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Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC)
Q1 2021 Earnings Call
May 7, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the Q1 2021 Tabula Rasa HealthCare, Inc. Earnings Conference Call. [Operator Instructions] So I would now like to hand the conference over to your speaker today, Kevin Dill, Corporate Counsel. Please go ahead.

Kevin J. Dill -- General Counsel

Thank you, and good morning. I'm Kevin Dill, Corporate Counsel for Tabula Rasa HealthCare. The company intends to avail itself of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain statements made during this call will be forward-looking statements within the meaning of that law. These forward-looking statements are subject to risks, uncertainties and other factors that could cause Tabula Rasa HealthCare's actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include the developing nature of the market for technology-enabled healthcare products and services and potential changes to laws and regulations that may impact our clients.

For additional information on the risks facing Tabula Rasa HealthCare, please refer to our filings with the SEC, including the Risk Factors section of our 10-K filed on February 26, 2021. A recording of this call is accessible through a link on the Investor Relations page of our website, and it will be available for 90 days. Now I'll turn the call over to Dr. Calvin Knowlton, CEO, Chairman and Founder of Tabula Rasa Healthcare.

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

Thank you, Kevin. Greetings, investors and analysts. Thanks for joining our earnings call for the first quarter of 2021. After my opening remarks, you will hear updates from Dr. Orsula Knowlton covering important PACE industry developments; Dr. Kevin Boesen on Sales; and Mr. Brian Adams, who will cover our financial results. Also with us today and available to take questions, is our newest leadership addition, Dr. Celynda Tadlock, who is our Chief Client Officer and EVP of Pharmacy Benefit Solutions. As a reminder, this conference call and webcast is accomplished by a PowerPoint presentation available at the IR section of our website, and I would encourage you to download the slides to follow along with our prepared remarks. Let me begin by thanking our team members for an incredible first quarter of recovery as we emerge from the COVID-19 pandemic.

Thank you, team. In this section, I want to underscore the fact that we are passionately pioneering a new digital frontier, the safe use of medication with MedWise. We are taking the drug disposition sciences from academic research to real-world application for people with chronic conditions who take multiple medications. Today, I will cover three points. First, our quality outcomes persist. We continue to publish in peer-reviewed journals, evidence that interventions driven by MedWise and the derivative MedWise Risk Score reduce healthcare costs. We have constantly demonstrated in pace and enhanced medication therapy management and an array of payer groups that using MedWise dramatically reduces adverse drug events, which manifests materially as life-enhancing decrease in falls, ER visits, hospitalizations, rehospitalizations and now reduced risk of premature death.

The latest research regarding the value of MedWise was published three weeks ago in the Journal of Patient Safety. Researchers at DARTNet, a non-for-profit research institute at the University of Colorado, demonstrated that a higher MedWise Risk Score was independently associated with an increased risk of death. Further underscoring the value of MedWise to improve the safe use of medication. The study concluded that interventions for patients with a high MedWise Risk Score can lessen the risk of premature debt. On average, certified MedWise advisor pharmacists reduced the MedWise Risk Score by five to seven units, which translates to improved patient safety and reduce premature mortality. Please read the article in the Journal of Patient Safety for specific information. You will find the study along with our other published research at our website, www.trhc.com, click on R&D pillar and then on the lower left, Publications and Reports.

Second, while our quality outcomes continue, we now have a tailwind catalyzing precision pharmacotherapy. Though TRHC has been using pharmacogenomic insights for a decade now. It has not been considered customary in medical practice. That mindset may be quickly changing, however, thanks in part to the $834 million judicial judgment in Hawaii brought against Bristol-Myers and Sanofi. The court essentially emphasized that enduring patient-specific pharmacogenomic data, especially when an FDA black box warning is disregarded, can evoke serious liability. We have seen a huge uptick in inquiries about our PGx based services and have plans to offer them more broadly. MedWise is the only system available that simultaneously analyzes drug gene pairing as well as competitive inhibition.

