What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-09-10 compared with 2023-09-12 · 130 added, 145 removed, 381 unchanged (42% of the section changed)

17 unchanged sentences

(“InnovAge”).

In this Annual Report on Form 10-K, the terms “we”, “our”, “our company” and “us” may refer, as the context requires, to InnovAge or collectively to InnovAge and its subsidiaries.

InnovAge is headquartered in Denver, Colorado.

The Company manages its business as one reportable segment, PACE.

As of June 30, 2023, the Company served approximately 6,400 PACE participants, making it the largest PACE provider in the United States of America (the “U.S.”) based on participants served, and operated 17 PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia.

In this Annual Report, the terms “we”, “our”, “our company” and “us” may refer, as the context requires, to InnovAge or collectively to InnovAge and its subsidiaries.

InnovAge is headquartered in Denver, Colorado and manages its business as one reportable segment, PACE.

As of June 30, 2024, the Company served approximately 7,020 PACE participants, making it the largest PACE provider in the United States (the “U.S.”) based on participants served, and operated 20 PACE centers across California, Colorado, Florida, 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.

6 unchanged sentences

Dual-eligible seniors must navigate a disjointed, separately administered set of Medicare and Medicaid benefits, which often results in uncoordinated care delivered in silos.

Our vertically integrated care model and full-risk contracts incentivize us to coordinate and manage all aspects of a participant’s health.

Costs under the PACE program are estimated to be 15% lower on average than for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of most recently available data by the National PACE Association in July 2023.

Importantly, we believe we can deliver better health outcomes.

Our care model reduces unnecessary or avoidable medical spend.

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, 2023, our participants had a 12% lower 30-day hospital readmission rate compared

to a frail, dual-eligible or disabled waiver population.

In addition to reducing spend, we also focus on ensuring our participants are satisfied and receive the necessary care.

Our participant satisfaction, based on our most recent survey of participants administered by an independent third party as of March 1, 2023, is 78%.

Our vertically integrated care model and full-risk contracts requires us to coordinate and manage all aspects of a participant’s health, and deliver the necessary care.

Costs under the PACE program are estimated to be 12% lower on average than for a comparable dual-eligible population aged 65 and older under Medicaid, based on an analysis of most recently available data by the National PACE Association in January 2024.

Importantly, we believe our vertically integrated model can deliver better health outcomes and reduces unnecessary or avoidable medical spend.

In addition, as of June 30, 2024, we believe our participants had a lower hospital readmission rate compared to a frail, dual-eligible or disabled waiver population.

In addition to reducing spend, we also focus on ensuring our participants are satisfied with the services delivered.

Our participant satisfaction is administered quarterly and is measured through a Net Promoter Score (“NPS”).

NPS is a metric used to measure customer satisfaction, loyalty and enthusiasm by asking how likely they are to recommend a company to a

friend or colleague, and is reported as a number between negative 100 and positive 100.

Based on surveys of our participants administered by a third-party vendor in FY24, our average FY24 NPS was 46.

According to Qualtrics, the creator of the NPS, Bain and Company suggests a score above 20 is favorable and above 50 is excellent.

We believe our value proposition to each constituency translates into a predictable economic model.

5 unchanged sentences

The overall growth rate of healthcare spending is expected to accelerate due to the aging population.

Government healthcare spend is disproportionally concentrated on the dual-eligible population, who typically suffer from multiple chronic conditions and require long-term services and supports.

Medicare and Medicaid spend on average three times more per capita on a dual-eligible senior than a Medicare-only senior.

We believe government healthcare spend is higher for the dual-eligible population, who typically suffer from multiple chronic conditions and require long-term services and supports.

We believe Medicare and Medicaid spend on average three times more per capita on a dual-eligible senior than a Medicare-only senior.

Improved care management of dual-eligible seniors is critical to reducing the rapid growth in government healthcare spending in the United States.

8 unchanged sentences

Dual-eligible beneficiaries are among the most medically complex, high-frequency users of healthcare services.

Based on InnovAge data as of June 30, 2023, the typical InnovAge participant had, on average, eleven chronic conditions and, based on the data most recently available to us from a 2021 modified health outcomes survey, required, on average, assistance with two or more activities of daily living (“ADLs”).

Based on InnovAge data as of June 30, 2024, the typical InnovAge participant had, on average, ten chronic conditions and, based on the data most recently available to us from a 2022 modified 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.

2 unchanged sentences

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.

Healthcare spending on nursing care facilities and continuing care retirement communities was expected to reach approximately $201.4 billion in 2023, based on the latest projections made by the Office of the Actuary of CMS, which is a 1.9% increase compared to the 2023 projection from the prior year.

Healthcare spending on nursing care facilities and continuing care retirement communities is expected to reach approximately $216.3 billion in 2024, based on the latest projections made by the Office of the Actuary of CMS, which is a 3.3% increase compared to the current 2023 projection.

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.

9 unchanged sentences

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.

A recent example of this has been the growth of the PACE program.

PACE is a government-sponsored, provider-led managed care program focused on enabling frail, dual-eligible seniors who have skilled nursing needs to age independently in their homes.

