Tabula Rasa Healthcare Inc (TRHC) Q2 2021 Earnings Call Transcript

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Tabula Rasa Healthcare Inc (TRHC)
Q2 2021 Earnings Call
Aug 6, 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 and welcome to the Second Quarter 2021 Tabula Rasa HealthCare Inc. Earnings Conference Call. Please be advised that today's conference is being recorded. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

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

Kevin Boesen -- Chief Sales Officer

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.

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Thank you. Greetings, and thank you all for joining our call today. I would like to start with some perspective on our company as we approach the five-year anniversary of our IPO in October. In our first year as a public company in 2016, we generated $94 million in revenue, largely derived from a relatively small, but growing Pace market. Five years later, we are on track to increase revenue by more than 3.5 times.

Since our IPO, even with the COVID headwinds that slowed our growth, the TRHC CAGR over these five years is 29%. This occurred through a combination of strong organic growth supplemented by strategic acquisitions. These tailwinds broadened our offerings and footprint in our core Pace market, which as we discussed during our first-quarter earnings call is garnering a great deal of attention from state and federal lawmakers to increase funding and access. This attention also exponentially increases our total addressable market by serving health plans and community pharmacies through our MedWise segment. The continued strong recovery in Pace and our CareVention HealthCare segment led our second-quarter revenue and profitability to be at the high end of our guidance range. As we enter the remaining months of 2021, we are encouraged by the improving trends in our CareVention HealthCare segment with Pace enrollment returning to pre-pandemic levels in recent months and all of our key metrics moving in a positive direction.

Within CareVention, our year-over-year organic growth improved to 13% during the second quarter versus 6% during the first quarter of 2021. Turning to our MedWise segment, our number one objective is reaccelerating revenue growth and we are making progress on this front and expect to return to positive year-over-year growth in both the third and fourth quarter of 2021. This improvement along with the strong recovery in Pace is driving our return to double-digit organic growth in the second half of 2021 as highlighted on Slide 3. In early July, we announced the hiring of Kelli Kovak to lead our integrated MedWise business. Ms. Kovak has a wide range of C-level experience in the payer PBM pharmacy and Pharmaworld, most recently at United Healthcare Group, making her an ideal candidate to lead our MedWise segment.

We are excited about the positive impact she has had already, and we will add in the coming quarters and years as she settles into her new role at TRHC. We will make sure that investors have an opportunity to engage with her in the near future. The integration of our unique simultaneous multi-drug interaction science across all our MedWise solution is leading to important new wins across a diverse base of clients. Kevin Boesen will expand on this later, but in short, our sales team is delivering bookings with exponential growth in our MedWise payer segment as compared to a year ago.

I'm now going to turn it over to Orsula, who is going to talk about a number of industry developments, including the important role that pharmacists are playing in the broader healthcare ecosystem, which will benefit TRHC and our MedWise segment specifically for years to come.

Orsula?

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

Thanks, Cal. Last quarter, we talked about all the exciting developments impacting Pace and our CareVention segment, but after a few brief Pace comments, this time, I will focus on our MedWise Healthcare division, an important trend that we believe will provide a strong catalyst for sustained long-term growth.

With regard to Pace, in addition to the Pace plus Act at potential record funding for home and community-based services, as part of the reconciliation package expected this fall, we have seen encouraging efforts at the state level to expand Pace, most notably bills in Florida and California. In Florida, funding for Pace has increased significantly, which should more than double the number of Pace participants in the state in the coming years with the vast majority of this expansion this year and in 2022. In California, Assembly Bill 540 will require the state to include information about Pace in medical enrollment forms along with an outreach program to people, who may be eligible for Pace. By 2030, an estimated one in four Californians will be 60 or older and expanding access to Pace is a priority. Other states including Maryland and Missouri are exploring expansion of Pace in their states and states like Kentucky and Illinois are adding Pace as Medicaid benefit, an option for their frail elderly population to live independently in the community.