Competitive inhibition occurs when a person is taking a combination of medications that happened to go through the same metabolic pathway. The effective drugs metabolically collide, causing higher or lower blood levels than expected, which leads to adverse drug events. Many of our peer-reviewed papers attest to MedWise impact, reducing and/or eliminating competitive inhibition, thus enhancing healthcare quality and reducing total medical costs. These papers also can be found on our TRHC website under R&D and then Publications. Ameliorating competitive inhibition is our most common pharmacotherapy intervention in MedWise. Almost 50% of our interventions have to do with ameliorating competitive inhibition. The third point I'd like to make in addition to our tome of quality outcomes and broadening our pharmacogenomic precision focus is that we are enhancing our efforts of stimulating pertinent regulatory advances.

We are working diligently to ensure that the new administration has a solid understanding regarding TRHC's medication risk reduction focus and solid outcomes. There are exciting developments related to our federal and state endeavors. In addition to the pending state Medicaid Medication Risk Reduction Legislation, we met with CMS' Center for Medicare and Medicaid Innovation last week to show them the clinical and financial impact we have made in the enhanced medication therapy management program. Specifically, with those members assigned to us who had a MedWise Risk Score greater than 14. Our statistically significant outcomes reduced all the economic, clinical and humanistic metrics mentioned above, including lessening premature debt. This was in the 40,000-member subset, as I said, that had a Risk Score of greater than 14.

In other words, while we have been provided full information monthly from CMMI on about 305,000 total members. That is Part A, B and D data. We only intervened on the 40,000 members with MedWise Risk Score greater than 14. For those whom we intervened upon, the clinical and economic results were material. We have engaged a notable DC firm, that's a consulting firm for CMS and CMMI, to assure that the leaders of the regulatory agencies understand our novel results. We also have three papers in peer review right now, which document our clinical and ROI success in EMTM. In addition to the possible expansion and adoption of our EMTM model, we have positioned our safe use of opioids initiative in the forefront of the regulators.

There continues to be a significant opportunity to improve the opioid epidemic with MedWise initiatives such as ours that prospectively predict what multidrug combinations interfere with metabolic disposition, in particular, triggering unintended overdosing, which all can be mitigated by altering current time of the administration. This is, again, the pharmacokinetic science of competitive innovation, which is an innovation and application that only TRHC has mastered. Furthermore, we recently published two papers using MedWise simulation, demonstrating that the repurposed drugs used in the COVID raised the MedWise Risk Score significantly when added to real-world current medication regimens. In the two studies, it was combined -- combining them, there were 540,000 patients that were reviewed and simulated.

We are now formulating, approaching both pharma companies and the FDA with the unique opportunity to use TRHC's real-world MedWise simulation model, both in clinical trials and in regulatory review. In summary, we are seeing tremendous positive synergy for the broad application of MedWise for three reasons: The economic clinical and humanistic outcomes, resulting from our novel application of drug disposition science, are becoming public knowledge and the rationale of reducing premature death is compelling; number two, precision pharmacotherapy, whereby TRHC is the only comprehensive pharmacogenomic drug gene peer and competitive inhibition, knowledgeable provider.

It's is heightened by judicial judgments; and number three, regulatory tailwinds are gaining traction on the federal and state levels, recognizing that an optimized and safe medication regimen is actually an ethical right for every person as well as being clinically and economically beneficial to society. I want to make one last point for you to remember for you and your family. Adverse drug events are an unnatural disaster. Adverse drug events are caused by humans who lack the tools to make better decisions. MedWise can remedy this ubiquitous trial and error-based medication problem. TRHC is the first company focused solely on the personal and precision application of medicinal science. And by doing so, TRHC is making a huge impact, reducing morbidity, mortality, medical expenditures and premature deaths. In addition, all of our outcomes are documented in peer-reviewed publications. I will now turn it over to Orsula. Orsula?

