Peizer’s Catasys to Provide Depression, Anxiety, and SUD Treatment to Largest Medicaid Plan in Texas

Peizer’s Catasys to Provide Depression, Anxiety, and SUD Treatment to Largest Medicaid Plan in Texas

– Texas Represents Nearly 30% of the Member Population for this National Health Plan
– Expansion into Texas is Following Expansion of Original Program in Wisconsin

Los Angeles, California—March 25, 2017—Catasys, Inc. (CATS), a provider of proprietary predictive analytics and integrated treatment solutions to health plans, announced today that it has expanded its OnTrak™-C solution coverage with one of the nation’s leading health plans to Texas. The health plan has the largest Medicaid plan in Texas, and the eligible Medicaid members with Substance Use Disorder (“SUD”) will be covered under OnTrak-C, a 52-week, integrated medical and behavior treatment program in which enrolled members receive medical and psychosocial interventions, as well as intensive care coaching.

“Expanded coverage of our OnTrak-C solution into Texas represents the second state that we have entered with this leading national health plan. We are pleased to have this customer expand availability to Texas, which is its largest state plan, representing nearly thirty percent of the health plan’s Medicaid member population. This is our third agreement with the nation’s leading health plans for Texas, which will allow us to further leverage our existing operational infrastructure. We are excited with the continued growth of our program as all of our customers have expanded the availability of OnTrak into new states, new lines of business (commercial, Medicare and Medicaid plans), or by expanding their coverage to include depression and anxiety,” said Terren Peizer, Catasys Founder, Chairman and CEO.

“Our experience has shown that Medicaid populations tend to have a higher prevalence of eligible members than commercial populations. We look forward to assisting these Medicaid members to improve their health and to reduce costs for the health plan,” concluded Mr. Peizer.

Catasys’ OnTrak program is designed to improve patient health while lowering costs to the insurer for underserved populations in which behavioral health conditions are exacerbating co-existing medical conditions. OnTrak has demonstrated effectiveness with a 50% reduction in health care costs for members enrolled in the program as well as reductions in hospital days, ambulance usage, emergency room visits and more thorough identification, engagement and treatment. Catasys currently operates programs in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.

About Catasys, Inc.
Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. Catasys’ 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 percent reduction in total health insurers’ costs for enrolled members. OnTrak is currently available to members of several leading health plans in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin. For further information, please visit catasys.com.

Peizer’s Catasys Expands Further in Illinois with OnTrak’s Success with Treatment for Depression, Anxiety, and SUD.

Improvements in Member Health Lead to Expansion of the OnTrak™ Program to Individual and Public Marketplace Plan Members in Illinois

Los Angeles, California—March 17, 2017—Catasys, Inc. (CATS) and Health Alliance Medical Plans today announced they are expanding the OnTrak program to Health Alliance individual and public marketplace plan members in Illinois. OnTrak provides support and guidance to members struggling with both medical and behavioral conditions, including depression, anxiety and substance use disorders.

“Our goal is to support all of our members to become healthier. We know a portion of our members struggle with medical and behavioral challenges. A little over a year ago, we started offering the OnTrak program to members to give them the support they need. The results have been dramatic. Members have not only gotten healthier and spent less time in the hospital, but are reporting better family relationships, return to activities they enjoy and overall better wellbeing,” said John P. Beck, MD, FAPA, Health Alliance Vice President and Associate Chief Medical Officer. He is also Behavioral Health Committee Chairman.

“Our experience with OnTrak has led us to expand the program and its benefits to more members with anxiety, depression and substance use disorders alongside chronic medical conditions, such as diabetes, heart disease and pulmonary disease,” Dr. Beck continued.

The benefits of the partnership are multifaceted.

“Health Alliance has been a great partner, and we are pleased that we have been able to assist them with their members,” said Terren Peizer, Catasys Founder,Chairman and CEO. “Health Alliance has been on the forefront of recognizing the needs of this underserved population, and we are thrilled to work with them to expand on the success we have seen so far.”

About Health Alliance
Health Alliance is a leading provider-driven health plan in the Midwest, serving more than 240,000 members in Illinois, Iowa, Indiana, Ohio and Washington.

About Catasys, Inc.
Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. Catasys’ 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 percent reduction in total health insurers’ costs for enrolled members. OnTrak is currently available to members of several leading health plans in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin. For further information, please visit catasys.com.

Peizer’s Catasys Expands into Massachusetts with Another Leading National Insurance Provider

Catasys Expands OnTrak-A Solution to Massachusetts with Leading National Health Insurance Provider

LOS ANGELES, February 16, 2017 /PRNewswire/ — Catasys, Inc. (CATS), a provider of proprietary predictive analytics and integrated treatment solutions to health plans, announced today that it has entered into an agreement to expand its OnTrak™-A solution with one of the nation’s leading health plans to Massachusetts. The plan’s eligible commercial and Medicare Advantage members will be covered under OnTrak-A, a 52-week, multi-phase program in which enrolled members receive medical and psychosocial interventions, as well as intensive care coaching.

