Modivcare Inc. (Nasdaq: MODV) leaders are forecasting pretty significant growth for the company in the near-term future. Specifically, they expect 7% to 10% growth across the entire company.
Just one month after laying out his 90 day goals for Modivcare during the company’s Q3 earnings call, President and CEO Heath Sampson shared his target growth rate for the overall business.
The Denver-based Modivcare offers technology-enabled health care services and provides non-emergency medical transportation (NEMT). The company also has its Modivcare Home division which includes personal care, remote patient monitoring and nutritional meal delivery services.
When looking at Modivcare’s personal care business, Sampson explained that a large number of the states the company operates in understand the value of these care services.
“They’re actually increasing the amount of personal care, and that has been reflected in a lot of the rate reimbursement changes we had in 2022,” he said during a presentation at BofA Securities Home Care Conference on Tuesday. “Those have been even above our expectations, and that’s allowing us to share and increase our wages for our caregivers, therefore, being able to recruit and retain more.”
In addition to the reimbursement increases, Modivcare also expects to benefit from the American Rescue Plan (ARP) funds, intended to enhance home- and community-based services (HCBS), throughout 2023.
Sampson also noted that he sees room for organic growth on the personal care side through various avenues.
“We expect to grow within our footprint — lots of opportunity for organic growth via taking business, as well as opening up to de novos,” he said.
The company has seen labor market tailwinds, as more people are rejoining the labor force and widening the hiring pool. This has been especially beneficial on the personal care side of the business as well.
Aside from people returning to the labor market on their own, Modivcare is actively doing things that will make it more attractive to applicants and current employees.
“That involves providing additional services like cell phones, better health care, real-time pay, community-based consulting, so those areas together with an improving labor market … are allowing us to grow,” Sampson said. “I expect that to continue at this current rate in the fourth quarter into 2023.”
As far as turnover, ModivCare is in the 40% range, according to Sampson. For context, the caregiver turnover rate in 2021 was 64%, according to Home Care Pulse data.
“We feel proud of where we are now,” he said. “There was some bumpiness during COVID, but that is one of our secret sauces that we have.”
Outside of in-person care, ModivCare’s remote patient monitoring business has also been successful for the company, according to Sampson. He credits states and payers recognizing the value of remote patient monitoring for the traction the company is gaining in this segment.
“We’ve developed this new product where we collect data, and then even push scripts to help change outcomes for our payers,” he said. “That is working. We can target a population to ensure they get their flu shot, ensure they get their colonoscopy and this directly affects star ratings for MA members, directly affects people getting better outcomes.”
As for the future, the next step for Modivcare looks to be further moving toward value-based care.
“We have contracts in certain states where we get paid for changing outcomes,” he said. “I expect that to continue to accelerate. That will become a more meaningful part of our financials, as well as a meaningful part of our business to ensure that we’re sticky and adding more value.”
ModivCare’s vision is to continue to have a national home-based care footprint. This will lead to more acquisition but, for now, the company is focused on organic growth.
“It’s about executing what we have, integrating and growing organically is the biggest bang for the buck we have right now,” Sampson said.
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