Turning to MedWise, there is continued momentum to advance the role of the pharmacist. Starting with provider status legislation at both the federal and state-level, which allows pharmacists to be paid for delivering a range of clinical services. At the federal level on April 22, 2021, the Pharmacy and Medically Underserved Areas Enhancement Act was introduced by a bipartisan Group of Congress. This act would enable seniors to access pharmacist provider services under Medicare Part B and be reimbursed under Part B if provided in medically underserved areas or populations or where health professional shortages exist, which is where nearly 60% of independent community pharmacists practice. Shifting to the individual state level, the State of Iowa, for example, passed legislation recognizing pharmacists as providers under Medicaid effective July 1, 2021. An important catalyst for this was a three-year value-based pharmacy pilot at Wellmark, BlueCross, BlueShield. The pilot involving 74 pharmacies launched in 2017.

It is now a permanent program after demonstrating successful outcomes, reduced emergency department and hospitalizations, for example and total cost of care savings of 5% over a 12-month period for patients with chronic conditions such as heart disease, diabetes, depression, and asthma. Similarly, the State of Ohio, another example, passed Provider Status Legislation in 2019. In 2020, CareSource, a multistate managed care plan launched the pharmacist provider status pilot to reimburse pharmacists for clinical services, for Medicaid beneficiaries identified as high risk. Within six months, dramatic improvements in asthma control and blood glucose levels ensued resulting from pharmacist engagement.

A number of our PrescribeWellness client pharmacists in Iowa and Ohio are participating in these exciting pharmacy programs, and CareSouce is planning to scale the program to 200 pharmacists as well as expand it into other states including Kentucky, Indiana, and Georgia. This is the new model of chronic care as managed care beneficiaries can get better care from the pharmacist as part of an interdisciplinary scheme while the health plans enhance the quality rating. And there are several examples of plans and provider groups, who have already integrated the primary and chronic care role of pharmacists such as Troy Medicare, a TRHC client Medicare Advantage plan in North Carolina paying pharmacists between $30 and $50 per member per month for care management services; Kaiser Permanente, which utilizes more than 1500 employed clinical pharmacists as part of their integrated care model and with embedded pharmacists managing vulnerable high-risk patients in the community.

Also, since 2013, 15 states have passed bills recognizing pharmacists as providers for provider Perry Laws that allows pharmacists to be reimbursed under their scope of practice by commercial and government health plans. Thus far in 2021, 213 bills related to pharmacists expanded scope of practice have been introduced in 43 states. 32 of them in 18 states have passed the legislatures and are signed into law, while 16 bills in 10 states await the Governor's signature. All of this activity sets the stage for continued pharmacists scope of practice expansion, furthering the adoption of MedWise science in three areas, delivering and billing for enhanced comprehensive MTM services directly or through collaborative practice agreements along with the implementation of Medicaid, Medication Risk Reduction Model as evidenced by New Jersey's recently passed legislation, which recognizes the medication expertise of the pharmacist to drive outcome and impact the total cost of care.

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

Kevin?

Kevin Dill -- Corporate Counsel

Thank you, Orsula. The second quarter was highlighted by a return to the field after more than a year of almost exclusively web-based sales due to the COVID-9 pandemic. As an example, this summer, our team has been on site at more than 10 Pace centers across the country, numerous chain pharmacies, several health plans, and a number of live industry conferences.

We have also continued to expand the sales team with experienced sales professionals, who have successfully leveraged relationships to shorten the sales cycle. We have increased the size of the sales by 64% since the start of the year. In addition to our core Pace community pharmacy and payer markets, we now have dedicated team members selling MedWise technology and services directly to the self-insured employer market, healthcare providers, and pharma. We will continue to increase the size of the sales team through the end of 2021. In addition to the renewed organic growth in Pace we highlighted earlier, CareVention HeathCare's second quarter bookings were up 26% compared to the first quarter of 2021. We continued to have strong success with our cross-selling efforts and contracting with new Pace programs for multiple service lines.

