PACE Provider Raises Eyebrows by Seeking For-Profit Status

InnovAge, a home and community services provider that boasts Susan Sarandon as a spokesperson, has sparked controversy with its decision to transition from a non-profit to a for-profit company.

Based in Denver, InnovAge serves Colorado, California and New Mexico, offering a range of services intended to help people age in their own homes. These include skilled and non-skilled home care through InnovAge Home Care, care coordination services and adult day programs.

InnovAge also is a PACE organization. PACE, the Program of All-Inclusive Care for the Elderly, is a government initiative through which seniors can receive money and supports to live at home rather than in a nursing home. As part of its participation, InnovAge has opened facilities throughout Colorado, where seniors can receive care and services during the day while continuing to reside at home. The company opened its sixth site last month, serving participants in Fort Collins and nearby communities.


Originally, only nonprofits could participate in PACE. However, the Centers for Medicare & Medicaid Services (CMS) has proposed that for-profits also may meet qualifying criteria, and the state of Colorado passed a law in May paving the way for this to occur in the Rocky Mountain State. InnovAge was seen as the primary beneficiary of that law, according to the Denver Business Journal. That’s because the organization had reached its bonding limit as a nonprofit, and says it needs to convert to for-profit status to keep growing.

Now, InnovAge has unveiled its plans to transition to a for-profit, stirring objections from a watchdog group, the Colorado Center on Law & Policy.

The Center objects to InnovAge’s valuation of its current resources at $180 million, saying this is based on outdated information. It also says that InnovAge leaders will be too closely tied to the newly proposed InnovAge Foundation, which the company says would continue to serve the PACE beneficiaries. The major concern is that InnovAge will fail to provide the same level of services to that needy population after it becomes a for-profit.


InnovAge has countered that the valuation is fair and was done by a highly reputable firm, according to the Business Journal. PACE also is renewed on a two-year basis with the state and federal governments, and so risks losing those contracts if it is failing to meet program objectives, lobbyist and InnovAge legal counsel Mike Feeley told the publication.

The state’s attorney general has scheduled a Dec. 17 public hearing on the conversion, and is taking comments from the public through Jan. 8.

Written by Tim Mullaney

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