When Modivcare Inc. (Nasdaq: MODV) reorganized its home-based services under the business division Modivcare Home, it was part of a larger strategy to lean into value-based care initiatives.
A month after Modivcare’s operational realignment announcement, the company is beginning to see its plan come to fruition.
“Consolidating our home-based services under Modivcare Home puts us in a position to accelerate our value-based care initiatives,” Daniel Greenleaf, president and CEO of Modivcare, said during the company’s Q4 earnings call Friday. “We are making significant advancements in our one-stop-shop capabilities [and] are in multiple conversations with payers around partnering on an integrated value-based pilot, which we expect to launch later this year.”
Based in Denver, 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.
Greenleaf noted that Modivcare Home, under the leadership of Jason Anderson, will also present greater opportunities for cross-selling.
“[Cross-selling] is a key component of additional organic growth, as a referral source and the case manager are typically the same call points for personal care, remote patient monitoring and meals,” he said.
Those cross-selling and organic revenue growth components will be focal points for Modivcare’s management team throughout 2022, according to Greenleaf.
“We have implemented a win, retain and expand sales strategy involving a highly coordinated approach between our account management and growth team,” he said. “This year, we will strive to meet or exceed 2021’s retention rates of 98% for managed care organization contracts and 100% for state relationships. We believe a few significant new state contracts will be awarded this year and remain steadfast in our position to capture these.”
During the call, Anderson also unveiled the company’s top strategic priorities for Modivcare Home in 2022.
One area of focus for the segment is enhancing its caregiver recruiting initiatives. Amid the COVID-19 emergency, the company saw a decrease in its caregiver workforce and has implemented a strategy to increase its number of caregivers in order to keep up with its referral volume and meet the high demand for personal care.
“We also recognize the need to modernize our caregiver recruiting strategies, particularly with the challenges of today’s labor market,” Anderson said. “We have implemented a centralized talent acquisition function, which augments our local community-based recruiting team.”
Another strategic priority for Modivcare Home is to increase the company’s sales pipeline across services offerings.
Additionally, scaling Modivcare Home’s meal delivery service is top of mind for the company.
“We have a strong pipeline of payers who are interested in our meal delivery service,” Anderson said. “We are currently shipping meals to members through our national food service partner, and we are focused on scaling this business to service the strong demand that exists from our Medicaid and Medicare Advantage customers.”
In addition to driving organic growth, Modivcare Home is evaluating inorganic growth opportunities. This means opening de novo personal care branches in several key markets within the company’s existing footprints, according to Anderson.
“We expect that de novo growth and continued M&A will become a significant part of our strategy going forward,” he said. “In addition, we will continue to evaluate a robust pipeline of inorganic growth opportunities in order to further scale or enter new markets across our multiple service offerings.”
Overall, Modivcare recorded revenue of $575.8 million during the fourth quarter of 2021, a 44% increase compared to $398.5 million in the fourth quarter of 2020.
Looking at the full year of 2021, Modivcare recorded revenue of $1.9 billion, a 46% increase compared to $1.3 billion in 2020.
On the personal care side, Modivcare brought in $157 million for Q4 2021, compared to $54 million in the prior year period.
“The increase was driven by a fruitful quarter contribution of revenue from the Simplura Health Group acquisition, which closed in November 2020, as well as $48 million of revenue from the CareFinders acquisition, which closed in mid-September 2021,” Modivcare CFO Heath Sampson said.