets before we spend too much time and energy and resources. So a good example of that is the self insured employer market, where we brought on a consultant to help create some relationships with benefit brokers and consultants.

Ted trigger some initial wins and so now we've got some additional full ftes that are helping support that effort in expanding that.

Right and just on that bundling.

Kevin So what is the pricing like when you what are the what are the economics to when you do bundle.

Hey, David I'll take that 1.

So so the typical MTM program, if you're bundling MTM with E M T M.

It's going to be our standard pricing and then for the population we're addressing with the MTM solution. It's our standard MTN pricing for that group. So.

We use the same pricing model that we've been using but just over that.

Populations that we're managing with each 1 of those solutions.

Got it.

Hey, guys great. Thanks, very much thank you.

Thank you and as a reminder, if you have a question simply press star 1 on your telephone.

Our next question is from Vikram, I guess, how that book.

With RV.

RW Baird sorry go ahead.

Yeah. Thanks, Good morning, Hey, I was just curious could you just remind us what your guidance assumes as far as pace enrollment trends through the back half of this year and do you see the potential for any changes there just based on recent case volumes and anything that youre seeing in the market share.

So the original guidance assumes that we get to just north of 1% per month on a sequential basis.

Exiting the second quarter, we're at about 1% per month, so trending nicely against our expectations in fact.

The second quarter were a little bit ahead of where we where we plan to be we didn't think we were going to rebound as quickly as we did so.

I think getting into the second half of the year things.

In line with with what we expected.

Okay, Great and then maybe just as a follow up you called out some of the increases you've made to the sales team. Just curious if you can give us some more color on the progress that you've made there to date and what your expectations are on through the balance of year in terms of the size and type of hiring that you plan to do thanks.

Yeah, absolutely. So we've increased field based staff and we've talked about that.

Previously.

In our core markets as far as.

Pharmacy.

Payers as well as the care bench on the pay side of the business.

So we continue to to hire folks that have some experience in that space from existing relationships.

And that has gone well, so that the payer side of or the field based side of things.

That's been our strategy. In addition, we've got an in house sales team that does.

Our community pharmacy sales.

Historically and so we have 3 teams based in California that provide those services recently hired started to hire a fourth team on that will work out of a different location and help support some of their in house sales opportunities for some of our other product lines and that can be anywhere from.

Some of our.

Business deals related to hospitals, if it's our dosing segment, but also some lead generation for our field based teams.

So that's really the growth and then the target is really to try to get to a total of about 50 by the end of the year.

Okay, great. Thank you.

Thank you and ladies and gentlemen, this concludes our Q&A session and program for today. Thank you for your participation and you may now disconnect have a wonderful day.

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Session to ask a question during that session you will need to press star 1 on your telephone if you require any further assistance. Please press star zero. It is my pleasure to hand, the conference over to Kevin Thill. Please go ahead.

Thank you and good morning.

Kevin Dill corporate counsel for Tabula Rasa healthcare.

The company intends to avail itself of the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Certain statements made during this call will be forward looking statements within the meaning of that law.

For additional information on the risks facing tabula Rasa healthcare, please refer to our filings with the SEC, including the risk factors section of our 10-K filed on February 26.2021.

A recording of this call is accessible through a link on the Investor Relations page of our website and it will be available for 90 days.

Turn the call over to Dr. Calvin Knowlton, CEO, chairman and founder of Tabula Rasa healthcare.

Thank you our greetings and thank you all for joining our call today.

I'd like to start with some perspective on our company as we approach the 5 year anniversary of our IPO.

October.

And our first year as a public company in 2016, we generated $94 million in revenue.

Largely derived from a relatively small but growing pace market.

5 years later, we are on track to increase revenue by more than 3.5 times.

Since our IPO, even with the COVID-19 headwinds that slowed our growth.

The tiara HD CAGR over these 5 years is 29%.

This occurred through a combination of strong organic growth supplemented by strategic acquisitions.

This attention also exponentially increases our total addressable market.

By serving health plans and community pharmacies through our Med wise segment.

