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In August, Modivcare announced that it had filed for Chapter 11 bankruptcy and was subsequently delisted from the Nasdaq. The company’s CEO expects to exit bankruptcy by the end of 2025, saying Modivcare will emerge “even stronger.”
Modivcare has been through a challenging few years, CEO Heath Sampson told Home Health Care News. To guide the company through its bankruptcy and position it for recovery, Sampson is prioritizing technology investments and alignment among the company’s workforce. The CEO reported optimism in the company’s future and said that its $750 million Maine transportation contract – recently under scrutiny – will move forward as planned.
While undergoing a major restructuring, Modivcare is also facing challenges common across its industries. Medicaid cuts can create confusion for members, and require providers to “do more with less.” Still, Modivcare’s scale and experience allow it to turn headwinds into tailwinds, Sampson said.
HHCN caught up with Sampson to discuss the company’s future after bankruptcy, the executive’s priorities and planned investments in people, process and technology.
Below is that conversation, edited for length and clarity.
HHCN: Modivcare recently filed for Chapter 11 bankruptcy. What contributing factors required that decision?
Sampson: There was an opportunity for us to ensure that we’re even stronger going forward. So we voluntarily went into this restructuring. A lot of people don’t understand bankruptcy, which I totally get. It really is a time to reset and ensure that we come out even stronger. It is also pre-arranged. There’s not a lot of uncertainty around, ‘Who’s going to be our owners? What’s our future strategy?’ It really is just alignment to ensure that we have the right balance sheet, we have the right liquidity, and then therefore could invest and continue to improve and get better across all our services.
Then within Maine, investing in people, process and the right level of tech ensures high quality as well as high efficiency, which is important to the state itself and the taxpayers in that state. I’m excited about the process, and we expect to be out of bankruptcy and put this behind us by the end of the year.
What are your overall priorities for Modivcare, looking to 2025 and 2026?
The overall priorities for us is to come out of this restructuring process that we’re in, and ensure that the company is ready for 2026.
There’s a lot that’s happening in health care across the country with the Medicaid federal bill, and what that means to certain states. So there’s a lot of requirements, and a lot of stress is going to be on the membership. So it really is leaning into that and ensuring we can help Maine, as well as all our clients across the country, to ensure that they adhere to those and also thrive. One of the derivative benefits of these changes is this integration across Medicaid, Medicare or other reimbursements. This kind of one-patient approach is really exciting, and that’s going to be a big focus for us, is to ensure that it’s not confusing for the member, but also is efficient and effective from a cost perspective.
How do you lean into the federal Medicaid bill?
You have to really understand it. There are new requirements, whether that is work requirements or eligibility requirements, and then the related impacts that that has to the state’s cost structure. So it really is understanding that and ensuring that when we have all that data, which can be complicated, we’re making the right decision to adhere to the new requirements, but as importantly, ensuring we’re giving that care as well. It’s a big data complexity-benefits-design mesh, that is how we’re complying with all that.
What is your strategy to achieve your priorities?
It all starts with people. You always have to understand where health care is today and where health care is going tomorrow. Then with that, you have the necessary plans, whether that’s around people, process or tech, but it really gets to people to ensure that everyone’s aligned, motivated and pulling in the right direction. We’re servicing our clients that service their members. It’s pretty simple, but it’s a big coordination effort to ensure the short term as well as the long term is balanced. That’s the strategy.
Where is health care headed?
It’s the unsolvable problem of the right level of access, at the right quality, and then, of course, at the right cost. We know that the traditional ways of health care, whether that’s all facility- or hospital-oriented, or one-dimensional underwriting and payer oriented, we know that that intersection of care, which is in the home or providing access to care, is where that trend is going to continue. So you need to have the right capabilities to be in the home and have the right data to know when you should be preventative. That’s where healthcare is going. A company like ours is in between the payers and the legacy providers to ensure that access continues and also acceleration into the home.
HHCN recently reported that Maine lawmakers have questioned Modivcare’s non-emergency transportation (NET) contract with the state of Maine. Is there any risk of that contract being discontinued?
I really don’t see any risk. I know there’s lots of political noise there, and I’m empathetic to some of the legacy providers there, but the data speaks for itself. We’ve been at this business for many years, since 2013. The new contracts that we won, so we won the whole state, that’s been going through the court process, and rightfully so. Each time, it continues to progress through the phases. So I let the data speak for itself and our performance speak for itself, and I expect that we’ll continue with this contract and expand to broader contracts when we get through this process.
What headwinds and tailwinds does Modivcare currently face?
For headwinds, it is the change and the pressure from a financial perspective within the country that’s going down into the most vulnerable populations within Medicaid. There is the highest level of elderly people, and that will continue to happen through 2030, so it’s doing more with less. The other is, we’re continuing to go through change. Yes, I’m optimistic about bankruptcy, but it was challenging for a couple years. So the change and managing that, what that effect has on people, is a big part of the challenge, but I’m excited about the future.
The tailwinds are the other side of the coin. Because of the complexity, because of the pressures, a company like ours that has scale and has the resources to invest in technology – that is the right technology that makes us more efficient and effective – will ensure that we can continue to improve processes and invest in people. I’m thankful for the capabilities we have, and I know we’ll be able to double down on the investments to ensure that we can attack the complexities in the most efficient and effective way. So like anything when there’s disruption, if you’re ready and transparent, companies like ours are going to see those as tailwinds.
What technology investments are you pursuing?
It’s across the board. There’s technology that happens in a call center all the way from how we prioritize and answer quickly, to using the right level of AI, where we can engage with a bot to ensure something quickly happens and can route people the right way. It is all around member engagement, but then also other technologies.
For the personal care sites, it’s the same. Our caregivers need to be efficient and effective across how they engage with members, so they use technology to ensure that they’re getting to where they need to get to at the same time. And then, of course, matching right not all caregivers are meant for all patients, and vice versa. That’s a growing and important need for the personal care segment to ensure we’re matching the right member with the right caregiver.
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