PACE is a value-based government-sponsored, provider-led managed care program focused on enabling frail, dual-eligible seniors who have skilled nursing needs to age independently in their homes that can mitigate concerns over utilization of high-cost healthcare.

PACE providers receive a monthly risk-adjusted payment for each participant (PMPM) directly from Medicare and Medicaid to oversee the totality of medical care an enrolled participant needs.

4 unchanged sentences

This is driven by two factors:

(i) we provide care for a higher acuity population, with an average Medicare Risk Adjustment Factor (“RAF”) score of 2.46 based on InnovAge data as of June 30, 2023, 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.

(i) we believe we provide care for a higher acuity population, with an average Medicare Risk Adjustment Factor (“RAF”) score of 2.46 based on InnovAge data as of June 30, 2024, 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, with a higher RAF score indicating poorer health and higher predicted healthcare costs, 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.

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.

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.

Legacy healthcare delivery infrastructure has been slow to transition from fee-for-service to value-based care models.

1 unchanged sentence

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.

The COVID-19 pandemic amplified several flaws in the current legacy healthcare delivery system.

Traditional healthcare providers faced dwindling fee-for-service visits during the stay-at-home orders, government restrictions and general patient fear of medical settings.

This not only reduced revenues for traditional providers, but also strained their ability to provide necessary care for their patients.

Patients in long-term care facilities, such as nursing homes, also saw 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.

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.

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 further highlighted the need for integrated, multimodal value-based care delivery models.

The COVID-19 pandemic amplified several flaws in the current legacy healthcare delivery system, including the need for integrated, multimodal value-based care delivery models.

Traditional healthcare providers faced dwindling fee-for-service visits during the stay-at-home orders, government restrictions and general patient fear of medical settings, reducing their revenue and straining their ability to provide care.

Our Market Opportunity

We are one of the largest healthcare platforms focused on frail, dual-eligible seniors, serving participants primarily through our PACE program.

We have built the largest PACE-focused operation in the country based on number of

participants;

we are 16% larger than 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.

We are one of the largest healthcare platforms focused on frail, dual-eligible seniors, serving participants exclusively through our PACE program.

We have built the largest PACE-focused operation in the country based on number of participants, with 20 operational centers across six states;

we are 11% larger than the size of our closest PACE-focused competitor and more than 30 times larger than the typical PACE operator.

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.

2 unchanged sentences

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.

We 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.

We 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.

We leverage the InnovAge Platform (as defined herein) which is designed to provide comprehensive, coordinated healthcare to enable our frail, eligible for skilled nursing seniors to live independently in their homes and communities.

1 unchanged sentence

Based on historical results for the year ended June 30, 2024 and our experience and industry knowledge, we estimate an average annual revenue opportunity of $113,000 per participant (or $9,400 PMPM) and a total addressable market opportunity of $260 billion, based on our estimated market of approximately 2.3 million PACE eligible in the United States in 2023, as described above.

Of these estimated PACE eligible participants, only approximately 70,000 are enrolled in a PACE program, based on a July 2023 report from the National PACE Association, and over the next five years, the National PACE Association is targeting a PACE enrollment increase at a compound annual growth rate (“CAGR”) of approximately 21%.

Of these estimated PACE eligible participants, only approximately 77,000 are enrolled in a PACE program, based on a June 2024 report from the National PACE Association, and over the next four years, the National PACE Association is targeting a PACE enrollment increase at a compound annual growth rate (“CAGR”) of approximately 23%.

As a result, we believe that, subject to our ability to effectively execute our growth strategy, we have a substantial opportunity to bring our comprehensive value-based model of care to more frail, dual-eligible seniors across the country.

9 unchanged sentences

healthcare system.

As a result, the average InnovAge participant has a Medicare RAF of 2.46 based on InnovAge data as of June 30, 2023, 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 healthcare costs.

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.

All of our participants are certified as nursing home-eligible.

As of June 30, 2023, 90% of our participants are able to live safely in their homes and communities.

As of June 30, 2024, 92% of our participants were able to live safely in their homes and communities.

Our interdisciplinary care teams.

8 unchanged sentences

IDTs are typically comprised of a primary care provider, registered nurse, master’s level social worker, physical therapist, occupational therapist, recreational therapist or activity coordinator, dietician, center manager, home care coordinator, personal care attendant and driver.

The IDTs meet multiple times per week to discuss each

participant’s care plan and closely monitor key clinical metrics to ensure each participant receives optimal treatment based on his or her current conditions.

The IDTs meet multiple times per week to discuss each participant’s care plan and closely monitor key clinical metrics so that each participant receives optimal treatment based on his or her current conditions.

Our community-based care delivery model.

8 unchanged sentences

We incorporate population-specific design elements, such as grab bars and rounded hallways, to accommodate the frailty and the prevalence of dementia among our participant population.

The size and design of our centers enable us to deliver a significant portion of our participants’ care in one location, simplifying the healthcare experience for participants and their families.

The size and design of our centers enable us to

deliver a significant portion of our participants’ care in one location, simplifying the healthcare experience for participants and their families.

