Tabula Rasa HealthCare Inc (TRHC) 2020 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Tabula Rasa HealthCare Third Quarter 2020 Earnings Conference Call. (Operator Instructions) Please be advised that this call is being recorded. (Operator Instructions)

I would now like to hand the conference over to Kevin Dill, Corporate Counsel for Tabula Rasa HealthCare. Thank you, and please go ahead, sir.

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 March 2, 2020. 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, Kevin. Good morning, and thank you for joining us for our Third Quarter 2020 Earnings Call. With me today are Dr. Orsula Knowlton, Co-Founder, Chief Marketing and New Business Development Officer; Mr. Brian Adams, our Chief Financial Officer; and Dr. Kevin Boesen, our Chief Sales Officer. Orsula and Kevin will both be available to respond to questions after we conclude our prepared remarks.

As a reminder, this conference call and webcast is accompanied 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.

While the ongoing pandemic impacted our third quarter results, we are continuing to see signs of recovery that we expect will be meaningful drivers of improved performance in 2021. Most notably, our October 2020 PACE net enrollment figures far exceeded our expectations. I want to focus my comments on 4 areas as reflected on Slide #3. PACE; second, bookings; third, MedWise; fourth, Personica.

First, the most encouraging data point heading into 2021 is our October 2020 PACE net enrollment, which more than doubled versus September, and is the highest figure we have seen in 2 years. Slide 4 highlights the trends we have discussed within our PACE census, which have now rebounded strongly off of the May trough. It is important to note, these gains were broad-based with a number of PACE organizations recording their highest net enrollment figures of any month in 2020.

In addition to the array of new entities coming into PACE, our current PACE organizations are expanding with new PACE centers. As we head into 2021, we have a solid PACE base as well as a strong pipeline of new centers opening. Our current backlog of new PACE openings or site extensions over the next 12 months has increased to 31.

We are further encouraged by improved sales activity during the third quarter, which would -- which we would attribute to PACE organization successfully adapting their business models to deal with COVID during the second quarter and now returning to efforts to grow their membership during the third quarter.

According to the National PACE Association, covering more than 100 PACE organizations, the number of new COVID-19 cases indexed in the 4-week period ending in October 5 had fallen by 47% and 32%, respectively, versus the prior 4-week period.

Also, the bulk of the confirmed cases and deaths are shared by a relatively small number of PACE organizations, mostly concentrated in the Northeast. Specifically, 9 PACE organizations comprised 41% of the cumulative reported cases and 6 PACE organizations comprised 43% of the cumulative reported deaths.

On to the second topic, bookings. Despite continued COVID-related challenges, third quarter bookings increased 12% as compared with the second quarter of 2020 and increased 15% as compared with a year ago, that excludes the COVID-19 test kits. Through the first 3 quarters of 2020, our total bookings have increased 22%. Much of this growth was driven by our payer segment, which accounted for 45% of total bookings year-to-date.

Our wins in the payer segment through the first 9 months of 2020 continue to be a bright spot with record third quarter bookings growing 50% on a sequential basis as compared to the second quarter and more than double compared to the first quarter of 2020. Over 40% of our 2020 bookings will be recognized in 2021.

Third, last quarter, we highlighted the July launch of MedWise within our PrescribeWellness community pharmacy network of more than 10,000 community pharmacies. This included a new feature known as MedWise decision support, enabling a pharmacist to simulate changes to a patient's medication regimen. And visualize the impact on the MedWise risk score in real-time, while not disrupting the actual medication regimen.

This past Monday, we announced a collaboration with PioneerRx to expand the reach of our MedWise and our clinical pharmacy support services to Pioneer's 4,700 pharmacies. This addition enables us to embed MedWise into more than 14,000 community pharmacies. We have 2 additional cohorts of community pharmacies we are working on, which would bring us up to 20,000 pharmacies. We also have a promising pipeline of additional MedWise application opportunities with health plans and with government agencies, and this will further expand the impact of our quality-enhancing and life-extending safe use of medication platform for 2021.

Lastly, I wanted to welcome our new team members from Personica. In the first few weeks since the acquisition closed in early October, we already filed a cross-selling to sign a new contract with an East Coast PACE organization, which starts in 2021. We are excited to add Personica's pharmacy services that provides us now with more than 27,000 new PACE members to this TRHC CareVention HealthCare family. With 1 of our 5 PACE-focused CareVention services, we now touch more than 90% of all PACE organizations.