The continued strong recovery in pace and our care adventure healthcare segment.

Led to our second quarter revenue and profitability to be at the high end of our guidance range.

Within <unk>, our year over year organic growth improved to 13% during the second quarter versus 6% during the first quarter of 2021.

Turning to our <unk> segment.

Our number 1 objective is re accelerating revenue growth and we are making progress on this front and expect to return to positive year over year growth in both the third and fourth quarter of 2021.

This improvement along with the strong recovery in pace is driving our return to double digit organic growth in the second half of 2021 as highlighted on slide 3.

In early July we announced the hiring of Kelly Kodak to lead our integrated <unk> business.

This Kodak has a wide range of C level experience in the payer Pbms pharmacy and pharma World Most recently at United Healthcare Group.

Making her an ideal candidate to lead our <unk> segment. We are excited about the positive impact. She has had already and we will have in the coming quarters and years as he settles into her new role at <unk>, We will make sure that investors have an opportunity to engage with her in the near future.

Growth in our Med wise payer segment segment as compared to a year ago.

I am now going to turn it over to Oyesola who's going to talk about a number of industry developments, including the important role that pharmacists are playing in the broader healthcare ecosystem, which will benefit <unk> and our <unk> segment, specifically for years to come.

Firstly.

Thanks, Carol last quarter, we talked about all the exciting developments impacting pace and our <unk> healthcare segment.

After a few brief comments this time I will focus on our med wise healthcare division and important trends that we believe will provide a strong catalyst for sustained long term growth.

With regard to pace. In addition to the pace plus act at potential record funding for home and community based services as part of the reconciliation package expected. This fall we have seen encouraging efforts at the state level to expand pace, most notably bills in Florida and California.

In California Assembly Bill $5.40.

Will require the state to include information about pace and Medicare enrollment form along with an outreach program to people who may be eligible for pace.

By 2030 and estimated 1 in for Californians, there'll be 60 or older and expanding access to pace is a priority.

Other states, including Maryland, and Missouri are exploring expansion of pace on their states and states like Kentucky, and Illinois are adding pace as Medicaid benefit an option for their frail elderly population to live independently in the community.

Turning to Med wise, there is continued momentum to advance the role of the pharmacist starting with provider status legislation at both the federal and state level.

Which allows pharmacists to be paid for delivering a range of clinical services.

At the federal level on April 22021.

Pharmacy and medically underserved areas enhancement Act was introduced by a bipartisan group of Congress.

This act with enables seniors to access pharmacist provider services under Medicare part B and be reimbursed under part B, if provided in medically underserved areas or populations or warehouse.

Health professional shortages exist, which is where nearly 60% of independent community pharmacy practice.

Shifting to the individual state level the state of Iowa for example passed legislation recognizing pharmacists as providers under Medicaid effective July 1 of 2021.

An important catalyst for this was a 3 year value based pharmacy pilot at Walmart Blue Cross Blue Shield.

Pilot involving 74 pharmacies launched in 2017.

It is now a permanent program after demonstrating successful outcome.

Yeah.

On the emergency Department and Hospitalizations for example, and total cost of care savings of 5% over a 12 month period for patients with chronic conditions, such as heart disease diabetes depression in asthma.

Similarly, the state of Ohio. Another example, past provider status legislation in 2019.

In 2020 care source or multi state managed care plan launched the pharmacist provider status pilot to reimburse pharmacists for clinical services.

For Medicaid beneficiaries identified as high risk.

Within 6 months dramatic improvements in asthma control and blood glucose levels ensued, resulting from pharmacists engagement.

A number of our prescribe wellness client pharmacies in Iowa, and Ohio are participating in these exciting pharmacy program and characteristics planning to scale. The program to 200 pharmacies as well as expanded into other states, including Kentucky, Indiana and Georgia.

This is the new model of chronic care as managed care beneficiaries can get better care from a pharmacist as part of an interdisciplinary team while their health plans enhance their quality ratings.

And there are several examples of plans and provider groups, who have already integrated the primary in chronic care pharmacists, such as Troy Medicare a T.

