InnovAge is the leading healthcare delivery platform by number of participants focused on providing all-inclusive, capitated care to high-cost, dual-eligible seniors.
−Removed: Our programs directly address two of the most pressing challenges facing the U.S.
+Added: Our programs are designed to address two of the most pressing challenges facing the U.S.
healthcare industry:
rising costs and poor outcomes.
−Removed: Our participant-centered care delivery approach meaningfully improves the quality of care our participants receive, while keeping them in their homes for as long as safely possible and reducing over-utilization of high-cost care settings such as hospitals and nursing homes.
+Added: Our participant-centered care delivery approach is designed to improve the quality of care our participants receive, while keeping them in their homes for as long as safely possible and reducing over-utilization of high-cost care settings such as hospitals and nursing homes.
Our participant-centered approach is led by our Interdisciplinary Care Teams (“IDTs”), who design, manage and coordinate each participant’s personalized care plan.
−Removed: We directly manage and are responsible for all healthcare needs and associated costs for our participants.
+Added: We directly manage and are responsible for all healthcare needs and associated costs, including housing costs where applicable, for our participants.
We directly contract with government payors, such as Medicare and Medicaid, and do not rely on third-party administrative organizations or health plans.
−Removed: We believe our model aligns with how healthcare is evolving, namely (i) the shift toward value-based care, in which coordinated, outcomes-driven, high-quality care is delivered while reducing unnecessary spend, (ii) eliminating excessive administrative costs by contracting directly with the government, (iii) focusing on the patient experience and (iv) addressing social determinants of health.
+Added: We believe our model aligns with how healthcare is evolving, namely (i) the shift toward value-based care, in which coordinated, outcomes-driven, quality care is delivered while reducing unnecessary spend, (ii) eliminating excessive administrative costs by contracting directly with the government, (iii) focusing on the patient experience and (iv) addressing social determinants of health.
InnovAge Holding Corp.
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and certain of its subsidiaries converted from not-for-profit organizations to for-profit corporations, and Total Community Options Foundation, Inc.
−Removed: (“Foundation”) and Johnson Adult Day Program, Inc.
−Removed: (“Johnson”), both not-for-profit organizations, separated from Total Community Options, Inc.
+Added: and Johnson Adult Day Program, Inc., both not-for-profit organizations, separated from Total Community Options, Inc.
In connection with our initial public offering (“IPO”), which occurred in March 2021, we changed the name of our company from TCO Group Holdings, Inc.
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In the following text, the terms “we”, “our”, “our company” and “us” may refer, as the context requires, to InnovAge or collectively to InnovAge and its subsidiaries.
−Removed: InnovAge, which is headquartered in Denver, Colorado, aims to allow seniors in need of care and support to live life on their terms by aging in place, in their own homes and communities, for as long as safely possible.
−Removed: Through our Program of All-Inclusive Care for the Elderly (“PACE”), we manage, and in many cases directly provide, a broad range of medical and ancillary services for seniors, including in-home care services (skilled, unskilled and personal care);
+Added: InnovAge is headquartered in Denver, Colorado.
+Added: Our mission is to allow seniors in need of care and support to live life on their terms by aging in place, in their own homes and communities, for as long as safely possible.
+Added: Through PACE, we manage, and in many cases directly provide, a broad range of medical and ancillary services for seniors, including in-home care services (skilled, unskilled and personal care);
in-center services such as primary care, physical therapy, occupational therapy, speech therapy, dental services, mental health and psychiatric services, meals, and activities;
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The Company manages its business as one reportable segment, PACE.
−Removed: As of June 30, 2021, the Company served approximately 6,850 PACE participants, making it the largest PACE provider in the United States of America (the “U.S.”) based upon participants served, and operated 18 PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia.
+Added: As of June 30, 2022, the Company served approximately 6,650 PACE participants, making it the largest PACE provider in the United States of America (the “U.S.”) based on participants served, and operated 18 PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia.
PACE is a fully-capitated managed care program, which serves the frail elderly, and predominantly dual-eligible, population in a community-based service model.
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Additionally, under the Medicare Prescription Drug Plan, the Centers for Medicare and Medicaid Services (“CMS”) share part of the risk for providing prescription medication to the Company’s participants.
−Removed: We deliver our participant-centered care through the InnovAge Platform, which we have designed to bring high-touch, comprehensive, value-based care.
+Added: We deliver our participant-centered care through the InnovAge Platform, which is designed to bring high-touch, comprehensive, value-based care.
We believe the traditional fee-for-service reimbursement model in healthcare does not adequately incentivize providers to efficiently manage this complex population.
−Removed: Dual-eligible seniors must navigate a disjointed, separately
−Removed: administered set of Medicare and Medicaid benefits, which often results in uncoordinated care delivered in silos.
−Removed: Our vertically integrated care model and full-risk contracts incentivize us to coordinate and proactively manage all aspects of a participant’s health.
−Removed: Costs under the PACE program are estimated to be 13% lower on average than for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of available data by the National PACE Association in November 2020, and our costs are estimated to be approximately 8% lower on a weighted average basis than costs for comparable fee-for-service Medicare beneficiaries, based on our analysis of the most recent Dartmouth Atlas data from 2017.
−Removed: Importantly, we believe we deliver significantly better health outcomes.
+Added: Dual-eligible seniors must navigate a disjointed, separately administered set of Medicare and Medicaid benefits, which often results in uncoordinated care delivered in silos.
+Added: Our vertically integrated care model and full-risk contracts incentivize us to coordinate and manage all aspects of a participant’s health.
+Added: Costs under the PACE program are estimated to be 13% lower on average than for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of available data by the National PACE Association in November 2020.
+Added: Importantly, we believe we can deliver better health outcomes.
Our care model reduces unnecessary or avoidable medical spend.
−Removed: Based on an analysis performed using most recently available data from 2018, we estimate that across our mature markets, our participants on average have 16% fewer hospital admissions and 73% fewer low- to medium-severity emergency room visits relative to a comparable Medicare fee-for-service population with similar risk scores for which data is available.
+Added: Based on an analysis performed using the data most recently available to us from 2018, we estimate that across our mature markets, our participants on average have 16% fewer hospital admissions and 73% fewer low- to medium-severity emergency room visits relative to a comparable Medicare fee-for-service population with similar risk scores for which data is available.
In addition, as of June 30, 2022, our participants had a 23% lower 30-day hospital readmission rate compared to a frail, dual-eligible or disabled waiver population.
−Removed: In addition to reducing spend, we also focus on ensuring our participants are satisfied and receive high-quality care.
−Removed: Our participant satisfaction, based on a survey of a random sample of participants and administered by an independent third party as of January 1, 2021, is 86%.
−Removed: Based on our analysis as of June 30, 2021, our participants live, on average, 1.4 years longer than comparable populations who choose nursing home care, based on a U.S.
−Removed: Department of Health and Human Services (“HHS”) report dated June 27, 2017.
−Removed: We believe our strong value proposition to each constituency translates into a superior economic model.
−Removed: We directly contract with Medicare and Medicaid on a per member, per month (“PMPM”) basis, which creates recurring revenue streams and provides significant visibility into our revenue growth trajectory.
+Added: In addition to reducing spend, we also focus on ensuring our participants are satisfied and receive the necessary care.
+Added: Our participant satisfaction, based on our most recent survey of participants administered by an independent third party as of January 1, 2022, is 81%.
+Added: We believe our value proposition to each constituency translates into a predictable economic model.
+Added: We directly contract with Medicare and Medicaid on a per member, per month (“PMPM”) basis, which creates recurring revenue streams and provides significant visibility into our revenue trajectory.
We receive 100% of the pooled capitated payment to directly provide or manage the healthcare needs of our participants.
−Removed: By proactively providing high-quality care and addressing risks related to social determinants of health, we have demonstrated our ability to reduce avoidable utilization of high-cost care settings, such as hospitals and nursing homes.
−Removed: As a result, we create a surplus that can be used to invest in refining our care model and providing even greater social supports for our participants.
−Removed: These investments further improve participants’ experiences and health outcomes, which we believe will result in more savings that will drive our profitable growth.
−Removed: The virtuous cycle we have created enables us to consistently deliver high-quality care, achieve high participant satisfaction and retention, and attract new participants.
−Removed: We believe that continuing to drive medical cost savings over a growing participant census will deliver an even greater surplus to our organization, enabling us to invest in more participant programs, evolve our care model, enhance our technology and fund new centers.
Industry Challenges
Unsustainable and rising healthcare costs.
−Removed: According to data from the Office of the Actuary of CMS, healthcare spending in the United States has grown at approximately 5% per year from 2014 to 2019, and in 2019 represented $3.8 trillion of annual spend, or 17.7% of U.S.
+Added: According to data from the Office of the Actuary of CMS, healthcare spending in the United States grew at approximately 5% per year from 2015 to 2020, and in 2020 represented $4.1 trillion of annual spend, or 19.7% of U.S.
The overall growth rate of healthcare spending is expected to accelerate due to the aging population.
−Removed: Furthermore, the government’s share of total healthcare spend through programs such as Medicare and Medicaid is expected to grow from approximately 37% in 2019 to more than 40% as early as 2024, indicating faster growth in government-sponsored healthcare than the overall market.
Government healthcare spend is disproportionally concentrated in the dual-eligible population, who typically suffer from multiple chronic conditions and require long-term services and supports.
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Furthermore, this dynamic often makes the healthcare system difficult for patients to navigate.
