Once Backed with $34M, Skilled Nursing Telehealth Provider Call9 to Shut Down

Call9, a startup that raised tens of millions of dollars to expand its model of in-house emergency care at skilled nursing facilities, is winding down operations and restructuring its remaining assets.

CNBC first reported the news Tuesday afternoon; about 100 employees have been laid off as part of the wind-down process, according to the outlet.

Promoted as a key way for nursing homes to reduce hospital readmissions, the company’s platform embedded paramedics on-site at SNFs to give residents real-time access to emergency care, using technology such as iPads to connect nurses with remote physicians.

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The Brooklyn, N.Y.-based company had raised a total of $34 million in funding from a variety of investors, including actor Ashton Kutcher, 23andMe’s Anne Wojcicki, and Y Combinator’s former chairman Sam Altman, the article noted.

Call9 had partnered with a roster of SNF providers that included Centers Health Care and CareRite, and expanded to the Albany, N.Y. area in April of this year, according to a timeline on the company’s website. It also had an agreement with the Archdiocese of New York’s long-term care arm, ArchCare, to offer services at two of its nursing homes.

Peck and another spokesperson for Call9 did not respond to SNN’s requests for comment by press time.

The tech provider had worked with such insurers as Anthem, Blue Cross Blue Shield, and Healthfirst, and participated in different Medicare Advantage programs as of the start of last year. The company’s business plan was to strike deals with insurance companies to split the savings from avoiding emergency room trips, while also marketing its services directly to nursing homes, CNBC reported.

“They are already looking for solutions [to reduce re-admissisions]; we are giving them a unique solution,” Timothy Peck, co-founder and CEO of Call9, said during an interview with Skilled Nursing News in January 2018. “[All the payors] are squeezing them, asking them to keep costs down and improve quality at the same time, but not looking to pay them more.”

When making the pitch directly to operators, Peck and Call9 had additionally focused on acuity: By using the company’s services, the thinking went, operators could fill more unused beds with patients who otherwise would have to return to the hospital. In an era of increasing bundled payment pressures and readmission penalties, a facility that could take on those higher-acuity patients could potentially see referral growth from hospital partners.

“They want to send their sicker patients to a place they will be taken care of and not bounce back for 30 day re-admits,” Peck said. “[Our customers] have better results and they get more patient referrals.”

In general, Call9’s value proposition was set firmly in the value-based world, with Peck targeting more forward-thinking operators that eyed their place in the larger continuum.

“If they are innovative operators, those are the ones that we want to work with,” Peck said. “We want to work with people who get the larger picture, want to deliver higher quality care, and understand the payment model is changing.”

That focus, however, in part contributed to the company’s downfall; speaking to CNBC, Peck attributed the company’s issues to the newness of value-based contracting.

“We do still think that value-based contracting is better for the patient, for payers like Medicare, and for the long-term health of start-ups,” Peck told CNBC. “But we also know that fee-for-service can give you more revenue compensation in the short-term, and start-ups often feel that pressure to focus their efforts there.”

Call9’s first client was Central Island Healthcare, where founder Tim Peck stayed for three months to test Call9’s model; the facility’s executive director, Michael Ostreicher, recently presented on his experience with Call9 at the LTC 100 conference in Naples, Fla. earlier this year.

Ostreicher expressed regret about Call9’s shutdown, noting that the platform was successful in reducing unnecessary hospitalizations at the SNF. But the provider is taking steps to mitigate the impact.

“However, the show must go on,” Ostreicher said in a statement provided to SNN. “Our staff became accustomed to utilizing telemedicine for immediate physician intervention at the patient’s bedside, and we are therefore currently finalizing a deal to bring in an established telemedicine provider to take Call9’s place on our team.”

A scheduled presentation from Call9 at the Healthcare Innovation and Investment Conference (HI2) in Chicago last week had been cancelled.

Peck told CNBC that he would continue to operate Call9 Medical, a part of the company that employs doctors and provides medical care, while considering “pivoting” the remaining assets to a new company that would focus on bringing technology into SNFs.

Centers Health Care, one of the providers with which Call9 worked, said it was sorry to see the company was shutting down its flagship services.

“We wish the best for Mr. Peck in his next business endeavor and Centers Health Care is confident that he will land on his feet again,” a spokesperson for company said in a statement to SNN.