<unk> client Medicare advantage plan in North Carolina, paying pharmacists between 30 and $50 per member per month for care management services, Kaiser Permanente, which utilizes more than 1500 employed clinical pharmacists as part of their integrated care model and Geisinger health was embedded pharmacist.

Managing vulnerable high risk patients and the community.

Also since 2013.15 states have passed bill recognizing pharmacists as providers, we're establishing for a provider Perry laws that allow pharmacists to be reimbursed under their scope of practice by commercial and government health plans.

All of this activity sets the stage for continued pharmacist scope of practice expansion.

Furthering the adoption of <unk> science and free area.

Levering and billing for enhanced comprehensive MTM services directly or through collaborative practice agreements.

In summary, these collective efforts to empower pharmacists to practice at the top of their license and improve outcomes for patients are key factors in our optimism for strong future growth within our med wife's healthcare segment.

Kevin Thank.

Thank you Ursula.

As we stated in our press release, we have a strong pace implementation backlog for the remainder of 2021 and 2022.

To address bookings I would like to talk about our year to date progress as of July 31, since we had a couple of material contract signing slip from Q2 into early July.

Specifically I would like to highlight our med wise payer segment, which has generated bookings that are more than double what we realized during the same period last year.

For additional context, our Q3 bookings have already surpassed Q1, 2020, which was the highest booking quarter in company history, and the last pre pandemic quarter, where.

We are confident the second half and full year 2021 bookings will show healthy growth versus 2020.

He wins included.

Multi year contract renewal for MTM services, with our largest payer customer.

Continued expansion of current MTM programs with Humana and Wellcare.

Our new 2022, MTM win with 1 of the nation's largest Medicare advantage payers.

Our new contract to deliver our enhanced MTM model for employees of a regional Blue Cross Blue Shield plan.

And new enhanced MTM type programs without risking concierge provider groups.

This agreement will support patient loyalty and allow our network of pharmacies to continue to enhance clinical services through the use of our software.

This in year revenue represented 7 percentage points of growth.

Which equated to more than $21 million.

Brian.

Thanks, Kevin.

Pleased to report another quarter, showing continued improvement and solid execution by our team members.

Q2, total revenue of $82.3 million was at the high end of our guidance range and represented 7% growth versus a year ago, and 7% growth on a sequential basis versus Q1.

Non-GAAP adjusted EBITDA of $6 million represented a 7.2% margin and was right at the midpoint of our guidance range.

Turning to Q3 guidance, we expect to show continued sequential growth across both the care venture and med wide segment with the midpoint of our revenue range, representing 7% sequential growth versus Q2, and 25% year over year growth.

Note that this will be the last quarter of inorganic growth contribution from Personna codes, we anniversaried the acquisition in early October 2021.

I'd like to specifically note that we expect <unk> revenues to begin to show healthy year over year growth this quarter compared to declines in the first half of the year. This is a result of new contract implementation as well as a more balanced delivery of MTM intervention throughout 2021.

As noted in our press release, our guidance for the full year of 2021 remains unchanged with our revenue range representing growth of 13% to 20% and organic growth estimated to be in the range of 9% to 16%.

The larger than normal revenue and non-GAAP adjusted EBITDA ranges for both third quarter and full year are.

Are the reflection of a high level of ongoing sales activity concentrated in our med wide segment, including a number of large contracts that have a wide range of possible outcomes.

As highlighted on slide 10.

We had significant improvement in our cash flow from operations and free cash flow during Q2 and expect further improvement in both Q3 and Q4 we.

We expect free cash flow for 2021 to be in the range of negative $10 million as we continue to invest in R&D and sales and marketing.

With that I'll turn it back over to Cal for closing comments.

To close we are pleased with our first half performance and look forward to closing out the remainder months of 2021 on a strong note.

Operator, please open the call for Q&A.

Yeah.

Thank you and I'm, Sorry reminder, to ask a question simply press star 1 on your telephone to withdraw your question press the pound or hash key please standby, while we compile the Q&A roster.

First question comes from Sean Dodge with RBC capital markets.

