CMS Changes to Medicare Part D Provide Potential Expansion of TRHC Medication Therapy Management Services for Medicare Advantage Plans

MOORESTOWN, N.J., April 04, 2018 -- Tabula Rasa HealthCare, Inc. (TRHC) (NASDAQ:TRHC), a healthcare technology company optimizing medication safety, has reviewed and determined the impact to TRHC of the Centers for Medicare and Medicaid’s (CMS) April 2, 2018 announcement of changes to its Medicare Prescription Drug Program (Part D).  These changes will affect more than 42 million Medicare Part D beneficiaries across the U.S., with the most significant impact being felt by the 19 million, and growing, Part D beneficiaries who receive prescription drug coverage through Medicare Advantage plans.

Significantly, among these changes is one that enhances the way Part D health plans will view and invest in medication therapy management services (MTM). TRHC currently provides MTM programs to 150 Medicare Advantage contracts representing 3 million beneficiaries. We believe CMS anticipates that Medicare sponsors will expand MTM enrollment. 

Under the new requirement, Part D health plans must spend $.85 of every premium dollar on patient care with the remaining $.15 for plans to cover other costs, including administrative expenses and profit.  The ratio of patient care expenses to administrative expenses is expressed as a percentage and is referred to as the Medical Loss Ratio (MLR).  An MLR lower than 85% results in a Part D health plan paying penalties.  Part D health plans, therefore, want to include as many activities as possible in the numerator (i.e., patient care side) of the MLR.

Until now, MTM had been considered an administrative expense and was a required cost of being able to participate in Medicare Part D.  Starting in January 2019, however, Part D health plans will be able to attribute the costs of MTM to the numerator (or the “patient care” side) of the MLR.

For TRHC, this means that Part D health plans, including our clients and client prospects, will have far greater financial incentive to invest in the innovative, quality-focused medication therapy management programs that Tabula Rasa provides.

TRHC is presently spearheading a large CMS model program, called Enhanced MTM, across seven states. 

“We view Monday’s action by CMS as a significant opportunity to expand our market and bring its innovations in MTM to a larger footprint of Part D health plans,” said TRHC Chairman and CEO, Calvin H. Knowlton, PhD.  “For the first time since Part D was adopted and MTM services were mandated, Part D health plans will have incentives to invest in innovative MTM services in order to drive therapeutic outcomes for patients and reduce unnecessary costs in the system.”

In the same action, CMS also made all expenditures related to fraud-reduction activities (including fraud prevention, detection, and recovery) a part of the MLR numerator.  These changes also will take effect in January 2019.

About Tabula Rasa HealthCare
TRHC (NASDAQ:TRHC) is a leader in providing patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk. TRHC provides solutions for a range of payers, providers and other healthcare organizations.  For more information, visit TRHC.com.

Forward-Looking Statements
This press release includes forward-looking statements that we believe to be reasonable as of today’s date. Such statements are identified by use of the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “should,” and similar expressions.  These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release.  Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable regulations; increasing consolidation in the healthcare industry; managing our growth effectively; our ability to adequately protect our intellectual property; and the other risk factors set forth from time to time in our filings with the SEC, including those factors discussed under the caption “Risk Factors” in our most recent annual report on Form 10-K, filed with the SEC on March 14, 2018, and in subsequent reports filed with or furnished to the SEC, copies of which are available free of charge within the Investor Relations section of the TRHC website http://ir.trhc.com or upon request from our Investor Relations Department. Any forward-looking statement speaks only as of the date on which it was made. TRHC assumes no obligation and does not intend to update these forward-looking statements, except as required by law, to reflect events or circumstances occurring after today’s date.

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