Tabula Rasa HealthCare, Inc.

Good day, and thank you for standing by. Welcome to Tabula Rasa Health Care's fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Frank Sparacino, Senior Vice President of Investor Relations and Corporate Development. Please go ahead.

Good morning. This is Frank Sparacino, SVP of Investor Relations and Corporate Development 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 our expectations regarding industry and market trends, including the expected growth and continued structural change and consolidation in the market for healthcare in the United States. Our expectations about the growth of programs of all-inclusive care for the elderly pays organizations. Our plans to further penetrate existing markets and enter new markets, plan strategies and objectives of management for future operations, future capital expenditures, future economic conditions or performance, and our estimates regarding capital requirements and needs for additional financing. For additional information on the risks facing Tabitha Rasa Healthcare, please refer to our filings with the SEC, including the risk factors section of our 2021 10-K, filed on February 25, 2022, and our 2022 10-K to be filed shortly. When we discuss our results on this call, unless indicated otherwise, we are referring to results from continuing operations. For additional information on our results from discontinued operations, please refer to the financial statements contained in the earnings release issued on March 6, 2023, and the notes to the financial statements to be included in our 10-K for 2022. A recording of this call is accessible through a link on the investor relations page of our website. I will now turn the call over to Brian Adams, President and Interim CEO of Tabula Rasa Healthcare. Thanks, Frank.