Okay.

Good morning, and congratulations on the.

Good momentum in the quarter.

Maybe starting on the med wide bookings, Kevin I think you said those were up.

So far year to date, but I think there are a number of instances, where you have 1 bid, but not yet at a point, where you can put those into bookings. So maybe if you could just put some numbers around.

That and then anything you can share on timelines.

Something that.

Could also help have a lift as we get into debt.

<unk> for the year.

Large wins in flight.

On that we expect to close by the end of the third quarter.

That's driving that in year sales revenue that I referenced.

Okay and then.

On the I guess, turning to pace and it looks like on the pipeline for implementation. There continued to expand can you wrap some numbers around.

Average revenue profile to these new implementation looks like.

Hi, Sean I'll take that.

I think most notably.

The implementations that we had during the second quarter were heavily concentrated around.

Pharmacy services.

So we do.

Expect that theyre going to have a pretty meaningful impact on 2022 revenue and then see that ramping going forward.

So about a third of the 46.

Debt, we quoted in the earnings release and on the call our pharmacy related and obviously that carries the.

The.

Highest revenue opportunity for us.

Okay.

That's very helpful. Thanks again.

Our next question comes from Ryan Daniels with William Blair.

Yes.

Hey, guys. Thanks for taking the questions just a quick 1 on the delayed contracts.

<unk> been signed by the end of July does that delay that ink to green process, meaning the timing that you think youll be able to recognize revenue from those or was it merely the contract signing that got delayed.

Now Brian Thanks for the question merely just the contract signing thing summer vacations for folks that haven't been on the road for 2 years on.

Net delayed at signature a week.

Okay, Great and then can you talk a little bit more about your new remote patient monitoring solution I'm just curious maybe what the pricing is on that if you've seen demand in the market.

On a pushed you to reach out and develop a partnership there and just any thoughts around that and the potential opportunity.

Yeah sure Ryan Thanks for the question, it's Eric So that's really an add on service that we have seen interest.

And avoid hospitalization for pace participants in particular should they have COVID-19 symptoms or are discharged from the hospital with COVID-19 symptoms as a way to reduce the number of staff that need to be available to those participants.

The revenue that we have not protected anything as far as I know, we do have we did have a pilot and we have a number of large programs interested in such as you can imagine it's a major issue.

To try and get ahead of.

So.

Typical of charged.

<unk> would be in the $200 range, we get a small percent of that is really acting as a reseller.

Of the product and we have a very strong relationship with tice, who is offering the product to the paint market.

And thats per month.

Okay, Perfect and then maybe just 1 last 1.

Kelly you started out by talking about the.

Progression of the company since the IPO and you now have a variety of different offerings like <unk>.

The risk adjustment services, you do the medication adherence and E R.

Our EBITDA avoidance you have the remote patient monitoring et cetera is this also potentially opening up the opportunity to do business.

With more at risk groups, I think even talked a little bit about that some of the concierge medicine and maybe the MAA at risk providers, but it seems like you're offering now is really more robust with maybe more of a partnership type model for those NDA. So I'm curious how much.

Developing and your thoughts on the sales pipeline yes.

Youre absolutely right. In fact, we do have a couple of Acos..1 just started a couple of others who are in line. So.

Our entire <unk>.

Platform is focused debt people that are Ed financial risk.

And companies are at financial risk, So youre absolutely right on we've got a strong plan.

We're expanding beyond where we are right now.

Kevin maybe you want to just touch on how we've been able to deepen some of our relationships with existing customers that are at risk with some of the other services that we have.

I think that's a key point in driving some of our success is how the data that we have that shows our science.

Allowing us to expand MTM services, it's allowing us to expand.

Star related services in unique ways, because not only are we.

Driving metrics were really.

Impacting total cost of care.

Your point, you'll see that in pesos in Medicare advantage provider to these at risk provider groups that are now carrying similar risk.

Does that answer that question.

Alright. Our next question is from Stephanie Davis with SBB Leerink.

Thank you for taking my question guys.

Afternoon.

