Tabula Rasa HealthCare Inc (TRHC) 2021 Q2 法說會逐字稿

Good day. Welcome to the Second Quarter 2021 Tabula Rasa HealthCare, Inc. Earnings Conference Call. Please be advised that today's conference is being recorded. (Operator Instructions)

It is my pleasure to hand the conference over to Kevin Dill. 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 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.

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

Thank you. Greetings, and thank you all for joining our call today. I would like to start with some perspective on our company as we approach the 5-year anniversary of our IPO in October.

In 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 3.5x. Since our IPO, even with the COVID headwinds that slowed our growth, the TRHC CAGR over these 5 years is 29%. This occurred through a combination of strong organic growth supplemented by strategic acquisitions. These tailwinds 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 MedWise segment.

The continued strong recovery in PACE and our CareVention 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 CareVention HealthCare segment with PACE enrollment returning to pre-pandemic levels in recent months, and all of our key metrics moving in a positive direction. Within CareVention, our year-over-year organic growth improved to 13% during the second quarter versus 6% during the first quarter of 2021.

Turning to our MedWise segment. Our #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 Kovac to lead our integrated MedWise business. Miss Kovac has a wide range of C-level experience in the payer PBM Pharmacy and Pharmaworld, most recently at UnitedHealthcare Group, making her an ideal candidate to lead our MedWise segment. We are excited about the positive impact she has had already and will have in the coming quarters and years as she settled into her new role at TRHC. 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 MedWise solutions 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 MedWise payer segment as compared to a year ago.

I'm now going to turn it over to Orsula, who is 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 TRHC and our MedWise segment specifically for years to come. Orsula?

Thanks, Cal. Last quarter, we talked about all the exciting developments impacting PACE in our CareVention HealthCare segment. After a few brief PACE comments this time, I will focus on our MedWise 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 and 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 PACE participants in the state in the coming years, with the vast majority of this expansion this year and in 2022. In California, Assembly Bill 540 will require the state to include information about PACE in medical enrollment forms, along with an outreach program to people who may be eligible for PACE. By 2030, an estimated 1 in 10 Californians will be 60 or older, and expanding access to PACE is a priority.

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

Turning to MedWise, there is continued momentum to advance the role of the pharmacist, starting with provider status legislation at both a federal and state level, which allows pharmacists to be paid for delivering a range of clinical services. At the federal level, on April 22, 2021, the Pharmacy and Medically Underserved Areas Enhancement Act was introduced by a bipartisan group of Congress. This act would enable seniors to access pharmacists provider services under Medicare Part B and be reimbursed under Part B, if provided in medically underserved areas or populations or where health professional shortages exist, which is where nearly 60% of independent community pharmacist 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. The pilot involving 74 pharmacies launched in 2017. It is now a permanent program after demonstrating successful outcomes, reducing -- 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 and asthma.

Similarly, the state of Ohio, another example, passed provider status legislation in 2019. In 2020, CareSource, a 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 pharmacist engagement. A number of our prescribed wellness client pharmacies and Iowa and Ohio are participating in these exciting pharmacy programs and CareSource is planning to scale the program to 200 pharmacies as well as expand it 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 and chronic care role of pharmacists, such as Troy Medicare, a TRHC 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 1,500 employed clinical pharmacists as part of their integrated care model, and Geisinger Health which embedded pharmacist managing vulnerable high-risk patients in the community.

Also, since 2013, 15 states have passed bills recognizing pharmacists as providers for establishing for a provider 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 their legislatures and are signed into law, while 16 bills in 10 states await their governor signature. All of this activity sets the stage for continued pharmacist scope of practice expansion, furthering the adoption of MedWise science in 3 areas, delivering and billing for enhanced comprehensive MTM services directly or through collaborative practice agreements, along with the implementation of Medicaid medication risk reduction models as evidenced by New Jersey's recently passed legislation, which recognizes the medication expertise of the pharmacist to drive outcome and impact the total cost of care.

In summary, these collective efforts to empower pharmacists to practice at the top of their license and improve outcomes for patients are key factors and our optimism for strong future growth within our MedWise HealthCare segment. Kevin?