−Removed: Primary, acute, behavioral and long-term care providers need to work together to effectively manage a patient’s care, yet, today, they work in silos.
+Added: Primary, acute, behavioral and long-term care providers need to work together to effectively manage a patient’s care, yet, today, they often work in silos.
This lack of care coordination can result in missed or inaccurate diagnoses, gaps in care, unnecessary spend and ultimately sub-optimal patient outcomes.
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Few government-sponsored programs other than PACE bring together the Medicare and Medicaid benefit for these individuals, creating further barriers to delivering coordinated care.
−Removed: Dual-eligible beneficiaries are among the most medically complex,
−Removed: high-frequency users of healthcare services.
−Removed: Based on InnovAge data as of June 30, 2021, the typical InnovAge participant had, on average, eight chronic conditions and, based on our most recently available data from a 2018 health outcomes survey, required, on average, assistance with three or more activities of daily living (“ADLs”).
+Added: Dual-eligible beneficiaries are among the most medically complex, high-frequency users of healthcare services.
+Added: Based on InnovAge data as of June 30, 2022, the typical InnovAge participant had, on average, eight chronic conditions and, based on the data most recently available to us from a 2018 health outcomes survey, required, on average, assistance with two or more activities of daily living (“ADLs”).
A lack of coordination across providers can have severe consequences given the high occurrence of chronic illnesses and other underlying health issues in this population.
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A 2019 study, published in the Journal of the American Medical Association, estimated that approximately 25% of all annual healthcare spending is for unnecessary services, excessive administrative costs, fraud and other inefficiencies creating waste.
−Removed: At spending levels evaluated during the time of the study, this represented approximately $760 billion to $935 billion of wasteful spending.
Proper management of chronic conditions and targeted interventions to mitigate challenges presented by social determinants of health can significantly reduce the incidence of acute episodes, which are the main driver of emergency room visits and hospitalization among the dual-eligible senior population.
−Removed: Healthcare spending on nursing care facilities and continuing care retirement communities was expected to reach approximately $191.8 billion in 2021, based on the latest projections made by the Office of the Actuary of CMS.
+Added: Healthcare spending on nursing care facilities
+Added: and continuing care retirement communities was expected to reach approximately $188.1 billion in 2022, based on the latest projections made by the Office of the Actuary of CMS, which is a 6.4% decrease compared to the 2022 projection from the prior year.
Similar to spend on hospitals and other high-acuity care settings, we believe many of these dollars can ultimately be saved by providing proactive treatment and investing in proper medical and social supports to enable frail seniors to live in their homes and communities.
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Rather, many policymakers and healthcare experts believe it unintentionally creates the opposite result—acute, episodic care delivered in high-cost settings that unnecessarily drive up the total cost of healthcare.
−Removed: High-cost, dual-eligible seniors require proactive, coordinated care plans to address their medical acuity, need for long term support and risks related to social determinants of health.
−Removed: Without personalized, patient-centered care that removes barriers to treatment, high-cost, dual-eligible seniors would continue to over-utilize healthcare in higher-cost settings, such as emergency rooms and nursing homes.
+Added: High-cost, dual-eligible seniors often require proactive, coordinated care plans to address their medical acuity, need for long term support and risks related to social determinants of health.
+Added: Without personalized, patient-centered care that removes barriers to preventative or other early treatment, high-cost, dual-eligible seniors would continue to likely over-utilize healthcare in higher-cost settings, such as emergency rooms and nursing homes.
Government payors have responded by incentivizing a transition to value-based reimbursement models for dual-eligible seniors.
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These services, such as care coordination and ancillary support to remove barriers created by social determinants of health, can have a significant impact on a participant’s overall health.
−Removed: InnovAge participants are, on average, more complex and medically fragile than other Medicare-eligible patients, including those in Medicare Advantage (“MA”) programs.
+Added: InnovAge participants are, on average, more complex and medically fragile than other Medicare-eligible patients, including those in average Medicare Advantage (“MA”) programs.
As a result, we receive larger payments for our participants compared to MA participants.
This is driven by two factors:
−Removed: (i) we provide care for a higher acuity population, with an average risk adjustment factor (“RAF”) score of 2.45 based on InnovAge data as of June 30, 2021, compared to an average RAF score of 1.08 for Medicare fee-for-service non-dual enrollees, as calculated in an analysis by Avalere Health in June 2020 of a cohort of individuals enrolled in Medicare Fee-for-Service in 2019, and (ii) we have Medicaid spend in addition
+Added: (i) we provide care for a higher acuity population, with an average Medicare Risk Adjustment Factor (“RAF”) score of 2.40 based on InnovAge data as of June 30, 2022, compared to an average RAF score of 1.08 for Medicare fee-for-service non-dual enrollees, as calculated in an analysis by Avalere Health in June 2020 of a cohort of individuals enrolled in Medicare Fee-for-Service in 2019, and (ii) we have Medicaid spend in addition to Medicare.
Our comprehensive care model and globally capitated payments are designed to cover participants from enrollment until the end of life, including coverage for participants requiring hospice and palliative care.
−Removed: The successful clinical approaches of PACE helped inform certain aspects of the Center for Medicare and Medicaid Innovation’s recently announced Direct Contracting Program set to begin in 2021.
−Removed: The Direct Contracting Program aims to create value-based payment arrangements directly with provider groups for their current Medicare fee-for-service patients.
+Added: The successful clinical approaches of PACE helped inform certain aspects of the Center for Medicare and Medicaid Innovation’s Global and Professional Direct Contracting (“GPDC”) Model which began in 2021.
+Added: The GPDC Model is an alternative Accountable Care Organization (“ACO”) model that aims to create value-based payment arrangements directly with provider groups for their current Medicare fee-for-service patients.
By transitioning from fee-for-service arrangements to value-based payments, CMS expects healthcare providers will be financially incentivized to simultaneously improve quality while lowering the cost of care and focusing on patient experience, as is done in PACE today.
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In order for the shift to value-based payment models to drive meaningful results, we believe there must be a corresponding shift in care delivery models.
−Removed: While there has been significant investment by providers, payors and technology companies in developing solutions to enable higher-quality and lower-cost care, the healthcare industry is still heavily reliant on fee-for-service reimbursement models.
−Removed: The novel coronavirus disease (“COVID-19”) pandemic has amplified several flaws in the current legacy healthcare delivery system.
−Removed: Traditional healthcare providers have faced dwindling fee-for-service visits in light of stay-at-home orders, government restrictions and general patient fear of medical settings.
−Removed: This has not only reduced revenues for traditional providers, but has strained their ability to provide necessary care for their patients.
−Removed: Patients with chronic conditions in the fee-for-service system have found themselves unable to access care because the broader healthcare system could not rapidly shift services from institutions to home-based environments.
−Removed: Patients in long-term care facilities, such as nursing homes, have also seen a disproportionately high infection rate as a result of the pandemic.
+Added: While there has been significant investment by providers, payors and technology companies
+Added: in developing solutions to enable higher-quality and lower-cost care, the healthcare industry is still heavily reliant on fee-for-service reimbursement models.
+Added: The COVID-19 pandemic amplified several flaws in the current legacy healthcare delivery system.
+Added: Traditional healthcare providers faced dwindling fee-for-service visits during the stay-at-home orders, government restrictions and general patient fear of medical settings.
+Added: This not only reduced revenues for traditional providers, but also strained their ability to provide necessary care for their patients.
+Added: Patients in long-term care facilities, such as nursing homes, also saw and continue to see a disproportionately high infection rate as a result of the pandemic.
The highly contagious nature of the virus that causes COVID-19 combined with the higher mortality rate in frail seniors created devastating conditions that led to many avoidable deaths.
−Removed: As of June 1, 2021, 4% of all U.S.
−Removed: COVID‑19 cases could be linked to long-term care facilities, according to The New York Times, but those cases translated into 31% of all U.S.
−Removed: COVID-19‑related deaths.
Providers that operate comprehensive value-based models, like us, were better positioned to quickly pivot their care delivery approach to safely treat patients in virtual and home-based settings without losing any revenue.
+Added: PACE participants had one-third the COVID-19 cases and deaths compared to the rates of nursing home residents as of June 30, 2021, according to an analysis performed by The New York Times.
We believe the COVID-19 pandemic has further highlighted the need for integrated, multimodal value-based care delivery models.
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We have built the largest PACE-focused operation in the country based on number of participants;
−Removed: we are twice the size of our closest PACE-focused competitor, more than 30 times larger than the typical PACE operator and the only for-profit PACE operator with a footprint in three or more states.
−Removed: Given our scale and track record of success across geographies, we believe we are well-positioned to capitalize on a significant market opportunity to provide care to frail, high-cost, dual-eligible seniors.
−Removed: According to CMS, healthcare spending in the U.S.
−Removed: was greater than $3.6 trillion in 2018, and Medicare and Medicaid combined accounted for greater than $1.3 trillion spent on the care of approximately 125 million individuals.
−Removed: In 2018, there were approximately 12 million individuals simultaneously enrolled in Medicare and Medicaid that we estimate accounted for approximately $464 billion, representing 34% of combined Medicare and Medicaid spend.
+Added: we are almost twice the size of our closest PACE-focused competitor, more than 30 times larger than the typical PACE operator and the only for-profit PACE operator with a footprint in three or more states.