Our in-home care capabilities .

3 unchanged sentences

In addition, we manage transportation not only to and from our centers, but also to all third-party medical appointments.

Our capitated payment model gives us the flexibility to invest in home modifications, such as ramps, grab bars and shower chairs, to reduce falls and make the home safer for our seniors.

We believe our presence in our participants’ homes gives us real-time insight into our participants’ health and enables us to positively influence many environmentally-driven social determinants of health.

Our capitated payment model gives us the flexibility to invest in home modifications, such as ramps, grab bars and shower chairs, to reduce falls and make the home safer for our participants.

We believe our presence in our participants’ homes gives us real-time insight into their health and enables us to positively influence many environmentally-driven social determinants of health.

Our virtual care capabilities .

16 unchanged sentences

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.

Recent Audit Processes and Remediation Efforts

We are regularly subject to, and will continue to be subject to, various routine and non-routine governmental inspections, reviews and audits.

Starting in 2021, we underwent federal and state audits in our centers in Sacramento, California, Colorado and New Mexico.

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 our centers in Colorado.

We were fully released from those sanctions in Colorado in January 2023 and in California in May 2023.

The Company’s priority continues to be to remediate the deficiencies raised in audit processes and to implement post-sanction corrective actions as required, as well as maintain high quality of regulatory compliance in all its centers.

Through the audit processes, we worked on mission-critical people, process, and technology gaps identified as causes of the audit deficiencies and strengthened our center operations throughout our portfolio.

Although the Company continues post-sanction monitoring, the Company is currently able to enroll new participants at its 17 centers and also expects to responsibly pursue growth opportunities through opening de novo centers and/or pursuing tuck-in acquisitions and partnerships.

Our Value Proposition

6 unchanged sentences

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.

our participants have fewer hospital admissions and lower hospital readmission rates.

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.

2 unchanged sentences

Our model handles all transportation to and from medical appointments and center visits, helps participants with ADLs, and creates social outlets for participants to reduce isolation.

Most importantly, we believe we offer “peace of mind” to our participants’ families who know their loved one’s complex needs are cared for.

Most importantly, we believe we offer “peace of mind” to our participants’ families who know their loved one’s complex

needs are cared for.

“Friends and family” of participants remain one of our largest referral sources for recruiting new participants.

5 unchanged sentences

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.

Costs under the PACE program were estimated to be 15% 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 July 2023.

For states, costs under the PACE program were estimated to be 12% less than the cost of caring for a comparable population through other Medicaid services based on an analysis of most recently available data by the National PACE Association in January 2024.

Our Growth Strategy

Increase participant enrollment and capacity within existing centers

• For the fiscal year ended June 30, 2023, our participant census was approximately 6,400 across our 17 centers in five states.

We are now able to enroll participants at all of our centers and are gradually increasing enrollments in our Sacramento, California center and in our centers in Colorado.

We also intend to increase the utilization of capacity at our existing centers.

Increase participant enrollment and capacity within our centers

• For the fiscal year ended June 30, 2024, our participant census was approximately 7,020 across our 20 centers in six states.

During fiscal year 2024, we opened or acquired three new centers, two in Florida and one in the Crenshaw neighborhood of Los Angeles, and have two additional planned de novo centers in Bakersfield and Downey, California.

During fiscal year 2025, we expect to focus on increasing enrollments and utilization of capacity at our existing centers.

Build de novo centers

• In fiscal year 2024, we expanded into a new geography by opening two de novo centers in Florida (Tampa and Orlando) and acquired one planned de novo center in Bakersfield, California.

We also have one additional planned de novo center in Downey, California.

• We believe de novo centers generate compelling long-term unit economics and the potential for robust internal rates of return.

• We have operated our platform across different geographies and we expect to prioritize a list of target markets that we believe are optimal environments to launch the InnovAge Platform.

We are currently pursuing the licensure required to open two de novo centers in Tampa and Orlando in Florida and another one in Downey, California.

• 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.

Execute tuck-in acquisitions and partnerships

• 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.

• Over the past six fiscal years, we have acquired and integrated four PACE organizations for a total of eight operational centers (excluding the PACE center in Bakersfield, California, which is not yet operational).

These acquisitions represent expansion of our InnovAge Platform into one new state and five new markets.

By bringing acquired organizations under the InnovAge Platform, we hope to further realize revenue growth and improve operational efficiency and care delivery post-integration.

• We believe there is a robust landscape of potential tuck-in acquisitions to supplement our organic growth.

Since the Company was released from sanctions, we have recommenced our efforts to pursue tuck-in acquisitions.

We remain disciplined in our approach to acquisitions, including with respect to the types of organizations we seek.

We are focused on seeking organizations with experienced personnel, demonstrated quality service and compliance scores, compelling financial results and growth expectations.

• We also intend to pursue relationships with key stakeholders, existing organizations and other care providers in order to form partnerships in target geographies.

In fiscal year 2024, we completed an acquisition of two PACE programs in California from ConcertoCare, which included one operating center in the Crenshaw neighborhood of Los Angeles and a second program that is a planned de novo in Bakersfield.

