Tabula Rasa HealthCare, Inc.
Q1 2021 Earnings Call Transcript

Published: 9 May 2021

[Operator:]

Good day and thank you for standing by. Welcome to the Q1 2021 Tabula Rasa HealthCare, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin Dill Corporate Counsel. Please go ahead.

[Kevin Dill:]

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 health care 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. Now, I'll turn the call over to Dr. Calvin Knowlton, CEO, Chairman and Founder of Tabula Rasa Healthcare.

[Calvin Knowlton:]

Thank you, Kevin. Greetings, investors and analysts, thanks for joining our earnings call for the first quarter of 2021. After my opening remarks, you will hear updates from Dr. Orsula Knowlton covering important PACE industry developments; Dr. Kevin Boesen on Sales; and Mr. Brian Adams, who will cover our financial results. Also with us today and available to take questions is our newest leadership addition Dr. Celynda Tadlock, who is our Chief Client Officer and EVP of Pharmacy Benefit Solutions. As a reminder this conference call and webcast is accomplished by a PowerPoint presentation available at the IR section of our website and I would encourage you to download the slides to follow along with our prepared remarks. Let me begin by thanking our team members for an incredible first quarter of recovery as we emerge from the COVID-19 pandemic. Thank you, team. In this section, I want to underscore the fact that we are passionately pioneering a new digital frontier, the safe use of medication with MedWise. We are taking the drug disposition sciences from academic research to real-world application for people with chronic conditions who take multiple medications. Today, I will cover three points. First, our quality outcomes persist. We continue to publish in peer-reviewed journals, evidence that interventions driven by MedWise and the derivative MedWise Risk Score reduce health care costs.

[Orsula Knowlton:]

Important points, Cal. Thank you. I'd like to start by thanking our clients for their amazing efforts to vaccinate in some cases up to 90% of their participants along with a good percent of their staff. It's incredible to witness their unwavering leadership and focus on the future. At Tabula Rasa, we believe that elders deserve to lead fulfilling lives on their own terms. Our mission and our passion is to help the elderly age in place with dignity and independence. That's why we created the most comprehensive and integrated suite of PACE solutions and services available. We provide the support PACE administrators need to operate their programs effectively, compassionately and successfully and we are seeing positive signs through our PACE census of a return to pre-COVID organic growth or better. Turning to catalyzing policy, the first four months of 2021 have been extremely active and encouraging from the federal policy perspective as the new administration has placed an emphasis on seniors aging in place. This of course was in response to the high death rates in the nursing home population. Industry sources estimate that there are 2.2 million PACE eligible individuals across the country today, but the current market penetration is less than 3%.

[Kevin Boesen:]

Thanks, Orsula. I'd like to provide an update on our sales activities to date the continued growth of the sales team and pipeline and progress towards our 2021 revenue growth target. I'm happy to report that first quarter sales were on target with our internal expectations. Our payer sales were up 41% compared to Q1 of last year and accounted for 62% of first quarter bookings. Additionally, our payer pipeline as of the end of April is up 14% since the start of the year. As we publish more outcome data like the studies presented by Dr. Cal Knowlton, interest in MedWise continues to expand to new models of care. One example is a new contract signed this year with Signify Health. Beginning in Q3, Signify Health pharmacists will utilize our MedWise platform to prevent hospital readmissions in support of their episodes of CARES solutions. Signify Health recognized MedWise as the only technology proven to predict and prevent rehospitalizations caused by adverse drug events. Before I address our community pharmacy sales, I would like to say that we are inspired by community pharmacists across the United States during the COVID-19 pandemic. Our 15,000-plus community pharmacy partners play a critical role in managing COVID-19 and TRHC is proud to have supported their efforts by providing COVID-19 test kits state and federal vaccination database integrations, contactless vaccine registration, and MedWise Medication Risk Mitigation Solutions for COVID-19 treatments. Community pharmacy sales have grown significantly after COVID related reductions in 2020. Community pharmacy bookings during Q1 were up 20% compared to Q4 2020 and up 66 million compared to Q3 2020. In addition to the solutions mentioned sales growth is being fueled by the launch of MedWise for community pharmacies as well as our partnership with eHealth to support enrollment for the millions of Medicare patients that use prescribed wellness pharmacies. We are optimistic about continued growth throughout 2021 with the pending launch of a suite of solutions for 5000 McKesson Health Mart pharmacies. In the PACE market, as Dr. Orsula Knowlton discussed, we are also seeing signs of recovery with multiple service offerings. Additionally, our pharmacy benefit services solution Pharmastar acquired in 2020 is driving new cross-sell opportunities in both PACE and non-PACE markets. Pharmastar and our PeakTPA offering now support three Medicare Advantage start-ups with two of the plans also using our MedWise MTM solutions. Last, I'll address our progress towards our 2021 revenue target. Our revenue target for new sales is unchanged at effectively $21 million. As of the first quarter, we have closed approximately one quarter of this target which is consistent with our internal projections. We expect to close a large part of the remaining gap during the second and third quarter of 2021 and my confidence remains high based on our pipeline and record number of requests for proposals in the first quarter. This increase in pipeline and RFPs is directly linked to the growth of the sales team that is on schedule for 2021. We have continued to hire experienced and seasoned sales representatives growing the business development team by 40% to a total of 40. I'll now turn it over to Brian.

