Catasys, Inc. (CATS) provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. CATS' OnTrak solution--contracted with a growing number of national and regional health plans--is designed to improve member health and, at the same time, lower costs to the insurer for underserved populations where behavioral health conditions cause or exacerbate co-existing medical conditions. The solution utilizes proprietary analytics and proprietary enrollment, engagement and behavioral modification capabilities to assist members who otherwise do not seek care through a patient-centric treatment that integrates evidence-based medical and psychosocial interventions along with care coaching in a 52-week outpatient treatment solution.

OnTrak is currently improving member health and, at the same time, is demonstrating reduced inpatient and emergency room utilization, driving a more than 50% reduction in total health insurers' costs for enrolled members. OnTrak is currently available to members of several leading health plans, including four of the nation’s seven largest plans. Contracts in place covering 7.5 million equivalent lives (ELs) in 18 states with plans to expand to other major states. Revenue run rate 12-months post-launch approximately $63 million per 10 million ELs with $26 million free cash flow. CATS anticipates surpassing 20 million ELs by the end of 2017.

  • CATS reported revenue of $1.8 million in 1Q17, an increase of 150% YOY
    • Deferred revenue of $1.9 million in 1Q17, an increase of 27% QoQ
    • Total cash receipts of 2.2 million in 1Q17, an increase of 8% QoQ
  • OnTrak currently available in 18 states and will expand into additional states under agreements with major and regional health plans
    • Contracts with four of the top seven health plans, including Aetna, United Healthcare, Humana, and Centene
    • Expect to surpass 20 million ELs by end of 2017
    • Adoption driven by proven reduction in inpatient and emergency room utilization, resulting in more than 50% cost savings for health plans
  • Members with behavioral health disorders average higher healthcare costs for covering health insurance providers
    • Contracts covering depression and anxiety typically have greater eligibility than those that cover just substance dependence
    • Medicare, Medicaid, and Dual Eligible plans generally have a higher prevalence of eligible members than commercial health plans
  • Generates monthly, fee-for-service or upfront fees from health plans for enrolled members; targeting behavioral health management services to high-cost members
    • Revenue per one (1) million ELs approximately $6.3 million run rate 12-months after launch
    • Every 10 million ELs generate approximately $26 million in free cash flow
  • Proven roll-out strategy leveraging big data analytics
    • Established systems for hiring and training outreach specialists and care coaches pre-launch
    • 45-day ramp period pre-launch in previously entered states; 90-day ramp in new states
    • Achieves 20% steady state enrollment approximately 12-15 months post-launch
  • Buy rating from leading analyst at Joseph Gunnar & Co. with $3.00 price target

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