Welcome to Evolent Health earnings conference call for the quarter ended March 31, 2020. As a reminder, this conference call is being recorded. Your host for the call today is Mr. Frank Williams, Chief Executive Officer of Evolent Health. This call will be archived and available for later this evening and for next week via the webcast on the company's website in the section entitled Investor Relations. Here are some of the important introductory information. This call contains forward-looking statements under the U.S. Federal securities laws. These statements are subject to risk and uncertainty that could cause actual results to differ materially from historical experience or present expectations. A description of some of these risks and uncertainty can be found in the company's reports that are filed with the Securities and Exchange Commission, including cautionary statements included in the current and periodic filings. For additional information on the company's results and outlook, please refer to its first quarter news press release issued earlier today. As a reminder, reconciliations of non-GAAP measures discussed during today's call to the most direct comparable GAAP measures are available in the company's press release issued today and posted on the Investor Relations section of the company's website ir.evolenthealth.com and the 8-K filed with the company with the SEC earlier today. At this time, I will turn the call over to the company's Chief Executive Officer, Mr. Frank Williams.

Thank you and good evening. I am Frank Williams, Chief Executive Officer of Evolent Health and I am joined by Seth Blackley, our President and John Johnson, our Chief Financial Officer. First and foremost, I hope you and your families are all staying safe and healthy during what I know has been an extraordinarily difficult period from both a personal and public health perspective. The Coronavirus has had an unprecedented impact on the population, the healthcare delivery system, and the overall economy. During this evening's call, I will share our perspective on the impact that COVID-19 is having on the healthcare industry in particular as well as how we have worked collaboratively with our partners to provide support to vulnerable patient populations in an effort to reduce infection rates and mortality. I will also provide a general update on the business, day-to-day operations, and the pipeline. John will take us through a more detailed review of the first quarter and then I will close with a summary of our progress on Evolent's key strategic priorities for the year. As always, we will be happy to take questions at the end of the call. In terms of our results for the quarter, total adjusted revenue for the quarter ended March 31, 2020 increased 24.7% to $247.3 million from the comparable quarter of the prior year. Adjusted EBITDA for the quarter ended March 31, 2020 was $3.6 million. As of March 31, 2020, we had approximately 3.4 million total lives on the platform. And with two partner additions this quarter, we have welcomed three new partners to the Evolent national network already this year. Overall, we are pleased that we met our key financial objectives for the quarter and we continue to feel confident about meeting the revenue and profit targets for 2020 that we outlined at the beginning of the year. Specifically, we have strong visibility into a minimum of 20% revenue growth in our service business for this year, achieving our goal of becoming cash flow positive by this fall and driving a strong exit run rate on the bottom line as we enter 2021. At this stage, we haven't experienced any material negative impact from COVID-19 and our business remains well positioned in the market given the mission-critical nature of our service offering and our diversified customer base. We, of course, acknowledge that this is an evolving and unprecedented situation and we continue to closely monitor each of our businesses to ensure we are prepared to address any major issues should they arise. In addition, we are continuing to make significant progress on our margin enhancement efforts while expanding and diversifying our national network of payer and provider partners. Most importantly, across the last several weeks, our team responded quickly and comprehensively to support our partners during a rapidly evolving public health crisis and our collective work has had a significant and positive impact. Turning specifically to COVID-19. As of yesterday, there have been approximately 1.2 million positive diagnoses and 70,000 deaths in the United States. The impact on the healthcare system has been unprecedented in terms of equipment shortages, inpatient capacity constraints, and the toll on physicians and nurses. The response across our partner base and across the country has been truly inspirational given the acute challenges of the public health crisis of this speed and magnitude. Our perspective on how the pandemic is impacting the healthcare industry has, therefore, been formed through the lens of working with our partners who are on the front lines every day from a patient care and community health perspective. As the potential severity of the virus came into focus across the last several weeks and months, our teams mobilized quickly to leverage our analytics and predictive modeling capability, phone and web-based outreach and care management resources, and our integrated healthcare platform to proactively address risks for vulnerable segments of the population. From a public health standpoint, Evolent has been focused on two main goals with our partners: helping to flatten the curve to avoid severe capacity constraints across the healthcare system and reducing the mortality rate, particularly in vulnerable populations where social determinants can lead to vast differences in life expectancy. From our experience in Chicago, New York City, Miami, Houston, Kentucky, Indiana, and Idaho, for example, we are seeing that the virus impacts communities in very different ways and depends on a number of factors. The structure of the regional healthcare delivery system, the density of the population, the steepness of the initial incidence curve, testing capacity, social determinants, and local community leadership all play an important role in the effectiveness of the response. As such, we believe it takes a population health approach that leverages data and high-powered analytics as well as targeted virtual clinical interventions to address the health needs of the most vulnerable patients before they are exposed to the virus or have a devastating acute episode. More specifically, in terms of flattening the curve, we have been focused on a couple of key priorities. First, we have worked actively with our partners to disseminate important public health practice and education across the communities we serve. We are actively leveraging our telehealth capabilities through our virtual care management teams to share CDC guidelines and to help thousands of members and patients navigate an increasingly complex web of health information. More broadly, we have also collaborated on public education campaigns through online messages, billboards, and other public