[Brian Adams:]

Thanks Kevin. As you can tell from Cal Orsula and Kevin's comments, we remain very bullish on the potential for Tabula Rasa this year. In addition to guidance, I'm going to focus my commentary around two key areas influencing our growth prospects for 2021. PACE census trends and MedWise sales progress. First, as we have been disclosing throughout the year pace enrollment has continued to improve each month as more participants get vaccinated and PACE centers begin to reopen. In addition, PACE operators have adapted well to serving more people in their homes since the pandemic began and are now shifting their focus to growth. While our census during the first quarter was essentially flat with Q4 2020 in our PACE Pharmacy services business, we saw approximately 1% net enrollment in both March and April on a sequential basis, the strongest consecutive two-month period since the pandemic began. In addition, our preliminary enrollment numbers for May suggest a continuation of this positive trend with 1% sequential growth. These growth rates are slightly ahead of our expectations at this point in the year, an encouraging sign that pace growth rates may return quicker than we have forecasted. Second, our MedWise win rate continues to accelerate with much of the success in the payer market, where we are concentrating our investment from a sales and marketing perspective. I'll remind you that we have adjusted our approach to our MTM business this year, which was reflected in our guidance. Rather than having an end of Q1 and Q2 as the strongest periods during the year as we've experienced in the past, we have taken a more balanced approach to delivering clinical intervention to better manage staffing and enhance profitability. On the surface during Q1 and Q2 this year, the progress Kevin's team has made on the sales front may not be as evident as we are rebalancing MTM workload and successfully backfilling the previously disclosed client attrition from last year. We have multimillion-dollar contract expansions with several national payers' new clients beginning services and an unexpected increase in demand for our support from payers and pharmacies due to the continued focus from pharmacies on the vaccine rollout. We believe all of these factors will drive quarterly sequential revenue growth in the MedWise division this year. In addition to the growth in bookings, payer programs that experienced COVID related delays in 2020 are off to a very promising start. Revenue contributions from new agreements signed in 2020 with United HealthCare, Humana and WellCare increased 10 times in the first quarter of 2021 versus a year ago, placing us in a potentially favorable position versus our initial projections. Last, our full year guidance remains unchanged and we are introducing second quarter guidance as follows. Revenue in the range of $80.5 to $82.5 million, which represents growth of 5% to 7% compared to a year ago and sequential growth of 5% to 8%. And which is consistent with the quarterly revenue progression we projected with our full year guidance. Adjusted EBITDA in the range of $5.5 million to $6.5 million, which represents margin of 6.8% to 7.9% and a significant improvement as compared to the first quarter of 2021 due to higher revenue across our two major operating segments and disciplined cost management. With that, I will turn it over to Dr. Knowlton for closing comments. Cal?

[Calvin Knowlton:]

Thank you, Brian. To close, we are encouraged by the early signs of 2021 across our key end markets all bolstered by the tailwind of our unique MedWise applications, which are yielding solid outcomes and are aligned with our novel value-based contracting. Operator, please open the call for Q&A.

[Operator:]

Thank you. Our first question comes from Sean Dodge with RBC Capital Markets. Your line is open.

[Sean Dodge:]

Thanks. Good morning. Maybe starting on MedWise. It looks like, bookings during the quarter were very strong. Your overall revenue guidance obviously assumes quite a bit of acceleration in MedWise revenue. It sounds like you're tracking toward that. But could you just kind of walk us through the progress you're making there? And any changes in your level of confidence in those MedWise targets for the year?

