A Discussion with CareMount Medical on COVID-19

April 2020

Hello, I’m Rob Fraiman, President of Cain Brothers. Today I'm delighted to interview Dr. Scott Hayworth, President and CEO of CareMount Medical, and Kevin Conroy, Chief Financial Officer and Chief Population Health Officer of CareMount. CareMount is based in Westchester County, New York, just north of New York City. It is one of the largest primary care oriented multispecialty physician groups in the United States with more than 600 providers in 50 locations and specializing in over 50 different areas.

Scott, describe the impact of the steps that CareMount has taken to treat patients, protect your clinicians and your staff, and secure the necessary supplies.

Dr. Scott Hayworth: Before the crisis, CareMount consisted of 600 plus providers providing care in six counties in New York, from Manhattan, 120 miles up to Kingston. We are the only NextGen Accountable Care Organization (ACO) in New York and we're one of 40 Next Gen ACOs in the country. Our number one priority is the safety of our patients and our providers. Once we ensured the safety, and as our COVID volumes dropped, we did a few things. First, we interview patients ahead of time to ensure they were properly classified, and we went to twelve visits in the morning and six visits in the afternoon. Unfortunately, as our volumes declined, we had to furlough some of our employees. We have an A and B team, and they alternate, working every other week.

Dr. Scott Hayworth: We also leveraged our Teladoc platform. We decided a couple of years ago to get into telemedicine, and our team did an incredible job of bringing it up to speed quickly. We have every provider on telemedicine. We are currently doing about 1,400 telemedicine visits a day.

Fortunately, we planned for a crisis a few years ago and we had PPE in stock. Some organizations had to cut down their visits because they didn't have adequate PPE.

Our providers really stepped up. With having to potentially work in a different building and with different staff each week, they really showed leadership and I'm very proud of our providers. The decline in volume affects our revenue, as well as the substantial cost of PPE, because we had to purchase additional PPE in the market to replace the PPE we used. We put a mask on every patient who comes through the door, as well as full PPE for our providers and staff.

Kevin, how would you describe the financial impact and, which of the various CARES Act programs have you participated in so far? How have your commercial insurance partners responded in the New York market?

Kevin J. Conroy: The financial impact is as dramatic as you might imagine. We're looking at a loss in revenues upwards of 20 percent. It's very difficult to tell at this point given the trajectory of the COVID-19 crisis but time will tell. From a federal aid perspective, we fall into an interesting category. The CARES Act is providing some relief for physician groups, but as the aid packages evolve, a lot of it is going to be for the hospitals. Physician groups, which serve as an alternative treatment option to hospitals, are suffering to a similar extent, while trying to treat our patients as Dr. Hayworth spoke to, and we are being devastated as well.

The CARES Act is giving separately through the Medicare program. As you know, Health and Human Services (HHS) has a program, and depending upon your proportion of Medicare activity, you receive funds. On the Small Business Administration Payroll Protection Program, we're too large to qualify. In terms of recovering lost revenues, the programs simply aren't going match the impact which we are facing. On the commercial insurance side, we reached out very quickly to our payers to make sure telehealth parity from a reimbursement perspective was in place. I'm pleased to report we're getting paid as if it were a typical Evaluation & Management (E&M) visit.

Some of the insurance plans have stepped up in terms of trying to accelerate claims processing and relieve some of the other barriers to getting paid quickly. I see some of that, but not nearly enough. They are trying to provide support, but it's simply not to a degree we're going to need. We’re taking other measures to try and mitigate the losses. As Dr. Hayworth pointed out, we implemented a furlough program, we looked at all our vendors with respect to timing and payment. Of those, we are evaluating other supply chain opportunities to see where we can make a difference. I would also like to applaud our physicians and Industry Insights | April 30, 2020 3 C-Suite Executive Interview Conducted by Robert J. Fraiman, Jr. Continued from p. 2 frontline teams that are experiencing an income hit from this pandemic given the fact that we're a shareholder owned entity.

Dr. Scott Hayworth: We’re not performing elective procedures and elective visits. That's a real reduction in revenue for the group as well as not providing the ancillary services in the same level as we were before.