I heard a lot of MTN when called out in the prepared comments.

That's how I wanted to touch on the outlook.

MTM program any views on a potential extension and then maybe that risk action creates a near term conversion opportunity for MTM win that soaks up for Oh go forward solution.

Yes, I think yes.

We've had really good.

Insight from that.

Paper, we put out with all of the people that signed with us.

And.

Yes.

Actually has.

Been responded to within 2 days. So we have a meeting with the person in charge of leading charge at CMS.

The next couple of weeks.

So we've got a real good response here, but anyway. It's what we're look what we're trying to do is get them to expand and expand the program.

And actually to focus the program more on it.

Selfishly more on the types of things that we're doing with the science because we've got great result.

And so now we're at the top of CMS and we have besides what happened in New Jersey. Medicaid also in addition to the CMS up besides that we now have about 6 other states that are.

<unk>.

Copying.

On to speak.

What we've done in New Jersey, and we have another 6 will told that are in the process. So we'll see how that takes on that wall.

Improve our ability to as the Air force and the group debt.

Our University certified pharmacist so.

We think we've got a big opportunity to take the MTM to expanded embedded in Medicare and also to take it into all these other states with Medicaid and there's you know.

<unk> $40.50 million people on Medicaid so.

Yeah.

It's a good opportunity.

Stephanie on you have to size I will now continue I was just going to add to that just a little bit that day.

Back to your sort of preference is a question of the contract wins that large payer contract renewal that we had as well as the 2022 win with a large national payer are directly related to our ability to add the science into the traditional MTM program. So it's certainly driving results outside of MTN.

So if you guys had to talk about it.

What kind of risk profile on <unk>.

T M program. It sounds like you feel very confident and extension.

If on the.

Calvin takeaway correctly.

Well.

We can answer that better on a couple of weeks when we meet with ourselves.

I don't want them.

I don't know.

I don't know what goes through the Academy, we met with them 3 months ago right. After our latest earnings call and that's when they told us that either regulatory change or legislative change.

We would need to be.

Sometimes the consensus would need to happen. So that's why we went to consensus routes and we will see that impactful I mean I was very encouraged that within 2 days, we've contacted so but I don't know, we will see but rather whether that does or does not happen.

We're more excited frankly about what Kevin just said, we're using the med wise to partner with all of those people who are the largest provider of freestanding MTM and the country in most of the contracts that we have are interested in.

Spanning they won't do something cool and helpful. So that's and then when you add the Medicaid to that it's just we've got a tremendous ramp ahead of US right now and Stephanie I think the most exciting thing right now is that we're publishing the result.

That should be coming out in October and in that.

Peer reviewed journal at 3 specific articles debt will be available on the results of our intervention.

On the MTF.

We've got a very robust 3 articles on what we did what the pharmacist did.

What is it all about what are the farmers to do the second 1 what kind of interventions and number 3 was what was the specific outcomes, we add on and that'll be in our specialty.

Special channel.

Understood the opportunities either way and on <unk> and <unk>.

Just want a quick 1 for Brian I don't want to leave them out just thinking about the FY 'twenty 1 outlook how much of it at this point is dependent on timing of these new wins ramping.

Ramping up or do you feel like with this giant amount of what we just had it pretty slow day risks given the year day paid.

Stephanie I think you heard Kevin probably say, we're about 60% sold.

On the on the target as of the end of July so.

Still work to be done through the end of the third quarter, but.

We've got a tremendous pipeline debt.

Yes.

We're able to execute.

It should be in a good position to close out the year.

All right. Thanks, guys. Appreciate it thanks guys. Thank you.

Our next question comes from Sean Wieland with Piper Sandler.

Hi, Thanks excuse me. Thank you good morning.

And just to follow up hi, just to follow up on <unk> line of questioning with MTM.

Can you help us interpret the data that the results that CMS published earlier this week on the MTM program comparing them across all regions.

Yes.

On the thing that.

CMS.

Well the reason, we met with them because they.

They homogenized our interventions of cost 305000 people, which are the people we were assigned.