Brian will now review the numbers. Brian?

Thanks, Cal. I'm going to focus my comments today on 3 topics: MedWise, 2020 guidance and 2021 guidance. While our CareVention HealthCare segment performed as expected during the third quarter, our MedWise HealthCare segment underperformed as medication safety services fell short of expectations due to 2 reasons. In order of importance, they are: one, we experienced COVID-related delays with 2 large health plan contracts originally signed during the first quarter of 2020 that went live later than expected, effectively in the fourth quarter.

The delays were driven by changes that allowed for early refills and increased quantity supplies for maintenance medications at the beginning of the pandemic, delaying the need to address medication adherence. Second, new restrictions related to CMRs performed with caregivers and prescribers slowed patient engagement in the third quarter. Subsequently, we have implemented tactics to complete the majority of those CMRs in the fourth quarter.

Moving on to Slide #6. For the full year 2020, we now expect total revenue to be in the range of $294 million to $296 million, the midpoint of which represents 4% growth, and non-GAAP adjusted EBITDA in the range of $21 million to $22 million. The key factors influencing our adjustment to 2020 guidance are: one, the aforementioned temporary CMR challenges; and two, the negative impact from COVID-19 on medication adherence initiatives that are seasonally weighted towards the second half of the calendar year.

Turning to Slide #7. We plan to provide formal 2021 guidance in conjunction with our fourth quarter and full year 2020 results. Based on all the factors we know at this time, we're comfortable that overall revenue can grow 20% in 2021 using the midpoint of our 2020 guidance. Given the performance of our MedWise unit in 2020, I wanted to spend some time to highlight several factors driving growth in 2021.

First, we now have a committed time line in our contract with Health Mart, which will positively impact our software subscription revenue growth beginning in the second quarter of 2021. Second, and shifting to medication safety services. As we have noted, CMS changes the percentage of Medicare patients for whom it was required to complete a CMR in order to achieve certain Star Ratings on an annual basis. These percentages increased significantly in 2019, making our 2020 comparisons challenging.

Recently released CMS targets for CMRs are effectively neutral to a potential positive as the threshold for Medicare Part C and Part D plans to reach a 4-star rating has increased modestly. Given the popularity of Medicare Advantage, we see health plans investing more in Star Ratings in order to ensure more of their membership is covered by 4-star plans or higher to remain competitive as more seniors enroll in Medicare Advantage plans. Third, we added several large clients in 2020, and have several new health plans launching clinical programs in 2021.

Fourth, in 2021, we will launch our MedWise science as part of our core MTM services, allowing Medicare Advantage plans the ability to use our CMR and adherence programs to also prevent hospitalizations and emergency revisits. Adding 4,700 community pharmacies as the result of our new agreement with PioneerRx to our 10,000 prescribe wellness community pharmacies gives us further opportunity to drive adoption of our MedWise programs.

Last, one of the 2020 headwinds we expect to dissipate in 2021 is our medication adherence-focused clinical interventions. In prior calls, we noted improved adherence rates in 2020 as a result of actions taken by CMS in the wake of the pandemic, including effectively waving prescription refill limits, encouraging longer day supply and relaxing restrictions on home or mail delivery.

A recent industry report Medication Adherence Global Market Report 2020 to 2030, COVID-19 growth and change confirms challenging market dynamics we have experienced as medication adherence market is projected to decline by 2% to $2.5 billion in 2020. We expect to return to normal in 2021, and the long-term outlook remains positive, estimated to grow to $3.6 billion by 2030 with a compound annual growth rate of 13%.

With that, I will turn it back over to Dr. Knowlton for closing comments. Cal?

Thanks, Brian. As we exit 2020, we are encouraged by many of our leading indicators for growth in 2021. This includes: one, the rebound we witnessed with our PACE membership; two, our PACE backlog of new PACE organizations and current PACE site expansions; three, the health of our MedWise sales pipeline; and four, with recent additions, our more experienced team in IT, operations and sales.

Operator, please open the call for question and answers.

(Operator Instructions) Our first question comes from the line of Glen Santangelo with Guggenheim.

