There are a couple of reasons for this, according to Modivcare President and CEO and L. Heath Sampson.

“This is a proposal and CMS will receive ample feedback during the 60-day commentary,” he said during the company’s first-quarter earnings call Thursday. “It is essential to remember that this is part of the standard rulemaking process. The heightened attention on personal care services leads to necessary sophistication, oversight and regulation. It’s also worth noting that the proposed rule indicates this change wouldn’t become effective until four years after the final rule is issued.”

Sampson also noted that he believes higher reimbursement for caregivers will improve Modivcare’s ability to recruit staff.

“However, we believe CMS should consider all costs associated with providing personal care services, including care coordinators, recruiters, training, and compliance systems like electronic visit verification, among others,” he said. “The growing attention and support for home- and community-based services is commendable. One of CMS’ strategic pillars focuses on expanding access, which is vital for our members.”

The Denver-based Modivcare offers technology-enabled health care services and provides non-emergency medical transportation (NEMT). The company’s Modivcare Home division includes its personal care, remote patient monitoring and nutritional meal delivery services.

During the call, Sampson also discussed Medicaid redetermination and how he believed it would impact Modivcare.

States were able to begin re-determining the eligibility of Medicaid members on April 1.

“The health care system is in the early stages of the Medicaid programs re-enrolling members, which we think will last up to five quarters,” Sampson said. “We expect most of the impact from redetermination will be on the non-emergency medical transportation (NEMT) business, where approximately 80% of our members are Medicaid beneficiaries. As mentioned last quarter, we anticipate no significant impact on our NEMT membership for determination until the latter half of this year.”

Specifically, Modivcare projects its membership could be affected by 10% to 15%.

The company expects the majority of redetermined members to be lower utilizing individuals, which would lead to a smaller decline in its total trip volume compared to the overall membership, according to Sampson.

On its end, Modivcare has been preparing for redetermination and moving away from full-risk contracts.

“We made a conscious effort to effectively and efficiently transition a large portion of our previous full-risk contracts to contracts that are shared risk or fee-for-service arrangements, protecting ourselves and our customers,” Sampson said. “These shared risk contracts significantly de-risk the financial impact from redetermination by setting contractual revenue rates primarily based on trip volumes, as opposed to membership.”

In general, this will allow Modivcare to fully offset the growth profit impacts from lower membership from redetermination.

The company’s remaining full-risk contracts only account for 20% of NEMT revenue, compared to 60% at the beginning of the pandemic.

Personal care sees growth

Overall, Modivcare’s revenue for Q1 was $662.3 million, an increase of 15.3% from $574.5 million during the same period last year.

The revenue increase is most due to a 4.7% bump in membership and an 11.8% spike in revenue per member in Modivcare’s NEMT segment. In addition, the company saw a 4.4% increase in hours worked and a 4.4% increase in rate per hour in the company’s personal care segment.

The personal care segment brought in $174.1 million, a 9% increase compared to $159.7 million during the same period in 2022.

“Our personal care team has made good progress in centralizing and standardizing back office functions, and certain operational functions, as we continue to build for scale,” Sampson said. “This year, we plan to centralize 12 critical business functions, and 100% of our personal care team is expected to be aligned to centralized management by the end of the year, with ongoing continuous improvement. We also expect continued growth in the personal care hours, driven by increased caregiver recruiting and retention, as well as the opening of several de novos.”

The post Modivcare Continues To Grow Personal Care Segment, Unconcerned With Medicaid Rule Proposal appeared first on Home Health Care News.