forums. Second, we have been working closely with our partners to find innovative ways to expand testing resources and clinical capacity at local healthcare facilities. In terms of testing, we have worked with our partners to free up lab capacity and improve access through member education and offering drive-through capabilities where possible. Our alignment with local providers has helped to make this a collaborative effort to facilitate access to rapid COVID-19 testing in an effort to quickly identify those who contracted the virus. In terms of inpatient capacity, our partners are working with their networks and our teams to shift protocols and accelerate discharge planning for stable inpatients to expand capacity for more severe COVID-19 cases. We are also supporting our partners in securing necessary medical equipment and staffing expanded-capacity field hospitals where necessary. Many of our nursing staff have volunteered to serve in local field hospitals that called upon, which is a testament to their commitment to our mission and community health. In terms of reducing the mortality rate, our experience tells us that it's critical to use extensive data and predictive analytics to identify those at high risk and then proactively engage them to reduce their likelihood of contracting the virus or suffering an acute episode. First, in terms of data and analytics, it's important to have a data infrastructure that aggregates as much information as possible on the population to identify hotspots across communities and those who are potentially most at risk. Consider the compounding effect that co-morbidities and social determinants, such as access to food and lack of stable housing, have on the likelihood of who contracts the virus. Proactively addressing social determinants as part of a holistic approach to population health is paramount to making an impact. Accordingly, we rapidly developed and deployed a specialized COVID-19 risk stratification model which leverages our proprietary predictive analytics engine as well as machine learning and artificial intelligence to analyze clinical claims, social determinants data, and a number of other factors. Second, how you target those at risk is paramount to reducing the mortality rate. Based on our experience managing chronic conditions, we believe it is essential to deploy an integrated care model that incorporates multiple modalities of engagement. From provider outreach to personal calls to text messages to pharmacy and specialty care consults done remotely, using predictive experience to know when and how to engage members makes a significant impact on outcomes. This model helped the Midwest health plan micro-segment several hundred thousand members down to the 8,500 highest risk and the next 20,000 modest-risk individuals. Over the course of a week, our teams outreached to over 3,500 patients a day to ensure they were following their care plans or social distancing and had adequate support in terms of pharmacy delivery, food resources, and access to social services. Our integrated approach also comes to life within New Century Health where the team assesses patients holistically while implementing COVID-19 triage clinical pathways and assessing appropriate treatment options for their underlying condition. The result is a more effective way to manage those who may be at increased risk of complications from the virus, particularly with oncology patients with suppressed immune systems who still need to continue their course of treatment. Across the board, our teams of care advisers, nurses, social workers, and many others are doing an amazing job deploying creative solutions to support our partners and their communities and there's certainly more work to do. Across our solution areas, we believe our combined efforts will prevent thousands of hospital bed days per month at a time that is especially critical to alleviating capacity issues and elevating overall public health. We are heartened by the fact that the investments we have made in our differentiated asset base, including our approach to data aggregation, population health, and virtual care management, has played an important role in providing our partners with a very strong infrastructure with which to respond and make an impact during the COVID-19 pandemic and beyond. As we step back and reflect, we believe the COVID-19 pandemic highlights the need for a more integrated, less siloed approach to community health in the United States. In a situation such as a pandemic with an increasingly high incidence of chronic conditions, we believe it's essential to integrate large data sets of individual health information to identify hotspots, perform sophisticated analysis, and quickly identify those most at risk. Along with risk stratification and identification, you need the clinical depth to develop early intervention strategies and the ability to reach members through multiple modalities of engagement. This outreach must take place in coordination with the provider and payer community through an integrated health model to ensure coordination of care and a seamless experience for those receiving service. The pandemic has also shined a light on the challenges the most vulnerable members of our society face whether they are on Medicaid or Medicare or lack access to essential factors that promote good health. This makes an integrated approach to patient care with deep ties to providers and community resources all that more critical. Evolent's population health orientation and integrated suite of clinical and administrative solutions are based on these philosophies and have been immensely valuable during this public health crisis. We believe our role, serving as a bridge between payer and provider, fosters a trust-based relationship that's also critical to breaking down silos in the healthcare system that get in the way of improving health outcomes. We think our provider and payer partners ultimately benefit from our approach to providing whole person care in a proactive data-driven way. In terms of a general update on the business, we continue to believe that our core solutions that address total cost of care, specialty care, and administrative simplification are highly relevant in today's healthcare environment. Our role as a bridge between providers and payers and catalyzing improvements in health outcomes and driving greater efficiency on the administrative side is increasingly important in a world where federal, state, and employer budgets will be under increased pressure. As I discussed earlier, based on what we know today, we feel comfortable with our original outlook for 2020, which currently assumes that we do not add any additional new partner revenue this year. The pipeline, which is really about setting up 2021 and beyond, feels good relative to historical metrics and we continue to see meaningful engagement across a number of pursuits that are targeted to close in the summer and fall time frame. In particular, we are continuing to see significant interest in New Century Health specialty management capabilities as oncology spend and quality remains a key priority for health plans across the country. While we may see some delays in