Brian, I just want to follow-up on the fiscal -- revised fiscal '20 guidance a little bit. It kind of implies that you're not really expecting any sort of meaningful pickup in 4Q if we use the midpoint of that revised guidance. And in your prepared remarks, you seem to suggest that it was COVID-related delays on 2 health plans that went live later than expected.

It kind of sounds like they're live now. Should those revenues be flowing through fourth quarter? And as a secondary sort of consideration, given the uptick in cases, it looks like to us that PACE enrollment growth is slowing. And so what sort of gives you confidence in -- as we head into fiscal '21 with that -- with the projection that you've made?

Sure, Glen, thanks for the question. As it relates to Q4, we are expecting modest sequential growth, excluding the Personica acquisition. As you note, the 2 larger health plan contracts did really -- essentially get pushed to the fourth quarter. Fourth quarter is when we have the lowest number of CMRs that are completed for the payer division. So we do anticipate that, that's going to be up slightly. Similarly, we will have a contribution from these new contracts that did go live later. I will say that the reason that those have been delayed are really twofold. One, the process for getting some of the communications necessary to launch a new program, especially around 1 that's adherence related, have been delayed throughout the year due to the fact that internally at our customers, most of the communications that were being reviewed internally by their teams were focused on their members.

And so those new programs that were being launched did get delayed. And the fact that they were adherence related and adherence rates were up considerably in the first half of the year, it wasn't as much of a focus. So that did lead to some delays. We are seeing very positive signs going into next year, and even the fact that these programs have now launched that these will be pretty impactful and meaningful going forward.

So modest uptick in Q4. But thinking forward, in terms of 2021, specifically as it relates to PACE, we've got a couple of really strong data points that show, over the past, specifically in October, that our census growth in our customer base is up considerably from where it's been over the past few months. And in fact, double what it was in September. And it's the highest that we've seen, net enrollments, in the past 2 years. So a very encouraging sign.

Brain, if I could add -- this is Cal. If I could add 1 thing to that, Glen. PACE enrollment happens in the first few days of every month. That's the way CMS has it set up. So 3 days in, as of our report 5 o' clock last night with a couple more days to go, we are basically at the same run rate in November with new patients as we were in October. So we haven't seen any decline in that.

Okay. And maybe I just ask 1 quick follow-up. I was just hoping to get a little bit more color on the comment in the release about the restrictions related to the CMRs. Could you maybe just elaborate it a little bit by that, what you mean? And is there any sort of quantification you can give us on that front to help us as we think about the sort of the sustainability or lack thereof of, of that trend as we move into 2021?

Yes, that's a great question, Glen. I'll take that. This is Kevin Boesen. The restrictions really have to do with tightening who you provide that CMR to. And so there was some flexibility last year to do it with caregivers, prescribers. With this year, the focus is really on the patients themselves. So we've implemented some operational changes that allow us to engage patients a little bit more. So the overall numbers, targets of patients that plans are wanting to have a CMR with has stayed relatively consistent.

We expect that, with the new CMR Star Ratings, to be consistent for 2021 as well. It's really given us an opportunity though to combine and leverage some of our other technologies as far as accelerating some of the integration with our prescribed wellness network. We'll have new opportunities to engage some of those patients directly with the new Pioneer partnership as well. So we've made some changes to be a little bit more -- the other opportunities to engage patients and have made that adjustment. So we're well positioned next year.

Our next question comes from the line of Sean Dodge with RBC Capital Markets.

Maybe starting on bookings. I just wanted to make sure I understand some of the comments you've made there. You said 43% represents 2021 revenue. The other 57%, I'm assuming, is 2020 revenue. But is that revenue from contracts that were implemented this year and potentially later in the year, such that there will be a, I guess, a bigger kind of full year contribution next year? So some of this other 57% could be 2021 revenue, too? Or am I misinterpreting that?

No, you're correct. Sorry, this is -- thanks, Sean This is Kevin again. No, you're correct. So the contracts that were signed in 2020 were that revenue programs initiated in 2020 do carry into 2021. And also relative to the types of contracts that we're signing, many of those and most of them have really -- are centered around our core MedWise safety science. So not only is it a nice growth in payer contracts, and we're optimistic about 2021. But it's further aligned with our medication safety strategy and having the health plans adopt our core science in that respect.

Just to add on to that. This is Brian. I was just going to say that the percentage that relates to 2021 is incremental to the base we're building off of in 2020.