“We are pleased to expand our OnTrak-A solution into Massachusetts for eligible commercial and Medicare Advantage members. This represents the eighth state in which we have announced the launch of the OnTrak-A program and builds on our existing operation in Massachusetts,” said Rick Anderson, Catasys’ President and COO. “We look forward to improving the health and lives of our enrolled members and their families while reducing overall medical treatment costs for the health plan.”

According to the U.S. Department of Health and Human Services’ National Survey on Drug Use and Health: Mental Health Findings for 2013, approximately 20 million (8.5%) adults in the U.S. met criteria for a substance use disorder (i.e., illicit drug or alcohol dependence or abuse). The National Institute of Mental Health reports anxiety disorders are the most common mental illness in the U.S., affecting 18.1% of the U.S. adult population, or approximately 43 million people age 18 and older. People with an anxiety disorder are three to five times more likely to go to the doctor and six times more likely to be hospitalized for psychiatric disorders than those who do not suffer from anxiety disorders. In addition, in 2013, an estimated 15.7 million U.S. adults aged 18 or older, or 6.7% of all U.S. adults, had at least one major depressive episode in the past year based on a study conducted by the National Survey on Drug Use and Health.

Catasys’ OnTrak program is designed to improve patient health while lowering costs to the insurer for underserved populations in which behavioral health conditions are exacerbating co-existing medical conditions. OnTrak has demonstrated effectiveness with a 50% reduction in health care costs for members enrolled in the program as well as reductions in hospital days, ambulance usage, emergency room visits and more thorough identification, engagement and treatment. Catasys currently operates programs in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.

About Catasys, Inc.
Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. Catasys’ 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 percent reduction in total health insurers’ costs for enrolled members. OnTrak is currently available to members of several leading health plans in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin. For further information, please visit catasys.com.

Peizer’s Catasys Expands in Texas with Another Leading National Health Insurance Provider

Catasys Expands OnTrak-A Solution to Texas with Leading National Health Insurance Provider

LOS ANGELES, February 7, 2017 /PRNewswire/ — Catasys, Inc. (CATS), a provider of proprietary predictive analytics and integrated treatment solutions to health plans, announced today that it has entered into an agreement to expand its OnTrak™-A solution with one of the nation’s leading health plans to Texas. The plan’s eligible commercial and Medicare Advantage members will be covered under OnTrak-A, a 52-week, multi-phase program in which enrolled members receive medical and psychosocial interventions, as well as intensive care coaching.

“We are excited to now provide our OnTrak-A solution to eligible commercial and Medicare Advantage members in Texas, which is the plan’s largest state by membership. This represents the seventh state in which we have announced the launch of the OnTrak-A program. We are gratified to be adding our second largest national health plan to partner with us in the state of Texas,” said Rick Anderson, Catasys’ President and COO. “We are pleased with the rollout of OnTrak and the increased availability of our solution to members in Texas. We look forward to improving the health and lives of our enrolled members and their families while reducing overall medical treatment costs for the health plan.”

According to the U.S. Department of Health and Human Services’ National Survey on Drug Use and Health: Mental Health Findings for 2013, approximately 20 million (8.5%) adults in the U.S. met criteria for a substance use disorder (i.e., illicit drug or alcohol dependence or abuse). The National Institute of Mental Health reports anxiety disorders are the most common mental illness in the U.S., affecting 18.1% of the U.S. adult population, or approximately 43 million people age 18 and older. People with an anxiety disorder are three to five times more likely to go to the doctor and six times more likely to be hospitalized for psychiatric disorders than those who do not suffer from anxiety disorders. In addition, in 2013, an estimated 15.7 million U.S. adults aged 18 or older, or 6.7% of all U.S. adults, had at least one major depressive episode in the past year based on a study conducted by the National Survey on Drug Use and Health.

Catasys’ OnTrak program is designed to improve patient health while lowering costs to the insurer for underserved populations in which behavioral health conditions are exacerbating co-existing medical conditions. OnTrak has demonstrated effectiveness with a 50% reduction in health care costs for members enrolled in the program as well as reductions in hospital days, ambulance usage, emergency room visits and more thorough identification, engagement and treatment. Catasys currently operates programs in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, North Carolina, New Jersey, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.

About Catasys, Inc.
Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. Catasys’ 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 percent reduction in total health insurers’ costs for enrolled members. OnTrak is currently available to members of several leading health plans in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, North Carolina, New Jersey, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin. For further information, please visit catasys.com.