We remain disciplined in our approach to acquisitions and in the past have executed multiple types of transactions, including turnarounds and non-profit conversions.

When integrating acquired programs, we work closely with key constituencies, including local governments, health systems and senior housing providers, to enable continuity of high-quality care for participants.

• We also have pursued and intend to pursue additional relationships with key stakeholders, existing organizations and other care providers in order to form partnerships in target geographies.

In fiscal year 2024, we opened the Orlando PACE center as a joint venture with Orlando Health, a healthcare system broadly recognized for its care programs, services and extensive community outreach and support with the goal of magnifying the impact and extend the reach of PACE services for eligible seniors in the Orlando market.

Reinvest in the InnovAge Platform to optimize performance

11 unchanged sentences

• 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;

• enforcement actions by governmental agencies and/or state law claims for monetary damages by patients or employees relating to breach of, impermissible use or disclosure of, or other incident relating to protected health information (“PHI”) and other types of personal data or personally identifiable information (collectively, “PII” and, together with PHI, “PHI/PII”) that we collect, use, and disclose, 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 CCPA as amended by the California Privacy Rights Act of 2020 (“CPRA”), other state data privacy and security laws, and the Privacy Act of 1974;

• enforcement actions by governmental agencies and/or state law claims for monetary damages by patients or employees relating to breach of, impermissible use or disclosure of, or other incident relating to protected health information (“PHI”) and other types of personal data or personally identifiable information (collectively, “PII” and, together with PHI, “PHI/PII”) that we collect, use, and disclose, in violation of federal or state privacy laws, including, for example and without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended by HITECH Act (“HIPAA”), or state data privacy and security laws;

• mandated changes to our practices or procedures that significantly increase operating expenses or decrease our revenue;

16 unchanged sentences

Such audits 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.

Risk Factors, “Risks Related to Regulation” for a description of recent audits in the States of California, Colorado, and New Mexico.

We expect these audits to continue in the future.

Whether identified through such audits or other avenues, our failure to comply with the federal and state laws applicable to our business has 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, corrective action plans, CMS imposed sanctions (including suspension or exclusion from participation in government programs), loss of contracts, or cessation of our services.

Risk Factors, “Risks Related to Regulation” .

Whether identified through such audits or other avenues, our failure to comply with the federal and state laws applicable to our business could 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, corrective action plans, CMS imposed sanctions (including suspension or exclusion from participation in government programs), loss of contracts, or cessation of our services.

Licensing Laws

We, our healthcare professionals, and our centers are subject to various state and local licensure and certification requirements in connection with our provision of healthcare and other services.

We, our healthcare professionals, and our centers are subject to various federal, state and local licensure and certification requirements in connection with our provision of healthcare and other services.

Specifically, in some of the states in which we operate, we are required to maintain licensure or certification as an adult day health center, home health or home care provider, diagnostic and treatment center, pharmacy provider, clinical laboratory and/or other type of facility, and our affiliated physicians and other clinicians also must be licensed or certified, as applicable, in the states in which they are providing services.

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, and qualifications of our personnel, and our operations.

In addition to state requirements, we, our centers, and 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 laboratory services and Drug Enforcement Administration registrations for prescribing, storing, and dispensing controlled substances.

In addition, certain of the states where we currently operate regulate the operations and financial condition of risk bearing providers and impose capital requirements, licensing or certification, governance controls, and other obligations.

While the states in which we operate do not currently impose these regulations on entities solely bearing risk under the PACE

program, these states may seek to license or otherwise regulate our operations and financial solvency in the future;

While the states in which we operate do not currently impose these regulations on entities solely bearing risk under the PACE program, these states may seek to license or otherwise regulate our operations and financial solvency in the future;

further, states in which we expand in the future may impose similar requirements on our operations.

Failure to comply with federal, state and local licensing and certification laws, regulations and standards could result in a variety of consequences, including cessation of our services, loss of our contracts, prior payments by payors being subject to recoupment, requirements to make significant changes to our operations, or civil or criminal penalties.

1 unchanged sentence

While we endeavor to comply with federal, state and local licensing and certification laws and regulations and standards as we interpret them, the laws and regulations in these areas are complex, changing and often subject to varying interpretations.

Any failure to satisfy applicable laws and regulations could have a material adverse impact on our business, results of operations, financial condition, cash flows and reputation.

Any failure to

satisfy applicable laws and regulations could have a material adverse impact on our business, results of operations, financial condition, cash flows and reputation.

Corporate Practice of Medicine

10 unchanged sentences

Court decisions have held that the statute may be violated even if only one purpose of remuneration is to induce referrals.

In addition, the Affordable Care Act (the “ACA”) amended the federal Anti-Kickback Statute to clarify that a defendant need not have actual knowledge of, or the specific intent to violate, the federal Anti-Kickback Statute in order to have the requisite intent to support an Anti-Kickback Statute violation.

In addition, a defendant need not have actual knowledge of, or the specific intent to violate, the federal Anti-Kickback Statute in order to have the requisite intent to support an Anti-Kickback Statute violation.

