Tabula Rasa HealthCare, Inc. Common Stock (TRHC) Q1 2020 Earnings Call Transcript

Tabula Rasa HealthCare, Inc. Common Stock (TRHC)
Q1 2020 Earnings Call
May 07, 2020, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Tabula Rasa HealthCare, Inc. first-quarter 2020 earnings conference call. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions] I would now like to hand the conference to your speaker today, Kevin Dill, general counsel.

Please go ahead, sir.

Kevin Dill -- General Counsel

Thank you, and good evening. 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 acceptable 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. Cal?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Thank you, Kevin. Good evening, and thank you for joining us for our first-quarter 2020 earnings call. With me today are Dr. Orsula Knowlton, co-founder, chief marketing, and new business development officer; and Mr.

Brian Adams, our chief financial officer; along with Dr. Kevin Boesen, our chief sales officer. Orsula and Kevin will both be available to respond to questions after we conclude our prepared remarks. In our ongoing effort to improve our communications with investors this conference call and webcast is accompanied by a PowerPoint presentation available at the IR section of our website, trhc.com, and I would encourage you to download the slides to follow along with our prepared remarks.

Given the disruptions beginning in early March from the COVID-19 pandemic, I am pleased to report first-quarter 2020 total revenue of $72.8 million and non-GAAP adjusted EBITDA of $4.8 million. Both are near the high end of our guidance ranges. Despite adjusted EBITDA being negatively impacted by additional costs related to COVID-19, including: one, higher IT expenses to enable our 1,300-member team work remotely from home; and two, higher labor costs with our 100 team members working in our pace of pharmacy fulfillment operations. Before turning it over to Brian to expand on these numbers, I want to discuss four key developments during the first quarter and in subsequent weeks thereafter, as reflected on Slide 3.

First, the significant investments we made in sales and marketing during 2019 are showing encouraging signs. As of May 1, 2020, our overall sales pipeline is 49% higher versus January 1, 2020. With the number of aggregate sales opportunities up over 68%. Importantly, our first-quarter bookings, based on annualized recurring revenue, is more than 2 times higher than any quarter during 2019.

We realized important pharmacy wins at Health Mart and also with a large pharmacy chain, as well as a number of exciting wins with MODA Health Plan, WellCare and two of the top 10 largest health plans in the United States. Second, while we continue to significantly expand our client base with new wins, we are also making progress with upsell efforts enabled by our M&A strategy. In PrescribeWellness, we are experiencing success of PrescribeWellness 365, formerly known as VRX Assists. PW365 provides a virtual staff to help community pharmacists create new revenue streams.

For instance, enrolling patients in a medication synchronization program. For this project, we were able to leverage Symphonia Telepharmacy call centers around the country. During Q1, PW365 revenues increased threefold compared to a year ago. Third, I want to commend the efforts of our R&D organization, including our precision pharmacotherapy R&D Institute, led by our Chief Scientific Officer, Dr.

Jacques Turgeon. Earlier today, we hosted a webinar entitled Important Medication Safety Considerations for COVID-19 treatment. We also filed three different COVID-19-related studies with the NIH program. For this project, we were [Inaudible] risk score by simulating the effect of adding COVID-19-related repurposed drugs such as Hydroxychloroquine, Chloroquin and Remdesivir; to the current medication regimen of seniors.

These are people enrolled in our PACE organization. What we found was a significant increase in the MedWise risk score, particularly with females, resulting in problematic heart dysrhythmia risk among other things. We are now expanding that study to a larger cohort of elderly people from a large health plan to test an additional 500,000 patients in simulation. As we mentioned in one of our press releases, we signed an agreement to distribute the BioIntelliSense BioSticker and now to monitor the result in the biological attributes, to our at-risk PACE members.

We are especially watching for key symptoms associated with COVID-19. In addition, we were able to deliver COVID-19 test kits to our PACE participants and for Americans more broadly through our PrescribeWellness network of more than 10,000 pharmacies. Fourth, I wanted to acknowledge the vital role that pharmacists nationwide and our TRHC pharmacists are playing during the current pandemic. We are also very pleased about the future potential that exists as states expand the scope of pharmacy practice laws, highlighted by news at both the federal and state level.