Peizer’s Catasys Contracts with the Largest U.S. Health Insurance Company

Catasys Contracts with the Largest U.S. Health Insurance Company

– OnTrak-U Solution initially launching in 8 states
– OnTrak-U Solution will cover depression, anxiety, and substance use disorder

LOS ANGELES, February 2, 2017 /PRNewswire/ — Catasys, Inc. (CATS), a provider of proprietary predictive analytics and integrated treatment solutions to health plans, announced today that it has contracted with the largest national health insurance company in the United States (the “Insurer”) to implement its OnTrak solution for anxiety, depression and substance use disorders (OnTrak-U). OnTrak-U is anticipated to launch in the first half of 2017 in eight states where OnTrak is already available to members of other leading health plans, with a case rate fee when members enroll plus a sharing of savings with the health plan.

Catasys eligible members average approximately $30,000 in costs to health insurers per year, and Catasys has been shown to reduce inpatient and emergency room utilization, driving an approximately 50 percent average reduction in total health insurers’ costs for enrolled members from the year prior to enrollment.

This contract will leverage Catasys’ proprietary analytic models to identify impactable members to engage and is anticipated to significantly contribute towards the Company’s goal of Equivalent Lives covered under contract of 20 million by the end of 2017. The Company has signed agreements to provide its OnTrak solution to several health plans, including some of the largest in the United States (http://catasys.com/clients.html).

“This is an exciting opportunity to expand and leverage our existing operations in several states and significantly increase the number of eligible members for our OnTrak solution. This represents the first multi-state agreement which will use our analytic models for our expanded product offering covering high-cost members suffering from anxiety, depression or substance use disorders. We are very pleased with the reception our advanced proprietary solutions are receiving in the market,” stated Rick Anderson, President and COO of Catasys.

“This particular health plan has an exceptional track record of innovation and providing care to its members. We are excited to partner with them and look forward to demonstrating the value of our solution,” concluded Mr. Anderson.

Investor Call
The Company will hold a conference call with the investment community today, February 2, 2017 at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. For interested individuals unable to join the conference call, a replay of the webcast will be available at http://catasys.com/presentations.html for 30 days following the call. Also, a dial-in replay of the call will be available through February 16, 2017, at +1-844-512-2921 (U.S. Toll Free) or 1-412-317-6671 (International). Participants must use the following code to access the dial-in replay of the call: 1474347.

About Catasys, Inc.
Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. Catasys’ 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 percent reduction in total health insurers’ costs for enrolled members. OnTrak is currently available to members of several leading health plans in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, North Carolina, New Jersey, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin. For further information, please visit catasys.com.

Peizer’s Letter to Shareholders Discusses the Mental Health System and Catasys, Inc.

Catasys, Inc. Issues Letter to Shareholders

Increasing Utilization and Expansions From Health Plans to Increase Equivalent Lives Under Contract in 2017
to More Than 20 Million
———
Such Adoption Portends to a Cash Receipts Run Rate of Approximately $126 Million 12 Months from Launch

Dear Catasys Shareholder,

We are pleased to update you, our valued shareholder, on the exciting events occurring throughout our business and will be taking steps to provide additional visibility into our progress going forward. The rapid pace at which we are expanding our engagements with the major U.S. health plans has dramatically increased the total number of equivalent lives we are reporting at the end of 2016. This growth is expected to have a significant impact on our financial performance for 2017.

The healthcare industry, in particular, health insurance companies and plans, typically take many years to allow a new entrant such as us to gain significant traction. It has taken the Company several years to prove out our business model, as it is currently accepted by many national health plan providers. During this time, we have found it virtually impossible to have enough visibility in our business to publicly provide accurate financial guidance and direction. Through this letter, we hope that you will sense something must be changing given our newly communicative posture.

Further, we will briefly discuss our vision; the healthcare industry issues that we are addressing; the proprietary nature of our products; the scalable nature of our business, and our near term expectations.

Company Vision and Solution

The Company’s vision is to improve the behavioral health industry by providing an innovative proactive treatment solution with cost saving opportunities for health plan customers, and ultimately be able to scale its availability on a national and perhaps one day, international basis.

Today, we are focused on substance use disorder (SUD), depression and anxiety which comprise approximately
75% of behavioral health disorders. The U.S. currently has a passive system whereby treatment avoidant patients (cost, denial, stigma, access) need to seek out treatment, gain access to treatment, afford said treatment, and then receive the appropriate care that addresses both the physiological and psych-social aspects (“integrative care”) of these complex diseases.

Unfortunately, the more severe patients we serve have these diseases as co-morbid conditions of each other, and have other co-morbidities, such as cardiovascular, diabetes, renal, liver disease, etc. The average amount of costs associated with these patients directly related to the behavioral diseases alone is $30,000. These costs are predominantly from emergency room visits and in-patient hospital stays.