Okay. Good. That's a good clarification. And then on the new PACE center opening, you said 31 now under contract to open over the next 12 months. How long does it generally take a center to reach full capacity? And then I guess, based on the timing of these, as they kind of flow through the next 12 months, do you have a sense for how much incremental revenue just those new centers should add to 2021?

Yes, Sean, that's a good question. This is Brian again. In terms of the amount of time it typically takes for a center to get to full enrollment, what we've seen is it's somewhere between 2 to 3 years. And the interesting thing that I'll note is that many of the newer customers that we've brought on recently have been growing at even faster rates than what we've seen in the past.

So we would anticipate to get to those levels quicker than the 2- to 3-year time frame. Of the centers that are planned to open, they're spread out over a 12-month period. So the contribution from those will be relatively low next year. But I would estimate it's going to be about $5 million in terms of contribution just in 2021 related to those new centers.

Our next question is from the line of Ryan Daniels with William Blair.

This is Jared Haase for Ryan. I wanted to maybe just stick with some of the PACE enrollment dynamics. I think in the press release, you mentioned, you're seeing outsized contribution from for-profits just in terms of the enrollment. Just curious if there's anything more specific you can add to that to provide some more context. Any way to maybe quantify sort of that impact? And how sustainable do you expect that just when thinking about the enrollment trends for 2021?

This is Cal. I -- it reminds us of Hospice back in the day when we were in the Hospice business. When the for-profits came in at the turn of -- in 2000, it -- all boats rose. But they were much more aggressive in bringing on new clients. And we're seeing the exact same thing with the new for-profits that are coming into PACE. They're much more aggressive. They're much more business-centered focused.

So -- and I think it's just the start. We've had some recent calls with a couple of them that are coming in as recently as yesterday. And I think it's just the start. I think you're going to see a lot for-profit activity in 2021 and a lot of growth in PACE.

Got it. That's helpful. And then maybe just 1 other quick follow-up. So just on the Personica asset, it sounds like you expect that to, obviously, be accretive in Q4 and have a positive contribution in 2021. When thinking about kind of the potential cross-selling that you can do with that asset, are there more investments needed at this point or more integration-related efforts to kind of get to that point? Or is there anything unique with maybe the typical cadence of the sales cycle? Just trying to get a sense of how impactful cross-selling can be to 2021?

This is Orsula. Yes. It's a wonderful acquisition. A great company that's been in the market for a decade, and we definitely see opportunity there. CMS actually is requiring new programs to have a company like Pharmastar or Personica in place prior to starting. So that was one of the drivers in our desire, along with the increased scrutiny of PACE organizations, very similar to MA plans. And their audit expertise is certainly something that we desired as well to add to our list of services. So we see a great opportunity for cross-selling and are starting to see that already.

As far as integration, we would envision that it would make our data analytics more robust and where appropriate, and that will take some integration, but nothing too big.

I think -- This is Cal. I think to your point of extra assets, the answer is no. We really won't take any extra assets to make this happen.

And our next question comes from the line of David Grossman with Stifel.

I was wondering if we could just go back to the bookings for a moment. Perhaps you could quantify or give us some order of magnitude in terms of what that 43% represents in terms of dollars of visibility into next year? And just as a follow-up to that question, we've had fits and starts in terms of visibility over the last couple of years as it relates to contract ramps, et cetera.

I'm just curious whether you feel or why you would feel that you've got better visibility now than maybe you've had -- taking obviously and stripping out the COVID-19 impact on visibility. But even before that, we were having, again, some issues at least with predicting timing. So again, just curious on kind of quantifying how much that base represents going into next year? And why you think you've got better visibility today than you maybe had over the last couple of years as it relates to bookings conversion?

Yes, David, I'll take that. Appreciate the question. I think that to address the issue relative to visibility, we've really done a lot to enhance the sales team and our sales processes over the last year. So we came into the year with a pretty small sales team. We've expanded that quite a bit throughout the year. And due to the challenges that we faced with COVID and trade shows and getting our word out, we've really brought in more of a higher level executive group of sales reps that allow us access to decision-makers a little bit quicker.