+Added: Given our scale across geographies, we believe we are positioned to capitalize on a significant market opportunity to provide care to frail, high-cost, dual-eligible seniors once restrictions on our ability to enroll participants as a result of the audits of our centers in Sacramento, California and Colorado and on our ability to open de novo centers as a result of actions taken by other states or us, are lifted or resolved.
Our care model targets the most complex, frail subset of the dual-eligible senior population.
−Removed: We estimate our target population at approximately 2.2 million in 2021 based on data from the U.S.
+Added: We estimated our target population at approximately 2.1 million in 2021 based on data from the U.S.
Census Bureau from 2018, representing seniors who we believe are dually eligible for Medicare and Medicaid and meet the nursing home eligibility criteria for PACE.
−Removed: We prioritize high-density urban and suburban areas, where there are sizable numbers of frail dual-eligible seniors who would benefit most from our program.
−Removed: We leverage the InnovAge Platform to provide comprehensive, coordinated healthcare to enable our frail, nursing home-eligible seniors to live independently in their homes and communities.
−Removed: We believe people want to stay in their home for as long as possible, and the InnovAge Platform empowers seniors to age independently in their own homes, on their own terms, for as long as possible.
−Removed: Based on historical results for the year ended June 30, 2021 and our experience and industry knowledge, we estimate an average annual revenue opportunity of $95,000 per participant ($7,900 PMPM) and a total addressable market opportunity of $210 billion, based on our estimated market of approximately 2.2 million PACE eligible in the United States in 2021, as described above.
−Removed: Of these estimated PACE eligible participants, only approximately 57,000 are enrolled in a PACE program, based on an August 2021 report from the National PACE Association, and over the next seven years, the National PACE Association is targeting a PACE enrollment increase at a CAGR of approximately 17%.
−Removed: As a result, we believe we have a substantial runway for growth by bringing our comprehensive value-based model of care to more frail, dual-eligible seniors across the country.
+Added: We have historically and, once restrictions on our ability to enroll participants as a result of the audits on our centers in Sacramento, California and Colorado and on our ability to open de novo centers as a result of actions taken by other states or us, are lifted or resolved, expect to prioritize growth in high-density urban and suburban areas, where there are sizable numbers of frail dual-eligible seniors who would benefit most from our program.
+Added: We leverage the InnovAge Platform which is designed to provide comprehensive, coordinated healthcare to enable our frail, nursing home-eligible seniors to live independently in their homes and communities.
+Added: We believe people want to stay in their home for as long as possible, and the InnovAge Platform is designed to empower seniors to age independently in their own homes, on their own terms, for as long as possible.
+Added: Based on historical results for the year ended June 30, 2022 and our experience and industry knowledge, we estimate an average annual revenue opportunity of $98,000 per participant (or $8,200 PMPM) and a total addressable market opportunity of $220 billion, based on our estimated market of approximately 2.2 million PACE eligible in the United States in 2021, as described above.
+Added: Of these estimated PACE eligible participants, only approximately 61,000 are enrolled in a PACE program, based on a July 2022 report from the National PACE Association, and over the next six years, the National PACE Association is targeting a PACE enrollment increase at a compound annual growth rate (“CAGR”) of approximately 20%.
+Added: As a result, we believe that, subject to our ability to effectively remediate deficiencies identified during audits of our centers, we have a substantial opportunity for growth by bringing our comprehensive value-based model of care to more frail, dual-eligible seniors across the country.
The InnovAge Platform
Our participant-centered approach is tailored to address the complex medical and social needs of our frail dual-eligible senior population.
−Removed: We leverage the InnovAge Platform to deliver comprehensive, highly coordinated healthcare to our participants.
+Added: We leverage the InnovAge Platform to deliver comprehensive, coordinated healthcare to our
+Added: participants.
The InnovAge Platform consists of (1) our interdisciplinary care teams and (2) our community-based care delivery model.
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healthcare system.
−Removed: Based on InnovAge data as of June 30, 2021, the typical InnovAge participant had, on average, eight chronic conditions and, based on our most recently available data from a 2018 health outcomes survey, required, on average, assistance with three or more ADLs.
+Added: Based on InnovAge data as of June 30, 2022, the typical InnovAge participant had, on average, eight chronic conditions and, based on the data most recently available to us from a 2018 health outcomes survey, required, on average, assistance with three or more ADLs.
As a result, the average InnovAge participant has a Medicare RAF of 2.40 based on InnovAge data as of June 30, 2022, compared to an average RAF score of 1.08 for Medicare fee-for-service non-dual enrollees, as calculated in an analysis by Avalere Health in June 2020 of a cohort of individuals enrolled in Medicare Fee-for-Service in 2019.
A higher RAF score indicates poorer health and higher predicted health care costs.
−Removed: Our platform enables participants to exercise their preference to age independently in their homes and stay active in their communities for as long as safely possible.
−Removed: All of our participants are certified as nursing home-eligible, but, as a result of the InnovAge PACE care delivery model, as of June 2021, over 90% of our participants are able to live safely in their homes and communities.
+Added: Our platform is designed to enable participants to exercise their preference to age independently in their homes and stay active in their communities for as long as safely possible.
+Added: All of our participants are certified as nursing home-eligible.
+Added: As of June 30 2022, over 90% of our participants are able to live safely in their homes and communities.
Our interdisciplinary care teams.
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Our multimodal approach leverages (1) the care center, (2) the home and (3) virtual care capabilities to deliver comprehensive care to our participants.
−Removed: Our capitated payment model gives us the flexibility to invest in care coordination, transportation and other services to mitigate challenges presented by participants’ social determinants of
−Removed: health, regardless of what is traditionally covered by insurance.
+Added: Our capitated payment model gives us the flexibility to invest in care coordination, transportation and other services to mitigate challenges presented by participants’ social determinants of health, regardless of what is traditionally covered by insurance.
As a result, our capabilities are not limited to what we are able to offer inside of our centers.
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Our in-home care capabilities .
−Removed: Our in-home care capabilities enable our participants to live safely in their homes and avoid nursing homes to the extent safely possible.
+Added: Our in-home care capabilities are designed to enable our participants to live safely in their homes and avoid nursing homes to the extent safely possible.
We directly deliver or manage all skilled and unskilled care a participant may require to live independently at home.
−Removed: Additionally, we have dedicated strategic partnerships with “hospital-at-home” providers to deliver acute care in-home when appropriate.
+Added: Additionally, we have dedicated strategic partnerships with
+Added: “hospital-at-home” providers to deliver acute care in-home when appropriate.
In addition, we manage transportation not only to our centers but also to all third-party medical appointments.
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In situations where a participant is unable to use telehealth technology on their own, we dispatch a team member to their home to assist.
−Removed: During the COVID-19 pandemic, we developed our telehealth capabilities, with almost half of our provider visits and almost one quarter of IDT visits provided to our participants remotely during the year ended June 30, 2021.
−Removed: The COVID-19 pandemic has highlighted the strength and adaptability of the InnovAge Platform and our community-based care delivery model.
−Removed: Though the COVID-19 pandemic has altered the mix of settings where we deliver care, our multimodal approach ensures our participants continue to receive the care they need.
+Added: We developed our telehealth capabilities during the COVID-19 pandemic.
+Added: The pandemic highlighted the adaptability of the InnovAge Platform and our community-based care delivery model.
+Added: Although participant attendance in the centers increased over the past fiscal year, our telehealth capabilities remain an important offering in our multimodal approach to deliver comprehensive care with 6% of our provider visits and 5% of IDT visits provided to our participants remotely during the year ended June 30, 2022.
Addressing social determinants of health .
−Removed: We believe a key element of the success of our care delivery model is the provision of services that mitigate challenges presented by participants’ social determinants of health.
−Removed: We designed our care delivery model to address the following areas:
+Added: Our care delivery model is designed to provide services that mitigate challenges presented by participants’ social determinants of health, such as:
● Economic stability
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Our technology suite.
−Removed: Our technology suite supports our ability to deliver consistent, high-quality care to our participants at scale.
Our fully capitated care model is operationally complex;
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We leverage what we believe to be industry-leading reporting and predictive analytics solutions to collect and analyze data, stratify our population and uncover actionable participant insights.
−Removed: Our Track Record of Profitable Growth
−Removed: We have a record of driving profitable growth and achieving compelling unit economics.
−Removed: For the fiscal years ended June 30, 2021 and 2020, our consolidated Center-level Contribution Margin, expressed as a percentage of revenue, was 27.3% and 24.9%, respectively, and all of our centers had a positive Center-level Contribution Margin.
−Removed: Our de novo centers opened in the last seven years have generated positive Center-level Contribution Margins in fewer than 12 months of operation.
−Removed: We have demonstrated an ability to scale successfully, expanding our model to a network of 18 centers in five states, which provided care for approximately 6,850 participants during the year ended June 30, 2021.
−Removed: As of June 30 2021, our eligible participant penetration rate was, on average, 13% across our existing markets, and as the only designated PACE provider in most of the MSAs that we serve, we believe there is significant runway for further growth.
−Removed: We believe our track record of successfully operating across different markets gives us an advantage when opening centers in existing and new geographies.
−Removed: We aim to grow the InnovAge Platform by substantially increasing the number of centers we operate in new and existing markets to positively impact the lives of more frail, dual-eligible seniors and drive long-term value for our key stakeholders:
−Removed: participants and their families, government payors and providers.
+Added: Fiscal Year 2022 Audit Processes and Remediation Efforts
+Added: In May 2021, CMS, together with other state regulatory authorities, commenced audits in our Sacramento center in California and in all our centers in Colorado.