Catasys provides an integrated outpatient solution with proprietary analytics and predictive modeling, proprietary enrollment, engagement and modification of behavior techniques. Our solution effectively turns the passive system, treatment avoidant, minimal access to care, unidentified patient population to a proactive, replicable, scalable, national solution where we focus on the complete care of the patients.

The results from our solution have shown that patients are getting better, and the health insurance companies are
consistently saving 50% of the medical costs for each patient enrolled. Hence, there is a health plan incentive to pay
for all the associated treatment costs. Through OnTrak, behavioral health patients now have full treatment program coverage, increased access to treatment and effective care.

First Quarter and Full Year 2017

Catasys has emerged as a leading healthcare analytics company providing proprietary value-added care for health plan members. We are like “Amazon and Uber” to the standard facilities-based behavioral health industry model, as we are virtual and scalable throughout the country, utilizing provider networks of independent contracted medical doctors and psychologists, companioned with our own Care Coaches, in an outpatient setting.

All of our existing health plan customers, including, Humana, Aetna, Centene, and HAMP, have expanded OnTrak to their other products and expanded geographically. We are now operating in 18 states, with more to come. This week we have seen for the first time that one of our customers expanded from our SUD OnTrak program to the OnTrak treatment of SUD, depression and anxiety.

While we have been growing revenues significantly year-over-year and sequentially, the numbers are quite small relative to what we expect in the coming year and beyond. We have worked through much of the customer specific logistical issues in 2016 that limited our revenues, and it appears that the “perfect storm” is beginning to culminate in the first quarter of 2017.

“Perfect Storm”

We anticipate shortly that all of our existing customers will be operating at or near full capacity for the lives under contract by the end of the first quarter of 2017, with additional opportunities to expand. We expect this growth to come throughout their eligible members, including Medicare, Medicaid, commercial, individual, and, hopefully, TRICARE (military and veterans), as well as, expansion throughout our depression and anxiety offerings.

It’s important to note that when a health plan contracts OnTrak for depression, anxiety and SUD, it represents an approximately 4.4X increase of the eligible population from which we enroll. We began the year with at or under 20% enrollment rates of eligible lives. We are constantly trying to improve our techniques and we are beginning to see the results. While we are only one quarter in, we are currently seeing a 20-25% enrollment rate which exceeds our expectations.

Another input to the “storm” is additional health insurance contracts. We expect to add more national and super-regional health plans. This will be a major impetus to revenue growth. Excitingly, we expect many of the new contracts to include the treatment of depression and anxiety. These will be the first instances of new customers contracting for all three disease states. We are hopeful that in 2017 we will have contracts in place with health plans that represent in excess of 75% of the commercially covered lives in the USA. We are hopeful that we will have contracts with 7 of the 8 largest health plans in the country. Importantly, all of our existing and future customers will continue to benefit from the trend in place, and expected to accelerate with the next administration, of more of the Medicare and Medicaid populations moving to managed care. These populations have an approximately 2.5X the eligible patients from which we enroll than a commercial population.

Unfortunately, another “tailwind” is the increasing rates of mental illness in the U.S. In a survey released this week, one out of six adults take psychiatric medications. Alarmingly, 85% of them are prescribed multiple refills. This is indicative of rising dependencies and associated medical costs. The government increasingly recognizes the U.S. mental health problem and has instituted the Mental Health Parity Act, and this week, the 21st Century Cures Act became law thereby improving U.S. mental health efforts.

The Result: Large Projected Revenue Streams

We believe that in 2017 we will nearly triple our Equivalent Lives (ELs) under contract from the current 7.5 million we have in place. Each 10 million ELs is anticipated to equate to a cash receipts run rate 12 months from launch of $63 million. Hence, 20 million ELs could translate to a cash receipts run rate of approximately $126 million 12 months from launch. Excitingly, this is only the beginning and would expect significant revenue and cash flow growth rates for years to come.

We are extremely excited for Catasys’ future growth. I certainly hope that you can sense my excitement for the coming year(s). Perhaps now you can understand why I personally invested in excess of $22 million into Catasys, Inc. Thank you for remaining dedicated to our Company’s vision which will hopefully transform the behavioral health industry.

I wish you a happy and healthy Holiday season, and a tremendous New Year for all Catasys shareholders.

Respectfully,

Terren S. Peizer
Founder, Chairman & CEO
Catasys, Inc.

About Catasys, Inc.

Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak solution. Catasys’ 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 percent reduction in total health insurers’ costs for enrolled members. OnTrak is currently available to members of several leading health plans in Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, North Carolina, New Jersey, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin