Modivcare Inc. (Nasdaq: MODV) leaders believe the company’s access to the home will be what separates it from others in the eyes of payers.
“The people that take risk, whether that’s a payer or somebody that the payer has offloaded risk to, those are our customers,” Modivcare CEO L. Heath Sampson said during the company’s third-quarter earnings call Friday. “Because we offer the services we do — whether that’s a device in the home, a person in the home doing personal care, somebody driving or somebody connecting through one of our contact centers – we have access they don’t have. That’s the value we give them.”
Based in Denver, Modivcare is a technology-enabled health care services company.
Apart from its at-home care services — which include personal care, remote patient monitoring and meals — the company also is one of the largest providers of non-emergency medical transportation (NEMT).
Although Modivcare has long touted its technology, it continues to add to its arsenal.
“Now, because of our competencies around process and specifically around tech enablement, we can start tracking a member longitudinally,” Sampson said. “When you put some clinical support behind that, we can actually start giving data and helping our customers improve outcomes and have higher satisfaction. We all know that CMS and states have high expectations when it comes to that.”
Modivcare plans to use higher value-based care expectations across health care as a “trampoline” to further sell its point solutions.
“On top of that, it creates additional revenue sources,” Sampson said. “We’re getting paid by sharing in those risk-bearing entities. Our strategy is meeting where health care is going.”
Modivcare’s personal care business saw higher hours – a 2% increase – and higher revenue per hour – a 4% increase – year over year. The reimbursement rates rose in a handful of states, as did wages.
Although profit margins continue to be slim on the personal care side of the business, Sampson said he expects those to grow over the next few years as the company automates and centralizes certain parts of the business.
By standardizing and centralizing its operations, Sampson estimated that it could get to a 10% to 12% margin in its personal care business.
However, Modivcare doesn’t expect it to be higher than that for a specific reason.
“What we want to do with these additional savings and leverage that we’re going to get is to reinvest back into that caregiver,” he said. “That is where the value comes in, so we can outgrow the market. On the remote patient monitoring front, it’s all about strong margins and growth. That is where the tip of the spear is for us getting paid differently — specifically sharing in that value-based care. That’s where we’ll have strong growth, but even more exciting is where we’ll start seeing different payments and different revenue models in 2024 and beyond.”
Modivcare reported $686.9 million in revenue, a 6% increase year over year. For its home care segment, revenue came in at $180 million, a 6.4% increase year-over-year.