For example, on April 8, HHS authorized pharmacists to order and administer COVID-19 test in its efforts to expand testing capabilities. In Florida, the governor signed a bill, HB 389 in March to expand patient access to healthcare, allowing pharmacists to test and treat a wide range of chronic conditions. And following the passage of Ohio legislation in late 2019, that formally recognize pharmacies as healthcare providers, the Ohio Pharmacist Association recently announced a new program with UnitedHealthcare to pay community pharmacists to work with Medicaid patients to better manage chronic conditions. In summary, it has been a rewarding quarter.

I'm extremely proud of our team's collective efforts, and we'll now turn it over to Brian. Brian?

Brian Adams -- Chief Financial Officer

Thanks, Cal. I'm happy to report a good start to 2020. As promised, our Q1 results reflect our new organizational structure comprised of our CareVention Healthcare or PACE segment and our MedWise Healthcare segment. Our MedWise segment consists of our payer, pharmacy and provider focused businesses.

Starting with Slide 4. Total revenue of $72.8 million increased 19% on a reported basis and 9% on an organic basis. By segment, CareVention revenue increased 15%, all organic, and MedWise revenue increased 29% on a reported basis, but declined 4% on an organic basis. Within MedWise, software subscriptions increased 185% on a reported basis and 7% on an organic basis, but medication safety services declined by 7%.

As noted in our commentary on this slide, the first quarter of 2019 benefited from two major factors. First, we saw record activity levels attributed to changes in MTM program completion rates for CMRs as part of the CMS Star rating system for 2019. Second, we pulled forward a material amount of revenue in 2019 in anticipation of bringing a large contract with CVS Health online in the second half of 2019. Shifting to profitability.

Our gross margin, excluding depreciation and amortization, continued to improve to 34%, up 240 basis points versus a year ago. Our GAAP net loss of $14.4 million or $0.68 per diluted share compares with a net loss of $11 million or $0.54 per diluted share in the same period a year ago. The increased loss is driven by a % increase in operating expenses, excluding changes in fair value of acquisition-related contingent consideration and higher interest expense. Non-GAAP adjusted diluted EPS of $0.01 is down from $0.10 a year ago.

Non-GAAP adjusted EBITDA of $4.8 million is down 16% versus a year ago, driven by higher operating investments to drive future growth, as well as some additional expenses related to COVID-19 that Cal highlighted earlier. By segment, excluding corporate shared services, CareVention adjusted EBITDA increased 11% to $11.7 million and MedWise increased 72% to $2.8 million. The latter benefiting from staffing efficiencies and higher member engagement. Moving to Slide 5.

Consistent with our budget starting 2020, we expect Q2 total revenue to be in the range of $76 million to $81 million, which represents organic growth of 0% to 6%. With non-GAAP adjusted EBITDA in the range of $7 million to $9 million. There are three key factors to consider. First, we expect incremental medication fulfillment for our CareVention PACE members, but would note our most recent PACE census figures are showing negative trends for the first time in our history.

Second, within MedWise, for the same reasons we noted earlier, Q2 2020 represents a difficult comparison versus 2019, but we do expect the number of total clinical interventions to increase materially on a sequential basis versus Q1, with a similar sequential trajectory playing out in the second half of 2020. Third, while we are excited about the strength of our Q1 bookings, these important wins are coming online late in Q2 and will not be fully recognized until the second half of the year, which is in line with previously communicated expectations. Moving on to Slide No. 6.

We are maintaining our full-year 2020 guidance with total revenue to be in the range of $332 million to $352 million, which represents growth of 17% to 24% and non-GAAP adjusted EBITDA in the range of $46 million to $52 million. As we communicated during our Q4 2019 earnings call, our 2020 revenue and adjusted EBITDA is more weighted toward the second half of the year as compared with prior years. One key factor driving the seasonality is our growing MedWise payer business, which represents the largest percentage of our overall sales pipeline with a number of large opportunities. While COVID-19 pandemic did not have a significant impact on our first-quarter 2020 revenue performance.