[Kevin Dill:]

Sean, I'll take that one. Thanks for joining the call this morning. As we said, on the call in my remarks is, we're confident. The hiring that we've done the pipeline that we have in place does support where we're going to be in the second half of the year.

[Sean Dodge:]

Okay. And then I guess Kevin and Cal, you both mentioned the journal publications and raising awareness of adverse drug events just kind of more broadly, you've significantly ramped your efforts around that over the last 18 months. Can you maybe talk about the impact you're seeing these journal publications have on the sales process being able to put this type of data these types of outcomes validated into the hands of prospective clients. How meaningfully is that shifting the conversations you're having now with them?

[Calvin Knowlton:]

Yes Sean that's a great question as well. And I think that's one of the things that we've been really excited about as we've come out of the pandemic and really focus on COVID conversations is really what does the future look like and what's important to health plans. And so having some critical studies published this last year that validate our hospital reductions further cost reductions if pharmacogenomics is involved. And then, really the recent article that looked at the association between risk orders and premature death has really heightened in awareness around MTM programs and adherence based programs and how ours can really be differentiated. Instead of just looking at chasing certain metrics can you have meaningful improvement? And so, I think when you see the health plans really looking at that and seeing, how we've integrated as a company and what the differentiators really are. Those studies are really driving some conversations and a lot of momentum.

[Sean Dodge:]

The -- so maybe just kind of tying that to the MedWise bookings. So a 41% increase from payers year-on-year in the first quarter. Can you attribute that? Is that just having a bigger sales force and just kind of putting more kind of grid or wood behind it or is this you think really kind of a lift from these broader awareness and maybe kind of the industry approaching a little bit more of a tipping point.

[Calvin Knowlton:]

I think it's both. We've done a great job recruiting and the sales team that we have is fantastic. We've been able to bring in some really top-notch experienced health care professional sales representatives. So that's certainly accelerating things in addition to the research.

[Sean Dodge:]

Okay. Great. Thanks again.

[Calvin Knowlton:]

Thanks, Sean.

[Operator:]

Thank you. Our next question comes from Ryan Daniels with William Blair. Your line is open.

[Jared Haase:]

This is Jared Haase for Ryan. Thanks for taking the question. Brian, I guess this is maybe one for you just on the guidance. Just curious, how you would sort of characterize your level of visibility at this point. Obviously, it sounds like from everything you guys mentioned. Everything thus far it has been largely going kind of in line with expectations. The numbers in Q1 were mostly in line with guidance. But it sounds like PACE is maybe enrollments maybe playing out a bit better than what was originally contemplated when you gave the guidance. So, just trying to get a sense of how you're thinking about visibility and sort of the potential swing factors related to sort of maintaining your outlook for this year?

[Brian Adams:]

Thanks, Jared. I would say in general outlook remains unchanged. We do see some encouraging data coming out of pace slightly ahead of where we expected to be at this point during the year. I think, the numbers that we're seeing are more reflective of enrollment rates on the second half of the year, so maybe a slight upside on the PACE side. Kevin and his team have been able to close successfully a quarter of the sales target, which is right in line with where we expected to be. So I don't see too many material deviations from the initial guidance that we gave in February and the assumptions associated with that.

[Kevin Boesen:]

If I could just add one thing to that to also that we had our largest organic growth month in PACE last month. And as of this morning that's eclipsed by another 10% on top of it. So it's -- there's no question. The trajectory there is three months in a row now 10% growth over each one on organic. So, we are pretty confident of what's happening there.

[Jared Haase:]

Okay. That's great to hear. And Kevin, maybe if I could follow-up on a question related to your prepared remarks. I think you mentioned the business development team grew by 40%. Just based on the bookings activity in MedWise, I'm guessing those are mostly oriented around that segment versus the Pace segment. But just any color you can kind of give us as far as are those generally more senior level sales executives that are kind of ramped up pretty quickly here. Obviously, you guys have expressed a lot of confidence in being able to hit the new sales goals over the next couple of quarters. So, I'm guessing that's the case. But just any more flavor you can give us around the composition of those two hires and level of productivity and things like that?

[Brian Adams:]

Yes. Thanks. No, you're correct. That's the target that we went after as far as growing the sales team, our experienced executives primarily in the payer space that's where we see a lot of growth opportunity and that's where we're seeing the acceleration.

[Operator:]

Thank you. Our next question comes from Sean Wieland with Piper Sandler. Your line is now open.