The -- that helps in terms of really understanding the pipeline, tracking that and being able to manage that a little bit better. The other component that gives us confidence is the types of contracts that we're signing are more specific to our core medication safety technology. So they're much more predictable in terms of the patient population that we're serving, when clients need to start those programs and stop those programs. Some of them are still related to the Medicare compliance, and where we've been able to add on the medication safety technology similar to what the EMTM model is.

And so that's given us a little more confidence in the predictability for next year, and that's been the key driver for that. Relative to quantifying that, we'll be able to provide more insight to that as we -- in the future as we provide more guidance for 2021.

David, just to kind of build on that because I know your question is, how do we kind of bridge to the 2021 numbers and get comfortable with that? So if you assume right now, based on the numbers that we've put out there, that we're going to have about $60 million of growth next year, call it $30 million coming from the organic growth within PACE that we're seeing return to normal levels, so we're encouraged from that standpoint.

Another $15 million or so coming from the Personica acquisition. You've got close to another $5 million from the Health Mart, McKesson go live at the end of the first quarter next year. And that puts us with a gap of probably about $10 million, which is much smaller than what we started out this year with.

And given the fact that we've talked about that a number of the bookings this year relate specifically to 2021. I think that we have a much higher degree of confidence in the figures that we put forward at this point as it compares to last year coming into the year.

Got it. That was very helpful. And Brian, just back to your comment about the revision to the fourth quarter. Some of that being the seasonal downtick in CMRs, I mean, I would have thought that would have already been factored into guidance. So did something change in the -- as it relates to the fourth quarter in that seasonality?

No. So -- and my comment earlier may have been a little bit misleading. I was just noting that typically, we do have a lower level of CMRs that take place in the fourth quarter. We had been anticipating some additional adherence-related work in Q4. And as Kevin has talked about that, that's really been deprioritized in 2020 for a lot of plans. So that does represent a good portion of the reduction for Q4. CMR levels should be consistent with prior forecasts. But some of the adherence work that we typically see in the second half of the year did not materialize as we anticipated.

I see. Okay. And then just -- I mean, obviously, pretty impressive PACE enrollment in October. However, I mean, do you have any -- I mean, obviously, we've been at depressed levels. So I'm assuming some of that represents pent-up demand. So if in fact, that's the case, do you have any sense for when -- whether you've satisfied a lot of that in October? Or whether you could see those elevated levels extending throughout the quarter so that the base entering next year is even higher than what you're projecting today?

Well, what I mentioned -- this is Cal. What I mentioned, David, earlier was that we actually are seeing a replication of October's numbers in November, and we're only 3 days into November. So I don't know the answer to your question, but it's speculative. But it seems to be pent-up demand is not going to just happen in October. It seems to be that the -- plus, I think also, we mentioned before, the -- there is an impact on the -- with the for-profits coming in. I mean, they're much more aggressive. So I think that the -- well, we'll see what happens. But it looks to us from this vantage point today that the census is going to continue growing like it is.

And did you see an inflection? I'm sorry.

I was just going to add that with the challenges that we've seen in long-term care facilities, there's a greater desire for people to be in the community to receive managed long-term care as opposed to institutional facilities. So we would envision and PACE organizations certainly see this as an opportunity to get the message out about the benefits of being home and being taken care of from a long-term perspective.

Right. And Orsula, did you see some pause with the for-profit PACE organizations at the beginning and during the pandemic? That -- because I think we had pretty good momentum going into it with for-profits. So are we just starting to see the inflection point that was manifesting itself before the pandemic? Or is this kind of too early to really tell what's going on?

We did not see the for-profits stopping. They opened their facilities on time that they had planned. So I would envision that this type of growth will continue.

It actually represents -- go ahead Calvin.

I'm sorry. So we opened 1 for-profit and 1 nonprofit November 1. So they're still moving.

I was just going to add, David, that the number of for-profits in our pipeline of centers to open is materially higher than it's been in the past. So we're seeing a significant contribution from the for-profits.

And I think, Brian, I think that's putting pressure on the nonprofits because we're seeing a lot of site extensions where they're adding adjacent sites now, which they haven't been doing before. So I think it's giving them some pause, too.

Our next question comes from the line of Matthew Gillmor with Baird.

I guess I had a follow-up on the conversation you were just having. For the $30 million of growth you need for 2021 on the organic side from PACE enrollment. Can you give us a sense for sort of what you're assuming within that? Is that an assumption that be kind of get back to normal? Or the elevated trends you've seen in November and October continue? Just sort of where -- I just want to understand kind of how aggressive or not aggressive the assumption is behind that $30 million?