Federal criminal penalties for the violation of the federal Anti-Kickback Statute include imprisonment, fines and exclusion of the provider from future participation in federal healthcare programs, including Medicare and Medicaid.

4 unchanged sentences

Civil penalties for violation of the Anti-Kickback Statute include up to $120,816 in monetary penalties per violation, fines, or penalties of up to three times the total payments between the parties to the arrangement and potential exclusion from participation in Medicare and Medicaid.

In addition, the ACA amended the federal Anti-Kickback Statute to provide that any claims for items or services resulting from a violation of the federal Anti-Kickback Statute are considered false or fraudulent for purposes of the FCA, which is further discussed below.

In addition, the federal Anti-Kickback Statute provides that any claims for items or services resulting from a violation of the federal Anti-Kickback Statute are considered false or fraudulent for purposes of the FCA, which is further discussed below.

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.

The federal Anti-Kickback Statute includes statutory exceptions and regulatory safe harbors that protect certain arrangements.

1 unchanged sentence

To receive safe harbor protection, business transactions and arrangements must meet all the requirements of a safe harbor.

However, transactions and arrangements that do not satisfy

all elements of a relevant safe harbor do not necessarily render the arrangement per se illegal.

However, transactions and arrangements that do not satisfy all elements of a relevant safe harbor do not necessarily render the arrangement per se illegal.

When an arrangement does not satisfy a safe harbor, the arrangement must be evaluated upon all facts and circumstances, on a case-by-case basis in light of among other things, the parties’ intent, and the arrangement’s potential for abuse.

Arrangements that do not satisfy a safe harbor may be subject to greater scrutiny by enforcement agencies.

Additionally, some states have enacted statutes and regulations similar to the federal Anti-Kickback Statute, which may be applicable regardless of the payor source for the patient.

These state laws may contain exceptions and safe harbors that are different from and/or more limited than those of federal law and that may vary from state to state.

Additionally, some states have enacted statutes and regulations similar to the federal Anti-Kickback Statute.

Unlike the federal Anti-Kickback Statute, however, certain state laws may be applicable regardless of the payor source for the patient.

Moreover, these state laws may contain exceptions and safe harbors that are different from and/or more limited than those of federal law and that may vary from state to state.

We have entered, and may continue to enter, into several arrangements that may not fit squarely within enumerated safe harbors and could potentially implicate the Anti-Kickback Statute if the requisite intent were present, such as:

• Joint Ventures.

We operate one of our centers, our Sacramento, California center, under a joint venture with a not-for-profit healthcare provider and may enter other joint ventures with providers and payors in the future.

We operate two of our centers, our Sacramento, California center, and Orlando, Florida center, under joint ventures, each with a not-for-profit healthcare provider.

We may enter other joint ventures with providers and payors in the future.

The Office of Inspector General (the “OIG”) of the Department of Health and Human Services (“HHS”) has warned healthcare entities in the past that certain joint venture relationships have a potential for abuse.

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.

We have endeavored to structure our joint ventures 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.

6 unchanged sentences

In structuring our relationships with providers, including our physician partners, and other healthcare entities, we endeavor to comply with the regulatory requirements of such safe harbors and exceptions.

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.

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, and issued final rules effective January 19, 2021, that amend the Anti-Kickback Statute by adding new safe harbors and modifying existing safe harbors that protect certain payment practices and business arrangements from sanctions under the Anti-Kickback Statute in order to remove potential barriers to more effective coordination and management of patient care and delivery of value-based care.

Among other changes, the new regulations contain safe harbors for value-based arrangements centering around value-based enterprises, which are enterprises, such as ours, composed of participants collaborating to achieve one or more value-based purposes, including coordinating, and managing the care of a target patient population and coordinating and managing the care of a target population.

These modifications may impact our business, results of operations and financial condition.

On January 19, 2021, the OIG issued regulations under the Anti-Kickback Statute that added new safe harbors and modified existing safe harbors that protect certain payment practices and business arrangements from sanctions under the Anti-Kickback Statute in order to remove potential barriers to more effective coordination and management of patient care and delivery of value-based care.

Among other changes, these regulations contained safe harbors for value-based arrangements centering around value-based enterprises, which are enterprises, such as ours, composed of participants collaborating to achieve one or more value-based purposes, including coordinating, and managing the care of a target patient population and coordinating and managing the care of a target population.

These new and modified value-based care safe harbors may allow our business to pursue new value-based arrangements with safe harbor protections under the Anti-Kickback Statute.

However, compliance with these new Anti-Kickback Statute safe harbors is complex and, to the extent that one of our value-based arrangements does not squarely fit within the relevant safe harbors, it could be subject to greater scrutiny by enforcement agencies.

Federal Self-Referral Prohibition

1 unchanged sentence

“Designated health services” include clinical laboratory services, inpatient and outpatient hospital services, physical and occupational therapy services, outpatient speech-language pathology services, certain radiology services, radiation therapy services and supplies, durable medical equipment and supplies, parenteral and enteral nutrients equipment and supplies, prosthetics, orthotics and prosthetic devices and supplies, home health services, and outpatient prescription drugs.