[Sean Wieland:]

Thank you. Good morning. You called out the payer market as -- my words not yours an inflection point that you're seeing there. I was just -- could you dig into that a little deeper specifically within the payer market what markets -- what channels within the payer market? And is there something that you can put your finger on this causing that inflection point?

[Calvin Knowlton:]

I think great question. Similar to what I've said before, I think the payer market coming out of the singular focus on COVID, is really looking at health outcomes reductions in total cost of care hospitalization. And I think that's where our differentiators are. So, I think that's driving it. We're seeing that across all of the core markets that we're really in Medicare, Medicaid self-insured employers. So, we're seeing that universally.

[Sean Wieland:]

And to ask about the Signify deal. We're seeing a lot of these high growth what we call primary care 2.0 businesses at risk primary care models seem to be growing like a weed. Maybe a comment on Signify, and then more broadly speaking for these new models of high-growth primary care, do you have any strategy for executing in that market?

[Calvin Knowlton:]

I think that's a great point. I think it aligns nicely with our value proposition our ability to provide value-based contracting. And so, with that Signify health. I mean their focus and their benefit is going to be derived from our ability to help them prevent rehospitalizations and the focus on doing that through preventing adverse drug events is something that nobody else can do. So that's going to start at a pretty good size and we do expect that to escalate quickly. And to your point I mean there's other folks within that space that sales targets for us.

[Sean Wieland:]

Okay. Thank you very much.

[Operator:]

Thank you. Our next question comes from Stephanie Davis with SVB Leerink. Your line is now open.

[Stephanie Davis:]

Hey guys. Thank you for taking my questions and congrats on the payer traction you've been getting this quarter. So, I've got a 2-parter on that. First ones for Kevin. Next one is for Brian. Kevin, I'd love to hear a little bit more about the genesis of the new sales to payers. How much of that is a function of certain products banding traction with the payers in the post coped world versus some of the market research studies and thought leadership campaigns you highlighted we chatted? And how much of it is just a function of some of the relationships being brought in by your new hires?

[Kevin Boesen:]

Yes. Stephanie, I think those are really the key three drivers. The relationships definitely help in terms of what we were focusing on bringing in some folks. And so that's accelerated the sales cycle for sure. But as those folks go in the ability to really have the proven outcomes in an environment where people are really focused on the quality of the care. And so, I think all those things have really come together nicely and that's driving a lot of the results.

[Calvin Knowlton:]

Steph, if I could add one thing. This is Cal. We had a call yesterday with one of these types of groups. And at the end of the call the gentleman said to us the medical directors to go. So, you're not pushing the risk down to the physicians then, right? You guys are actually taking the risk and we said yes, we're taking the risk. As long as we have a certain amount of uptake over recommendations. He said, well that's unique. That everybody have been talking to that give me this value-based song and dance. And then they say at the end, yes well, we're not taking risk. It goes back to the physicians. So, I think it's really not of what we're doing.

[Stephanie Davis:]

Understood. It's compelling for the payers in that one. Now Brian because you've been quiet in this question and hearing the new PACE of wins, I wanted to hear how that compares to your new wins assumptions baked in the guidance. Since on the low end you said before it doesn't bake in any new wins it sounds like you've already gotten that. And the midpoint so, we assume in line productivity with last year. Would it be safe to say then that you're at least trending at or above the midpoint for this year-to-date?

[Brian Adams:]

Thank you for the question Stephanie. I appreciate it. Yes, I think it's the bogey that we had out there for Kevin and the sales team would put us right at the midpoint. So, I think we're trending nicely towards that midpoint right now. I think we've got a lot of nice tailwinds. As Cal mentioned PACE sets continues to improve which is exciting to see. The traction on the sales side is great. Cross-selling continues to accelerate between the CareVention businesses. So there's a lot of very positive activity. And I think at this point I'm comfortable saying we're trending nicely towards that midpoint.

[Stephanie Davis:]

That is awesome. Thanks guys, keep the good work.

[Brian Adams:]

Thanks Steph.

[Operator:]

Thank you. Our next question comes from David Larsen with BTIG. Your line is now open.

[David Larsen:]

Hi, thanks for taking the question. Do you have any -- or can you expand a little bit on the MedWise Healthcare revenue trend down year-over-year about 13%. Any comments on like med safety? I would think with like the vaccine deployment and vaccination efforts med safety demand would increase not decline. Just any color there would be very helpful? Thanks.