It is too early to forecast the duration and magnitude of this pandemic and its resulting impact on the remainder of 2020. In addition to the PACE census headwinds described earlier, there are additional factors that may negatively impact our sales and business development activities. Specifically, within our MedWise segment, our three largest pharmacy trade shows during July have all been canceled. We hope to navigate around these ongoing challenges, and I'm pleased with the strong efforts from our sales team to date.

With that, I will turn it back to the operator to open the call for the Q&A session. Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] And our first question comes from Ryan Daniels with William Blair. Your line is now open.

Jared Haase -- William Blair and Company -- Analyst

Yeah. Good evening. This is Jared dialing in for Ryan. Thanks for the color, and thanks for the questions.

Brian, curious -- I think you just made the comment within the MedWise, the payer business specifically represents the largest percentage of the sales pipeline. I'm just curious if you could go into maybe a little bit more color there. Just on what specifically is resonating in that market right now? And how sustainable do you see that going forward?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

I'm going to give this one to Kevin Boesen, and I think he's best positioned to respond to that, Jared.

Kevin Boesen -- Chief Sales Officer

Great. Thanks, Brian, and Jared, thanks for the question. The pipeline growth is -- we focused on Medicare. That's a core business.

Enhancing MTM services with some MedWise program. But the Medicare pipeline only represents about 25% of current opportunities. So we have about another 25% that are in Medicaid combination of managed Medicaid, some creative fee-for-service programs, now that some of the states are doing carve-outs of their pharmacy benefit. But the remaining is in commercial and employer-based plans specifically.

So as that risk helped employers look specifically at ways to reduce those costs with hospitalizations. MedWise is something that they're definitely interested in. So we've gained a lot of traction in the pipeline relative to that.

Jared Haase -- William Blair and Company -- Analyst

OK. Got it. Yeah, that's very helpful. And then maybe just one quick follow-up just relative to the guidance.

I think, Brian, last quarter, you mentioned there was like a 10% bogey that was needed to go catch in terms of new business in order to kind of come in line with guidance. Obviously, you have the really strong pipeline commentary, and you maintained the outlook there. So it sounds like things are progressing nicely. But just curious if you could comment on how you're kind of progressing on those fronts in light of the disruption from COVID-19?

Brian Adams -- Chief Financial Officer

Sure. Great question. We've closed about 20% to 25% of the gap that we had at the year-end earnings call. So we made -- Kevin and his team have done a nice job with the wins that we just talked about and the pipeline continues to grow pretty nicely.

So we've made the progress that we expected to make by this point.

Jared Haase -- William Blair and Company -- Analyst

Got it. Thanks very much.

Operator

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

David Grossman -- Stifel Financial Corp. -- Analyst

Thank you. So Brian, if I could just quickly follow-up that last question. So if you look at the back half of the year because as you've mentioned in your prepared remarks, it's a pretty steep ramp to hit your guidance in the back half. So is that to suggest that you have visibility on all but about 7% -- 8% of the total year at this point.

And obviously, that would be skewed to the last two quarters of the year?

Brian Adams -- Chief Financial Officer

That's right, David. I would say that that is the case. Now one caveat there is that that is assuming that our PACE growth rate continue with historical. So we have seen a little bit of a slowing there.

But they are still enrolling members. And while there might be a slight dip in the near term, longer term, we don't see that they're going to be impacted. So that assumption does have that we would see similar growth rates in the PACE market for the remainder of the year.

David Grossman -- Stifel Financial Corp. -- Analyst

Right. And actually, my second question was on PACE. So thanks for the disclosure by the way that's very helpful to understand the business. So the Solutions business, I think your commentary said that you had a renewal maybe that the scope of services were reduced, which looks like it was about $1.5 million in the quarter.

Am I understanding that right? And so is that a $6 million headwind for the year? That has to be made up? Or am I not understanding that comment?

Brian Adams -- Chief Financial Officer

No, the contract, it's about $1 million in the first quarter. It's not consistent throughout the remainder of the year in terms of 2019. So I don't expect that we'll see the same level of impact throughout the year. But that contract did change.

And so we're seeing that. We would expect to see that ramp throughout the end of this year and into next year.