+Added: Based on deficiencies detected in the audits related to participant provision of services, which can be categorized as care delivery and management, care coordination and documentation of care, CMS and regulatory authorities in the states of California and Colorado suspended new enrollments at our Sacramento center in California and all our centers in Colorado.
+Added: The suspensions will remain in effect until CMS and the other regulatory authorities determine that we have remediated the deficiencies to their satisfaction.
+Added: In November 2021 and March 2022, CMS began audits of our Albuquerque, New Mexico center and San Bernardino, California center, respectively.
+Added: CMS issued preliminary results in both audits identifying certain deficiencies, but in both cases have verbally notified us that no enforcement actions will be taken.
+Added: To address the deficiencies identified in the audit processes, we are required to implement immediate corrective actions.
+Added: Our plans to do so (“iCARs”) have been accepted by CMS and we are currently working on the audit close out process for these two audits.
+Added: There can be no assurance as to the timelines of such close outs.
+Added: In addition, the States of Kentucky and Indiana have taken actions to suspend our ability to open de novo centers in those states, and we have committed to regulatory agencies in the State of Florida, that we will proactively pause remaining steps with respect to planned de novo centers in that state.
+Added: For more information, see Item 1A.
+Added: Risk Factors, “Risks Related to Our Business—We face inspections, reviews, audits and investigations under federal and state government programs
+Added: and contracts.
+Added: These audits require corrective actions and have resulted in adverse findings that have negatively affected and continue to affect our business, including our results of operations, liquidity, financial condition and reputation.”
+Added: The Company’s priority is to remediate the deficiencies raised in the audit processes and to return to growth as a company, both for the short- and long-term.
+Added: We continue to work with the appropriate authorities to make the necessary changes within the Company to increase care coordination and care documentation among our centers.
+Added: As part of this focus, we are working to fill critical personnel gaps at our centers.
+Added: We recently hired a Chief People Officer to help provide assistance and oversight of current employee engagement and personnel hiring.
+Added: Other key remediation initiatives include standardizing the process of our IDTs, strengthening our home care network and reliability, improving timeliness of scheduling and coordinating care with providers outside the centers, improving our telephonic channel response times, improving the efficiency and reliability of transportation for our participants, standardizing our wound care program across the enterprise and reducing documentation outside the electronic medical record.
+Added: True to our mission, which seeks to provide quality care to our participants so that they can live in their homes and communities for as long as possible, we continue to work to enhance our practices and implement measures adopted in our centers under audit throughout all our centers, not only to satisfy federal and state government agencies’ concerns, but most importantly to enhance the quality of care we provide to our participants.
Our Value Proposition
−Removed: We believe that the InnovAge Platform has enabled us to create a healthcare model where all constituencies involved, including participants, their families, providers and government payors, have the ability to “Win.” Therefore, we “Win” through a virtuous cycle that promotes growth and drives our financial results.
+Added: We believe that our healthcare model is one where all constituencies involved, including participants, their families, providers and government payors, have the ability to “Win.”
Our participants “Win” by enjoying a better participant experience, improved health outcomes and remaining in their homes and communities for longer.
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We enable our participants to remain in their homes and age independently.
−Removed: As a result, as of June 2021, over 90% of our participants live in their preferred setting:
+Added: As a result, as of June 30 2022, over 90% of our participants lived in their preferred setting:
their home or community.
−Removed: Our care model also delivers superior clinical outcomes:
+Added: We believe our care model also delivers better clinical outcomes:
our participants have fewer hospital admissions, fewer low- to medium-severity emergency room visits and lower 30-day hospital readmission rates.
−Removed: Based on our analysis as of June 30, 2021, our participants live, on average, 1.4 years longer than comparable populations who choose nursing home care, based on a report by HHS dated June 27, 2017.
−Removed: Our care model is not “one size fits all,” it is customized to the unique needs of each participant.
−Removed: This approach leads to high levels of participant satisfaction with our program.
+Added: Our care model is not “one size fits all,” it is customized to the unique needs of each participant, which benefits participant health and increases participant satisfaction with our program.
Families “Win” as we reduce their caregiving burden and provide “peace of mind”.
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Government payors “Win” through fiscal certainty and lower costs.
−Removed: We provide fiscal certainty through our capitated payment arrangements and reduce the cost of both medical and long-term support and services for high-cost, dual-eligible seniors.
−Removed: Costs under the PACE program are estimated to be 13% lower on average than for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of available data by the National PACE Association in November 2020, and our costs are estimated to be approximately 8% lower on a weighted average basis than costs for comparable fee-for-service Medicare beneficiaries, based on our analysis of the most recent Dartmouth Atlas data from 2017.
−Removed: Our Competitive Advantages
−Removed: We are the leading healthcare delivery platform by number of participants focused on providing all-inclusive, capitated care to high-cost, dual-eligible seniors.
−Removed: Our size and scale confer significant competitive advantages that further differentiate us in the marketplace.
−Removed: Visionary leadership team with mission-focused culture.
−Removed: The members of our world-class senior leadership team, led by our President and Chief Executive Officer, Maureen Hewitt, have considerable years of healthcare experience.
−Removed: Hewitt and the senior leadership team’s commitment have fostered a mission-focused, participant-centered culture that drives our leading performance in managing frail dual-eligible seniors.
−Removed: Hewitt led the conversion of InnovAge from a not-for-profit entity to a for-profit entity, which allowed us to access the required capital to grow our footprint nationally and reach more participants.
−Removed: Since the for-profit conversion, the number of participants under our care grew 119% from the fiscal year ended June 30, 2016 to the fiscal year ended June 30, 2021.
−Removed: In the same period, our total
−Removed: revenues grew 173%, reflecting a 22% CAGR, and our revenue grew organically at a 15% CAGR, which excludes contribution from acquired centers.
−Removed: Our robust operating platform.
−Removed: We have standardized and streamlined our operations across markets and have invested meaningfully in the corporate infrastructure needed to drive participant satisfaction, manage healthcare costs and improve clinical outcomes at scale.
−Removed: Because of our scale, we have been able to invest in dedicated, well-staffed teams for all of our corporate and market-level functions.
−Removed: As a result, our physicians can focus on providing care and are not as burdened with additional administrative demands.
−Removed: Our scale also enables us to make large, organization-wide investments in sales and marketing, technology and clinical infrastructure.
−Removed: We leverage established technology solutions to drive improvements in our operations.
−Removed: We have developed robust internal marketing and referral source development capabilities, including significant investments in digital marketing.
−Removed: Our regulatory expertise and de novo development engine differentiate us from other providers.
−Removed: Importantly, we have a robust compliance infrastructure and team.
−Removed: These platform advantages, coupled with our mission-focused culture, give us confidence in our ability to drive growth and bring our participant-centered care model to more frail, dual-eligible seniors.
−Removed: Our ability to recruit and retain participants.
−Removed: Our ability to recruit and retain participants has resulted in 10% annual, organic census growth over the last four years.
−Removed: Despite our high levels of participant satisfaction, awareness of the PACE model among potential participants and their families has historically remained low.
−Removed: Based on August 2021 information from the National PACE Association and data from the U.S.
−Removed: Census Bureau from 2018, we estimate that approximately 3% of patients who are PACE-eligible are currently enrolled in a PACE program.
−Removed: We continually invest in targeted sales and marketing capabilities to improve awareness of our program among potential eligible participants.
−Removed: We take a multichannel approach to sales and marketing, relying on a mix of traditional provider referral sources in the community as well as leveraging targeted digital marketing.
−Removed: We have realigned our marketing strategy to focus more on digital channels during the COVID-19 pandemic and to reach those searching for senior care alternatives.
−Removed: We are proud of the fact that the friends and family of our participants remain one of our largest referral sources.
−Removed: We believe our average referral conversion rate of 39.1% across all referral sources, calculated using the last two quarters of our fiscal year, is a testament to the value and attractiveness of our model.
−Removed: We experience very low levels of voluntary disenrollment, averaging 5% annually over the last three fiscal years, suggesting participants are highly satisfied with their care.
−Removed: Access to capital.
−Removed: Although most companies in the broader managed healthcare industry operate as for-profit entities, the vast majority of our direct competitors are not-for-profit entities, which we believe limits their ability to access capital.
−Removed: Federal restrictions on for-profit PACE providers existed until 2015.
−Removed: We believe we are one of only a few for-profit PACE providers in the country and are the largest PACE-focused operator by number of participants.
−Removed: We are an early adopter of the for-profit PACE structure in a market with limited precedents.
−Removed: As a result, we have devoted resources to engaging with our non-profit community partners, some of which are unaccustomed to working with for-profit organizations, to familiarize them with our business model.
−Removed: As part of our growth-oriented mindset, we have strategically deployed our capital to achieve scale and make the PACE care delivery model accessible to more frail, dual-eligible seniors.
−Removed: We believe our ability to attract investors and access capital will accelerate our growth plans and provides flexibility to simultaneously invest in sales and marketing efforts, de novo centers and strategic acquisitions, all of which will further solidify our leadership position in a fragmented, growing market.
−Removed: We have a first mover advantage in an industry with high barriers to entry.
−Removed: Our industry has high barriers to entry driven by regulatory complexity, operating model complexity and to the cost associated with opening new locations.
−Removed: Furthermore, state and federal governments typically restrict the number of providers who can operate in a designated market service area, often allowing only a single provider per metropolitan statistical area (“MSA”).
−Removed: We believe this dynamic creates significant first-mover advantages in new markets and ample runway for future growth.