As we stated in our press release, we have a strong Pace implementation backlog for the remainder of 2021 and 2022. To address bookings, I would like to talk about our year-to-date progress as of July 31 since we had a couple of material contract signings slip from Q2 into early July. Specifically, I would like to highlight our MedWise payer segment, which is generated bookings that are more than doubled what we realized during the same period last year. For additional context, our Q3 bookings have already surpassed Q1 2020, which was the highest booking quarter in the company's history in the last pre-pandemic quarter. We are confident the second half and full-year 2021 bookings will show healthy growth versus 2020. Our unique ability to combine traditional medication therapy management with our MedWise Science and enhanced MTM model has accelerated our wins across a wide spectrum of clients and ultimately our future growth rate.

Key wins included a multi-year contract renewal for MTM services with our largest payer customer, continued expansion of current MTM programs with Humana and WellCare, a new 2022 MTM win with one of the nation's largest Medicare Advantage payers, a new contract to deliver our enhanced MTM model for employees of a regional BlueCross, BlueShield plan and new enhanced MTM type programs without risking concierge provider groups. Additionally, we recently signed a multi-year agreement through our PrescribeWellness Business Unit enabling our network of community pharmacies to have access to several software tools and engage and support patients enrolling in Medicare. This agreement will support patient loyalty and allow our network of pharmacies to continue to enhance clinical services through the use of our software.

Lastly, I wanted to talk about sales progress toward our 2021 revenue target. Recall one of the key components we highlighted as part of our original 2021 guidance back in February was new 2021 bookings that would convert into 2021 revenue. This in-year revenue represented 7 percentage points of growth, which equated to more than $21 million. At the end of July, we have attained 60% of this target, which is already above the in-year revenue we generated during all of 2020. We expect to close the remainder of this gap in more by the end of the third quarter.

Brian?

Brian Adams -- Chief Financial Officer

Thanks, Kevin. I'm pleased to report another quarter showing continued improvement and solid execution by our team members. Q2 total revenue of $82.3 million was at the high end of our guidance range and represented 7% growth versus a year ago and 7% growth on a sequential basis versus Q1. Non-GAAP adjusted EBITDA of $6 million represented a 7.2% margin and was right at the midpoint of our guidance range.

Turning to Q3 guidance, we expect to show continued sequential growth across both the CareVention and MedWise segments. With the midpoint of our revenue range representing 7% sequential growth versus Q2 and 25% year-over-year growth. Note, that this will be the last quarter of inorganic growth contribution from Personica as we anniversary the acquisition in early October, 2021. I'd like to specifically note that we expect MedWise revenues to begin to show healthy year-over-year growth this quarter compared to declines in the first half of the year. This is a result of new contract implementations as well as a more balanced delivery of MTM interventions throughout 2021. As noted in our press release, our guidance for the full year of 2021 remains unchanged with our revenue range, representing growth of 13% to 20% and organic growth estimated to be in the range of 9% to 16%.

The larger than normal revenue and non-GAAP adjusted EBITDA ranges for both the third quarter and full year are the reflection of a high level of ongoing sales activity concentrated in our MedWise segment including a number of large contracts that have a wide range of possible outcomes.

As highlighted on Slide 10, we had significant improvement in our cash flow from operations and free cash flow during Q2 and expect further improvement in both Q3 and Q4. We expect free cash flow for 2021 to be in the range of negative $10 million as we continue to invest in R&D and sales for marketing.

With that, I'll turn it back over to Cal for closing comments.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Thank you. To close, we are pleased with our first half performance and look forward to closing out the remainder months of 2021 on a strong note.

Operator, please open the call for Q&A.

Questions and Answers:

Operator

Thank you and as a reminder, to ask a question [Operator Instructions] First question comes from Sean Dodge with RBC Capital Markets.