David Grossman -- Stifel Financial Corp. -- Analyst

So can you give us a sense of how much of a headwind it is to your growth rate for the year?

Brian Adams -- Chief Financial Officer

So again, it was about $1 million in the first quarter. I would say it's safe to assume that just for -- to make it easy, I would say, it's somewhere between $2 million and $3 million for the remainder of the year.

David Grossman -- Stifel Financial Corp. -- Analyst

Gotcha. And I think you said that the PACE of -- well, no pun intended here, but the rate of adds, same-store sales growth, it must have been in March because I think the January and February numbers were still high single digit. Is that what you meant when you said that you're seeing some slowing in that market and if so, how should we view that? I mean, is that just all the disruption created by anybody doing anything as it relates to taking care of the elderly and changing that during this period? Or I'm just trying to get my arms around that statement and how we should factor that out?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

This is Cal. I think that -- and I'll turn to Orsula, too, because she's really close to this. But in general, what's happening is the PACE organization take applications, so to speak, on recruit and then on the first of the month, so for example, the first of May, they will usher all those folks in. However, so that could be whatever.

And then they have to subtract from that the debts and then you get the net. And what we've seen is a little bit of contraction on the admissions, but we've seen a lot more of the depths. And I think it makes sense. These are the frailest elderly we have in the country that are ambulatory and with comorbidities.

So like in New York City, they really got hit. Our PACE programs up there. So I think that's what you're seeing. Orsula, would you want to further comment on that?

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

Well, just that having the home and community-based service which is a wonderful alternative for long-term care and really nobody wanting to be in long-term care. We would envision this as a very short term perhaps a little bit down on enrollment. In the long term, we believe that this experience might really promote PACE in a new way.

Brian Adams -- Chief Financial Officer

Yeah. Just to add to that, David, one comment would be this May is the first month where we've really seen any contraction up until this point, even through April. We haven't seen anything. So May is really the first month where we're seeing.

David Grossman -- Stifel Financial Corp. -- Analyst

Got it. And would it affect both solutions and product fulfillment equally or --

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

It would. It would.

David Grossman -- Stifel Financial Corp. -- Analyst

It would. OK. Got it. All right.

I'll get back in the queue. Thanks very much.

Operator

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

Sean Wieland -- Piper Sandler -- Analyst

Hi. Thank you very much. Brian, you said something that was a mouthful that I didn't quite get, record activity levels in Q1 were due to changes in MTM completion rates for CMRs, and then I lost you. But can you go back to that and then unpack it a bit?

Brian Adams -- Chief Financial Officer

Yeah. So going into 2019, the CMS Star ratings changed, and they increased the benchmark that were required to be hit in order to achieve certain star ratings. And so what that effectively did last year was boosted the number of CMRs. That we needed to complete in order to hit the same star ratings that the plans we're targeting.

And so that created a bit of a boost in the swell in the first half of last year for two reasons. One, we had more work to do. And two, many of the plans -- we were a little nervous about being able to get to those measures. And so they wanted to do it earlier on in the year.

So we saw an increase in the overall number of clinical interventions that were completed in the first half of the year. Does that make sense?

Sean Wieland -- Piper Sandler -- Analyst

I think so. And so that's why you're facing a tough comp for the first half of 2020. Were there any changes to the requirements for delivering the medication reviews because of the COVID-19 pandemic over the past couple of months?

Brian Adams -- Chief Financial Officer

We have not seen any. Sean, the benefit that we have now though, and it was in our commentary was that people are home. So there is an access thing there where we're able to engage, I think, a little bit easier than historically we've been able to.

Sean Wieland -- Piper Sandler -- Analyst

OK. And on the PACE trends, so can you comment on like COVID-19 incident rates within the PACE centers that might be causing the pressure in the numbers?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

We don't know specifically, however, we do know that it's trending the exact same as it's trending in the United States where the states that are heaviest hit with that in the elderly, like New York are the ones that we see that are getting traction, and others are flat and some have increased. But the heavy states of what on New York, California.

Sean Wieland -- Piper Sandler -- Analyst

OK. Thanks so much. Oh. What's that Orsula?

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

I said, Detroit also.

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Yes, Detroit. Yes, that's true.