Give us a little bit of detail about how many telehealth visits per week you're doing now versus for instance, six months ago.

Dr. Scott Hayworth: We're doing roughly 1,400 telehealth visits per day. Six months ago, we were probably doing five to 10 visits per day. The big difference is, we were using telemedicine for some postoperative visits and after-hour urgent care six months ago. Now, we have every specialty up on telemedicine. The team did a phenomenal job of taking something which should have been a three to six months lift, and got it done in two weeks.

Scott, as somebody who's a physician and a leader in the industry, how do you think this plays out in the future, and specifically in telehealth? Is this going to be the beginning of a permanent change in terms of the proportion of telehealth versus in-person visits?

Dr. Scott Hayworth: Without a doubt, I think the public has adapted to telemedicine. The public and providers can do telehealth visits in the evening after dinner, after they put their children to bed, as well as on the weekends. It's a lot easier, and our physicians don’t need to come to the office to do it. We're already studying the impact on our facilities and how we will be set up in the future because telemedicine is here to stay. Employers are going to like it as well as employees who no longer have to leave their desk to go to the doctor's office for many things.

It's going to be a combination of telemedicine with in-person visits and I think it all depends on what's going on. As technology gets better and better, eventually a doctor will be able to listen to a heart, listen to lungs, and do other types of exams through telemedicine. I think this has been a revolution in the industry.

Kevin J. Conroy: While we're seeing 40 to 50% of our current visits utilizing the telehealth platform, it will probably settle down post COVID to about 10%. One of the things that we recognize being a value player and a value-based care program, is that we recognize that telehealth is going to play an important role in providing care when we can't do it in person. We're in contact with our multiple co-morbid patients more often. We're also using telehealth to communicate within our inpatient side from a discharge planning perspective, as well as our post-acute skilled nursing facility settings. It's an added value in terms of integrating and coordinating care for our patients outside of our four walls.

Dr. Scott Hayworth: Especially with the next generation ACOs being at risk. The ACO has been very, very successful. So much so that we now have hospital clients for the Medical Science Liaisons (MSL), which has asked us to help them with Medicare Shared Savings Program (MSSP) as well as Next Gen.

CareMount has been a leader in the New York market and nationally for physician groups in adopting value-based models, particularly in the Medicare Advantage world. How do you see this crisis impacting CareMount’s ability to its value-based business?

Kevin J. Conroy: Dr. Hayworth recognized the need to grow value-based care programs years ago and we have been committed to taking on a greater responsibility for the total cost of care. As Dr. Hayworth suggested, we have 30,000 lives in our ACO and more than 10,000 lives in our Medicare Advantage programs. This translates into value-based and proactive care. We have made significant investments in data analytics, care coordination, and deployed robust physician led medical management programs. These investments have been vital for our patients, particularly for our most vulnerable patients who potentially are deferring care during this crisis. Through risk stratification and using our care coordinators, we are reaching out to our high-risk patients at this time to keep them healthy and avoid potentially complicated and costly episodes down the road.

We’re working with our provider partners throughout our geography and outside of our four walls to coordinate care, discharge planning, and post-acute patient management programs, all with a focus on improving care, outcomes, and the total cost of care. I'm not going to suggest that COVID is going to accelerate our road to value, but we're looking to double the number of Medicare Advantage lives we have over the next two to three years.

We are keenly focused on full, global capitation programs in the future. As you know, global capitation describes an arrangement where a provider organization, or group of organizations, come together to receive a single fixed payment for the entirety of healthcare services a patient could receive, including primary care, hospitalizations, specialist care and ancillary services. I think the key for providers that take on that risk, is what does it mean to not be able to access these patients? We're doing the best we can over telephone and we're using our platforms to reach out through our coordinated care platforms. At the end of the day we're deferring care and what that is going to mean for fully global cap providers is a question, but we're ready to take that on and we're going to move in that direction regardless.