To the extent we fall within the

types of entities to which the Stark Law applies, then we need to ensure that any financial relationships that we have with a referring provider would satisfy a statutory or regulatory exception to the Stark Law prohibition.

To the extent we fall within the types of entities to which the Stark Law applies, then we need to ensure that any financial relationships that we have with a referring provider would satisfy a statutory or regulatory exception to the Stark Law prohibition.

Providers are prohibited from billing Medicare and Medicaid for services related to a prohibited referral and a provider that has billed for prohibited services is obligated to notify and refund the amounts collected from the Medicare program or to make a self-disclosure to CMS under its Self-Referral Disclosure Protocol.

3 unchanged sentences

In addition to the Stark Law, various states in which we operate have adopted their own self-referral prohibition statutes.

As part of the Regulatory Sprint, CMS also issued a sweeping set of regulations that introduce significant new value-based terminology and exceptions to the Stark Law.

CMS has implemented new exceptions for certain remuneration exchanged between or among eligible participants in value-based arrangements.

In parallel with OIG’s regulations on value-based care discussed above, on January 19, 2021, CMS issued a sweeping set of regulations that introduce significant new value-based terminology and exceptions to the Stark Law, including new exceptions for certain remuneration exchanged between or among eligible participants in value-based arrangements.

These exceptions and their various requirements apply based on the level of risk assumed by the arrangement’s participants.

These new regulations purport to ease the compliance burden for healthcare providers across the industry while maintaining strong safeguards to protect patients and programs from fraud and abuse.

It is not yet clear what impact these new rules will have on our business.

These regulations purport to ease the compliance burden for healthcare providers across the industry while maintaining strong safeguards to protect patients and programs from fraud and abuse.

To the extent that we rely on the new value-based exceptions to the Stark Law for our value-based arrangements, we intend to fully comply with such safeguards.

However, if we were to be found as out of compliance with such exceptions, we could be subject to penalties, as discussed above.

The False Claims Act

5 unchanged sentences

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.

As noted above, 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.

The Affordable Care Act (“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.

2 unchanged sentences

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.

As of January 30, 2023, the minimum False Claims Act penalty increased from $12,537 to $13,508 per claim.

As of February 12, 2024, the minimum False Claims Act penalty increased from $13,508 to $13,946 per claim.

The maximum penalty has increased from $27,018 to $27,894 per claim.

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.

Private parties initiate qui tam whistleblower lawsuits against any person or entity under the FCA in the name of the federal government, as well as under the false claims’ laws of several states, and may share in the proceeds of a successful suit.

Private parties may initiate qui tam whistleblower lawsuits against any person or entity under the FCA in the name of the federal government, as well as under the false claims’ laws of several states, and may share in the proceeds of a successful suit.

Generally, federal and state governments have made investigating and prosecuting healthcare fraud and abuse a priority.

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.

Under Section 6031 of the Deficit Reduction Act of 2005, as amended, if a state enacts a false claims act that is at least as stringent as the federal statute and that also meets certain other requirements, the state will be eligible to receive a greater share of any monetary recovery obtained pursuant to certain actions brought under the state’s false claims act.

Under Section 6031 of the Deficit Reduction Act of 2005, as amended, if a state enacts a false claims act that is at least as stringent as the

federal statute and that also meets certain other requirements, the state will be eligible to receive a greater share of any monetary recovery obtained pursuant to certain actions brought under the state’s false claims act.

As a result, more states are expected to enact laws that are similar to the federal FCA in the future along with a corresponding increase in state false claims enforcement efforts.

17 unchanged sentences

Privacy and Security

HIPAA requires covered entities, and the business associates with whom such covered entities contract for services involving the use or disclosure of protected health information to provide certain protections to our participants and their health information.

Through our various service offerings, the Company acts primarily as a covered entity under HIPAA but may also act as a business associate of other covered entities.

The HIPAA privacy and security regulations extensively regulate the use and disclosure of PHI and require covered entities and their business associates, to develop and maintain policies and maintain policies and procedures with respect to PHI that is used to disclosed and implement and maintain administrative, physical, and technical safeguards to protect the security of such information.

Additional security

requirements apply to electronic PHI.

The HIPAA privacy and security regulations extensively regulate the use and disclosure of PHI and require covered entities and their business associates, to develop and maintain policies and procedures and implement and maintain administrative, physical, and technical safeguards to protect

the security of such information.

Additional security requirements apply to electronic PHI.

These regulations also provide our participants with substantive rights with respect to their health information.

The HIPAA privacy and security regulations also require covered entities to enter into written agreements with their business associates.

Covered entities may be subject to fines, 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.

Covered entities may be subject to fines and 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.

Business associates are also directly subject to liability under certain HIPAA privacy and security regulations.

In instances where we act as a business associate to a covered entity, there is the potential for additional liability beyond our status as a covered entity.

Covered entities must notify affected individuals of breaches of unsecured PHI without unreasonable delay but no later than 60 days after discovery of the breach by a covered entity or its agents.