−Removed: We have invested
−Removed: significant time and resources in partnering with state and federal governments to launch operations in new MSAs.
−Removed: We believe that each new program we build reinforces our competitive position.
−Removed: We are built to scale nationally.
−Removed: We have proven our ability to execute our model in multiple geographies, as evidenced by the strength of our center-level performance across markets.
−Removed: In all of our markets, our de novo centers opened in the last seven years generated positive Center-level Contribution Margins in fewer than 12 months of operation.
−Removed: This consistent performance highlights the predictability of our model and gives us the conviction to continue investing in building centers, hiring top-tier talent and attracting participants in new markets in order to drive long-term value creation.
−Removed: We are one of the few providers operating a globally capitated care model.
−Removed: We have a long track record of successfully managing medical risk, driven by the strength of our operational playbook as well as our risk pool.
−Removed: We believe that we have created a repeatable, data-driven playbook to expand our brand and operations across the United States, and we have made substantial investments to support each key component of our approach.
−Removed: The fundamental aspects of our expansion playbook include deep regulatory knowledge, a disciplined approach to site selection, a targeted sales and marketing approach, a concerted effort to recruit and develop talent, scalable underlying clinical technology and an efficient, uniform operating model.
−Removed: We have invested in multimodal care delivery capabilities.
−Removed: The COVID-19 pandemic has highlighted the advantages of our multimodal care delivery capabilities.
−Removed: The COVID-19 pandemic has disrupted traditional channels of care delivery and created barriers to accessing care for many dual-eligible seniors.
−Removed: Our investment in in-home and virtual care capabilities outside of the four walls of our care centers has enabled us to execute on each participant’s care plan without disruption.
−Removed: We believe the adaptability of our model and our ability to effectively engage our participants in numerous ways, without negatively impacting our capitation revenue, differentiates us from other care providers.
+Added: We believe we provide fiscal certainty through our capitated payment arrangements and reduce the cost of both medical and long-term support and services for high-cost, dual-eligible seniors.
+Added: Costs under the PACE program were estimated to be 13% lower on average than for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of available data by the National PACE Association in November 2020.
Our Growth Strategy
Increase participant enrollment and capacity within existing centers
−Removed: ● We have driven 10% annual, organic census growth over the last four years.
● For the fiscal year ended June 30, 2022, our participant census was approximately 6,650 across our 18 centers in five states.
−Removed: ● Inclusive of our in-progress centers and potential center expansion efforts, our centers are expected to have an average maximum capacity of 900 participants and are expected to be able to serve a total of approximately 19,100 participants, which we believe leaves ample runway to increase the number of participants we serve within our current footprint.
+Added: Once restrictions on our ability to enroll participants as a result of the audits of our centers in
+Added: Sacramento, California and Colorado and on our ability to open de novo centers as a result of actions taken by other states or us, are lifted or resolved, we expect to strengthen our efforts to grow our census.
Build de novo centers
−Removed: ● We have a successful track record of building de novo centers, and currently have new opportunities in our pipeline which we expect to develop and open in the next one to two fiscal years, including opportunities in new states.
−Removed: We believe de novo centers generate compelling long-term unit economics and robust internal rates of return.
−Removed: ● We have demonstrated the portability of our platform across different geographies and have a prioritized list of target markets that we believe are optimal environments to launch the InnovAge Platform.
−Removed: ● Our approach to de novo developments includes building centers to our experience-based specifications, with flexibility for future center expansion factored into the blueprints where possible.
+Added: ● We believe de novo centers generate compelling long-term unit economics and the potential for robust internal rates of return.
+Added: ● We have operated our platform across different geographies and, once restrictions on our ability to enroll participants as a result of the audits of our centers in Sacramento, California and Colorado and on our ability to open de novo centers as a result of actions taken by other states or us, are lifted or resolved, we expect to prioritize a list of target markets that we believe are optimal environments to launch the InnovAge Platform.
+Added: ● Our approach to de novo developments is expected to include building centers to our experience-based specifications, with flexibility for future center expansion factored into the blueprints where possible .
Execute tuck-in acquisitions
−Removed: ● Over the past three fiscal years, we have acquired and integrated three PACE organizations, expanding into one new state and four new markets through those acquisitions.
−Removed: Over the past fiscal year, we have also been transferred slots and appropriation in one new state.
−Removed: ● By bringing acquired organizations under the InnovAge Platform, we are able to realize significant revenue growth and improve operational efficiency and care delivery post-integration.
−Removed: ● We believe there is a robust landscape of potential tuck-in acquisitions to supplement our organic growth, and that our known track record for improving and integrating acquired businesses while continuing to prioritize participant care positions us as the acquirer of choice in this market.
+Added: ● From fiscal year 2019 through fiscal year 2021, we have acquired and integrated three PACE organizations, expanding into one new state and four new markets through those acquisitions.
+Added: By bringing acquired organizations under the InnovAge Platform, we hope to further realize revenue growth and improve operational efficiency and care delivery post-integration.
+Added: ● Once restrictions on our ability to enroll participants as a result of the audits of our centers in Sacramento, California and Colorado and on our ability to open de novo centers as a result of actions taken by other states or us, are lifted or resolved, we believe there is a robust landscape of potential tuck-in acquisitions to supplement our organic growth and that our history of integrating business will help increase efficiencies during the integration process.
Reinvest in the InnovAge Platform to optimize performance
−Removed: ● We believe that our ongoing investment in the InnovAge Platform drives greater efficiency across our business, creating a virtuous cycle that allows us to continue growing.
−Removed: Our platform is the largest among PACE providers and one of the most geographically diverse.
+Added: ● We believe that our ongoing investment in the InnovAge Platform drives greater efficiency across our business, creating a virtuous cycle that allows us to continue providing necessary care to our participants.
+Added: Our platform is the largest among PACE providers based on participants served and one of the most geographically diverse.
● We plan to continually invest in technology improvements and seek to unlock new insights through enhanced data analytics capabilities that will advance our care model.
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● criminal or civil liability, fines, damages or monetary penalties for violations of healthcare fraud and abuse laws, including the federal Anti-Kickback Statute, Civil Monetary Penalties Law, the False Claims Act (“FCA”) and/or state analogs to these federal enforcement authorities, or other regulatory requirements;
−Removed: ● enforcement actions by governmental agencies and/or state law claims for monetary damages by patients or employees who believe their protected health information (“PHI”) and other types of personal data or personally identifiable information (collectively, “PII” and, together with PHI, “PHI/PII”) has been impermissibly used or disclosed or not properly safeguarded, or their rights with respect to PHI/PII have been protected, in violation of federal or state health privacy laws, including, for example and without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”), and their implementing regulations (collectively, “HIPAA”), the California Consumer Privacy Act (“CCPA”) , and the Privacy Act of 1974;
+Added: ● enforcement actions by governmental agencies and/or state law claims for monetary damages by patients or employees who believe their protected health information (“PHI”) and other types of personal data or personally identifiable information (collectively, “PII” and, together with PHI, “PHI/PII”) has been impermissibly used or disclosed or not properly safeguarded, or their rights with respect to PHI/PII have been protected, in violation of federal or state health privacy laws, including, for example and without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended by HIPAA, the California Consumer Privacy Act (“CCPA”) , other state comprehensive privacy laws, and the Privacy Act of 1974;
● mandated changes to our practices or procedures that significantly increase operating expenses or decrease our revenue;
● imposition of and compliance with corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our business practices which could lead to potential fines, among other things;
−Removed: ● termination of various relationships and/or contracts related to our business, including joint venture arrangements, contracts with government payors and real estate leases;
+Added: ● termination of various relationships and/or contracts related to our business, including joint venture arrangements, contracts with government payors and real estate leases or contracts with specialty medical providers;
● changes in and reinterpretation of rules and laws by a regulatory agency or court, such as state corporate practice of medicine laws, that could affect the structure and management of our business;
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We are subject to a complex array of federal and state laws, regulations, and guidance, including legal requirements directly applicable to PACE providers as well as Medicare and Medicaid laws and regulations.
−Removed: These laws and guidances relate to our organizational structure, governance, fiscal soundness, marketing activities, participant enrollment and disenrollment, charges to participants, provision of healthcare and other services to participants, care planning activities, service delivery settings and maintenance of centers, participant rights, employment and contractual arrangements with health care providers and other staff, quality assessment and performance improvement activities, participant grievances and appeals, medical records documentation, compliance program activities, and other aspects of our operations and financing.
+Added: These laws and guidance relate to our organizational structure, governance, fiscal soundness, marketing activities, participant enrollment and disenrollment, charges to participants, provision of healthcare and other services to participants, care planning activities, service delivery settings and maintenance of centers, participant rights, employment and contractual arrangements with health care providers and other staff, quality assessment and performance improvement activities, participant grievances and appeals, medical records documentation, compliance program activities, and other aspects of our operations and financing.
As a PACE provider that provides qualified prescription drug coverage, we are also subject to requirements applicable to Medicare Part D plan sponsors.
−Removed: As a PACE provider, we and our centers are subject to audits by CMS and state agencies, which have in the past or may in the future result in the identification of deficiencies in connection with our compliance with regulatory requirements, participant quality of care, care plan development and implementation, grievance and appeal processes, clinicians acting outside of their scope of practice, and other issues.
−Removed: Risk Factors, “ Risks Related to Regulation” for a description of certain current audits.