Thank you, Orsula. The 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 MedWise 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 PACE we highlighted earlier, CareVention 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 for 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 slip from Q2 into early July. Specifically, I would like to highlight our MedWise 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 in the last pre-pandemic quarter. 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 MedWise science and enhanced MTM model has accelerated our wins across a wide spectrum of clients and ultimately, our future growth rate. Key wins included a multi-year contract renewal for MTM services with our largest payer customer, continued expansion of current MTM programs with Humana and WellCare, a new 2022 MTM win with one of the nation's largest Medicare Advantage payers, a new contract to deliver our enhanced MTM model for employees of a regional Blue Cross Blue Shield plan, and new enhanced MTM type programs with at-risk and concierge provider groups.

Additionally, we recently signed a multi-year agreement through our prescribed 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 one 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 gap and more by the end of the third quarter.

Brian?

Thanks, Kevin. I'm 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 CareVention and MedWise 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 Personica as we anniversary the acquisition in early October 2021.

I'd like to specifically note that we expect MedWise 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 the reflection of a high-level of ongoing sales activity concentrated in our MedWise 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.

Thank you. 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.

(Operator Instructions) First question comes from Sean Dodge with RBC Capital Markets.

Congratulations on the good momentum in the quarter. Maybe starting on the MedWise 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've won 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 timeline for those? Are these something that could also help have a lift as we did with the BF in the back half of the year?

Yes, Sean, thanks for the question. I appreciate that. You are correct. The way we do bookings is, 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 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, I guess, turning to PACE, it looks like the pipeline for implementation there continues to expand. Can you wrap some numbers around what these new centers can begin to contribute the way of incremental revenue in 2022 and into 2023? I guess, anything you can share on the mix in terms of how many of those include medication fulfillment or anything else that can help frame what the average revenue profile for these new implementations look like?

Sean, 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 they're going to have a pretty meaningful impact on 2022 revenue and then see that ramping going forward. So about a third of the $46 million that we quoted in the earnings release and on the call are pharmacy related. And obviously, that carries the highest revenue opportunity for us.

Our next question comes from Ryan Daniels with William Blair.

Just a quick one on the delayed contracts that appear to have been signed by the end of July, does that delay the ink to green process, meaning the timing that you think you'll be able to recognize revenue from those? Or was it merely the contract signing that got delayed?

No. Ryan, thanks for the question. Merely just the contract signing. I think summer vacations for folks that haven't been on the road for 2 years that delayed a 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 that pushed you to reach out and develop a partnership there? Just any thoughts around that and the potential opportunity?

Yes. Sure, Ryan, thanks for the question. It's Orsula. It's really an add-on service that we have seen interest. Try and avoid hospitalization for PACE participants, in particular, should they have COVID symptoms or are discharged from the hospital with COVID symptoms as a way to reduce the number of staff that needs to be available to those participants. We have not projected anything. As far as I know, we do have -- we did have a pilot. We have a number of large programs interested and such. As you can imagine, it's a major issue to try and get ahead of. So the typical charge would be in the $200 range. We get a small percent of that. We're really acting as a reseller of the product, and we have a very strong relationship with [TICE], who's offering the product to the PACE market. And that's per month.

Okay. Perfect. And then maybe just one last one. Cal, you started out by talking about the progression of the company since the IPO, and you now have a variety of different offerings like risk adjustment services, you do the medication adherence and ADA or ADE avoidance, you have the remote patient monitoring, etc. Is this also potentially opening up the opportunity to do business with more at-risk groups? I think you even talked a little bit about that, some of the concierge medicine and maybe the MA at-risk providers. But it seems like what you're offering now is really more robust, maybe more of a partnership type model for those ACOs. So I'm curious how that's developing and your thoughts on the sales pipeline?

Yes, you're absolutely right. In fact, we do have a couple of ACOs. One just started. A couple of others are in line. So our entire platform is focused at people that are at financial risk and in companies that are financial risks. So you're absolutely right on. We've got a strong plan for 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.

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 talked about help enable at-risk providers, health plans to maximize their reimbursement on that while they're improving patient care. And so the through and 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, we're really impacting total cost of care. And to your point, you see that PACE as a Medicare advantage provider to these at-risk provider groups that are now carrying similar risk.