Covered entities must notify affected individuals of breaches of unsecured PHI without unreasonable delay but no later than 60 days after discovery of the breach.

Reporting must also be made to the HHS Office for Civil Rights (“OCR”) and, for breaches of unsecured PHI involving more than 500 residents of a state or jurisdiction, to the media in accordance with HIPAA requirements.

All impermissible uses or disclosures of unsecured PHI are presumed to be breaches unless an exception to the definition of breach applies or the covered entity or business associate establishes that there is a low probability the PHI has been compromised.

Additionally, on December 1, 2022, OCR issued guidance on the use of tracking technologies on websites and mobile applications by covered entities and business associates, indicating that certain information collected by tracking technology vendors from websites and applications may cause a breach under HIPAA.

Additionally, beginning in December 2022, OCR has issued guidance on the use of tracking technologies on websites and mobile applications by covered entities and business associates, indicating that certain information collected by tracking technology vendors from websites and applications may cause a breach under HIPAA.

Violations of HIPAA by covered entities and business associates, 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.

3 unchanged sentences

There can be no assurance that we will not be the subject of an investigation (arising out of a reportable breach incident, audit or otherwise) alleging non-compliance with HIPAA regulations in our maintenance of PHI.

We may also be subject to other laws governing the privacy and security of data, such as the CCPA and data breach notification laws.

We may also be subject to other laws governing the privacy and security of data, such as the California Consumer Privacy Act of 1918 (“CCPA”) and data breach notification laws.

Additionally, many states also enacted laws that protect the privacy and security of confidential, personal and health information, which may be even more stringent than HIPAA and may add additional compliance costs and legal risks to our operations.

3 unchanged sentences

Various state laws and regulations also require us to notify affected individuals in the event of a data breach involving personal information without regard to the probability of the information being compromised.

Looking ahead, it is possible that the American Data Privacy and Protection Act (“ADPPA”), a landmark federal privacy bill with significant bipartisan support, may gain traction.

Although ADPPA would not apply to health data covered by HIPAA, it would apply to other health data, such as health data controlled by certain entities in the digital health space.

Looking ahead, it is possible that Congress could pursue a federal privacy bill to harmonize privacy regimes across states.

Various other federal and state laws restrict the use and protect the privacy and security of individually identifiable information, as well as employee personal information, including certain state laws modeled to some extent on the European Union’s General Data Protection Regulation.

1 unchanged sentence

Healthcare Reform Efforts

federal and state governments continue to enact and seriously consider many broad-based legislative and regulatory proposals that have had a material impact on or could materially impact various aspects of the healthcare system and our business, operating results and/or cash flows.

federal and state governments continue to enact and consider many broad-based legislative and regulatory proposals that have had a material impact on or could materially impact various aspects of the healthcare system and our business, operating results and/or cash flows.

In addition, state and federal budgetary shortfalls and constraints pose potential risks for our revenue streams.

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.

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:

5 unchanged sentences

If these types of changes are implemented in the future, we cannot predict whether the amount of fixed federal funding to the states will be based on current payment amounts, or if it will be based on lower payment amounts, which would negatively impact those states that expanded their Medicaid programs in response to the ACA.

• Legislation enacted in 2011 requires CMS to sequester or reduce all Medicare payments, including payments to PACE organizations, by two percent per year for a period of years.

• Legislation enacted in 2011 requires CMS to sequester or reduce all Medicare payments, including payments to PACE organizations, by two percent per year beginning on April 1, 2013.

• The Inflation Reduction Act of 2022 includes a few 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.

2 unchanged sentences

Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly” final rule (“PACE Final Rule”) set out a number of changes for PACE organizations, including (i) clarifying that CMS has enforcement discretion to impose civil monetary penalties or an intermediate sanction in the event CMS has made a determination that could lead to the termination of a PACE program;

and (ii) reinstating the requirement that PACE organizations to enter into written contracts with each outside organization, agency, or individual that furnishes administrative or care-related services not furnished directly by the PACE organization, including 25 medical specialties enumerated by the PACE Final Rule.

While there may be significant changes to the healthcare environment in the future, the specific changes and their timing are not yet apparent.

Specifically, changes in Medicare and Medicaid could lower PACE rates or increase our expenses.

Proposed December 27, 2022, the PACE Final Rule proposed rule included many changes to the current PACE regulations, including consideration of past performance when evaluating PACE organizations’ applications to offer a new PACE program or expand an existing PACE program.

While such changes were not implemented for 2024, we anticipate many such provisions affecting PACE organizations may be addressed for fiscal year 2025 by CMS.

Any failure to successfully implement strategic initiatives that respond to future legislative, regulatory, and executive changes could have a material adverse effect on government-sponsored PACE programs, our business, results of operations and financial condition.

and (ii) reinstating the requirement that PACE organizations enter into written contracts with each outside organization, agency, or individual that furnishes administrative or care-related services not furnished directly by the PACE organization, including 25 medical specialties enumerated by the PACE Final Rule.

• The remaining provisions of the PACE final rule from 2024 were issued alongside the new PACE Final Rule for 2025.