timing for deal closure due to COVID, we feel comfortable with our projected range of adding six to eight new partners across the calendar year and maintaining renewal performance in line with last year. To that end, we are excited to announce two new partners which brings us to three for this calendar year. First, New Century has partnered with EmblemHealth, one of the nation's largest nonprofit health insurers with 3.2 million members and an 80-year legacy of serving New York's communities. EmblemHealth will be deploying a value-based New Century Health offering to support a segment of its adult Medicaid, Medicare Advantage, and commercial and individual exchange membership. New Century will focus initially on leveraging its evidence-based precision pathways and peer-based collaboration model to focus on improving cost and quality of care and assisting Emblem in establishing a high-performing network. New Century has been providing value-based oncology management for Connected Care, an Emblem subsidiary, for the past two years and the success of that partnership led to the addition of Emblem's broader membership base this year, really exciting with the potential to drive tremendous impact across multiple populations in the Northeast. Second, New Century Health has also partnered with a regional nonprofit health plan based in the Northeast to provide comprehensive oncology management services to over 185,000 Medicaid, Dual-Eligible, and Exchange members. New Century's comprehensive solution and ability to address medical oncology, radiation therapy, and genetic testing in the outpatient setting were important factors in the evaluation process. Very exciting to add two highly respected new partners with strong reputations in their respective communities. We anticipate both of these partnerships launching sometime this year and to be fully operational in 2021. In terms of same-store growth, we are excited to announce that New Century Health has also expanded its existing partnership with Centene. As you recall, during our last earnings call in late February, we announced a new partnership with a national payer organization, initially deploying a light ASO version of our New Century Health offering across five states to support its oncology costs and quality management goals. That payer is Centene and we are pleased to announce that we have expanded our work with Centene to include two additional markets: one in New Hampshire and one in Washington State. Overall, we are delighted to see new and expanded partnerships for New Century as well as continued momentum in our overall pipeline. Before I turn it to John, I would like to provide a brief update on a few other areas in our business. As we step back and look across the enterprise as a whole, overall, we feel well positioned strategically in today's healthcare environment. Our ability to focus our capabilities alongside our partners to positively impact the response to COVID-19 solidifies the relevance of developing an infrastructure to support population health as well as virtual and integrated care management solutions. Outside of the pandemic, given the priorities that will emerge for payers and providers, our ability to virtually manage total cost of care, specialty costs, and provide highly efficient administrative solutions will likely be in high demand across the next several years. In terms of an operational update, first, our Evolent Health services team rapidly pivoted resources to continue to support our payer partners at a high level. Our past investments in supporting a robust remote infrastructure put us in a very good position to mobilize the team while ensuring uninterrupted operations and timely outreach to tens of thousands of members. Even during a time of rapid change in our partner organizations while moving to a remote model, the team continued to perform at a high level operationally in terms of its key member services, provider support, and call center management activities. Second, True Health New Mexico came into the year with solid growth in overall membership and continues to remain on track and perform well overall in terms of medical cost performance, quality, and service. True Health responded quickly to COVID-19 and has done an outstanding job serving its members, providers, and the broader community. The plan has played a key role in proactively addressing care needs to help mitigate the impact of the virus, particularly within the most vulnerable segments of its membership. Third, in respect to our Medicare Advantage partnership with GlobalHealth in Oklahoma, we have made the decision to not put additional capital into the joint venture, but we will maintain a meaningful service relationship with GlobalHealth. The recent capital call as a result of reserve requirements related to COVID-19 from the Oklahoma insurance regulators did not feel like an essential priority given our desire to focus our capital investments on our core service business and Passport. We may have an opportunity to take an ownership stake in the future. However, for now, we anticipate writing down our original investment. Lastly, our partner Passport Health Plan in Kentucky has demonstrated solid and consistent operational and financial performance and has delivered a positive operating margin from July 2019 through April of this year. The plan is adequately capitalized and has responded rapidly and holistically to the COVID-19 crisis in service of approximately 300,000 Medicaid beneficiaries. Passport's innovative approach to care management and deep ties to its community have helped the plan proactively address social determinants of health factors and work alongside its partners in the community to provide much-needed support and resources such as community education, virtual care management, expanding testing capacity with the University of Louisville, access to food, virtual substance use disorder counseling, and much more. In terms of the Kentucky Medicaid RFP, Passport originally anticipated an official decision on the RFP in the May time frame for the new contract commencing on January 1, 2021. At this point, we haven't received an update on the timing of the RFP decision or any specifics related to the potential timing impact from COVID-19. Overall, we believe this public health crisis has demonstrated that our platform and solutions remain highly relevant in today's environment and we are proud to stand with and support our partners. There are still a number of important unknowns relative to COVID-19 and its impact on sub-segments of the healthcare industry and the overall economy. Based on our best estimates at this time, we feel good about maintaining our original outlook for this year as well as the medium-term demand environment for our service offering. Our focus will continue to be on deploying our integrated infrastructure and clinical knowledge base alongside our partners to improve health outcomes related to the pandemic and also to manage the health of the populations we serve, particularly those with chronic conditions and other high-risk factors. With that overview, I will turn it over to John to speak about our financial performance on the quarter.