Orsula V. Knowlton -- Co-Founder, President, Chief Marketing & New Business Development Officer

Important points, Cal. Thank you. I'd like to start by thanking our clients for their amazing efforts to vaccinate, in some cases, up to 90% of their participants, along with a good percent of their staff. It's incredible to witness their unwavering leadership and focus on the future. At Tabula Rasa, we believe that elders deserve to lead fulfilling lives on their own terms. Our mission and our passion is to help the elderly age in place with dignity and independence. That's why we created the most comprehensive and integrated suite of PACE solutions and services available. We provide the support PACE administrators need to operate their programs effectively, compassionately and successfully, and we are seeing positive signs through our PACE census of a return to pre COVID organic growth or better. Turning to catalyzing policy.

The first four months of 2021 have been extremely active and encouraging from the federal policy perspective as the new administration has placed an emphasis on seniors aging in place. This, of course, was in response to the high death rates in the nursing home population. Industry sources estimate that there are 2.2 million PACE eligible individuals across the country today, but the current market penetration is less than 3%. I want to highlight several important developments referenced on Slide three and 4, each of which have the potential to significantly accelerate the growth and the size of the PACE market, starting with the American Rescue Plan Act, or ARPA, signed into law in March. The ARPA includes a 10% increase to the Federal Medicaid Assistance percentage for home and community-based services.

This targeted increase of $13 billion in federal matching funds is intended for states to intensify their HCBS efforts, which are defined to include PACE for the 12-month period starting April 1, 2021. Also, in March of this year, the Home- and Community-Based Services, HCBS Access Act of 2021 was introduced. This proposed bill added HCBS as a mandatory Medicaid service. HCBS waivers were first authorized in 1981. They allow older adults and individuals with intellectual and developmental disabilities eligible for Medicaid to receive services and support in the home or community setting as opposed to an institutional setting such as a nursing home. With demand for HCBS far outpacing access, waiting list enrollment has increased each year since 2010 and now exceeds 800,000 people according to industry sources.

In April, the President unveiled the American Jobs Plans, which includes $400 billion aimed at expanding access to Home- and Community-Based Services and extending the long-standing Money Follows the Person program. To put the $400 billion into perspective, for the most recent fiscal year reported 2018, national spending accounted for 56% of the total Medicaid long-term care senior services or $72 billion. Then on Thursday, April 15, U.S. Senator Bob Casey of Pennsylvania, Chairman of the Special Committee on Aging, introduced the PACE Plus Act to help medically complex low-income seniors and people with disabilities age in their home and communities. The PACE Plus Act would strengthen and expand access to the program and help release pressure on the growing Medicaid HCBS waitlist. Slide four in our presentation covers the important elements of this bill.

Supporting these exciting legislative efforts most favorable to PACE is an April publication by the Milken Institute's Center for the Future of Aging and Financial Innovation Labs. The report titled, New Approaches to Long-Term Care Access for Middle-Income Americans highlights that by 2029, 54% of middle-income seniors will not be able to afford the care they need. As slide five highlights, PACE is one of two integrated care programs that can be scaled with the aim of aging at home independently and reducing the overall cost of care. Finally, on Friday, April 30, the Executive Director of the National PACE Association, Shawn Bloom, wrote, "that the Milken study cited PACE as an effective program for caring for seniors in the community. In my view, we are only at the beginning of this long overdue and very positive discussion about the future of older adults. I've never been more optimistic about the future of PACE as I am today."

Finally, a few weeks ago, the National PACE Association hosted its 24th Annual Spring Policy Forum. The recurring theme was changing the default mindset that exists across healthcare for seniors and high-risk high-need individuals to emphasize home-based care over institutional care. One example of where this exists is the Department of Veterans Affairs, which participated in the 2-day event and highlighted the need for the federal government to reallocate more dollars to HCBS and PACE versus the traditional default nursing homes. In short, we are excited about the future to scale the PACE program exponentially to more Americans. Tabula Rasa HealthCare is ready with its full suite of solutions to expand PACE for current clients, help new PACE organizations as they start and to support those interested in exploring and investing in PACE. PACE should be considered the solution for aging in place and long-term care in the U.S. as opposed to facility based care. Kevin?