Sean Wieland -- Piper Sandler -- Analyst

And Detroit. OK. Thank you.

Operator

Thank you. Our next question comes from Matthew Gillmor with Baird. Your line is now open.

Matthew Gillmor -- Robert W. Baird and Co. -- Analyst

Hey. Thanks for the question. I hope everyone's doing well. On the PACE census issue, could you describe the magnitude of that? Is that going from what your commentary almost made it sound like it was turning negative? Is that the case? Or is it just a more muted growth rate than what you've seen historically for your clients?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

I think that it's -- typically, we see organic growth from our current PACE programs, anywhere from 100 to 200 or more patients per month, net. That is the admissions less the deaths. And this time, it's been pretty flat. So the trend is coming down on the organic growth side temporarily.

But I think it makes sense. I mean, these people, the ones that are going be susceptible to the virus and to the death.

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

Yeah. They are staying home. The PACE centers are closed, except use they people and open for their clinics. So activity is still occurring.

People being mad.

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Yeah. There's patients going out -- nurse to going after the home. One of them has a mobile unit that goes around. They are doing things very creative.

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

Yeah.

Matthew Gillmor -- Robert W. Baird and Co. -- Analyst

OK. But just to be clear, on a year-over-year basis, the census would still be up even if month-to-month from April to May or flat for a month. Is that correct?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Yeah. Our census for the first quarter was above by quite a few hundred people than it was in the first quarter of 2019. So that will still happen.

Matthew Gillmor -- Robert W. Baird and Co. -- Analyst

OK. For the new payer relationships that you announced or maybe if you want to speak to the pipeline, if that's easier. I guess I was curious from a product perspective, are these for traditional MTM services? Or are they more on the enhanced MTM model?

Brian Adams -- Chief Financial Officer

OK. Kevin, do you want to take that one?

Kevin Boesen -- Chief Sales Officer

Yeah. Thanks, Matt. I'll take that. It's a mix.

We do have some programs that we're launching that are adding the MedWise component to the traditional MTM program. We have programs where they're using MedWise in unique situations. So later this month or by the end of the second quarter, we plan to launch a program that's focused specifically on opioid patients who are taking opioid medications. There's quite a bit of interest in programs that also involves treatments for COVID positive patients.

And so there's a combination of a couple of the programs, though, are leveraging our strength. So a couple of the large health plan programs that we mentioned are leveraging that our regional call centers, the flexibility that they had without losing any momentum. They went from brick-and-mortar call centers to remote call centers, as well as the community pharmacies, particularly our 10,000 independents that have adapted to help health plans provide new solutions. And so those are focused on things like improving gaps in care gaps that might be related to Medicare Part D or even Medicare Part C measures.

So both drug utilization measures, as well as Medicare Part C to clinical measures. So a combination of everything. I think our ability to be flexible and offer services through the different business units that we have has been a real advantage for us.

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Matt, I think one other thing, Matt. So this has been the first time in our history that there's a public recognition of multidrug simultaneous interactions that kill people. It's all because of the medicines that have hit their news and everybody knows about them that people didn't not to sell so before and now they do. And the study that we just did that we published, that we talked about and that was accepted by NIH is absolutely huge.

Because what we did is we took all these people the regimens that they had in place, people with client conditions. And we added on those drugs incrementally and saw a tremendous increase in the risk work. So this is softening up the public market that there is a problem. It's a real problem, and somebody's got to come up with a solution, and we're the only ones that have that solution at this point.

So we believe that you're going to see some stuff coming out of us in the next quarter or two, that's going to be taking advantage of that. Let me put it that way.

Matthew Gillmor -- Robert W. Baird and Co. -- Analyst

OK. Great. Thanks very much.

Operator

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

Sean Dodge -- RBC Capital Markets -- Analyst

Thanks. I guess I want to start -- so a number of your program center on being able to engage people, and it's been a common theme we've seen across some of the other companies that have reported already that engaging people now is a bit easier given all of the sheltering in place that's happening. I guess, are you experiencing that too in some of your programs? And does that help out in areas like MTM or the EMTM pilot?