Sean Dodge -- RBC Capital Markets -- Analyst

Thanks, good morning and congratulations on the good momentum in the quarter. Maybe starting on the MedWise bookings. Kevin, I think you said, those were up double so far year-to-date, but I think there are a number of instances where you've won bid but not yet at a point where you can put those into bookings. So, maybe if you could just put some numbers around that? And then anything you can share on timeline for or is there something that could also help have a lift as we get into the back half of the year.

Kevin Dill -- Corporate Counsel

Yes, Sean. Thanks for the question. I appreciate that. You are correct, the way we do bookings as well. If we win a business, we won't count that as a booking until actual contracts are signed. So we do have a number of large wins in flight and that we expect to close by the end of third quarter and that's driving that in-year sales revenue that I referenced.

Sean Dodge -- RBC Capital Markets -- Analyst

Okay. And then on, I guess turning to Pace, it looks like the pipeline for implementation there continues to expand. Can you wrap some numbers around, what these new centers can begin to contribute in the way of incremental revenue in 2022 and in the end of 2022. I guess, anything you can share on like the mix, in terms of how many of those include medication fulfillment or anything else that can help frame what the average revenue profile for these new implementations looks like?

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Hi, Sean. I will take that. I think most notably the implementations that we had during the second quarter were heavily concentrated around pharmacy services. So we do expect that they're going to have a pretty meaningful impact on 2022 revenue and then see that ramping going forward. So about a third of the 46 that we quoted in the earnings release and on the call are pharmacy-related and obviously that carries the highest revenue opportunity for us.

Sean Dodge -- RBC Capital Markets -- Analyst

Okay, that's very helpful. Thanks, again.

Operator

Our next question comes from Ryan Daniels with William Blair.

Ryan Daniels -- William Blair -- Analyst

Hey guys, thanks for taking the questions. Just a quick one on the delayed contracts that appear to have been signed by the end of July. Does that delay the into-green process, meaning the timing that you think you'll be able to recognize revenue from those or was it merely the contract signing that got delayed?

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Ryan, thanks for the question. Merely just the contract signing, I think summer vacations for folks that haven't been on the road for two years that delayed the signature a week.

Ryan Daniels -- William Blair -- Analyst

Okay, great. And then, can you talk a little bit more about your new remote patient monitoring solution. I'm just curious maybe what the pricing is on that, if you've seen demand in the market that are going to pushes you to reach out and develop a partnership there and just any thoughts around that in the potential opportunity?

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

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

Ryan Daniels -- William Blair -- Analyst

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Yes, you're absolutely right. In fact, we do have a couple of ACOs one just started, a couple of others are in line, so our entire platform is focused at people that are at financial risks and in companies that are at financial risks. So you're absolutely right Ryan. We've got a strong plan for expanding beyond where we are right now. Kevin, maybe you want to touch on how we've been able to deepen some of our relationships with existing customers that are at risk with some of the other services that we have.

Kevin Dill -- Corporate Counsel

Yes, I think that's a key point in driving some of our success, is how the data that we have that shows our science and ultimately reduces hospitalizations and emergency room visits. The other tools that you talked about help enable at-risk providers health plans to maximize their reimbursement on that while they're improving patient care. And so the through and all of the services that we're offering is that science. So, it's allowing us to expand MTM services, it's allowing us to expand STAR-related services in unique ways because not only are we driving metrics, we're really impacting total cost of care and to your point, you see that Pace is a Medicare Advantage provider of these at-risk provider groups that are now carrying similar risks.

Operator

Does that answer that question. All right, our next question is from Stephanie Davis with SVB Leerink.

Stephanie Davis -- SVB Leerink -- Analyst

Thank you for taking my question guys.

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

Hi, Stephanie.

Stephanie Davis -- SVB Leerink -- Analyst

I heard a lot of MTM wind calls out in the prepared comments, I want to touch on the outlook for the EMTM program using a potential extension and if maybe that risk actually creates a near-term conversion opportunity for MTM wins as folks look for a go-forward solution?