Kevin Boesen -- Chief Sales Officer

Thanks, Orsula. I'd like to provide an update on our sales activities to date, the continued growth of the sales team and pipeline and progress toward our 2021 revenue growth target. I'm happy to report that first quarter sales were on target with our internal expectations. Our payer sales were up 41% compared to Q1 of last year and accounted for 62% of first quarter bookings. Additionally, our payer pipeline as of the end of April is up 14% since the start of the year. As we publish more outcome data, like the studies presented by Dr. Cal Knowlton, interest in MedWise continues to expand to new models of care. One example is a new contract signed this year with Signify Health. Beginning in Q3, Signify Health pharmacists will utilize our MedWise platform to prevent hospital readmissions in support of their episodes of CARES solutions.

Signify Health recognized MedWise as the only technology proven to predict and prevent rehospitalizations caused by adverse drug events. Before I address our community pharmacy sales, I would like to say that we are inspired by community pharmacists across the United States during the COVID-19 pandemic. Our 15,000-plus community pharmacy partners play a critical role in managing COVID-19 and TRHC is proud to have supported their efforts by providing COVID-19 test kits, state and federal vaccination database integrations, contactless vaccine registration and MedWise Medication Risk Mitigation Solutions for COVID-19 treatments. Community pharmacy sales have grown significantly after COVID related reductions in 2020. Community pharmacy bookings during Q1 were up 20% compared to Q4 2020, and up 66 million compared to Q3 2020.

In addition to the solutions mentioned, sales growth is being fueled by the launch of MedWise for community pharmacies as well as our partnership with eHealth to support enrollment for the millions of Medicare patients that use prescribed wellness pharmacies. We are optimistic about continued growth throughout 2021 with the pending launch of a suite of solutions for 5,000 McKesson Health Mart pharmacies. In the PACE market, as Dr. Orsula Knowlton discussed, we are also seeing signs of recovery with multiple service offerings. Additionally, our pharmacy benefit services solution, Pharmastar, acquired in 2020 is driving new cross-sell opportunities in both PACE and non-PACE markets. Pharmastar and our PeakTPA offering now support three Medicare Advantage start-ups with two of the plans also using our MedWise MTM solutions. Last, I'll address our progress toward our 2021 revenue target.

Our revenue target for new sales is unchanged at effectively $21 million. As of the first quarter, we have closed approximately 1/4 of this target which is consistent with our internal projections. We expect to close a large part of the remaining gap during the second and third quarter of 2021, and my confidence remains high based on our pipeline and record number of requests for proposals in the first quarter. This increase in pipeline and RFPs is directly linked to the growth of the sales team that is on schedule for 2021. We have continued to hire experienced and seasoned sales representatives, growing the business development team by 40% to a total of 40. I'll now turn it over to Brian.

Brian W. Adams -- Chief Financial Officer & Secretary

Thanks, Kevin. As you can tell from Cal, Orsula and Kevin's comments, we remain very bullish on the potential for Tabula Rasa this year. In addition to guidance, I'm going to focus my commentary around two key areas influencing our growth prospects for 2021. PACE census trends and MedWise sales progress. First, as we have been disclosing throughout the year, pace enrollment has continued to improve each month as more participants get vaccinated and PACE centers begin to reopen. In addition, PACE operators have adapted well to serving more people in their homes since the pandemic began and are now shifting their focus to growth. While our census during the first quarter was essentially flat with Q4 2020 in our PACE Pharmacy services business, we saw approximately 1% net enrollment in both March and April on a sequential basis, the strongest consecutive two-month period since the pandemic began.