The numbers that we're assuming are kind of our historical growth rates. While October, November are very strong, we're not assuming that any sort of elevated enrollment is included in that forecast. It's really based on historical trending.

Okay. And as we -- as many of us track the national PACE enrollment, would -- do you think that you -- it seems like maybe what you're saying is there's a wider separation between where your PACE enrollment has been versus what we see with the national numbers, maybe there's some noise in the national numbers. But I was just kind of curious if you'd agree with that there is maybe some separation or maybe the national numbers are just lagging a little behind what you're actually seeing on the ground?

I would say that, Matt, in general, we have a higher concentration of the start-up programs that tend to grow at much faster rates. And what you're seeing at a national level is kind of weighted by some of the larger programs that I think we've historically seen either not grow or being challenged by some of the issues related to COVID that Cal was referencing during his comments earlier, specifically in the Northeast.

And that's not where we have a very large footprint. So I would say that our programs do seem to be growing quicker. We also have a large presence in California, where there is a higher concentration of the Medicaid-only participants enrolled in PACE programs, which are not represented in the Medicare statistics. And those are growing quite quick.

Okay. And then last question I had was, is there any update you can provide with respect to the enhanced MTM pilot with CMMI? I was just curious how the latest year has gone and when we might expect to see some data out of it?

Yes. We -- this is Cal. We were very fortunate about 3 or 4 weeks ago that the PACE group up in the Northern Plains, the Blue Cross programs there gave us the green light to go ahead and publish because heretofore, we have not been able to publish anything. So we now have 2 papers that are in peer review that should be out very shortly. The 1 talks about the -- over the 3 years -- the first 3 years of the program that we intervened on. Out of the 250,000 people, we intervened on the highest risk. We intervened on about 42,000 of them. And we saved Medicare $128 million on -- mostly on hospitalizations. So the papers are forthcoming, finally. We're finally allowed to talk about it a little bit. So you'll see some publications coming out probably in the next month, depending on how...

Next question comes from the line of Stan Berenshteyn with Truist.

I guess the first question probably is for Brian, just to make sure I'm comparing apples-to-apples. When you guys report bookings, are -- is that capped on an annualized basis? Or for example, if you have a bookings event that could take over a couple of years and it could inflate bookings. I'm just trying to think when you're talking about the growth in bookings, is that apples-to-apples? Are there things in there that could inflate or deflate the actual percentage of growth since we don't get a dollar number? I'm just trying to think how to triangulate bookings growth versus future revenue growth.

Yes. So that is on an annualized basis, not -- it's not going to be multi-year.

Okay. Okay. Great. And then the second question, it relates to 1 or 2 previously asked ones. You guys seem to have pretty good visibility on the PACE business. It's been a little bit more challenging on the tech side of getting people to not just sign up but timing. You commented in the -- that Health Mart is now, I think, contractually down so that, therefore, basically, you're going to start generating revenue on a certain date regardless of go live.

And then also, why is it hard to get these customers if there's so much value? Why do they keep sometimes kicking the can down the road? And not to say, and let's get this done as fast as possible, obviously, COVID may have an impact. But it seems like that has been a longer trend that things get pushed out. They eventually get done, but there's this kick it down the road, we'll do it next quarter or next quarter, now we'll get to it?

I can take the first one. And maybe, Kevin, you want to -- or Orsula, you want to take the second.

On the Health Mart McKesson deal, we do have committed timeline to launch the project. And in fact, they have already paid a pretty significant implementation and set-up fees. So that's happened. Those fees would be recognized over the course of the contract once it goes live. So those fees have been paid. We've been doing work to prepare for the launch.

So it's a mutual agreement in terms of the launch date based on having everything as part of the offering that they want to kind of set up and ready to go. So we're in a good position to launch that at the end of the first quarter. And then Orsula and Kevin, maybe I'll give the next piece to you.

Yes. This is Kevin. I do think one of the things tied to program launch, particularly in the pharmacy space is a lot of the new programs, new technology would typically launch that summer trade vendor shows, the wholesaler shows, which were all canceled this year. So that was the primary reason to not launch some projects. The other thing that I think is one of the most exciting things that I don't want to have downplayed is the integration that we're doing with PioneerRx. So in addition to the work with Health Mart pharmacies, the integration of the MedWise technology within prescribed wellness.