Kevin Boesen -- Chief Sales Officer

Yes, I think that we have had really good insight from that paper we put out with all the people that signed with us and it actually has been responded to within two days. So we have a meeting with the person in charge leading to CMS in the next couple of weeks. So we've got a real good response here. But anyway, what we look, what we're trying to do is, get them to expand the program and actually to focus the program more on selfishly, more on the types of things that we're doing with the science, because we've got great results. And so, now we're at the top of CMS, and we have besides what happened in New Jersey Medicaid also in addition to the CMS besides that, we now have about six other states that are copying, so to speak. What we've done in New Jersey and we have another six, we're told that are in the process. So we'll see how that takes now; that will improve our ability to the Air Force and the group our university that certifies the pharmacists. So we think, we had a big opportunity to see EMTM to expand in Medicare and also to take it into all these other states with Medicaid and, there are as you know 40 million to 50 million people in Medicaid. So it's a good opportunity.

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

Continue.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

I was just going to add to that, just a little bit that to back to your sort of preface and the question of the contract wins, that large payer contract renewal that we had as well as the 2022 win with a large national payer are directly related to our ability to add the science into the traditional MTM program. So it's certainly driving results outside of EMTM.

Stephanie Davis -- SVB Leerink -- Analyst

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Well, we can answer that better in a couple of weeks when they meet with us. I don't know what goes through their head, I mean, we met with them three months ago, right after our last earnings call, and that's when they told us that either regulatory change or legislative change would need to be, were some type of consensus would need to happen, so that's why we went to consensus route, and we'll see if that is impactful. I mean, I was very encouraged that within two days, we've contacted so but I don't know, we'll see, but whether that does or does not happen, I'm more excited frankly about what Kevin just said that we're using the MedWise to partner with all those people as the largest provider of freestanding MTM in the country and most of the contracts that we have are interested in expanding and they want to do something cool and helpful. So, then we add the Medicaid to that, it's just, we've got a tremendous ramp ahead of us right now.

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

And secondly, I think the most exciting thing right now is that we're publishing the results, that should be coming out in October and in a peer-reviewed journal, three specific articles that will be available on the results of our intervention,

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Of the MTM. We've got very robust three articles on what all the pharmacists do, the second one, what kind of interventions, and number three, what were the specific outcomes we had and that will be a special journal.

Stephanie Davis -- SVB Leerink -- Analyst

Under the opportunities with the MTM and I just want a quick one for Brian. I don't want to leave out. Just think about the FY 2021 outlook, how much of it at this point is dependent on timing of these new wins ramping up or do you feel like with giant amount of wins you just had, pretty fully de-risked given the year they paid?

Brian Adams -- Chief Financial Officer

Well, Stephanie. I think you heard Kevin probably say, we're about 60% sold on the target as of the end of July. So there's still work to be done through the end of the third quarter, but we've got a tremendous pipeline that if we're able to execute, we should be in a good position to close out the year.

Stephanie Davis -- SVB Leerink -- Analyst

All right, thanks guys. I appreciate it.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Thanks, Steph.

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

Thank you.

Operator

Our next question comes from Sean Wieland with Piper Sandler.

Sean Wieland -- Piper Sandler -- Analyst

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Yes, the, Sean. The reason we met with them was because they homogenized our interventions across 305,000 people, which are the people we were signed and received all their AB&D data every month. But our strategy was to risk stratify them and find out who had a risk score of 15 are higher and it came up to about 42,000 people that we intervened on in the first few years. And we saved $128 million on those folks in the first three years. So, when you took that over the three or five it doesn't hit the 2% mark, but when you look at it as it was presented in a business plan to them, that we will not be, meaning overall these people will be intervening on the ones that are at risk. So that's kind of the disconnect there. The study was basically the way their actuaries looked at, everybody was modernized over the total denominator and our analytics were really just over the people we intervened on, what were the results. So that was the big disconnect there.