Brian Adams -- Chief Financial Officer

Absolutely. Yeah. We have seen that already, and it is generating some efficiencies on the staffing side as we work through some of these the existing programs and some of the new programs that Kevin signed up. So we are definitely seeing that that is the case.

Sean Dodge -- RBC Capital Markets -- Analyst

OK. And then I guess on the BioIntelliSense sticker, you highlighted it at the Investor Day, you're now the principal distributor for that end of the PACE program. I'm curious how that contract works? If this unlocks a new revenue stream for you all? And then how meaningful that could be? And then from a capability standpoint, how should we think about that fitting in or augmenting what you're already doing?

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Well, this is Cal. I wouldn't think of it exceptionally at this point because we're just getting started with it. We'll see how it goes. We have high expectations through the end of the year that it's going to be very effective in pharmacovigilance and also even right now with some of the COVID stuff.

But we just got our first shipment of these things, and we're just starting to test them, and we've got the software set up and so forth. So I don't want to overpromise on this because I'm not really sure how it's going to work in the real world. I mean, it sounded great. FDA sounded great about it, and the company that makes them sounds great about it.

But we'll see. We'll probably know, we'll probably be able to give you a better answer in a couple of months.

Brian Adams -- Chief Financial Officer

Yeah, I agree. I think we'll be able to give you a better answer on our Q2 call. At this point, as Cal said, we just got these in and our team has started to test them. But from an economic model, I wouldn't expect much in terms of a contribution this year.

We have an agreement with BioIntelliSense, where we would pay a monthly fee for the sticker and for the connectivity, and then we would also charge a fee related to the services that we're providing as well. So I think it's still pretty early on. And more to come probably in the next couple of months.

Sean Dodge -- RBC Capital Markets -- Analyst

OK. Great. Thanks again for the time.

Operator

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

Stephanie Davis -- SVB Leerink -- Analyst

Hey, guys. Thank you for having me back and taking my questions. So you guys have touched on COVID, but I wanted to delve a bit more into the PACE program. So one of the big takeaways from all of this is that nursing homes aren't looking so great.

Acknowledging that we're probably not seeing a lot of new PACE center openings near term, do you have any views on what that could mean longer-term for the rollout of the program, but it's still relatively unknown?

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

I think it really is an opportunity. It's an opportunity, Stephanie, as you're thinking for people to consider an alternative to long-term care in a more serious way than they had in the past. So we definitely believe that -- and are seeing it now, people are moving their patients, their family members from nursing homes, and they need other alternatives where if there's PACE in that community, they're able to enroll them. I did want to mention that we did see two were discharged alive.

We're just enrolled participants. We are seeing that too during the time. So people are less likely to change plans, which is helping.

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Yeah. I think that Orsula is correct, Stephanie. I think that I can't wait to see how the PACE organizations start taking this and marketing it. I think it's going to be -- I think you're absolutely right.

It's going to be a real waterfall for the marketing. I mean, what a tough thing to talk about, right? The long-term care facilities. And so yes, I think you're right. I think it's going to be a really interesting rest of the year when they start marketing against that.

Stephanie Davis -- SVB Leerink -- Analyst

That's what I was thinking. Where does the onus lie for this PR campaign to get folks aware of the PACE program? Its just like that's what we need.

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

I mean, as a small percent of people on PACE to our in-nursing homes because percent of people who will need nursing home level of care, regardless of whether they're on PACE or not. But for those who can still live at home, I think it's a great alternative.

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Yeah, it's less than 5% on long-term care now. But yeah, I think you're right. It'd be interesting to see how this thing plays out.

Stephanie Davis -- SVB Leerink -- Analyst

Now pivoting a little more to your pharmacy business. Throughout all of this, I've been hearing a lot of pharmacies or other health tech players looking for more like a tech-enabled consumer pharmacy solution pandemic just because folks aren't able to use their homes, right? There's more consultations that have to be done virtually. Could you walk us through any opportunities that you've seen come up as a result of all of this?