In addition, our preliminary enrollment numbers for May suggest a continuation of this positive trend with 1% sequential growth. These growth rates are slightly ahead of our expectations at this point in the year, an encouraging sign that pace growth rates may return quicker than we have forecasted. Second, our MedWise win rate continues to accelerate with much of the success in the payer market, where we are concentrating our investment from a sales and marketing perspective. I'll remind you that we have adjusted our approach to our MTM business this year, which was reflected in our guidance. Rather than having an end of Q1 and Q2 as the strongest periods during the year, as we've experienced in the past, we have taken a more balanced approach to delivering clinical intervention to better manage staffing and enhance profitability.

On the surface, during Q1 and Q2 this year, the progress Kevin's team has made on the sales front may not be as evident as we are rebalancing MTM workload and successfully backfilling the previously disclosed client attrition from last year. We have multimillion-dollar contract expansions with several national payers, new clients beginning services and an unexpected increase in demand for our support from payers and pharmacies due to the continued focus from pharmacies on the vaccine rollout. We believe all of these factors will drive quarterly sequential revenue growth in the MedWise division this year. In addition to the growth in bookings, payer programs that experienced COVID related delays in 2020 are off to a very promising start.

Revenue contributions from new agreements signed in 2020 with United HealthCare, Humana and WellCare, increased 10 times in the first quarter of 2021 versus a year ago. placing us in a potentially favorable position versus our initial projections. Last, our full year guidance remains unchanged, and we are introducing second quarter guidance as follows: revenue in the range of $80.5 to $82.5 million, which represents growth of 5% to 7% compared to a year ago and sequential growth of 5% to 8%. And which is consistent with the quarterly revenue progression we projected with our full year guidance. Adjusted EBITDA in the range of $5.5 million to $6.5 million which represents margin of 6.8% to 7.9% and a significant improvement as compared to the first quarter of 2021 due to higher revenue across our two major operating segments, and disciplined cost management. With that, I will turn it over to Dr. Knowlton for closing comments. Cal?

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Sean Dodge with RBC Capital Markets. Your line is now open.

Sean Dodge -- RBC Capital Markets -- Analyst

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

Kevin J. Dill -- General Counsel

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

Sean Dodge -- RBC Capital Markets -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

And so I think when you see the health plans really looking at that and seeing how we've integrated as a company and what the differentiators really are. Those studies are really driving some conversations and a lot of momentum.

Sean Dodge -- RBC Capital Markets -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Sean Dodge -- RBC Capital Markets -- Analyst

Okay. Great, Thanks again.

Kevin Boesen -- Chief Sales Officer

Thanks, Sean.

Operator

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

Jared Haase -- William Blaire -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

Kevin Boesen -- Chief Sales Officer

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

Jared Haase -- William Blaire -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

Operator

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

Sean Wieland -- Piper Sandler -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Sean Wieland -- Piper Sandler -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Sean Wieland -- Piper Sandler -- Analyst

Okay. Thank you very much.

Operator

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

Stephanie Davis -- SVB Leerink -- Analyst

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

Kevin Boesen -- Chief Sales Officer

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Stephanie Davis -- SVB Leerink -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Stephanie Davis -- SVB Leerink -- Analyst

Very awesome. Thanks, guys. [Indecipherable].

Operator

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

David Larsen -- BTIG -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

David Larsen -- BTIG -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

Kevin Boesen -- Chief Sales Officer

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

David Larsen -- BTIG -- Analyst

Okay, great. Thank you very much. I appreciate it.

Brian W. Adams -- Chief Financial Officer & Secretary

Sure.