Thanks Frank and good evening everyone. Tonight, my thoughts are with everyone facing challenges during this difficult and unprecedented time. I would also like to express my gratitude for the dedication and professionalism with which the Evolent team is tackling the challenges presented by this crisis and preserving service for our partners in this most critical time. Our first quarter results were right on track with expectations and reflect solid execution against our key priorities for the quarter. Before taking you through the details, I wanted to spend a moment discussing the possible effects of the COVID-19 pandemic on our financials. As Frank mentioned during his remarks, we did not see a significant net impact on our results during the first quarter. This is consistent with our expectations given the recurring nature of our revenue model and the visibility we have into our revenue range for the year. The diversity of our revenue streams across Medicaid, Medicare, and commercial lines of business, both fee-based and performance-based and principally sourced from health plan partners, further contributes to our financial stability. We are monitoring the pandemic across all areas of our business, but in particular, in the three areas of membership, medical utilization trends, and liquidity. First, many expect the pandemic to change enrollment profiles with increased unemployment driving an increase in Medicaid enrollment and a decrease in commercial membership. Through April, we have not seen material changes in our membership and based on what we know today, we are not expecting a net economic impact for membership at this time. That said, with over 50% of our lives in Medicaid, a shift towards higher Medicaid enrollments would likely be a net positive for us. Second, with respect to medical utilization trends, we may see impact in our health plans as well as in performance-based arrangements. This one is particularly difficult to forecast given the possibility of pent-up demand bounce-backs and other factors. We would expect a reduction in overall medical utilization for the year to drive the net benefit for our economics. Based on a detailed review of what we know today for our current portfolio across our fee and performance-based partnerships, at this time, we are projecting net neutral or potentially positive impact. But given the range of possible outcomes and uncertainty, we are not incorporating this into our guidance at this time. Finally, liquidity remains an important focus and is an area where we believe our strong balance sheet with no near-term maturities sets us up nicely as we move through the pandemic. We remain on track to reach our previously stated goal of positive cash flow by this fall. Now let me take you through our results for the quarter before turning to guidance, beginning with our consolidated results. Adjusted revenue increased 24.7% year-over-year to $247.3 million. Adjusted EBITDA grew to $3.6 million relative to minus $14.8 million in the same period of the prior year. Adjusted loss available to common shareholders was minus $12.1 million or minus $0.14 per common share for the quarter compared to minus $25.3 million or minus $0.31 per common share in the same period of the prior year. At the segment level, both our services and True Health businesses reported first-quarter earnings that were in line with our own expectations coming into the year. In our services segment, first-quarter adjusted revenue increased 43.5% to $221.4 million, up from $154.3 million in the same period of the prior year. The increase was primarily driven by cross-sell expansions within our existing partner base and by new partner additions. Adjusted platform and operations revenue accounted for $216.2 million or 97.6% of our total services revenue for the quarter compared to $150.9 million in the same quarter last year. As of March 31, we had approximately 3.4 million lives on our services platform. Our average PMPM fee for the quarter was $20.22 compared to $14.30 in the same period of the prior year and $18.16 in the fourth quarter of 2019, continuing the trend of a mix shift towards higher revenue services. Adjusted EBITDA from our services segment for the quarter was $3.9 million compared to minus $15.5 million in the prior year. Turning to our True Health segment. We had premium revenue of $32.4 million in the first quarter, down $15 million from the same quarter last year due to exiting the reinsurance agreement with New Mexico Health Connections in the fourth quarter of 2019 offset by membership growth within the individual and federal employee markets. True Health served an average of just over 24,000 members in New Mexico in the quarter, up from approximately 17,000 members in the fourth quarter of 2019 and due to the planned expansion into the individual and federal lines of business. Claims expense as a percentage of premium revenue was 73.6% in the first quarter. Adjusted EBITDA from True Health for the quarter was minus $0.2 million. Turning to the balance sheet. We finished the first quarter with $87.2 million in cash, cash equivalents, and investments, a decrease of $32.3 million versus year-end 2019 and principally driven by seasonal working capital requirements that were consistent with our expectations. During the quarter, cash used in operations was $20.1 million. Cash used in investing activities was $10.8 million. Cash provided by financing activities during the quarter was $32.1 million and largely comprised increases to restricted cash accounts held on behalf of our partners for claims processing purposes. Passport Health Plan, where we account for our investment using the equity method, continues to perform on track relative to our expectations of an overall profitable year. Finally, as Frank mentioned, our adjusted EBITDA results exclude a one-time non-cash write-down associated with our investments in GlobalHealth. In light of the COVID-19 pandemic, the state of Oklahoma required GlobalHealth to materially increase its statutory capital in the form of a capital infusion. Given our focus on executing our core growth strategy and on Passport, we chose not to participate in this round of financing, which we expect will close during May. As such, we wrote down substantially all of the value of our stake, resulting in a charge of $46.1 million that does not impact cash or our forward financial projections as we will maintain our services relationship with Global. While we didn't anticipate an additional capital call as a result of COVID, given the focus and strength of our current growth strategy, we felt comfortable not putting in additional capital at this time. Overall, we are pleased with our progress against our financial objectives for this year so far and as Frank noted, we are reiterating our full-year guidance with continued confidence. We are forecasting total adjusted revenue of $935 million to $985 million for calendar year 2020. The components of full-year 2020 adjusted revenue are as follows: We expect adjusted services revenues to be in the range of $830 million to $870 million. We are forecasting True Health segment revenues of $125 million to $135 million. We are forecasting intercompany eliminations of minus $20 million. With respect to full-year adjusted EBITDA, we continue to forecast a range of $24 million to $32 million. For the second quarter specifically, we are forecasting total adjusted revenue of $236 million to $247 million. The components of adjusted revenue in the second quarter of 2020 are as follows: We expect adjusted services revenues of $210 million to $220 million. We are forecasting True Health segment revenues of $30 million to $32 million. We are forecasting intercompany eliminations of minus $4 million to minus $5 million. And we are forecasting adjusted EBITDA of $5 million to $8 million. With that, I will turn it back over to Frank.