Our next question is from Stephanie Davis with SVB Leerink.

I heard a lot of MTM wins called out in the prepared comments. So Cal, I want to touch on the outlook for the EMTM program. Any views on a potential extension? And if maybe that risk actually creates a near-term conversion opportunity for MTM wins as folks look for a go-forward solution?

Yes. I think, Steph, we've had really good insight from that paper we put out with all the people that signed with us. And it actually has been responded to within 2 days. So we have a meeting with the person in-charge, lead in-charge of CMS in the next couple of weeks. So we've got a real good response there. But anyway, it's what we -- what we're trying to do is get them to 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 stuff, besides that, we now have about 6 other states that are copying, so to speak, what we've done in New Jersey, and we have another 6, we're told, that are in the process. So we'll see how that takes up. Now that will all improve our ability to -- as the Air Force and the group that our university that certifies the pharmacists. So we think we got a big opportunity to take the EMTM to expand it in Medicare and also to take it into all these other states with Medicaid. And there's 40 million, 50 million people on Medicaid. So it's a good opportunity.

Stephanie, I was just going to add to that just a little bit that to back to your sort of preface of the question of the contract wins, the 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 EMTM.

So if you guys had to talk about the risk profile of the EMTM program, it sounds like you feel very confident in extension. If I'm reading Cal's takeaway correctly?

Well, we can answer that better in a couple of weeks when we meet with them. I don't know what goes through their head. I mean, 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 would need to be -- or some type of consensus would need to happen. So that's why we went the consensus route, and we'll see if that's impactful. I mean, I was very encouraged that within 2 days, we were contacted.

So -- but I don't know, we'll see. But whether that does or does not happen, I'm more excited, frankly, about what Kevin just said that we're using the MedWise to partner with all of those people. We're the largest provider of freestanding MTM in the country. And most of the contracts that we have are interested in expanding, they want to 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 in a peer-reviewed journal. Three specific articles that will be available on the results of our intervention.

The EMTM.

The EMTM, yes.

We've got a very robust 3 articles on what we did, what the pharmacist did, what is it all about? What are the pharmacies? The second one, what kind of interventions? And #3 was what were the specific outcomes we had? And that will be in a special journal.

Understood. The opportunities either way in MTM. And I just want a quick one for Brian. I don't want to leave him out. Just to think about that FY '21 outlook, how much of it at this point is dependent on timing of these new wins ramping up? Or do you feel like this giant amount of win you've just had, it's pretty fully de-risked given the year-date paid?

Well, Stephanie, I think you heard Kevin probably say we're about 60% sold 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 that if we're able to execute, we should be in a good position to close out the year.

Our next question comes from Sean Wieland with Piper Sandler.

And just to follow-up on Stephanie's line of questioning with EMTM. Can you help us interpret the data that the results that CMS published earlier this week on the EMTM program comparing them across all regions?

Yes. The -- Sean, the thing that CMS -- well, the reason we met with them was because they homogenized our interventions across 305,000 people, which are the people we were assigned and received all their A, B and D data every month. But we risk -- our strategy was to restratify them and find out who had a risk of 15 or higher. And it came up to about 42,000 people that we intervened on in the first few years. And we had a tremendous -- we saved $128 million on those folks in the first 3 years. So when you took that over to 305, it's not -- it doesn't hit the 2% mark.

But when you look at it, as the plan was -- as it was presented in a business plan to them, that we will not be intervening over all of these people, we 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 actually looked at it was everybody was put homogenized over the 3 -- over the total denominator and our analytics were really just over the people we intervened on, what were the results. So that was the big disconnect here.

And how well is, among the CMS and other participants, is that disconnect understood?

Well, they read the original proposal back in 2015 and '16 that we submitted with them, and they knew what it was and what we were doing. But I guess somewhere along that 5 years that got diluted somehow. So that's why we met with them 3 months ago and tried to say it, that's when we were told well, we have -- to expand it or continue it, you'll have to go through a different process. So that's why we took this process. So we will have another opportunity to explain it to the Chief in a couple of weeks. So we'll see where it goes.