Pioneer is one of the fastest-growing pharmacy dispensing systems in the pharmacy space. And they're really working at a rapid pace to get MedWise integrated now that we've signed the contract with them in addition to some other technology integrations that we're doing with them that puts us closer to having information right at the point of dispensing within the pharmacy. So although a lot of the business was slow just the way the programs typically do product launches. There's a lot of optimism heading into next year with some of these new integrations, and we're seeing the pharmacies come out of that transition.

I think -- this is Cal. I think the other thing, too -- it's a very good question. The other thing is that the clients of McKesson and AmerisourceBergen and Cardinal, the pharmacies have been inundated, and really almost closed their doors for a long time. They were doing -- they're walking stuck out to the cars to people and things. There was no time to implement. It was not the right time to implement a new program for them. They were trying to survive and help their patients. I mean it was a very difficult time for pharmacy for the first few months of the COVID.

So it makes sense not to start a new program, even though it was ready to go. And even though McKesson had paid us a lot of money to get started with it, which we haven't recognized yet. I think it just had to do with the clients. They were struggling, they were having a tough time.

Our next question comes from the line of Stephanie Davis with SVB Leerink.

Can you hear me?

Yes.

All right. Perfect. So Cal, I noticed the tone in the press release and the prepared comments is a bit more PACE [centric].

Am I reading a little too much into that? Or is that indicative of sources of growth for 2021? And just as a follow-up to that, how should we think about the mix going forward as you're kind of seeing this healthy growth in PACE and some choppiness in the MedWise side?

Steph, I apologize. The first sentence or 2, I could not discern it. Could you ask me that again? I'm sorry.

No, no worries about that. I think my cellphone service is anything with the world ending over here. I was just saying the comments in the press release, they all seemed a little bit more PACE centric. Is that indicative of mix for the coming year?

I don't think so, but there's just so much going on right now in PACE. It's unbelievable what is transitioning, I mean what's happening with the for-profits and the growth. We've never seen so many PACE organizations expand to the next county over with new sites, for example. We've never had this type of expansion. And I think it's prompted probably because of competition. They want to make sure they're capturing their ZIP codes that they can before some for-profit comes in.

But it's really -- it's just the fact that we've never seen this type of growth. It's a real spurt with the PACE organizations. As far as the other things going on, we've never had an opportunity like this. But this is a longer-range thing to get ourselves involved in almost 20,000 community pharmacies with our software. And the model that we used in EMTM with 400 pharmacies and 400 pharmacists that we certified in MedWise in the community pharmacies is a good example of how we know we can propagate this in tens of thousands of community pharmacies throughout the country.

So that's a really exciting thing. That's what we always want to do is get this software out there. But that's going to take -- it's 1 pharmacy at time, so it's going to take a while. PACE stuff seems to happen quicker. So maybe that was probably the accent on PACE, I guess. But as far as the long term thing, it's spectacular for us to be able to have these relationships with so many people. And we didn't even mention the academics.

We've also now got an opportunity to penetrate about 100 schools of pharmacy as kind of our foreign team to get the students certified when they're in school before they graduate, and that will roll out over the next year or 2. So there's a lot of stuff going on outside of PACE, but it's just that the PACE kind of took the center stage because of how robust it is right now.

Understood. So more a function of excitement around that growth and stepping back from MedWise growth?

And then this follow-up is for Brian. When I look at the 2021 outlook and it better reflect 20% topline growth. How much of that is a function of easy comp this year versus the ramp-up of new bookings? And looking at the commentary in 2021, that went from double-digit growth to 20% in this quarter. What would that growth look like if not for these easy comps?

Well, I think that going into next year -- Cal just had the opportunity to expand on PACE. I mean that has been a very consistent and healthy part of our -- an important part of our growth in the past. And we've certainly been challenged in that area over the past 6 months or so. And so starting to see that rebound back to normal levels is really critical as we go into next year. So it's exciting to see what's happening in PACE right now because that, as I was kind of doing the crosswalk before, if you think about the $60 million of incremental revenue, PACE represents close to half of that.