Thanks John. I want to close with a few updates on our progress against our key strategic focus areas for the year. First and foremost, we are intently focused on continuing to leverage our differentiated solutions and talented employee base to provide the maximum support we can for our partners. Every week, we are seeing new innovations across our partner base in terms of ways to support the communities that our partners serve. We are documenting and disseminating these best practices across the network in an effort to minimize the impact of COVID-19 and support community health. Second, we believe this pandemic and the broader healthcare environment has emphasized the importance of our data-driven population health orientation as well as our integrated suite of clinical and administrative solutions. It has also helped us to refine our predictive modeling, deployment of AI, and the expansion of our virtual care management capabilities, which we believe will further drive our differentiation and demonstrable improvements in cost quality. Third, we are focused on continuing to enhance our impact by driving consistent growth as well as meeting our financial objectives for 2020. We continue to make significant progress on achieving increased efficiency across the business in an effort to be cash flow breakeven this fall and consistently expand margins long term. Lastly, we will continue to emphasize building a high-performance organization, which feels particularly essential in this moment as our employees and their families do their best to balance so many aspects of their personal and professional lives during this time. We are providing a number of important resources to support our employees with a focus on maintaining a sense of community and connectedness in a remote working environment as well as supporting employees that have unique needs during this time. I am heartened and, frankly, amazed by how our employees have responded in this moment and know they will continue to provide excellent service to our partners and their communities over the coming months. Our partners are heroes, and we feel honored to serve them in some capacity. Thank you again for participating in tonight's call. With that, we will end our formal remarks and we are happy to take questions.