Okay. And then one 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 revenues, 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'd say we're north of 95% at this point.

To the midpoint or high end or low end?

To the midpoint.

Our next question comes from David Grossman with Stifel.

So I wanted just to follow-up, again, some of the commentary about the bookings, the new bookings, that you've talked about. It sounds like there's been a lot of activity year-to-date. And perhaps you can just give us some context for that in terms of maybe dimension the potential ARR? Or anything that would give us a sense of how meaningful those may be in terms of contributing to revenue growth? I know one was a renewal, and maybe that was an expansion of scope as well. So any context would be helpful.

Yes, sure, David. I would say that -- you're right. One of the ones that we were excited about was a core contract renewal. That does include some expansion in that. It's a long-standing customer that we continue to grow services with. The remainder are new. And so the revenue that we're adding in-year is -- tends to be, at this point in the year, about half of what overall ARR would be for the following year. So you end up 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, the big renewal that Kevin was just referencing, 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. And the -- I guess, the balance of what's left, the 40%. So does that mean that we have about $8.5 million of -- in your bookings that we have to deliver in the back half of the year to the midpoint? Just to make sure I understand the math.

That is correct.

Okay. And again, is there any -- just remind us, there's 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 don't remember how to frame that number.

So 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 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, I know there's already been a bunch of questions on EMTM and CMS, but maybe, Cal, you can help us understand, was their objective to save 2% on the entire population, and that's where the disconnect is, and you're pointing out that the people that you intervene, you can save 2%? Or -- and even if that's not reconcilable, when you're going out to the commercial markets, because I assume you're really trying to market what you've been able to achieve with CMS to these commercial clients. Is that the relevant data point to them or again, are they looking across their entire populations for that cost savings?

Well, you're right. It's -- the 2% was across the whole population for all of the competitors. 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 patients that we restratified as we were working through this with some people at the state to see if it would make any sense. And there's about $400,000 that have a risk score sufficient enough to be intervened upon. So it depends on the cohort. So in a commercial population, to your point, we see anywhere in the single-digits typically because it's usually, it's a younger group. In the older or sicker people, we see it in the teens to 20%, typically, that are the low-hanging fruit for us. I mean, sometimes people have a -- they just have 2 drugs and have a high-risk score. But most of the time, they're on many medications with many co-morbidities.

Right. So just to be clear then, when you're going into the commercial markets, it sounds like they're satisfied with savings on the individual level as opposed to the population level, at least based on what you've seen so far?

Yes. What we do is, before we do anything, we ask to get a feed of their patient base. And then we run it through the system and come back and tell them, here's the #2 we have at high-risk, and we convert that into quality 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 one last thing. I think in the past, you talked about 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. And I think you also talked a little bit about bundling EMTM 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 EMTM science with MTM, that's what's driving a lot of our success. So I think that's been a huge win for us. From the consultant front, it's given us an opportunity to test the 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 to trigger some initial wins. And so now we've got some additional full FTEs that are helping support that effort and expanding that.

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

David, I'll take that one. So the typical MTM program, if you're bundling MTM with EMTM, it's going to be our standard pricing. And then for the population we're addressing with the EMTM solution, it's our standard EMTM pricing for that group. So it's -- we use the same pricing model that we've been using, but just over the populations that we're managing with each one of those solutions.

(Operator Instructions) Our next question is from Vikram Kesavabhotla with R. V. -- R. W. Baird, sorry.

I was 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 your recent case volumes and anything that you're seeing in the market?

Sure. So the original guidance assumes that we get to just north of 1% per month on a sequential basis. And exiting the second quarter, we're at about 1% per month. So trending nicely against our expectations. In fact, the second quarter, we're a little bit ahead of where we planned 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 are in-line 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 through the balance of the year, in terms of the size and type of hiring that you're going to do?

Yes, 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 and the PACE side of the business. So we continue to hire folks that have some experience in that space, some existing relationships, and that's gone well. So 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. We recently hired -- started to hire a fourth team that will work out of a different location and help support some of the in-house sales opportunities for some of our other product lines. And that could be anywhere from some of our business deals related to hospitals, if it's out of those 3 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.

Thank you. 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.