CareConnectMD Inc., a Costa Mesa-based provider of primary care and care coordination services for Medicare participants, on July 6 closed a $25 million financing round led by Bloomington, Minn.-based TT Capital Partners.
CareConnectMD, also known as CCMD, will use the funds to improve its technology platform, analytics and clinical command center as well as hire more to expand in California and enter new markets in Georgia, Ohio and Texas.
The company intends to double its current headcount of 89 employees within the next 18 months, founder and Chief Executive Kim Phan told the Business Journal.
“Our goal is to partner with physicians to create a special model of care of taking care of high- risk seniors,” Phan said. “We’re small but there’s a lot of need, a lot of demand.”
“CCMD has extensive experience designing successful risk-based care delivery models and delivering care to high-needs seniors,” said Dawn Owens, chief executive and partner of TT Capital Partners, who will join CCMD’s board of directors as part of the investment.
CareConnectMD concentrates on low-income patients who are in the final three years of their lives, what’s categorized in the profession as “high needs.” Such patients, who make up 5% to 8% of the population receiving Medicare, often “don’t receive the right care,” Phan said.
“These patients are very sick,” she said.
About 80% of its CareConnectMD’s 350 patients are in nursing homes while another 20% are in their own homes, she said. About half of the patients have some type of dementia.
Phan describes her company as providing “concierge services for patients.”
“We’ve developed a highly repeatable care model that has proven to improve both care and quality of life while also reducing costs,” she said.
CareConnectMD contracts with managed care and insurance plans to provide comprehensive primary and palliative care to high-risk populations in their homes or choice of care environments, such as skilled nursing facilities. The company also offers telemedicine and partners with other primary care physician groups, enabling them to participate in value-based care programs.
Phan has a long history in the industry. While working as an administrator for skilled nursing facilities (SNFs) in Southern California, she saw firsthand how many patients with advanced illness and especially those nearing the end-of-life were receiving care that was uncoordinated, fragmented, and unable to meet their preferences and values.
Recognizing the need to elevate the care for the fragile and medically complex residing in SNFs, in 1996 she started Gerinet Medical Associates alongside Dr. Chris Mlot. The company later changed its name to CareConnectMD.
When her father was diagnosed with Stage 4 lung cancer, Phan was able to put his care in the hands of her palliative care team when he and her family needed it the most.
The company is one of only eight nationwide that has been certified as a high-needs direct contracting entities (DCE) by the Centers for Medicare & Medicaid Services (CMS). The DCE model is a financial risk-sharing arrangement developed by the centers to reduce Medicare expenditures while enhancing the quality of care to members.
Nowadays, the company is generating about $12 million in annual sales, Phan said.
It was growing around 20% annually until the coronavirus, which was notorious for its effect on nursing homes. She’s seen a “big shift” to private homes rather than nursing facilities, where patient enrollments have declined about 12% since the pandemic, she said.
“You see a lot of patients in homes because their kids don’t want them in nursing homes,” she said.
“We’re trying to bring care to the patient wherever they call home.”
CareConnectedMD executives have plenty of experience in healthcare. Managing Director Alan Hoops previously served as executive chairman of HealthEssentials, as chairman and CEO of CareMore Health Plan, and as chairman and CEO of PacifiCare Health Systems.