Operator

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

David Grossman -- Stifel -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

Sure, Dave. Thanks for the question. We had when we applied for this when we were selected back in 2015, it was full disclosure of what we do. What we do is we take a large cohort, we risk stratify it and find out the people that are at risk for medication safety problems. And that's the people on whom we intervene. CMS knew that the Northern Plains Alliance to the cost programs, obviously knew that. And -- but people who -- the ones who didn't know where the actuaries that came at the end to do the analysis. And what they did on the analysis in our group, they looked at all 305,000 people. Well, the effect that we did and they're looking for a two percent change in medical spend. The effect that we did had a change, it was under two percent because they spread it across the whole 305,000 people instead of looking at the 40,000 people that we intervened upon, if you were, they were high-risk on what we can work on.

We will explain that to the people at CMS, they recall that that's what their recollection was. And then we said to them, look, we have three peer-reviewed papers that we want -- we're ready to publish. But our results, are you going to stop us from publishing it? Because if we want publishing, the Blue Cross programs want them published. And they said, "No, you can publish them." So they -- and that's the same model. That's the exact same model we're doing with the Medicaid program. Same model that New Jersey has $1.8 million. We're not going to deal with $1.8 million Medicaid. We're going to risk stratify and find the top probably mid-teens percent that our risk were above 14, and that's the ones we're going to intervene on, along with the local community pharmacies. And that's the -- how we want to propagate throughout the country and all Medicaid program.

So we're very clear on what we're doing, somehow got lost in the translation, and they homogenized it over the whole 305,000. And so now we had to go and straighten them out, and now they get it. So that's kind of the story.

David Grossman -- Stifel -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

Well, the best outcome is that we're going to we're publishing this stuff. That's really the best outcome because we can use this model with all sorts of other people. The CMS does have -- or CMMI does have an option to expand or continue certain programs as they choose to. And one of the things that we argued with them and why we got this consultant group involved. They said, look, we've made a profound impact on people's lives, this is 40,000 peoples' lives. And we think it's unethical to just drop it now, at least for the people in who we intervene. And we would like to see expanded it to include that or extend it to include them. We just think it's unconscionable when you've helped people. And our -- we showed them in the graphs. We have a lot of stats on this. But basically, when we do a medication safety review, the impact lasts for about six months. And then they kind of get back up to where they were.

And the reason is because they're seeing a lot of docs along the way and things are getting changed, and we're intervening retrospectively. The contrast to that is in PACE where we intervenes prospectively before every medication is taken. So we get like a 14:1 ROE there. But in the EMTM, it's about a 4:5 ROI because it's retrospective. So our goal is -- our long-term goal is to do everything prospectively using local community pharmacists as the ground force, not to the Air Force. And then, you'll see a lot better results that way. But that's going to take a while, we understand that. But anyway, that's kind of the -- that's kind of my best effort trying to explain it. I hope that's helpful.

David Grossman -- Stifel -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

David Grossman -- Stifel -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

David Grossman -- Stifel -- Analyst

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

Brian W. Adams -- Chief Financial Officer & Secretary

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

David Grossman -- Stifel -- Analyst

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

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

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

Orsula V. Knowlton -- Co-Founder, President, Chief Marketing & New Business Development Officer

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

Kevin J. Dill -- General Counsel

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

Orsula V. Knowlton -- Co-Founder, President, Chief Marketing & New Business Development Officer

Brian?

Brian W. Adams -- Chief Financial Officer & Secretary

Great. Thank you.

Orsula V. Knowlton -- Co-Founder, President, Chief Marketing & New Business Development Officer

Thank you.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Kevin J. Dill -- General Counsel

Calvin H. Knowlton -- Chief Executive Officer, Chairman and Founder

Orsula V. Knowlton -- Co-Founder, President, Chief Marketing & New Business Development Officer

Kevin Boesen -- Chief Sales Officer

Brian W. Adams -- Chief Financial Officer & Secretary

Sean Dodge -- RBC Capital Markets -- Analyst

Jared Haase -- William Blaire -- Analyst

Sean Wieland -- Piper Sandler -- Analyst

Stephanie Davis -- SVB Leerink -- Analyst

David Larsen -- BTIG -- Analyst

David Grossman -- Stifel -- Analyst

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