+Added: As a PACE provider, we and our centers are subject to audits by CMS and state agencies, which have in the past and may in the future result in the identification of deficiencies in connection with our compliance with regulatory requirements, participant quality of care, care plan development and implementation, grievance and appeal processes, clinicians acting outside of their scope of practice, and other issues.
+Added: Risk Factors, “Risks Related to Regulation” for a description of current audits in the States of California, Colorado, and New Mexico and their results.
We expect these audits to continue in the future.
−Removed: In addition to risks associated with audits of our current centers, we also face risks associated with new centers that we may acquire in the future, which may not have developed the same compliance and quality infrastructure that we currently have in place.
−Removed: Issues identified through these audits can result in corrective action plans, civil monetary penalties, enrollment suspensions, and other financial penalties and enforcement actions, in addition to loss of our contracts with CMS and state agencies.
+Added: In addition to risks associated with audits of our current centers, we also face risks associated with new centers that we may acquire in the future, which may not have developed the same compliance and quality infrastructure that we currently have in place or are in the process of implementing.
+Added: Issues identified through these audits have and may in the future result in corrective action plans, civil monetary penalties, enrollment suspensions, and other financial penalties and enforcement actions, in addition to loss of our contracts with CMS and state agencies.
The regulations and contractual requirements applicable to PACE providers are complex and subject to change, making it necessary for us to invest significant resources in complying with these requirements.
Scrutiny through federal and state government audits, oversight and enforcement and the highly technical regulatory scheme mean that our compliance efforts in this area will continue to require significant resources.
−Removed: CMS and state regulatory authorities regularly audit our performance to determine our compliance with CMS’s regulations and our contracts with CMS and to assess the quality of the services we provide to our participants.
−Removed: Whether identified through these audits or other avenues, our failure to comply with the federal and state laws applicable to our business may result in significant or material retroactive adjustments to and/or withholding of capitation payments, fines, criminal liability, civil monetary penalties, requirements to make significant changes to our operations, CMS imposed sanctions (including suspension or exclusion from participation in government programs), loss of contracts, or cessation of our services.
+Added: CMS and state regulatory authorities regularly
+Added: audit our performance to determine our compliance with CMS’s regulations and our contracts with CMS and to assess the quality of the services we provide to our participants.
+Added: Whether identified through these audits or other avenues, our failure to comply with the federal and state laws applicable to our business have and may continue to result in significant or material retroactive adjustments to and/or withholding of capitation payments, fines, criminal liability, civil monetary penalties, requirements to make significant changes to our operations, CMS imposed sanctions (including suspension or exclusion from participation in government programs), loss of contracts, or cessation of our services.
Licensing Laws
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We, our healthcare professionals and our centers are also subject to a variety of other state laws and regulations, relating to, among other things, the quality of medical care, equipment, privacy of health information, physician relationships, personnel and operating policies and procedures.
−Removed: to state requirements, we and/or our healthcare professionals are in some cases subject to federal licensing and certification requirements, such as certification or waiver under the Clinical Laboratory Improvement Amendments of 1988 for performing limited laboratory testing and Drug Enforcement Administration registration for writing prescriptions for controlled substances.
+Added: In addition to state requirements, we and/or our healthcare professionals are in some cases subject to federal licensing and certification requirements, such as certification or waiver under the Clinical Laboratory Improvement Amendments of 1988 for performing limited laboratory testing and Drug Enforcement Administration registration for writing prescriptions for controlled substances.
In addition, certain of the states where we currently operate or may choose to operate in the future regulate the operations and financial condition of risk bearing providers.
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While we believe that we are in substantial compliance with state laws prohibiting the corporate practice of medicine, other parties may assert that we could be engaged in the corporate practice of medicine.
−Removed: Were such allegations to be asserted successfully before the appropriate judicial or administrative forums, we could be subject to adverse judicial or administrative penalties, certain contracts could be determined to be unenforceable and we may be required to restructure our contractual arrangements.
+Added: Further, many such state laws are often vague or have otherwise only been infrequently interpreted by courts or regulatory agencies.
+Added: Were allegations to be asserted successfully before the appropriate judicial or administrative forums, we could be subject to adverse judicial or administrative penalties, certain contracts could be determined to be unenforceable and we may be required to restructure our contractual arrangements.
The consequences associated with violating corporate practice of medicine laws vary by state and may result in physicians being subject to disciplinary action, as well as forfeiture of revenues from government payors for services rendered.
1 unchanged sentence
Some of the relevant laws, regulations and agency interpretations in states with corporate practice of medicine restrictions have been subject to limited judicial and regulatory interpretation.
−Removed: In limited cases, courts have required companies to divest or reorganize structures deemed to violate corporate practice restrictions.
+Added: cases, courts have required companies to divest or reorganize structures deemed to violate corporate practice restrictions.
Moreover, state laws are subject to change.
Any allegations or findings that we have violated these laws could have a material adverse impact on our reputation, business, results of operations and financial condition.
+Added: In addition, agreements between the corporation and the physician could be considered void and unenforceable if in violation of such state laws.
Risk Factors, “Risks Related to Our Business—Laws regulating the corporate practice of medicine could restrict the manner in which we are permitted to conduct our business, and the failure to comply with such laws could subject us to penalties or require a restructuring of our business.”
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Investment interests in the joint venture may not fully satisfy a safe harbor.
−Removed: Although failure to comply with a safe harbor does not render an arrangement illegal under the federal Anti-Kickback Statute, an arrangement that does not operate within a safe harbor may be subject to increased scrutiny and the Office of Inspector General (the “OIG”) of HHS has warned health care entities in the past that certain joint venture relationships have a potential for abuse.
−Removed: Joint ventures that fall outside the safe harbors are evaluated on a case-by-case basis under the federal Anti-Kickback Statute.
−Removed: In this regard, we have endeavored to structure our joint venture to satisfy as many elements of the applicable safe harbor for investments in small entities as we believe are commercially reasonable.
+Added: The Office of Inspector General (the “OIG”) of HHS has warned health care entities in the past that certain joint venture relationships have a potential for abuse.
+Added: We have endeavored to structure our joint venture to satisfy as many elements of the applicable safe harbor for investments in small entities as we believe are commercially reasonable.
For example, we believe that these investments are offered and made by us on a fair market value basis and provide returns to the investors in proportion to their actual investment in the venture.
3 unchanged sentences
We employ our own sales force and attempt to meet the Anti-Kickback safe harbor for bona fide employment.
−Removed: If any of our business transactions or arrangements, including those described above, were found to violate the federal Anti-Kickback Statute, we could face, among other things, criminal, civil or administrative sanctions, including possible exclusion from participation in Medicare, Medicaid and other state and federal healthcare
−Removed: programs and FCA liability.
+Added: If any of our business transactions or arrangements, including those described above, were found to violate the federal Anti-Kickback Statute, we could face, among other things, criminal, civil or administrative sanctions, including possible exclusion from participation in Medicare, Medicaid and other state and federal healthcare programs and FCA liability.
Any findings that we have violated these laws could have a material adverse impact on our business, results of operations, financial condition, cash flows, reputation and stock price.
+Added: In addition to the federal Anti-Kickback Statute, various states in which we operate have adopted their own anti-kickback statutes.
As part of HHS’s Regulatory Sprint to Coordinated Care, OIG issued a request for information in August 2018 seeking input on regulatory provisions that may act as barriers to coordinated care or value-based care.
1 unchanged sentence
OIG issued final rules effective January 19, 2021, that modify existing safe harbors and create new safe harbors and exceptions that may impact our business, results of operations and financial condition.
−Removed: However, it remains unclear how these final rules will be interpreted and implemented.
Federal Self-Referral Prohibition
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Among other things, the FCA authorizes the imposition of up to three times the government’s damages and significant per claim civil penalties on any “person” (including an individual, organization or company) who, among other acts:
−Removed: ● knowingly presents or causes to be presented to the federal government a false or fraudulent claim for payment or approval, which may relate to our records or reports necessary to generate appropriate RAF determinations;
+Added: ● knowingly presents or causes to be presented to the federal government a false or fraudulent claim for payment or approval;
● knowingly makes, uses or causes to be made or used a false record or statement material to a false or fraudulent claim;
1 unchanged sentence
● conspires to commit the above acts.
−Removed: The federal government has used the FCA to prosecute a wide variety of alleged false claims and fraud allegedly perpetrated against Medicare and state healthcare programs, including but not limited to coding errors, billing for services not rendered, the submission of false cost or other reports, billing for services at a higher payment rate than appropriate, billing under a comprehensive code as well as under one or more component codes included in the comprehensive code, billing for care that is not considered medically necessary and false reporting of risk-adjusted diagnostic codes.
+Added: The federal government has used the FCA to prosecute a wide variety of alleged false claims and fraud allegedly perpetrated against Medicare and state healthcare programs, including but not limited to coding errors, billing for services not rendered, the submission of false cost or other reports, billing for services at a higher payment rate than appropriate, billing under a comprehensive code as well as under one or more component codes included in the comprehensive code, billing for care that is not considered medically necessary and false reporting of risk-adjusted diagnostic codes, encounter data or other information used to determine capitated payments.
The ACA provides that claims for payment that are tainted by a violation of the federal Anti-Kickback Statute (which could include, for example, illegal incentives or remuneration in exchange for enrollment or referrals) are false for purposes of the FCA.
In addition, amendments to the FCA and Social Security Act impose severe penalties for the knowing and improper retention of overpayments from government payors.