Sean Wieland -- Piper Sandler -- Analyst

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Well, they've read the original proposal back in 2015 and 2016 that we submitted with them and they knew what it was, what we were doing, but I guess somewhere along the five years, we've got alluded somehow. So that's why we met with them three months ago and so I'd say, that's when we were told well, we have to extend it or continue it, it will have to go through a different process. So that's why we took this process; so we will have another opportunity to explain it to achieve in a couple of weeks. So we'll see where it goes.

Sean Wieland -- Piper Sandler -- Analyst

Okay. And then one for Brian on the visibility into the back half, the ramp into the back half of the year. can you comment on what percent visibility you have on your full-year revenues now we're halfway through the year based on the bookings and even the vendor of choice, designations you've got?

Brian Adams -- Chief Financial Officer

Yes, Sean. I'd say we're north of 95% at this point.

Sean Wieland -- Piper Sandler -- Analyst

To the midpoint or high end or lower?

Brian Adams -- Chief Financial Officer

To the midpoint.

Sean Wieland -- Piper Sandler -- Analyst

Got it. All right. Thanks so much.

Brian Adams -- Chief Financial Officer

Thank, Sean.

Operator

Thank you. Our next question comes from David Grossman with Stifel.

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

Hi, David. Good morning.

David Grossman -- Stifel -- Analyst

Hi, good morning. Sorry I was on mute, so I wanted just to follow-up again on some of the commentary about the new bookings that you've talked about, it sounds like there's been a lot of activity year-to-date and perhaps you could just give us some context for that in terms of maybe to mention the potential here or anything that would give us a sense of how meaningful those may be in terms of contributing to revenue growth. I know one was a renewal and if that was an expansion of scope as well. So any context would be helpful.

Kevin Boesen -- Chief Sales Officer

Yes, sure David. I would say that you're right. One of the ones that we were excited about was a core contract renewal that does include some expansion in that, it's a long-standing customer that we continue to grow services with. The remainder are new and so the revenue that we're adding sort of in year tends to be at this point in the year, about half of what overall AR would be for the following year. So, you end up with some good growth set up in 2022 already, what we've said though is, we will provide a little bit more detail around bookings by the end of the third quarter to give you some more insight. So, more on that to come.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Yes, just to be clear, David, the big renewal that Kevin was just referencing, we don't include renewals in our bookings numbers. So the expansion of that will be included but it does not include renewals.

David Grossman -- Stifel -- Analyst

Got it. And I guess the balance of what's left, the 40%. So does that mean that we have about $8.5 million in your bookings that we have to deliver in the back half of the year to the midpoint, just to make sure I understand the math.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

That is correct.

David Grossman -- Stifel -- Analyst

Okay. And again, is there any, just remind us any context of historically from the end of July to December, is that a typical achievements of the Company has seen over the past? I just don't remember how to frame that number?

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

So the number is supported by the pipeline that we have and with the growth that we've had recently relative to the number of different clients that we work with and a consolidation of the payer and the pharmacist unit has created some opportunities to expand on existing contracts. And so, what we have in the pipeline to support existing contracts that relate to some core MTM services, some uptick in spending that we see from payers for quality improvement ratings, it does align.

David Grossman -- Stifel -- Analyst

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Well, you're right, the 2% was across the whole population for all competitors and so when we market it now, we tell them exactly what the program is. For example, so in New Jersey, we had 1.8 million Medicaid patients that we risk stratify as we were working through this with some people with the state to see if we would make any sense. And there is about 400,000 that have risk score sufficient enough to be intervened upon. So it depends on the cohort. So in a commercial population, to your point, we see anywhere in the single digits typically because of usually some younger group. In the older or sicker people, we see it in the teens to 20% typically that are, the low hanging fruit for us. I mean sometimes people have. I just have two drugs, have a high risk where most of the time they're on many medications with many comorbidities.