Yes. Hi. Thanks for taking the questions. I wanted to just touch on guidance since it sort of the last thing you guys were talking about here, John. And then the write-down in GlobalHealth, can you just go a little bit more? You are saying that it doesn't impact guidance for this year. But how would that have affected the financials going forward if we were to retain this? And is there any way to kind of recoup this? Or are we no longer a partner on the health plan side of it and now it's just a service provider to GlobalHealth?

Yes. This is Frank. I will take that, and John, you can feel free to add. I mean, I would say, if you look at our Medicare strategy as a whole, we have had a focus on delegated risk arrangement with national and regional payers. We have specialty management through New Century and then we support scaled plan through our service business. So when we entered into this joint venture, the thought was, here is a longer horizon investment we could make that is really an owned model for a segment of the market, with the idea being that it will be a multiple year investment and something that we could see an equity return from over time. I would say, looking at the strength of our strategy and where we are, we feel very good about our medium-term growth outlook. We still have a service relationship with Global, which may enable us to continue to grow service revenues in the future in our core business. And sort of given those two things and our desire to really focus and prioritize our allocation of capital, we did decide that, look, from a pure equity return, if the need is for us to put additional capital in at this time relative to our other priorities, we are simply not going to do that. So as John said, you see no impact on our guidance that we just reiterated for this year. And as we mentioned, we think we could get additional service revenues out of Global. And as they continue to grow and expand, we would obviously grow with that in the future. However, we don't think, in most cases, we will see much of a return from the financial and equity investment that we made. Again, I think it's the right priority and the most important thing is we feel very good about our overall growth strategy over the medium term.

No, that's helpful. And just two quick clarifications. On the EmblemHealth announcement, the new partnership here, should we be adding 3.2 million members? Or it's a subset of the total membership?

Yes. We have had a couple of arrangements recently that start out, particularly with New Century, as a what we call light management model where it's essentially a management fee for a segment of the population and that's what we are starting out here with Emblem. We don't include those in our life count when it's a management fee-based arrangement. We do think it can expand over time and obviously could go beyond a couple of hundred thousand lives to cover several hundred. But again, we are not counting those in our life count, but it will be a significant revenue contributor as we go into 2021.

Okay. So just to be clear, we should not be adding members because of this deal for this year. Is that the right way to think about that?

Yes, it is. Again, we sort of called out the ASO portion of our New Century business and we do not count those in our overall life count because it is a lower PMPM. It still is a substantial revenue relationship, so we feel very good about its contribution to 2021. But we will not include them in our life count at this point.

Okay. And then you talked about and my last question, just on pipeline, you said meaningful engagement. Has there been any type of disruption in terms of, as a result of COVID in terms of meeting times and scheduling and getting people to engage with you? Or really, at this point, as you said, you haven't really seen any material change? Thank you.

Well, I would say, look, we came into the year with a really good pipeline. We are happy. We have closed three thus far this year. We feel good about our value proposition given the overall environment. Surely, we expect to see some delay in decision process. You could see a 30 to 60-day delay. As we talked about, we are really dependent on the pipeline for setup for 2021. So when you think about meeting our target of six to eight new partners by the end of the year, we feel very comfortable given the adjustment in timeline that we can hit that objective and that we will be well set up as we go into 2021 based on what we know today.

Great. Thanks for the questions. I guess, Frank, maybe just to pick up there on the confidence of adding the six to eight new partners for the year. You mentioned you already have three secured. Just trying to think about the mix of new wins in this environment. The two announced tonight where you were obviously on the New Century side. Anything you can share as far as where you are seeing greater appetite given all that's going on? Is it more New Century Health Plan side of the world? Or is there still an appetite kind of on the traditional sale of the total cost management model?

Yes. I would say that NCH has been particularly strong because of the immediate value proposition. It drives savings that are substantive right out of the gates. And in a world where there is increased budget pressure and also a need to really manage complex specialties like cardiovascular care and oncology, I think we are seeing a very strong pipeline there. If you step back, the organizations that have substantially developed value-based businesses are more protected today than those that simply stayed for fee-for-service. If you have a prepaid model and one that can balance some of the impacts on utilization, I think it highlights that having diversification across your revenue base from fee-for-service to value is the right strategic move to make, particularly in this environment and we all know this could stick around for a while. So I would say that it surely helps. With organizations that have been considering putting more dollars and more effort into their value strategies, this environment would highlight the need to do that. We are seeing demand as organizations think through delegated risk arrangements, shifting away from fee-for-service and getting more upfront, pre-budgeted paid healthcare. I think that's a big opportunity for us. And I think we will continue to see opportunities on the health plan support administrative piece where organizations need greater efficiency and really are looking to drive savings through an integrated infrastructure. So as I said, we will surely, just the last month, people have been scrambling and that surely has slowed down decision cycles, but we feel pretty confident in the level of overall demand. People still are engaging. So we are still moving things through processes, largely call and video-based. So prospects are moving forward. And again overall, I would say this is a validation that a diverse and value-based revenue strategy makes sense, given the sort of things that are going on with the pandemic and chronic care utilization.

No, that's helpful. And then I guess maybe just one follow-up and it's kind of a bigger picture question, Frank. But you guys mentioned that the lower cost trend, it seems to overall be a favorable dynamic across the business and understanding that your arrangements take on many different forms across the various customer types that you have. But it does seem like that lower cost trend is a favorable, at least directional, dynamic for the company. How should we think about the ability to help your clients control cost as utilization comes back, whether that's later this year or next year? Does that pose any additional challenges just in the way that you help your customers manage costs into the different arrangements that you have?