And received all of their a b and D data every month, but we risk our strategy was to risk stratify them and find out who had a risk score of 15 or higher and it came up to about 42000 people that we.

In the first few years.

And we had a tremendous we stayed in the $128 million on on those people on those folks in.

In the first 3 years so.

When you took that over the 305.

It's not it doesn't hit the 2% Mark but when you look at it.

Is the plan as it was.

As presented in our business plan to them, we will not be leaning over all of these people will be intervening on the ones that are at risk. So that's kind of the disconnect there.

The study was basically.

The way they are actuaries looked at it everybody was.

Oh.

On modularized over the 3 over the total.

Denominator.

And our.

Analytics, we're really just over the people we intervened on what were the results. So that was the big the big disconnect here.

And how well is among the CMS and other participants are as that disconnect understood.

Well.

Ah.

They read the papers the original.

Proposal back in 2015, and 16 that we submitted with them and they knew what it was what we were doing.

I guess somewhere along the 5 years I've got that.

<unk> come out so that's why we met with them 3 months ago, and so I have to say and that's when that's when we were told well.

We have expanded or continue it.

It will have to go through the different process. So that's why we took this process. So we will have on another opportunity to explain it to the Gucci.

A couple of weeks, so we'll see where it goes.

Okay.

And then what.

1 for Brian on the visibility into the back half the ramp into the back half of the year.

Can you comment on what percent visibility you have on your full year revenue is now we're halfway through the year.

Based on the bookings and even the vendor of choice.

Designations, you've got yeah, yes, Sean.

I would say.

Were north of 95% at this point.

To the midpoint or high end low end to the midpoint.

Got it alright, thanks, so much sanction.

Thank you. Our next question comes from David Grossman with Stifel.

Hi, David Good morning.

Good morning, sorry.

David.

So I wanted to just to follow up again some of the commentary about the bookings the new bookings.

You've talked about it sounds like there's been a lot of activity.

Year to date.

Perhaps you could just give us some context for that in terms of.

Maybe dimension the potential <unk> or anything that would give us a sense of.

How meaningful those may be in terms of contributing to revenue growth I know 1 was a renewal and expansion of scope as well. So so any context would be helpful.

Yeah sure David I would say.

That the Youre right 1 of the ones that we were excited about with our core contract renewal. It does include some expansion in that it's a long standing customer that we continue to grow our services with the remainder are our new and so the revenue that we're adding sort of in year.

Is tends to be at this point in the year about half of what overall would be for the following year. So you end up with with some good growth set up in 2022 already.

What we've said, though is we'll provide a little bit more detail around bookings by the end of the third quarter to give you some more insight so more on that to come.

Yes, just to be clear David fee.

The big renewal that Kevin was just referencing and we don't include renewals in our bookings numbers. So the expansion of that will be included.

But it does not include renewals.

Yes.

On the.

<unk>.

I guess the balance of what's left.

40%. So does that mean that we are about $85 million of in year.

Sure.

On bookings that we have to deliver on the back half of the year to the midpoint to just to make sure I understand on the amount.

That is correct.

Okay, and again is there any just remind us any context of.

Historically.

On the end of July to December as debt.

Typical achievements that the company has seen over the past I, just don't remember how to how to frame that number.

So that the number is supported by the pipeline that we have and with the growth that we've had recently relative to.

The number of different clients that we work with and the consolidation of.

Some uptick in spending that we see from payers for quality improvement ratings.

It does align.

Got it.

And then just back to I know, there's already been a bunch of questions on.

Yes channel and CMS, but.

Maybe.

Kelly you can help us understand.

Their objective to save 2%.

On the entire population and that's where the disconnect is and you're pointing out that the <unk>.

That you are being you can save 2 percentage or.

Even if that's not reconcilable.

When youre going out to the commercial markets, because I assume youre really trying to market, what you've been able to achieve with CMS to these commercial clients.

It's a relevant data point to them or again are they looking across their entire population so that telecom et cetera.

Well.

Right.

The 2% was across the whole population through all of the competitors.

And.

And so when we market it now.