David Grossman -- Stifel -- Analyst

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

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Yes, I think what we do is with before we do anything, we ask get a few of their patient base and then we run it through the system and come back and tell them, here's the number who have a high risk and we convert that into quality of life, but also into dollars. So that's our model of how we sell this stuff.

David Grossman -- Stifel -- Analyst

Okay, got it. And just one last thing, I think in the past, you talked about some newer ways to go to market, including using consultants to market, to partners that may work with older populations that need may be better suited for your product and I think you also talked a little bit about bundling EMTM with your MTM customers to provide a taste of kind of the savings that they could achieve. Are those still pretty nascent efforts or anything to report on either of those?

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Yes, I think to the second point as far as bundling the EMTM science with MTM, that's what's driving a lot of our success. So I think that's been a huge win for us. From that consultant front, it's given us an opportunity to test the markets before we spend too much time and energy and resources. So a good example of that is the self-insured employer market where we brought in a consultant to help create some relationships with benefit brokers and consultants to trigger some initial wins. And so, now we've got some additional four FTEs that are helping support that and expanding that.

David Grossman -- Stifel -- Analyst

All right. And just on that bundling point, Kevin. So what is the pricing like, what are the economics to you when you bundle?

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

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

David Grossman -- Stifel -- Analyst

Got it. All right, guys. Great, thanks very much.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Thank you, David.

Operator

Thank you. [Operator Instructions] Our next question is from Vikram Kesavabhotla with R.W. Baird. Sorry, go ahead.

Vikram Kesavabhotla -- Robert W. Baird -- Analyst

Yes, thanks, good morning. Hey, I was curious, could you just remind us what your guidance assumes as far as Pace enrollment trends through the back half of this year and do you see the potential for any changes there just based on recent case volumes in anything that you're seeing in the market? Thanks.

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

Sure. So the original guidance assumes that we get to just north of 1% per month on a sequential basis and exiting the second quarter were at about 1% per month. So trending nicely against our expectations. In fact, the second quarter were a little bit ahead of where we plan to be, we didn't think we were going to rebound as quickly as we did. So I think getting into the second half of the year, things are in line with what we expected.

Vikram Kesavabhotla -- Robert W. Baird -- Analyst

Okay, great. And then maybe just as a follow-up, you called out some of the increases you've made to the sales team. Just curious if you can give us some more color on the progress that you've made there to date and what your expectations are through the balance of the year in terms of the size and type of hiring that you plan to do. Thanks.

Brian Adams -- Chief Financial Officer

Yes, absolutely. So we've increased field-based staff and we've talked about that previously in our core markets as far as pharmacy payers as well as the care bench in the pay side of the business. So we continued to hire folks that have some experience in that space from existing relationships and that's gone well. So that the field-based side of things, that's been our strategy. In addition, we've got an in-house sales team that does our community pharmacy sales historically and so we have three teams based in California that provide those services. We've recently started to hire our fourth team and that will work out of a different location and help support some of the in-house sales opportunities for some of our other product lines and that could be anywhere from some of our business deals related to hospitals, if it's [Indecipherable] segment, but also some lead generation for our field-based teams. So, that's really the growth and then the target is really to try to get to a total of about 50 by the end of the year.

Vikram Kesavabhotla -- Robert W. Baird -- Analyst

Okay, great. Thank you.

Operator

[Operator Closing Remarks]

Duration: 44 minutes

Call participants:

Kevin Boesen -- Chief Sales Officer

Calvin Knowlton -- Chief Executive Officer, Chairman & Founder

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

Kevin Dill -- Corporate Counsel

Brian Adams -- Chief Financial Officer

Sean Dodge -- RBC Capital Markets -- Analyst

Ryan Daniels -- William Blair -- Analyst

Stephanie Davis -- SVB Leerink -- Analyst

Sean Wieland -- Piper Sandler -- Analyst

David Grossman -- Stifel -- Analyst

Vikram Kesavabhotla -- Robert W. Baird -- Analyst

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