Dr. Scott Hayworth: Kevin has built an incredible team at CareMount. Previously, Kevin ran a health plan in New York and when he came on board six years ago, we asked him to help with setting up the Medicare Shared Savings Program (MSSP) plan. We were among the first wave of MSSPs in the country and Kevin has taken it to a whole new level. We now have hospital claims and we continue to expand our value consulting and our value technology, both in New York as well as across the country. We have built a team of data scientists and consultants, and it is beyond what anyone could have expected.

How is CareMount thinking about growth opportunities? How do you see the environment for CareMount to continue its growth plan as we return to normal in the coming months and the rest of the year?

Dr. Scott Hayworth: We've been getting phone calls from providers in our markets interested in speaking with us. Smaller physician groups are looking for a safe landing. CareMount is providing that safe landing and we are a physician-led alternative to the hospitals, and we will continue to grow. We want to cherry pick the best providers and we're very careful about who we bring on board. We want providers who align philosophically with our organization, placing the patient at the center of everything we do. We are in a better position to grow, and CareMount will come out of the COVID crisis stronger.

Scott and Kevin, share some lessons learned, and specifically, changes that should be implemented at physician practices like CareMount and other organizations across the country to improve the nation's responsiveness to future health care crises, which probably includes a second wave later this year.

Dr. Scott Hayworth: I'm blessed with an incredible management team over my 23 years as CEO. Two of CareMount’s senior people, Chris Sclafani, Chief Operating Officer, and Dr. Rich Morel, our Chief Physician Executive, were Eagle Scouts. I didn't get that far in the Boy Scouts, but we try to be prepared and I think that shows in how we do things.

We're actively working on post-COVID operations. We learned the importance of communication. We overcommunicated to physicians, patients and staff, with group wide calls, videos, and emails. We kept in touch with everyone. I can't stress the importance of communications enough. We are ready for the second wave. We have a robotic lab that can process 2 million specimens a year. If there is a return of COVID-19 in the fall, we're going to make sure we have enough PPE and testing so we can determine whether it's flu or COVID 19.

Kevin J. Conroy: We understand the safety aspect and component and how we need to consolidate. I'm most impressed and proud of our nimbleness as a management team. As Dr Hayworth has alluded to, we have worked collaboratively across the organization, from our physicians to our couriers to quickly respond to the pandemic. If there is a second wave of COVID, and inevitably there will be, we are ready.

Join Rob Fraiman, President of Cain Brothers, as he interviews Scott Hayworth, M.D., CEO of CareMount Medical, and Kevin Conroy, CFO and Chief Population Health Officer of CareMount in a discussion of the COVID-19 pandemic, its impact on the healthcare sector and how CareMount Medical is responding.

Scott HayworthDr. Hayworth has been President and Chief Executive Officer of CareMount Medical, PC (formerly Mount Kisco Medical Group, PC), the largest independent multispecialty medical group in the United States, for more than 20 years, having started in practice there in 1988. Dr. Hayworth has overseen a nearly 15-fold expansion in the size of CareMount, from 40 physicians to 650 providers, including 500 physicians. He has earned a national reputation as an authority on practice administration; multispecialty group management; and adaptation to the rapidly changing environment in health care, including the transition to value.

Under Dr. Hayworth's leadership, CareMount Medical has grown from a handful of locations to over 45 sites throughout the Hudson Valley and New York City, expanding and transforming staff, services, facilities, and practice infrastructure to offer a seamlessly integrated patient experience of the highest quality. He has guided the establishment of relationships between CareMount and diverse partners and institutions, including affiliations with Massachusetts General Hospital, Northwell Health, Memorial Sloan-Kettering Cancer Center, and nine regional hospitals. CareMount Medical was one of the first Accountable Care Organizations (ACOs) in the nation and it the only NextGen ACO in New York; it has been an NCQA Level III PatientCentered Medical Home for many years. CareMount has innovated in electronic health information for almost 20 years.

In 2019, Dr. Hayworth became Chairman of the Board and Chief Executive Officer of CareMount Health Solutions, LLC, a collaborative physician-owned management services organization with expertise in helping clients position themselves for the ever-changing health care environment. CareMount's practice management solutions enable physicians, hospitals and systems to increase margins, reduce costs, and improve the patient experience.