−Removed: This could be relevant to the extent we received improper payments on account of RAF determinations that are based on improper or erroneous records or reports.
+Added: This could be relevant to the extent we received payments on account of RAF determinations that are based on improper or erroneous records or reports.
Failure to return overpayments could subject us to liability under the FCA, exclusion from government healthcare programs and penalties under the federal Civil Monetary Penalty Statute.
The penalties for a violation of the FCA may include per claim penalties, plus up to three times the amount of damages caused by each false claim, which can be as much as the amounts received directly or indirectly from the government for each such false claim.
−Removed: The Department of Justice has adjusted the per claim penalty range from $11,665 to $23,331 for penalties assessed after June 19, 2020, if the underlying conduct occurred after November 2, 2015.
+Added: The Department of Justice has adjusted the per claim penalty range from $12,537 to $25,076 for penalties assessed after May 9, 2022, if the underlying conduct occurred after November 2, 2015.
In addition to civil enforcement under the FCA, the federal government can use several criminal statutes to prosecute persons who are alleged to have submitted false or fraudulent claims for payment to the federal government.
2 unchanged sentences
States are becoming increasingly active in using their false claims laws to police the same activities listed above, particularly with regard to capitated government-sponsored healthcare programs, such as Medicaid managed care and PACE.
+Added: For additional information regarding allegations against us under Federal and State FCA statutes, see Item 1A.
+Added: Risk Factors, “Risks Related to Our Business—We are subject to legal proceedings, enforcement actions and litigation, malpractice and privacy disputes, which are costly to defend and could materially harm our business and results of operations.”
Civil Monetary Penalties Statute
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The HIPAA privacy and security regulations also require us to enter into written agreements with certain contractors, known as business associates, to whom we disclose PHI.
+Added: A business associate is any person or entity (other than members of a covered entity’s workforce) that performs a service for or on behalf of a covered entity involving the use or disclosure of protected health information.
Covered entities may be subject to penalties for, among other activities, failing to enter into a business associate agreement where required by law or as a result of a business associate violating HIPAA, if the business associate is found to be an agent of the covered entity and acting within the scope of the agency.
6 unchanged sentences
Violations of HIPAA by providers like us, including, but not limited to, failing to implement appropriate administrative, physical and technical safeguards, have resulted in enforcement actions and in some cases triggered settlement payments or civil monetary penalties.
−Removed: Penalties for impermissible use or disclosure of PHI were increased by the HITECH Act by imposing tiered penalties of more than $50,000 (not adjusted for inflation) per violation and up to $1.5 million (not adjusted for inflation) per year for identical violations.
+Added: Penalties for impermissible use or disclosure of PHI were increased by the HITECH Act by imposing tiered penalties of more than $50,000 (not adjusted for inflation) per violation and up to approximately $1.9 million (not adjusted for inflation) per year for identical violations.
In addition, HIPAA provides for criminal penalties of up to $250,000 and ten years in prison, with the severest penalties for obtaining and disclosing PHI with the intent to sell, transfer or use such information for commercial advantage, personal gain or malicious harm.
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In addition, state and federal budgetary shortfalls and constraints pose potential risks for our revenue streams.
−Removed: We cannot predict how government payors or health care consumers might react to federal and state healthcare legislation and regulation, whether already enacted or enacted in the future, nor can we predict what form many of these regulations will take before implementation.
+Added: We cannot predict how government payors or healthcare consumers might react to federal and state healthcare legislation and regulation, whether already enacted or enacted in the future, nor can we predict what form such legislation or regulations will take.
Some examples of legislative and regulatory changes impacting our business include:
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There have since been numerous political and legal efforts to repeal, replace or modify the ACA, some of which have been successful, in part, in modifying the law.
−Removed: Although many of the provisions of the ACA did not take effect immediately and continue to be implemented, and some have been and may be modified before or during their implementation, the reforms could continue to have an impact on our business in a number of ways.
+Added: Although some provisions of the ACA have been and may be modified, the reforms could continue to have an impact on our business in a number of ways.
Provisions of the ACA that impact the Medicare and Medicaid programs, in particular, may have an impact on our business.
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Subsequent legislation extended these cuts through 2031, but legislation enacted in 2020 suspended the cuts during the pandemic.
−Removed: Currently, the 2% cuts under sequestration are scheduled to be reinstated in 2022, which, once reinstated, will negatively impact our revenue.
+Added: On December 10, 2021 the “Protecting Medicare and American Farmers from Sequester Cuts Act” extended the 2% Medicare sequester moratorium through March 31, 2022, and adjusted the sequester to 1% between April 1, 2022 and June 30, 2022.
+Added: These cuts were reinstated on July 1, 2022 and will negatively impact our revenue.
+Added: ● The Inflation Reduction Act of 2022 includes a number of provisions intended to lower the costs of some drugs covered under Medicare Part D and to limit Medicare beneficiaries’ out-of-pocket spending under the Medicare Part D benefit.
+Added: It is not yet clear what effect, if any, these legislative changes and any subsequent implementing regulations and guidance will have on our business.
While there may be significant changes to the healthcare environment in the future, the specific changes and their timing are not yet apparent.
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Occupational Safety and Health Administration regulations require employers to provide workers who are occupationally subject to blood or other potentially infectious materials with prescribed protections.
−Removed: These regulatory requirements apply to all
−Removed: healthcare facilities, including our community centers, and require employers to make a determination as to which employees may be exposed to blood or other potentially infectious materials and to have in effect a written exposure control plan.
+Added: These regulatory requirements apply to all healthcare facilities, including our community centers, and require employers to make a determination as to which employees may be exposed to blood or other potentially infectious materials and to have in effect a written exposure control plan.
In addition, employers are required to provide or employ hepatitis B vaccinations, personal protective equipment and other safety devices, infection control training, post-exposure evaluation and follow-up, waste disposal techniques and procedures and work practice controls.
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Certain states in which we do business or may desire to do business in the future have certificate of need programs regulating the establishment or expansion of healthcare facilities, including our community centers.
−Removed: These regulations can be complex and time-consuming.
+Added: These regulations can be complex and time-consuming to ensure compliance with.
Any failure to comply with such regulatory requirements could adversely impact our business, results of operations and financial condition.
−Removed: Impact of COVID-19
−Removed: The rapid spread of COVID-19 around the world and throughout the United States has altered the behavior of businesses and people, with significant negative effects on federal, state and local economies, the duration of which is unknown at this time.
+Added: Impact of COVID-19 and Macroeconomic Conditions
+Added: The COVID-19 pandemic altered the behavior of businesses and people, the effects of which continue on federal, state and local economies.
The virus has and continues to disproportionately impact older adults, especially those with chronic illnesses, which describes our participants.
−Removed: To date, we have experienced or expect to experience the following impacts on our business model due to COVID-19.
−Removed: Though the COVID-19 pandemic altered the mix of settings where we deliver care, our multimodal model ensured that our participants continued to receive the care they needed.
−Removed: We closed all our centers in March 2020 and transitioned to a 100% in-home and virtual care model that allowed for seamless delivery of care while increasing participant visit volume and maintaining continuity of care.
−Removed: Our telehealth solution received high satisfaction among participants, caregivers and IDTs.
−Removed: In February 2021, as the prevalence of COVID-19 decreased in the communities we serve, we began re-opening our centers using a phased approach to ensure the safety of both our staff and participants.
−Removed: In addition, community assisted living and skilled nursing facilities began to open to allow in-person visits by all members of our IDT.
−Removed: By June 2021, we fully opened all our centers and transitioned to a predominantly in-person, center-based care model, supplemented by telehealth.
−Removed: We expect telehealth care delivery to remain a part of our ongoing care model.
−Removed: As a result of the COVID-19 pandemic, at the end of March 2020, we pivoted to a virtual enrollment model due to safety concerns for our employees and participants and to comply with local government ordinances.
−Removed: We also realigned our marketing strategy to increase our focus on digital channels during the COVID-19 pandemic and to reach those searching for senior care alternatives.
−Removed: During our fiscal fourth quarter, as we continue to recover from the pandemic, enrollment growth continued to improve and has returned to pre-COVID levels.
−Removed: We continue to build on our media strategy targeting lower funnel media tactics that have built a strong pipeline of digital leads for enrollment.
−Removed: Our revenue is capitated and not determined by the number of times we interact with our participants face-to-face.
−Removed: As of June 30, 2021, we had not experienced a decline in revenue as a result of the COVID-19 pandemic.
−Removed: The capitation payments we receive from Medicare are risk-adjusted based on documented encounters and diagnosed conditions.
−Removed: Government payors require that participants’ health issues be documented annually regardless of the permanence of the underlying causes.
−Removed: Historically, this documentation has been required to be completed during an in-person visit with a participant, but due to COVID-19 and going forward, CMS is now allowing documentation of conditions identified during qualifying telehealth visits with participants.
−Removed: Thus far, we have been able to document the health conditions of our participants during telehealth visits as well as we did during in-person visits prior to COVID-19;
−Removed: however, any issues with documenting such conditions could adversely impact Medicare RAF scores and our resulting revenue for future periods.
−Removed: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into legislation.
−Removed: The CARES Act, in addition to other provisions, provided for the temporary suspension of the automatic 2%
−Removed: reduction of Medicare claim reimbursements (sequestration) for the period of May 1, 2020 through December 31, 2021, which positively impacted our revenue during the year ended June 30, 2021.