[Brian Adams:]

Sure. Thanks, David for the question. I'll start and then the team can jump in. There's really two factors at the beginning of the year that we previously disclosed. One, us being the attrition that we had coming into the year with a rather large client, that is a headwind. The second, is that we are taking a more balanced approach this year to the delivery of our MTM services. So in years past, we've had a spike at the end of the first quarter and into the second quarter. We are looking at that a little bit differently this year to better manage staffing and profitability. So we've rebalanced the workload and pushed some of that out from the first quarter, which is why you're seeing a bit of a dip and it's not highlighting the success that Kevin and the team are having on the sales front. But it is in fact there. And so you had those two other pieces that are really offsetting all the good things that are happening on the payer side.

[Q – David Larsen:]

That's very helpful. Thanks. And then why was there attrition? Why did that contract evaporate at the start of the year? And then what would the growth have been if we exclude that one contract?

[Brian Adams:]

I can talk to you about the growth that we would have seen and then maybe Kevin could jump in on CVS. The growth that we would have seen if you normalized everything and we didn't have the attrition would have been between 5% to 10% on the payer side for this first quarter.

[Kevin Dill:]

Yes. And I think relative to the client attrition that Brian is relating to referring to. That is CVS that we've disclosed previously. And that is a -- just a different direction that CVS took. We still have a small agreement in place with them. So nothing new on that.

[Brian Adams:]

David, one thing you brought up that I just want to touch on is, the vaccine rollout and how that's impacting our business. We are seeing some favorable activity as it relates to that because many of the pharmacies that typically would deliver components of these clinical pharmacy programs for payers are tied up with supporting the vaccine rollout. And so that has put us in a position where many of the payers and even pharmacies in some case are turning to us to help support. So that could be a real favorable tailwind going into the second half of the year.

[Q – David Larsen:]

Okay. Great. Thanks very much. Appreciate it.

[Brian Adams:]

Sure.

[Operator:]

Thank you. Our next question comes from David Grossman with Stifel. Your line is now open.

[David Grossman:]

Thank you. Maybe go back to some of the prepared remarks, Cal, if I understood it right you were talking about the CMS pilot part for EMTM. And if we go back to last year, in the fall there was a study out that was fairly pessimistic about the outcome of the pilot to date. But it sounds like if I'm understanding your comments right that you've had some follow-up conversations with them to share your own data. Could you just expand on that and what the response was? And if I'm understanding this correctly, how that may change the trajectory of where we are with that pilot?

[Calvin Knowlton:]

Sure, Dave. Thanks for the question. We had when we applied for this when we were selected back in 2015, it was full disclosure of what we do. What we do is we take a large cohort, we risk stratify it and find out the people that are at risk for medication safety problems. And that's the people on whom we intervene. CMS knew that, the Northern Plains Alliance to the cost programs, obviously knew that. And -- but people who -- the ones who didn't know where the actuaries that came at the end to do the analysis. And what they did on the analysis in our group they looked at all 305,000 people. Well, the effect that we did and they're looking for a 2% change in medical spend. The effect that we did had a change it was under 2% because they spread it across the whole 305,000 people instead of looking at the 40,000 people that we intervened upon, if you were they were high-risk on what we can work on. We will explain that to the people at CMS they recall that that's what their recollection was. And then we said to them look we have three peer-reviewed papers that we want -- we're ready to publish. But our results are you going to stop us from publishing it? Because we want publishing, the Blue Cross programs want them published. And they said, no you can publish them. So they -- and that's the same model. That's the exact same model we're doing with the Medicaid program. Same model that New Jersey has $1.8 million. We're not going to deal with $1.8 million Medicaid. We're going to risk stratify and find the top probably mid-teens percent that our risk were above 14 and that's the ones we're going to intervene on along with the local community pharmacies. And that's the -- how we want to propagate throughout the country and all Medicaid program. So we're very clear on what we're doing, somehow got lost in the translation and they homogenized it over the whole 305,000. And so now we had to go and straighten them out and now they get it. So that's kind of the story.

[David Grossman:]

So what is the outcome? As a result of you kind of pointing this out to them in terms of where the pilot is going and what the opportunity may be more near-term?