Good morning and thank you all for joining us. I'm proud of the Tabula Rasa team and what we accomplished during 2022, especially in the second half of the year. The numbers speak for themselves. For the full year, revenue grew at a rate of approximately 15%. And in the fourth quarter, however, revenue growth accelerated to 20%. As many of you know, It's been quite a transformational year on many levels for us. We sold our prescribed wellness business unit in August, announced an important leadership and board changes in September, named April Gill as our first chief commercial officer in November, and recently completed the sale of Symphonia RX and Dosme, two non-strategic assets. This is in addition to being recognized as a 2022 Champion of Board Diversity by the Forum of Executive Women and named one of America's greatest workplaces for diversity by Newsweek. I'm extremely proud of our nearly 700 team members for how they have helped position us as we enter 2023 with strong momentum. These important events and the continued evolution of our business over the past year have brought a number of new individuals to these calls. so I thought it might be helpful to provide a short overview of what we do. Tabula Rasa has been around since 2009 and has developed an expertise for managing the most complex patients in our healthcare system. We provide individualized care for the curation of personalized medication regimens to reduce risk and optimize efficacy and help organizations responsible for those patients operate more effectively. Over the years, we have developed our proprietary MedWise platform, which is our unique multi-drug interaction solution that helps predict medication-related risks. We have numerous peer-reviewed publications that showcase the profoundly positive impact from MedWise on patient health outcomes and the reduction of total cost of care in various settings. Our MedWise platform has been developed through a collaboration of our R&D and software engineering teams and contains a robust set of proprietary clinical algorithms that highlight multi-drug interactions and help clinicians to optimize individual medication regimens for their patients, reducing the risk of serious side effects while also promoting maximum effectiveness. MedWise can also account for a person's genetic makeup and their individual response to certain medications allowing for more precise prescribing. On a personal note, I really enjoy hearing the weekly updates our teams share showcasing the positive effects we are having on patient care by using the MedWise platform. These stories are personal and each one is worth celebrating. These are moments that help to motivate our team every day. In the program of all-inclusive care for the elderly, or PACE market, which represents the largest percentage of our revenue base today and grew at 27% in the fourth quarter, we have demonstrated a $5,000 annual savings per person when using our MedWise platform coupled with our pharmacy services, as compared to those not using Tabula Rasa. For those of you not familiar with PACE, it is a program funded by Medicare and Medicaid and designed to allow people to age in the community or at home rather than institutional care like a nursing home. It is arguably the most successful example of value-based care and has demonstrated material reductions in hospitalization rates and ER utilization compared to those individuals in long-term care settings. Over the years, we have added other technology-enabled services and software to our suite of solutions to help our clients simplify their operations and allocate more resources towards patient care. We believe a combination of these solutions is not only relevant to PACE, but also to adjacent healthcare markets taking on financial risk and serving similar demographics. Thanks to our efforts to refocus the company around these solutions, our cross-selling activities are gaining momentum. This is evidenced by the average revenue we generate per PACE individual per month. which increased to $494 in the fourth quarter of 2022, up 16% from $427 a year ago. The total monthly revenue we could generate from each individual if they were to be covered by all five of our services is currently more than $1,200. The most significant opportunity we have to increase the $494 average revenue per patient per month is through driving greater adoption of our pharmacy services into our existing PACE customer base. And we're making progress towards that goal. In 2022, we increased penetration of our pharmacy services to 38% of our overall base versus 34% at the end of 2021. In addition to the opportunity to provide incremental services to existing customers, the PACE market continues to grow, thus expanding our total addressable market. I want to highlight a few important developments that took place over the past 12 months. During 2022, Maryland, Ohio, and New Jersey committed to expanding their PACE program. According to the National PACE Association, Ohio has an estimated 66,000 individuals currently eligible for PACE but without access to services, making it one of the top states in terms of opportunities. Ohio passed a PACE expansion bill that includes $50 million to support startup costs, and the state is taking a proactive approach on outreach to drive enrollment in their PACE program. This proactive approach includes identifying eligible individuals and notifying them of PACE programs in the appropriate service area. This is important because it will increase consumer awareness. One of the key policy recommendations we highlighted last quarter from the bipartisan policy center to accelerate PACE adoption versus individuals residing in a nursing facility. In addition to these three states' expansions, Missouri and Kentucky became the two newest states in 2022 to start enrolling PACE participants, bringing the total number of states to 30. And according to NPA, Missouri and Kentucky have an estimated 40,000 plus individuals currently eligible. Last quarter, I highlighted NPA's PACE 200K project, and all of the developments I noted are important in driving an accelerated rate of market growth to reach the 200,000 enrollees by 2028. Using the $1,200 average revenue per PACE enrollee per month, that would result if a client used all of our PACE services, and applying that to the 200,000 targeted PACE enrollees would yield an estimated TAM of $2.9 billion by 2028. The expansion in existing states plus new states coming online gives us confidence in our expectation for continued strong growth over the next several years in the PACE market as we seek to increase our market share. As Tom will discuss in more detail, we're making important investments in our PACE business to accommodate this anticipated demand and to better serve our customers while also building a best-in-class commercial sales organization for profitable, scalable growth inside and outside of PACE. As we have discussed in prior calls, key adjacent markets include health plans and at-risk provider groups with a focus on the more than 12 million dual eligible beneficiaries that exist today and drive a disproportionate share of the country's total healthcare spending. Before I turn the call over to Tom, I also wanted to briefly mention the recent divestitures of Symfony Rx and DOSME. The decision to sell non-core assets and exit non-strategic markets is part of our continued strategy to realign the organizational structure and allow Tabula Rasa to grow in a more profitable manner while making strategic investments for the future. This strategy has resulted in a sharper focus. And this is one of the many reasons I am confident in our ability to execute on our future growth plans and expand our margins in the coming years. This process did not come without its challenges, as we were not able to find continuing roles for some of the team members associated with the Symphonia Rx business. I want to thank each and every person associated with Symphonia and Doceni for the important work they did while part of Tabula Rasa. And I wish you the best of luck in the future. These asset sales, along with our full year 2023 guidance, represent our commitment to focus on creating long-term value for our shareholders. 2022 was a transformational year for Tabula Rasa, and today we have highlighted the significant progress we have made so far. We remain focused on executing on our strategy, and we look forward to providing a more fulsome view of what you can expect from Tabula Rasa throughout the remainder of 2023 and beyond on a future call. I will now turn the call over to Tom to review our financial performance. Thank you, Brian, and good morning, everyone.