−Removed: For the year ended June 30, 2021, as compared to the year ended June 30, 2020, on a PMPM basis, our internal care delivery costs decreased, while our external provider costs increased, as further described in Results of Operations , in part due to the impact of COVID-19 on our care delivery costs as we executed our participants’ care plans through a different mix of care settings.
−Removed: On a PMPM basis, we did not experience material changes in our aggregate participant-related care expenses
The United States continues to experience supply chain issues with respect to personal protective equipment (“PPE”) and other medical supplies used to prevent transmission of COVID-19.
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Costs related to PPE medical supplies represented approximately 0.6% and 0.6% of our total cost of care for the years ended June 30, 2022 and 2021, respectively.
−Removed: While the price of PPE may remain higher than historical levels for the foreseeable future, we do not expect these incremental costs to be material as a percentage of our total expenses.
−Removed: Risk Factors for further discussion of the possible impact of the COVID-19 pandemic on our business.
+Added: These costs did not have a material effect on our business or expenses.
+Added: Labor market .
+Added: The COVID-19 pandemic has and continues to exacerbate difficulties to hire additional healthcare professionals, causing certain of our centers to be understaffed or staffed with personnel that requires training.
+Added: The labor shortage has also contributed to the increased wage pressure to retain and attract such healthcare professionals.
+Added: The combination of increased wage pressure and labor shortage amongst healthcare personnel, and specifically, trained personnel, has impacted and may continue to impact our expenses and ability to adhere to the complex government laws and regulations that apply to our business.
+Added: Additionally, geopolitical events have contributed to adverse macroeconomic conditions, including but not limited to inflation, new or increased tariffs, changes to fiscal monetary policy, higher interest rates, potential global security issues and market volatility.
+Added: None of these factors have had a material effect on our operations to date.
Trademarks and Intellectual Property
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We compete directly with national, regional and local providers of healthcare for participants and clinical providers.
−Removed: We also compete with payors and other alternate managed care programs for participants.
+Added: We also compete with payors and other alternate managed care
+Added: programs for participants.
Of these providers, there are many other companies and individuals currently providing healthcare services, many of which have been in business longer and/or have substantially more resources.
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Our principal competitors for dual-eligible seniors vary considerably in type and identity by market.
−Removed: Our growth strategy and our business could be adversely affected if we are not able to continue to penetrate existing markets, successfully expand into new markets, recruit qualified physicians or if we experience significant participant attrition to our competitors.
−Removed: See “Risk Factors—Risks Related to Our Business—The healthcare industry is highly competitive.”
+Added: Sanctions imposed on our Sacramento, California center and our Colorado centers have adversely affected and may continue to affect our ability to grow our business and recruit qualified physicians and could cause participant attrition to our competitors.
+Added: Risk Factors—Risks Related to Our Business—The healthcare industry is highly competitive and, if we are not able to compete effectively, our business could be harmed.”
We believe the principal competitive factors for serving adults dually-eligible for Medicare and Medicaid and who meet nursing home eligibility criteria include:
participant experience, quality of care, health outcomes, total cost of care, brand identity and trust in that brand.
−Removed: We believe we compete favorably on these factors.
Our business experiences some variability depending upon the time of year.
Medical costs will vary seasonally depending on a number of factors, but most significantly the weather.
−Removed: Certain illnesses, such as the influenza virus, are far more prevalent during colder months of the year, which will result in an increase in medical expenses during these time periods.
+Added: Certain illnesses, such as the influenza virus and possibly COVID-19, are far more prevalent during colder months of the year, which will result in an increase in medical expenses during these time periods.
We would therefore expect to see higher levels of per-participant medical costs in our second and third quarters.
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Business days can also create year-over-year comparability issues if a period in one year has a different number of business days compared to the same period in another.
−Removed: We also expect medical costs to be impacted by a pandemic such as the COVID-19 pandemic, which may result in increased or decreased total medical costs depending upon the severity of the infection, the duration of the infection and the availability of healthcare services for our participants.
In addition, the retrospective capitation payments we receive for each participant are determined by a participant’s RAF score, which is calculated twice per year and is based on the evolving acuity and chronic conditions of a participant.
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Human Capital Resources
−Removed: InnovAge is a mission-driven organization, focused on providing its participants with improved quality of care and allowing them to live in their homes for as long as safely possible, all while reducing the overutilization of our hospitals and nursing homes.
−Removed: In terms of diversity, our senior management team strives to be a reflection of the communities it serves.
−Removed: Our employees drive our mission and share core values, many of whom have cared for an aging relative, that both stem from and define our culture and which plays a critical role in our execution at all levels in our organization.
−Removed: Our values are used in candidate screening and in employee evaluations to help reinforce their importance in our organization.
−Removed: As of June 30, 2021, our voluntary retention rate for employees was 75.9%.
−Removed: Additionally, in our annual employee engagement survey conducted in 2020, 68% of our employees responding agreed that they would recommend InnovAge as a great place to work .
−Removed: As of June 30, 2021, we had approximately 1,800 employees, including 1,200 clinical professionals.
−Removed: This count excludes contractors.
+Added: As of June 30, 2022, we had approximately 2,000 employees, including 1,300 clinical professionals (excluding contract labor).
We consider our relationship with our employees to be good.
−Removed: None of our employees are party to a collective bargaining agreement.
−Removed: Implications of being an emerging growth company
+Added: None of our employees are unionized or party to a collective bargaining agreement.
+Added: Our people are our product at InnovAge, and their commitment to our participants propels our mission of enabling seniors to age at home, with dignity, for as long as is safely possible.
+Added: We believe that our employees are drawn to this mission and our values, which is why our voluntary retention rate was 63.6% over fiscal year 2022.
+Added: Additionally, in our most recent employee engagement survey conducted in April 2022, 73% of our employees indicated that they feel engaged by their work at InnovAge .
+Added: Attracting and retaining top talent is critical to the success of InnovAge's mission and one of the highest priorities to leadership.
+Added: To keep leadership informed of the health of our employee base, we report weekly on key hiring and retention metrics.
+Added: We launched employee engagement surveys in fiscal year 2022, and we are implementing action plans with all staff groups based on survey findings and opportunities uncovered.
+Added: We intend to monitor progress by releasing multiple engagement surveys annually.
+Added: We have recently added proven, experienced leaders at the executive level, including our new Chief Executive Officer and President, Patrick Blair, and our new Chief Medical Officer, Chief People Officer, and Chief Business Development Officer.
+Added: We continue to evaluate talent needs at the senior management level, aiming to hire ahead of the curve as the business evolves and to assess and respond to any gaps in our capabilities.
+Added: At InnovAge, we strive to be a reflection of the diverse communities that we serve.
+Added: We are committed to promoting diversity, equity, and inclusion across all teams at InnovAge and we believe in creating an environment where individual differences are respected and embraced.
+Added: In our most recent engagement survey conducted in April 2022, 79.2% of employees indicated that they feel that they can be their authentic selves at work.
+Added: As of June 30, 2022, our employed workforce was comprised of individuals who identified as women – 76%, and minorities – 40.3%.
+Added: Six of nine members of our executive leadership team identify as women.
+Added: Training and Development
+Added: We aim to provide our employees opportunities to grow and advance in their careers at InnovAge with learning and development programs.
+Added: Each year we conduct soft skills training for managers and supervisors, the content of which is informed by gap assessment surveys.
+Added: A quarterly training series for front-line leaders enables them to develop their management skills.
+Added: Our clinical leaders also conduct separate physician leadership trainings quarterly, with a new topic for each installment (e.g., email / phone etiquette).
+Added: We also launched a training needs assessment survey in August 2020 to hear directly from employees and managers where they think they could use more support and learning content in the coming year.
+Added: As a result of these assessment surveys, the Company has developed trainings tailored to the most prevalent needs identified by our employees.
+Added: Implications of being an emerging growth company and a smaller reporting company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
−Removed: We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (3) the date on which we are deemed to be a large accelerated filer or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
−Removed: We will be deemed to be a “large accelerated filer” at such time that we (a) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700.0 million or more as of the last business day of our most recently completed second fiscal quarter, (b) have been required to file annual and quarterly reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for a period of at least 12 months and (c) have filed at least one annual report pursuant to the Exchange Act.
−Removed: An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to public companies.
+Added: We will remain an emerging growth company until the earlier of (1) June 30, 2026, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (3) the date on which we are deemed to be a large accelerated filer or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
+Added: Additionally, we qualify as a “smaller reporting company,” and even after we no longer qualify as an “emerging growth company,” we may still qualify as a “smaller reporting company” based on the aggregate worldwide market value of common equity securities held by non-affiliates assessed on an annual basis and measured as of the last business day of the issuer’s most recently completed second fiscal quarter.
+Added: As an emerging growth company and a smaller reporting company, we may take advantage of reduced reporting requirements that are otherwise applicable to public companies.
These provisions include, but are not limited to:
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● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
−Removed: As a result, the information that we provide to our shareholders may be different than you might receive from other public reporting companies in which you hold equity interests.
In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.
−Removed: We intend to take advantage of the longer phase-in periods
−Removed: for the adoption of new or revised financial accounting standards under the JOBS Act until we are no longer an emerging growth company.
+Added: We intend to take advantage of the longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act until we are no longer an emerging growth company.
Our election to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the longer phase-in periods permitted under the JOBS Act and who will comply with new or revised financial accounting standards.
If we were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act.
+Added: As a result, the information that we provide to our shareholders may be different than you might receive from other public reporting companies in which you hold equity interests.
Available Information
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.