I think what I would say, if you step back and think of the potential impact on COVID, a couple of things to keep in mind and John highlighted this, a very diverse customer base. We obviously sell both to providers and payers, diverse from a population perspective. So I think there is some natural buffer from that. But if you look at our balance, one, over half our lives are in Medicaid and we are likely to see growth in membership in Medicaid across this year. That surely would have a positive impact. We are not taking that into account in our guidance today. And if you think on the utilization side, there's lots of different estimates out there. Surely, in the short term, you will see utilization improvement in both Medicaid and in many Medicare populations, frankly it depends on geography and also in commercial population. So I do think you naturally would get some utilization benefit in the short term. And then in a difficult economy and we know this from historical standards, the level of elective procedures and those types of utilization patterns usually don't go back to their normal for some time. People who are worried about being out of work, people who are worried about getting infected, probably will not go back at the same rate over the medium term. You will eventually see a bounce back. But if you just look at that overall picture, I would say, again, we are calling it neutral to net positive and I think that's an appropriate framework given our particular mix of revenue and the populations that we serve. On your cost question, as you get into next year and again, if you step back, if I am a health plan, if I am a provider in a value-based business, if I am a provider in fee-for-service, with all the things that we have seen, one, I am going to want to manage capacity in my facilities if there continues to be pressure from the pandemic because I am going to have a lot of medical cases, I have still got chronic patients and that's absolutely what we do in our population health model. We have adjusted our stratification to include COVID and other risk factors. We have engaged those patients successfully, not only reduces costs for performance in the value business but also helps on the utilization side as well. So I see this overall as a positive trend around the investments we have been making and a business model shift that I think we are going to continue to see on the provider side where having a balanced value-based business is going to be an important offset to lower utilization on the fee-for-service side, should that continue. So again, that's a view. It's an opinion. But that's where we see things today.

Okay. Got it. Thanks Frank.

Hi guys. Thanks for taking the questions. Frank, maybe one for you. Given the strength you are seeing in New Century, has there been internal debate about shifting some investment dollars towards that asset, especially as it relates to moving beyond cardiac and oncology specialty services into other areas?

Hi Ryan, it's Seth. I can take that one. I think the first fact on New Century in terms of opportunity is just the fact that we are really sub-5% penetrated today around cardiology and oncology. So the overwhelming opportunity is to continue to do more of what we are doing with cardiology and oncology. And so within that, we have certainly done a lot in terms of adding key talent into that business that have helped it scale and will continue to help it scale. So there's clearly something we have already done there. And I think the biggest opportunity, Ryan, is to just keep going down that vector, stay focused and executing on what's right here in front of us, which is going from a reasonably modest market share to something much more substantial and get the scale benefits of that. Over time, I do think there's a unique model we have of sitting in between the payer and the provider. We are helping drive down cost, but we do it in a way that the oncologists and cardiologists and ultimately, other specialists, primary care physicians, I think feel better about than maybe the traditional approach to managed care. So I think the model does apply quite well outside of cardiology and oncology. So what I would say in the medium term is, absolutely. I think in the short term, we will likely stay a bit more focused on a couple of specialties. If something comes along in the medium term that we feel like we can apply the same model to, I think we would certainly look at it.

Okay. That's helpful color. And then, Frank, any thoughts on the interim final rule around the Medicare ACOs? It seems overall favorable that they won't hold providers accountable for COVID costs. They are allowing kind of automated extensions for the year, staying in the same risk model, but they also block new entrants. I am curious, one, your overall thoughts? And two, did that or will that impact your pipeline at all given that they are not allowing entrants into that kind of niche value-based care model? Thanks.

Yes. Great question, Ryan. I agree with you. I think overall, the response from CMS has been strong. They have been actively working with us, with our provider partners. They want to get it right. They ultimately want to move payment to these types of models, and therefore, they want to be supportive. In some of the models, it's a comparative regional benchmark. So as long as you have done a good job given the situation that you are in, which we feel we have with our partners, you can still perform well. And obviously they need to look at the overall data and make appropriate adjustments. But I think they have been very, very reasonable. I think through our ACO program and you just look at the opportunities to work with other payers, there are certain programs where there may not be restrictions. We don't see it as a major issue impacting our pipeline at this point. So again, good same-store growth potential with the existing partners that we have, and then there may be segments, program segments that still will be expanding as we go into 2021 but nothing material there.

Okay. Perfect. And then one last follow-up and this isn't critically important, but I am not sure I understand it. Why are you required to write down effectively your entire investment simply because you didn't participate in the most recent capital call for the asset GlobalHealth?

Hi Ryan, it's John. I think as we think about the valuation of that financing round here in the middle of the pandemic, it was a down valuation which led to the write-down. I think not an optimal capital markets right now, still we believe the right strategic call.

That makes sense. Thank you so much.