[Calvin Knowlton:]

Well, the best outcome is that we're going to -- we're publishing this stuff. That's really the best outcome because we can use this model with all sorts of other people. The CMS does have -- or CMMI does have an option to expand or continue certain programs as they choose to. And one of the things that we argued with them and why we got this consultant group involved. They said look, we've made a profound impact on people's lives this is 40,000 peoples' lives. And we think it's unethical to just drop it now, at least for the people in who we intervene. And we would like to see expanded it to include that or extend it to include them. We just think it's unconscionable when you've helped people. And our -- we showed them in the graphs. We have a lot of stats on this. But basically when we do a medication safety review, the impact lasts for about six months. And then they get back up to where they were. And the reason is because they're seeing a lot of docs along the way and things are getting changed and we're intervening retrospectively. The contrast to that is in PACE where we intervenes prospectively before every medication is taken. So we get like a 14 to 1 ROE there. But in the EMTM it's about a 4 to 5 ROI because it's retrospective. So our goal is -- our long-term goal is to do everything prospectively using local community pharmacists as the ground force not to the Air Force. And then you'll see a lot better results that way. But that's going to take a while, we understand that. But anyway that's my best effort trying to explain it. I hope that's helpful.

[David Grossman:]

Right. No it is. Thank you very much for that. Maybe if I could just transition to. I think there was a question about -- earlier about just the pace of revenue growth accelerating in the back half of the year. So Brian you talked about rebalancing your MTM delivery model in terms of more evenly pacing it through the course of the year. So can you now quantify just how much impact that's having on growth in the first half versus the second half because ordinarily it sounds like a lot of that revenue would have come in the first half? And it may be skewing the comparison. So I don't know if you can somehow quantify that for us or sites for us. So we know how much of an impact that may have on the back half of the year just by virtue of this rebalancing effort?

[Brian Adams:]

Yeah. David, I would say that the most exaggerated quarter is Q2. That's where we have historically seen the largest bump in revenue related to completion of comprehensive medication reviews. And so I think you're going to see a more gradual sequential growth going from Q1 to Q2, 3% to 4% in the high single-digit range probably on a sequential quarter-over-quarter basis versus what you saw in previous years where Q2 was a real significant jump up and then a step down in the following two quarters. So that's the quarter where you will see the most impact from a comparative standpoint.

[David Grossman:]

But doesn't that get spread into the third and fourth quarter?

[Brian Adams:]

Some of it will. Yes. Some of it will get spread into the third and fourth quarter. That's right.

[David Grossman:]

And that's what I guess I'm asking is how much -- can you give us a sense of how much that may be in terms of revenue?

[Brian Adams:]

So I wouldn't necessarily quantify it from that perspective. I would just assume if you're trying to look in terms of modeling that you've got this gradual sequential growth quarter-over-quarter because there is some -- the attrition that we talked about and some other that are underlying those assumptions. So…

[David Grossman:]

Got it. Okay, good. I got it. And then just one last one if I could. So your PACE numbers if I understood is that you were up month-to-month I guess March, April and you're expecting to be up again in May. And I believe the census data is down modestly if I'm remembering right. So I don't know, if you can speak to that as to why your results are different. Is it just that you're dealing with the bigger organizations or maybe some of the newer stuff coming on that they actually started writing? It's actually started to ramp. Just curious if you have any insight into why your data is a little bit better than theirs?

[Calvin Knowlton:]

David, I'm going to let Orsula give you the real answer but I just would give you a footnote ahead of time that. We have -- PACE admissions come in the first week of every month. That's it. CMS allows you to admit people for just a few days after the month. And then it's not like as long-term care where you can go into the nursing them any time you want. So we are -- we have firm numbers actually for May right now. And it is what I said it was. It's much higher even than it was in the last two months. Orsula?

[Orsula Knowlton:]

Right. So we've had so many expansion locations and start-up organizations that even started last year that have had to postpone or reduce their expectations as far as growth. And we're really seeing the effects of that along with having added three programs in the first quarter and having numerous contracts that we expect of existing clients that will fuel our organic growth and new start-up.

[Kevin Dill:]

And just one thing to add to that David would be that, we have a high concentration of programs in California, which typically are enrolling a much larger percentage of Medicaid-only members and those are not reflected in the figures. So those programs are growing quite rapidly. So just -- it's an additional data point for you.

[Orsula Knowlton:]

Brian?

[Brian Adams:]

Great. Thank you.

[Calvin Knowlton:]

Thank you David.

[Orsula Knowlton:]

Thank you.

[Operator:]

Thank you. And this concludes today's conference call. Thank you for participating. You may now disconnect.

[Calvin Knowlton:]

Thank you.