Brian Adams -- Chief Financial Officer

Well, Stephanie, I think you bring up -- it's a great point. And Cal can probably talk a little bit more about what the role of a pharmacist today and tomorrow, but I can talk maybe for a moment about some of the things that we've already been doing as part of the COVID initiative. Specifically with our pharmacies, we've sent out over 2 million messages to help educate people around COVID and also educate them on what is available at their pharmacies because I think so many people are afraid to go out and not sure what to do. There's been a significant shift into 90-day supplies at these pharmacies that are part of our network.

And they're really seen as an access point. And we've got 10,000 pharmacies in the PrescribeWellness network that can reach close to 300 million people in the U.S. and we've got a pharmacy within five miles of the 300 million people. So we have a really interesting opportunity to play a pretty important role and one of the first steps was bringing COVID testing to those pharmacies.

And so we've got 3,000 pharmacies that responded to us saying that they were interested in delivering these tests locally. And we've already sent out 3,000 tests to these pharmacies as part of that program. So maybe I'll let Cal chime in on the future of pharmacy in this --

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Well, I think -- OK, Brian, thanks. I think that there's a couple of things going on. As pharmacists start getting more opportunities to help a chronic care patients as Ohio did and a couple of other states have it in lined up to be pass also. What they need to do there is they need to document it using SNOMED Codes, and they need to also have tools for pharmacists prescribing.

We have both of those in MedWise. I mean and MedWise with PrescribeWellness combined, the two softwares we have are unbelievable. I mean, they both work on SNOMED Codes. They both -- they are prescribing modules in them.

We're one of the very, very few companies that can help these pharmacists quickly, get that capability. And we know that that's going to happen. You can't help people with chronic conditions now unless you're documenting properly. And that's not typically what pharmacists do in their community pharmacy.

We have that embedded in the patient engagement center. And they can buy that from us that option. And I'd like to just let Kevin Boesen say one thing about that, too, because -- Kevin, would you like to expand on that just a little bit?

Kevin Boesen -- Chief Sales Officer

Yeah. A few things that come to mind relative to that question is, although we've talked about patient engagement being a little bit easier because people are home. There's still tremendous value in the payers working through us to have that communication come from the patient's pharmacy. So Brian talked about the 2 million messages that have gone out to patients from the pharmacy.

Many of those are on behalf of payers, which is one of the revenue models where we're providing services for payers, passing that on to pharmacies and they're using our technology to do it. And be able to, as Cal said, for to have that patient engagement using the tools that we have, those messages are going out in voice, text, they're going out on social media. So there's a lot of ways to engage patients. And then we're documenting that in the PrescribeWellness platform in a way that's codified.

So it can be transmitted back to physicians electronically back to the health plans electronically using the same model that we have in our EMTM platform to codify data. And so it's a tremendous advantage. So in terms of having patients to be remote and have access to telehealth technology, but then do it in a matter that they're still interacting with somebody that they trust has been a huge advantage in one of the areas that has really helped us with the growth. And deals that we've closed in Q1, we've continued that momentum in April, and that's why we're optimistic about the rest of the year as well.

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

And I think the last thing -- thank you, Kevin. I think the last thing that we've launched, if you go in the App store and type MedWise, you'll find the app, it's launched now. And it's in Version 1. We have three other versions lined up over the next six months that we start putting in risk and other kind of stuff and tethering them to the local pharmacists.

So we're also actively working down that pathway that we're bringing more, more consumer-focused and bringing them into our system. So you'll see a lot more of that happening, too.

Stephanie Davis -- SVB Leerink -- Analyst

Super helpful. Thank you so much, guys.

Operator

[Operator signoff]

Duration: 44 minutes

Call participants:

Kevin Dill -- General Counsel

Cal Knowlton -- Chief Executive Officer, Chairman, and Founder

Brian Adams -- Chief Financial Officer

Jared Haase -- William Blair and Company -- Analyst

Kevin Boesen -- Chief Sales Officer

David Grossman -- Stifel Financial Corp. -- Analyst

Orsula Knowlton -- Co-Founder, Chief Marketing, and New Business Development Officer

Sean Wieland -- Piper Sandler -- Analyst

Matthew Gillmor -- Robert W. Baird and Co. -- Analyst

Sean Dodge -- RBC Capital Markets -- Analyst

Stephanie Davis -- SVB Leerink -- Analyst

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