In this new final rule, CMS sets out changes which include but are not limited to:

(i) implementation of past performance guidelines used to evaluate new PACE organization applications;

(ii) personnel medical clearance guidelines;

(iii) updates to service delivery timeframes by which participants must receive services;

(iv) guidelines on IDT care coordination across all service settings with timeframes applied to external provider recommendations;

(v) new content and documentation guidelines for participant plans of care;

(vi) expansion of participant rights in care settings;

and (vii) revisions to existing grievance process to align with standard determination request guidance.

CMS and state Medicaid agencies also routinely adjust the RAF which is central to payment under PACE and Managed Medicaid programs in which we participate.

6 unchanged sentences

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.

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.

These regulatory requirements apply to all healthcare facilities, including our participant 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.

Employers are also required to comply with various record-keeping requirements.

7 unchanged sentences

Several states, including California, have adopted laws focused on competition, quality, access, and cost that authorize state agencies to review and approve healthcare transactions, and many other states, including Pennsylvania, are considering similar legislation.

California is also considering additional legislation that would provide the California attorney general with approval authority with respect to certain health care transactions.

Such laws may negatively affect our ability to grow our business.

Any allegations or findings that we or our providers have violated any of these laws or regulations could have a material adverse impact on our reputation, business, results of operations and financial condition.

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.

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.

Trademarks and Intellectual Property

Although we own trademarks and service marks such as “InnovAge,” which are protected under applicable intellectual property laws and are the property of us or our subsidiaries, we do not currently believe our intellectual property is material to our business.

healthcare industry is highly competitive.

14 unchanged sentences

We therefore see higher levels of per-participant medical costs in our second and third fiscal quarters.

Medical costs also depend upon the number of business days in a period, and shorter periods will have lower

medical costs.

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.

Medical costs also depend upon the number of business days in a period, with shorter periods generally having lower medical costs, all else being equal.

There is also increased variability of participant enrollment during the open enrollment period, which occurs during our third fiscal quarter.

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.

3 unchanged sentences

Human Capital Resources

As of June 30, 2023, we had approximately 2,100 employees, including 1,200 clinical professionals (excluding contract labor).

We consider our relationship with our employees to be good.

None of our employees are unionized or party to a collective bargaining agreement.

As of June 30, 2024, we had approximately 2,350 employees, including over 1,300 clinical professionals (excluding contract labor).

Approximately 1% of our workforce is represented by a union, all of which are located in Pennsylvania.

Collective bargaining commenced in March 2024.

We are unable to predict the terms or timing of any resulting collective bargaining agreement.

We believe our efforts in managing our workforce have been effective, evidenced by improved retention, lower turnover, and employee satisfaction during fiscal year 2024.

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.

We believe that our employees are drawn to this mission and our values, which is why our voluntary retention rate was 68% over fiscal year 2024.

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 .

Additionally, in our most recent employee engagement survey conducted in February 2024, 75% of our employees indicated that they feel engaged by their work at InnovAge .

Attracting and retaining top talent is critical to the success of InnovAge's mission and one of the highest priorities to leadership.

To keep leadership informed of the health of our employee base, we report weekly on key hiring and retention metrics.

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.

We intend to monitor progress by releasing multiple engagement surveys at least annually.

We launched employee engagement surveys in fiscal year 2022, and we implemented action plans with all staff groups based on survey findings and opportunities uncovered.

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.

2 unchanged sentences

Our commitment remains in building a culture where individual distinctions are not just acknowledged but deeply valued.

In our previous engagement survey from April 2022, 79.2% of employees indicated that they feel that they can be their authentic selves at work.

In our previous engagement survey from February 2024, 76.6% of employees indicated that they feel that they can be their authentic selves at work.

As part of our continuous journey to engage and understand our teams better, we plan to conduct our annual engagement survey during September 2024.

We look forward to our employees’ invaluable feedback, as it plays a pivotal role in shaping our collective future.

As of June 30, 2024, our employed workforce was comprised of individuals who identified as women – 76%, and minorities – 52%.

Five of nine members of our executive leadership team identify as women as of June 30, 2023.

Four of eleven members of our leadership team identify as women as of June 30, 2024.

Training and Development

7 unchanged sentences

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

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 $1.235 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.

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 $1.235 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.

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 our most recently completed second fiscal quarter.

4 unchanged sentences

• reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements;

• exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

• exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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.

2 unchanged sentences

If we were to subsequently elect instead to comply with public company effective dates, such election would be irrevocable pursuant to the JOBS Act.

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.

As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

Available Information

Our internet website is www.innovage.com.

We include our website address on this Annual Report on Form 10-K for reference only.

The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K or any other report or document we file with, or furnish to, the SEC.

We include our website address on this Annual Report for reference only.

The information contained on our website is not incorporated by reference into this Annual Report or any other report or document we file with, or furnish to, the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are available free of charge through our website at www.investor.innovage.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

Our SEC filings are also available to the public at the SEC’s website at www.sec.gov.

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.

What changed 10-K

Item 1. Business