And so that is very important that we do continue to see those same levels of net census enrollment over the coming months and quarters. And I think we're really encouraged about what we've been seeing over the past couple of months in the pipeline that is sitting in front of us of new centers that are planned to enroll are certainly going to help to support that. And then the Personica acquisition, adding another $15 million and some of the other things that we've already won that are set to roll out next year. I don't necessarily think of it as -- it's an easier comp going into next year. There's still a lot of work that needs to be done in order to get to those numbers.

But what I think we're optimistic about is the fact that a lot of the bookings that we've had this year really relate to 2021, in fact, almost half of them. So while we've had really nice progress this year, much of the focus has really shifted to 2021 versus 2020. And so I think we're pretty encouraged by what we're seeing at this point. And so if you back out the Personica contribution, you're probably looking at about 15% organic growth. And of course, going into next year, there's still some uncertainty around what's going to happen with COVID, but we feel very comfortable that these numbers right now accurately reflect the visibility that we have into the business.

Your next question comes from the line of Steve Halper with Cantor.

I was just wondering if you could provide a little bit more detail on the restrictions that you mentioned around the CMRs. What sort of happened there? And was this something that sort of cropped up during the quarter? Was it -- or should you have been expecting this to have happened during -- in advance of the quarter?

No. I'll address that. It is something that did come up during the quarter. It's -- we were able to pivot relatively quickly, but it still created a little bit of lag in terms of being able to reach the more difficult-to-reach patients for whatever reason. Whether it's a patient population that is -- has phone numbers that are difficult to reach, community pharmacy relationships that make it difficult to reach, maybe even health literacy issues.

So they're a challenging patient population. So having to sort of change strategy and pivot took a little bit of an operational shift, but something that we've been able to overcome.

And what were the exact restrictions that were imposed?

So in many times, with difficult-to-reach patients, you had the opportunity to provide CMRs with their caregivers, their prescribers. And there's -- that's no longer allowed.

And is that -- and that stays in place?

Correct.

Well, it is allowed in an instance, the has is competency issues. So there is an instance that's very specific. It's not just because they cannot be reached.

Your next question comes from the line of Sean Wieland with Piper Sandler.

It's Jess on for Sean. So our first question is just on Personica. Curious to know where it falls kind of on the spectrum of your PACE portfolios you outlined at the Analyst Day? And interested if the acquisition is adding incremental capabilities to the PACE pharmacy offering? Or is it's more a matter of just kind of expanding the footprint into a net, I think, 40% more PACE pharmacies than where you've been previously?

So I'll take the first piece and then Orsula, maybe you want to jump in on some of the capabilities. But the revenues related to Personica are going to be split between the Personifil fill piece of the business, which is PACE pharmacy. So you'll see that in our CareVention product revenue. And then the remainder amount will be related to Pharmastar and incorporated into our CareVention PACE solutions line item.

Yes. And the specific competencies it brings to us is their -- in addition to their relationships and the opportunity to cross-sell is the focus on the PACE-specific Part D requirements. All of PACE organizations go through a 1/3 financial audit, which routinely, we're in the process of in collaboration with Personica. Now as part of the team that gives us an opportunity to also enhance what we know from a pharmacy perspective into the benefits management space. And their audit expertise is something of great value, in particular because of the scrutiny.

I don't want to say the greater scrutiny, but the scrutiny that's coming up to the Medicare Advantage level for PACE. And the ability for them to be charged for anything that they -- any of their findings, which was not true in the past. So we really see it as an opportunity to bring that additional level of experience to our clients and our virtual clients.

Got it. And then just curious to know kind of how PACE and PMPM has been trending year-to-date. I think in January, the average was around $490. Is the Personica acquisition going to -- is that adding incremental potential PMPM or is it filled differently? And just overall, how is PMPM trending in CareVention Solutions year to date?

The majority of the revenue on the nonpharmacy side of Personica is built on a per claim basis. So it's a very low amount, which will effectively reduce the overall PMPM that you see on average for our PACE members. But incrementally, we are seeing expansion on an absolute dollar basis. So we'll be communicating more on that with our year-end numbers.

Thank you. And I'm not showing any further questions. I'll now turn the call back to management for closing remarks.

Well, thank you very much for joining us today, and we hope that this provides some information that was helpful in your decision making.

Ladies and gentlemen, this does conclude the program. Thank you for participating, and have a wonderful day.