Dr. Hayworth is a consultant to the Vincent Department of Obstetrics and Gynecology at Massachusetts General Hospital, and he is a past associate dean at the Icahn School of Medicine at Mount Sinai. He is past chairman of the board of the American Medical Group Association and past national treasurer and District II chairman for the American College of Obstetricians and Gynecologists. He has served as a consulting editor for Contemporary OB/GYN.

Dr. Hayworth chairs the advisory board for IKS Health and the board of directors of the Ambulatory Surgery Center of Westchester. He is the president of the board of directors of Bedford Physicians Risk Retention Group. He serves on national advisory boards for Aetna, Anthem, and MedPro, and he heads the health care advisory board for r4. Dr. Hayworth is a senior advisor to Arsenal Capital Partners, BioIVT, and WIRB-Copernicus Group (WCG). He sits on the boards of directors of TractManager Medical Holdings and mymedicalimages.com, and he is the non-executive board chair of US Digestive Health. He is a past advisor to Warburg Pincus and a past board member of Brighton Health Partners; Counsyl, Inc.; the Northern Westchester Hospital Foundation; and Community Mutual Savings Bank.

Dr. Hayworth has been named to many "Best Doctors" lists in successive years, including those in New York and Westchester magazines, Best Doctors in America, and America's Best Obstetricians and Gynecologists. He was selected by Becker’s Hospital Review as one of their “105 Physician Leaders to Know” in 2019 and “112 Physician Leaders of Hospitals and Health Systems” in 2018. He was chosen as one of City & State NY’s “Westchester Power 100” in 2019 and “Westchester Power 50” in 2018.

Dr. Hayworth was honored by the United Way of Westchester and Putnam at their 2018 "Imagine" gala. He received the Westchester County Doctors of Distinction Lifetime Achievement Award in 2015. The Visiting Nurse Association of The Hudson Valley has honored Dr. Hayworth twice, in 2005 with their Award of Merit and in 2015 with the Ellen Wood Health Care Award. In 2013 he was given the "Good Scout" Award by the Boy Scouts of America Westchester-Putnam Council and was named Business Person of the Year by the Yorktown Chamber of Commerce.

Dr. Hayworth received his A.B. in Biology from Princeton University and his M.D. from Cornell University Medical College. He and his wife, former Congresswoman Dr. Nan Hayworth, live in Bedford, New York, and have two adult children, Will and Jack.

Kevin ConroyKevin J. Conroy, MS, is the Chief Financial Officer and Chief Population Health Officer at CareMount Medical, PC, one of the largest, independent multispecialty medical groups in the nation. Mr. Conroy has over 25 years of extensive healthcare leadership experience in both the public and private sectors.

As Chief Financial Officer, Kevin oversees all aspects of financial management; payer relationships, physician compensation, operational budgets, and revenue cycle management and leads the strategic direction of the organizations growth and acquisitions. In 2015, Mr. Conroy took on the additional role of Chief Population Health Officer and established a new division at CareMount with the goal of transitioning the Group from fee for service to value based contracting. Under his leadership, CareMount grew to over 40,000 Medicare seniors under risk based contracts, including the only physician owned Medicare Next Generation ACO in the tri state area. CareMount deployed advanced clinical care coordination programming, robust data-driven programming, and strategic network contracting.

Prior to joining CMM, Kevin was President of WellCare of New York, served as CFO of a start-up Medicaid health plan increasing access to primary care for residents of New York City and was the VP and Treasurer of IntegraMed.

Mr. Conroy is a member of the Board of Partners Health Plan, a health plan dedicated to serving individuals with intellectual and developmental disabilities and their families and Neighbors Link, a not for profit organization dedicated to the strengthening the whole community through the healthy integration of immigrants. Mr. Conroy is also the Chair of the Chief Financial Officer Council for the American Medical Group Association and serves on the Advisory Board for r4.

Kevin holds his B.A. from Hamilton College and M.S. from the University of Rochester.

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