We tell them exactly what the program is for example, so in New Jersey, we had $1.8 million Medicaid patient that we risk stratify.

As we were working through this with some people with the state to state who would make any sense.

There's about 400000.

Net risk score sufficient enough to be intervened upon.

It depends on the cohort so in a in a commercial population to your point, we see anywhere in the single digits typically because as they usually had some younger group.

The odor.

Sicker people, we see.

In the teens to 20% typically that are.

The low hanging fruit for us I mean, sometimes people have.

Just have 2 drugs have a high risk most of the time they are on many many medications with many comorbidities.

Right so.

Just to be clear, then when youre going into the commercial markets.

Sounds like they are satisfied with.

Savings on the individual level as opposed to the population level at least based on what you've seen so far.

What we do is we just before we do anything we asked.

You get a few to their patient base and then we run it through the system and come back and tell them Here's here's the number of people, we have a high risk and we convert that into quality of life, but also into dollars. So that's kind of how we that's our model of how we sell this stuff.

Got it and just 1 last thing I think in the past you talked about.

Some newer ways to go to market and clothing.

Using consultants to.

Market to partners that may work with older installations.

It would be better suited for your product.

I think you also talked a little bit about bundling, Tim with your MTM customers just to provide a taste of.

The savings that they could achieve are those still pretty nascent efforts or anything to report on either of those.

Yes, I think to the second point as far as bundling the MTM science with MTN and that's what's driving.

A lot of our success.

So I think thats been a huge win for us from the consultant front, it's given us an opportunity to.

Tessa markets before we spend too much time and energy and resources. So a good example of that is the self insured employer market, where we brought in a consultant to help create some relationships with benefit brokers and consultants.

Ted trigger some initial wins and so now we've got some additional volume.

<unk> ftes that are helping support that effort in expanding that.

Right and just on that bundling point, Kevin So what is the pricing like what are the what are the economics to when you do bundle.

Hey, David I'll take that 1.

So so the typical MTM program, if youre bundling MTM with MTM.

It's going to be our standard pricing and then for the population we're addressing with the MTM solution. It's our standard MTN pricing for that group. So.

It's.

We use the same pricing model that we've been using but just over debt.

Populations that we're managing with each 1 of those solutions.

Got it alright, great. Thanks, very much thank you.

Thank you and as a reminder, if you have a question simply press star 1 on your telephone.

Our next question is from Vikram, I guess, how about Butler with RV.

W. Baird sorry go ahead.

Yeah. Thanks, Good morning, Hey, I was curious could you just remind us what youre on guidance as soon as far as pace enrollment trends through the back half of this year and do you see the potential for any changes there just based on recent case volumes and anything that youre seeing in the market share.

So the original guidance assumes that we get to just north of 1% per month on a sequential basis.

Exiting the second quarter, we're at about 1% per month, so trending nicely against our expectations in fact.

The second quarter were a little bit ahead of where we where we plan to be we didn't think we were going to rebound as quickly as we did so.

Getting into the second half of the year things are.

In line with with what we expected.

Yeah, absolutely. So we've increased field based staff and we've talked about that.

Previously.

In our core markets as far as.

Pharmacy.

Payers as well as the care bench in the PE side of the business.

So we continue to to hire folks that have some experience in that space from existing relationships.

And that has gone well, so that the payer side of or the field base side of things.

That's been our strategy. In addition, we've got an in house sales team that does or.

Our community pharmacy sales.

<unk>.

Historically and so we have 3 teams based in California that provide those services. We've recently hired started to hire a fourth team on that will work out of a different location and help support some of their in house sales opportunities for some of our other product lines and that can be anywhere from.

Some of our.

Business deals related to hospitals, if it's our dose B segment, but also some lead generation for our field based teams.

So that's really the growth and then the target is really to try to get to a total of about 50 by the end of the year.

Okay, great. Thank you.

Thank you and ladies and gentlemen, this concludes our Q&A session and program for today. Thank you for your participation and you may now disconnect have a wonderful day.

Q2 2021 Tabula Rasa HealthCare Inc Earnings Call

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