Thank you very much. Maybe just a follow-up actually to, I think, Charles' first question, maybe for John or Frank, feel free to chime in. One, I just want to make sure I understand that the three customers that you have signed so far today, are they having any meaningful contribution to revenue or lives this year? I wasn't quite clear if those three partners were in this year at all or really, I know you talked a lot about deals this year set up next year. I just wanted to make sure I was clear on that.

Primarily, they will represent growth going into next year. So they will kick off, we think, in the second half of the year. But they will be fully ramped by January of next year. And so they will really contribute to growth next year.

Okay. That's my first question. Second is, if I take the first quarter that you did and the midpoint of the second quarter for adjusted services revenue, to get to the midpoint, I mean you did raise the guidance a little bit, at least I think you did, it would imply that you are actually having down services revenue in the third and fourth quarter. Is there anything that I am forgetting that's rolling off anything that would cause that? I am just trying to understand, obviously, the mid to upper end of the range, it's not. But what's the conservatism that would suggest that that revenue would actually be down in the third and fourth quarter?

Hi. This is John. I will take that one and Frank can jump in. As we look at the overall sort of arc of the year here, the quarter-over-quarter growth from Q4 into Q1 and then Q1 into Q2 sort of played out as we expected with strong growth coming from both new partners and the full weight of the Passport and CountyCare cross-sells coming in from NCH. As we look at the rest of the year, we have put out a set of guidance that we feel quite confident in and very comfortable with and also recognize that we are in the middle of a pandemic. And so are sticking with that guidance at this time.

Yes. And I would just say, Sandy, I think your specific question is a little bit about Q1 versus the rest of the year. We had a little bit of a pass-through expense in Q1 and an increase there that we knew or thought was likely to happen. And so that's why you see a slight increase there. But we sort of expected revenue to be somewhat ratable throughout the year. Obviously, if you look at our Q3 and Q4 growth versus the prior year, we are at a growth rate north of 20%. It's possible, as I said, we will get a revenue pickup as we find out more about enrollments, particularly in Medicaid throughout the year, but we are not factoring that into our guidance at this point.

Hi. Thanks for taking the questions. I think we are just interested to know if you could talk a little bit, I guess, qualitatively about the virtual care capabilities at New Century and just kind of how many of the providers were using virtual care pre and post COVID and any investments you might have had to make in order to enable that over the first quarter and any that might continue in second, third? Thanks.

Hi Jessica, it's Seth. Yes. Look, I think I will answer that a little bit more broadly first and then we can talk about the virtual care. Just in general, we pulled together our entire scientific advisory board nationally around oncology, in particular given that obviously, cancer, in many cases, is more dangerous than COVID, so the treatments have to go on and put together a very holistic update on all the pathways that we think are relevant for patients. So everything from how do we treat patients in the home where they need infusion, how do you provide longer-lasting agents that don't have to come in as frequently if they do have to come in. And then virtual is one piece of that broader puzzle that had six or seven different elements to it. So we sort of rolled that out nationally. The telemedicine capabilities are capabilities that the providers have directly on their own. We facilitated them and then we have helped make decisions with the physicians on when telemedicine is appropriate, when bringing them into the office setting is appropriate. And we have done that again through adjusting our pathways but also adjusting the way that the drug regimens go. So I think I don't have a specific number for you on the percent increase in telemedicine, but it's incredibly large, multiples and multiples of what it was pre-COVID and it probably accounts for up to a third to half of patient visits in many practices. So it's become very substantial. But I think the important thing is, it's part of a broader pathway redesign that we did holistically around COVID which I think the oncologists really appreciate and certainly the right answer for the patient.

I would just add, sorry, outside of New Century, our traditional model has been to have multiple modalities of virtual care management in ways we can interact with patients. We also have an integrated health approach. So in our Medicaid populations where you have, as an example, high incidence of substance abuse disorder during a pandemic, you want those patients to still have access to counseling, so that they can continue to stick with their treatment regimen. And so we have been able to integrate, whether it's virtual behavioral health, substance abuse counseling, our normal care management for more severe chronic patients. And so it's just been an extension of what we have been doing historically. But I think in NCH, as Seth said, we made some specific investments across the last couple of months.

Awesome. And then just quickly on the New Century Health, are those for the most part straightforward PMPMs? Or are they tied to any kind of outcomes or volume sort of threshold?

The nice thing with New Century is, as we talked about, we are getting paid a base fee, as an example, in the Emblem relationship, but we also have performance incentives. If we perform well on quality metrics and on overall cost metrics, then you can have increased profitability with that arrangement and frankly in a lot of our relationships with NCH.

This concludes our question-and-answer session. I would now like to turn the conference over to Frank Williams for closing remarks.

We appreciate everyone participating in the call. I know there are some virtual conferences coming up, which we will be participating in, and we look forward to interacting with many of you during those conferences, but thanks again for participating tonight. Good night.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.